Last week, the local & national media gave extensive coverage to a case where the High Court directed a Local Authority to refund a development contribution to a local development company. The refund in this case was significant amounting to €1.1m and the Court awarded the refund as the works for which the contribution was levied had not been completed.
Development contributions are levied by way of a condition attached to a planning permission for infrastructural works which will benefit the development. Such infrastructural works generally include roads, sewers, water mains, open space and parking. Development contributions usually cover a number of such infrastructural categories and the contribution is levied on the basis of rates set by the Local Authority and reviewed annually.
Development contributions can be levied under the prevailing contribution rate at the time of the grant of planning permission or in the form a Special Contribution for a specific piece of infrastructure which would benefit the development. In the reported case, the contribution was levied for the development of a by-pass, only 17% of which has been built, while more than 7 years has elapse since the contribution was paid.
It should not be concluded from this case that contribution refunds are due on a large scale. Under the relevant provisions in planning legislation, an applicant is entitled to a contribution refund if the works for which the contribution was levied have not been carried and 7 years have elapsed. Establishing whether a refund is due is more straightforward where the contribution relates to a specific piece of infrastructure. As the majority of development contributions are based on the prevailing contribution rate and relate to a range of infrastructural works, establishing that the monies have not been spent in a manner and location which will benefit the development is less straightforward.
Nevertheless, there are undoubtedly cases where refunds are due on the basis of current legislation. In order to establish whether a refund is due, it is necessary to firstly identify the works for which the contribution was levied, and secondly establish whether all or any of the works have been carried out within the 7 year period available to the Local Authority.