Refund decision under the Planning and Building Act declared invalid

The case concerns the validity of a decision on the reimbursement of costs for the construction of roads, water and sewage in Trondheim.

Those who build necessary infrastructure – roads, water and sewage – in an area zoned for housing are entitled to reimbursement of the costs from all landowners who benefit from the development. The municipality must first make a preliminary decision that allocates the costs, and then make the final reimbursement decision after the development is completed. The total costs in the final decision cannot exceed the costs in the preliminary decision by more than 15 percent.

In this case, the County Governor had annulled the municipality's preliminary decision. Then, the municipality had approved increased costs that the developer had claimed in the meantime. The County Governor confirmed this new decision, on which the municipality's final reimbursement decision was based. A landowner challenged the final decision by bringing an action against the municipality, claiming it could not be based on the County Governor's preliminary decision because the preliminary decision was invalid.

The Supreme Court ruled in favor of the landowner. The Supreme Court first established that the courts can prejudicially review the validity of the preliminary decision. It is not required that the appellate body that made the decision – in this case, the State – be a party to the action. 

The Supreme Court also found that it was wrong to approve the increased costs. Corrections could only be made for the errors that justified the annulment. The relevant rules are based on the assumption that the costs are locked in the first decision, which is assumed to be made before the development starts. This ensures predictability for the parties. The appeal from Trondheim municipality was dismissed.

The judgment clarifies the content of key provisions in chapter 18 of the Planning and Building Act. It also clarifies general administrative law principles on the prejudicial review of administrative decisions and the public administration's possibility to build on new information.

Read the judgment from the Supreme Court (Norwegian only) (PDF)

Areas of law: Administrative law, planning and building law, sections 18-8 and 18-9 of the Planning and Building Act, Article 89 of the Constitution § 89

Key paragraphs: 42–46 og 59–61

Justices: Webster, Ringnes, Falch, Steinsvik, Sivertsen