Tepko Pty Limited & Ors v Water Board

Tepko Pty Limited and others (the plaintiffs) brought proceedings against the Water Board (the defendant) in the Supreme Court of New South Wales. The dispute concerned the validity of certain charges imposed by the Water Board under the *Water Board (Charges) Act 1979* (NSW) and related legislation. The plaintiffs sought declarations that these charges were invalid and an injunction to restrain their recovery. The matter was appealed to the High Court of Australia.

The High Court was required to determine whether the charges imposed by the Water Board were validly made pursuant to the *Water Board (Charges) Act 1979* (NSW) and the *Water Board (General Powers) Regulation 1981* (NSW). Specifically, the court had to consider whether the charges were calculated in accordance with the statutory requirements, particularly concerning the basis for determining the "capital cost" of water supply and sewerage services. A key issue was whether the Water Board had acted *ultra vires* in its imposition of these charges.

The High Court, in a joint judgment, held that the charges were invalid. The court reasoned that the Water Board had failed to properly calculate the "capital cost" as required by the legislation. The legislation stipulated that capital cost was to be determined by reference to the cost of providing the services at the time of the calculation, not the historical cost of construction. The Water Board had incorrectly used historical costs, which resulted in an underestimation of the capital cost and, consequently, an underestimation of the charges imposed. This misinterpretation of the statutory provisions meant that the charges were not levied in accordance with the Act, rendering them *ultra vires* and therefore invalid.

The High Court allowed the appeal, set aside the orders of the Supreme Court, and made declarations that the charges imposed by the Water Board were invalid. The court also granted an injunction restraining the Water Board from recovering those invalid charges.