Local authorities are seeking an urgent law change to avoid having to repay ratepayers up to $144 million in charges they have been levying unlawfully.
They are also seeking leave to take a case to the Privy Council, challenging a Court of Appeal ruling that refunds are owed. Their application is due to be heard by the Court of Appeal on November 20.
As many as 55 local authorities may be liable to pay refunds for levying unlawful charges on properties, including flats and shops.
Briefing papers for a meeting between central and local government representatives yesterday put the potential liability for territorial authorities at between $36 million and $144 million.
The difference is because there is uncertainty how far back liability might extend and whether the recipients might also be owed interest.
The problem is a result of local authorities apparently levying uniform charges incorrectly.
Instead of levying a single charge on a shopping centre or block of flats, the councils have been levying a uniform charge on each shop or flat in the block.
Local Government New Zealand and three of its members, the Rodney, Hutt and Manukau local authorities, have been involved in a test case against how the Valuer-General decides whether to create a separately rateable property.
They won a High Court case but lost on appeal, and are now seeking to have the case sent to the Privy Council.
At yesterday's meeting, Local Government New Zealand also asked the Government for an urgent law change clearing them of any liability.
The law change would confirm the way councils have been levying uniform charges as correct, and retrospectively clear them of the need to pay refunds.
A spokesman for Local Government New Zealand said the matter had been raised with Government ministers at a forum hosted by Prime Minister Helen Clark yesterday.
They had been asked to put a proposal for retrospective legislation in writing.
- NZPA
Councils want law changed
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