by The Landlord
The parties have been at loggerheads over the council’s requirement that Estate pay the lion’s share of the costs associated with building an arterial road through the middle of its subdivision.
This was despite undisputed evidence that the subdivision didn’t generate any demand for the road, and obtained little or no tangible benefit from it.
The case has spent five years before the courts, all the way up to the Supreme Court. The Supreme Court decided that it was not inherently illegal for the council to require Estate to construct and vest the road, but that it was up to the Environment Court to decide how much the council contributes to make it “fair and reasonable”.
The Supreme Court also decided that a statement in its original consent application that it expected to be compensated for the difference between the arterial road and a local road only bound Estate.
Consequently Estate’s compensation was limited to the difference between a local road and the arterial road that it built.
The Environment Court found in Estate’s favour, requiring the council to pay Estate the cost difference.
Nick Wright, partner at Brookfields Lawyers, who represented Estate, comments, “This case provides a strong cautionary note to councils about attempting to push developers into constructing public infrastructure which exceeds what the development itself requires”.
“It can be done, but there is a good chance that developers can bite back and seek a significant council contribution to the work costs.”
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