North Shore City Council will refund developers $10 million after the High Court found errors in its development policy.
Six developers deliberated with the council over the policy for two years, claiming the council failed to fairly gather revenue for development.
The judicial review of the council's 2004 development contributions
policy began in 2007, when Justice Judith Potter asked the council to reassess its contribution to the $425 million Northern Busway and other projects.
The High Court this week found the 2004 policy to be in error of law.
The council will make more than 4000 refunds totalling $10 million to the development community.
While the 2004 policy was not quashed, the decision will set the principles for a draft 2009 development contributions policy.
Council strategy and finance chairman Grant Gillon said he was delighted the issue had been resolved after two years of argument.
"I am very pleased to see that much of what we have learned and reviewed has been included in the draft 2009 development contributions policy," said Mr Gillon.
"The new policy is designed to make sure that all parties within the community pay a fair share towards any infrastructure and community assets that the council builds in anticipation of growth."
Property Council chief executive Connal Townsend said the refunds were a weak admission that council policy was "grossly unreasonable".
"Abuse of development contributions by local authorities has artificially driven up the cost of development, which in turn has increased house prices for first-home buyers and compromised job-rich commercial property investment."
Development contributions are required when a council must pay for new infrastructure because of growth in relation to a development. They are a major source of capital works funds, with more than $400 million to be collected in the 2009-2024 city plan period.
