Supreme Court Rules "User Charges Can Be Imposed for Water Supply Within Graded Water Service Areas"

"Imposition of Water Supply Cause-Payer Charges Must Follow Local Government Ordinances... Construction Costs Can Be Charged"

The Supreme Court has ruled that local governments can impose charges on water users for the burden of constructing water supply facilities when supplying tap water to buildings located within a water supply zone.

According to the legal community on the 9th, the Supreme Court's Second Division (Presiding Justice Kim Sang-hwan) upheld the lower court's ruling against Agricultural Corporation A in a lawsuit filed against the Yeongam County Governor of Jeollanam-do, who sought to cancel the imposition of a causative burden charge.

In May 2016, the Yeongam County Governor completed the expansion of the drainage area and the installation of water pipelines in the Sanho-ri area of Samho-eup, Yeongam County, Jeollanam-do, following complaints from Company A and local residents. Subsequently, Company A, the owner of a newly constructed four-story building, applied to Yeongam County for a new water supply construction. In June 2017, Yeongam County requested Company A to negotiate the imposition of the causative burden charge for this building, but when Company A did not respond, in February of the following year, Yeongam County imposed a causative burden charge of approximately 37 million KRW only on the lodging facilities (inn) on the 2nd and 3rd floors of the building.

In response, Company A filed a request to cancel the disposition, arguing that the lodging facilities were not subject to the causative burden charge for water supply.

The issue in the case was whether the lodging facilities were subject to the causative burden charge. Both the first and second instance courts ruled that it was appropriate to consider the lodging facilities as subject to the causative burden charge according to the Yeongam County ordinance. The Supreme Court also held, based on the provision in the Water Supply Act stating that "the causative burden charge for water supply shall be collected according to the ordinances of local governments," that Yeongam County could impose the causative burden charge in accordance with its ordinance.

The Yeongam County ordinance stipulates that "in the case of supplying tap water to buildings located within a water supply zone, such as lodging facilities with a total floor area of 600㎡ or more or 15 or more rooms," the causative burden charge is applicable, and Company A's lodging facilities fall under this provision. The Supreme Court ruled, "According to the Yeongam County ordinance, when supplying tap water to buildings located within a water supply zone, the construction costs of existing water supply facilities can be charged to those who use the tap water."

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