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Back to square one

Saturday, 17th August, 2013

By By Erica Visser

The Supreme Court yesterday overturned a ruling that would have made City Council pay $7 million to Perilya.

In 2007, the mine was valued by the Valuer-General at $20.9 million but the NSW Land and Environment Court (LEC) ruled last October that it was worth just $4.9 million.

The Valuer-General’s appeal against the LEC’s ruling was heard last month and the city has been awaiting a decision ever since.

Supreme Court Justice Mark Leeming yesterday set aside the October ruling and sent the case back to the LEC.

Justice Leeming found that both the Valuer-General and the mining company had made mistakes in the valuation of Perilya’s local operations.

He said that the valuation had failed to properly account for the royalties paid by Perilya.

Perilya has since refused to pay Council rates in a bid to offset the $6.9 million, however CEO Paul Arndt yesterday promised to pay the outstanding amount.   

“We’ve never ever had any issue with paying the rates where we have any debt that is owing.”

Mr Arndt said that from Perilya’s perspective, yesterday’s result was a negative one but it will keep fighting its valuation.

“We are disappointed. We still feel pretty strongly about our position in relation to this,” he said.

“We will continue to pursue the action. I think that we continually face challenges like this.”

Mr Arndt would not rule out cutting back staff or operations in Broken Hill as a result of the finding.

“I don’t want to speculate on that. It continues to be a difficult operation and we will continue working like we have been to ensure it’s a viable operation.”

Mayor Wincen Cuy said that the Supreme Court ruling had put Council “back to the beginning.”

“We’ve come to a point where the whole process starts over again,” he said.

“As recently as last Tuesday we have met with Perilya and while Perilya and ourselves have been on opposite sides of the fence, at no stage have we been throwing stones at each other.

“Now it goes back to the LEC for another round and Perilya and the Valuer-General can deal with it.”

Council’s General Manager, Therese Manns, said in a statement that the ruling would not affect Council’s need to review finances.

“Whilst this is good news for Council, it is still extremely important to us to review our current financial situation and ensure that we are financial sustainable into the future and able to remain resilient to changes in mining valuations,” Ms Manns said.

“I would stress that this does not just mean re-distributing rates from the mining sector to residential and business; it means a complete review of

Council operations to ensure we are operating within our means to the point that we are able to accept any financial risk associated with industry revenue.”

Mayor Cuy stressed that Council’s shifting of the rate burden from the mines to householders and businesses was a “totally separate issue.”

“We still need to come to a point where we as a Council are less reliant on the mines,” he said.

“Council also needs to ... streamline all of its operational activities.”

But Mayor Cuy refused to say whether he still believed that the mines were paying too much in rates.

He said that he was glad that the ruling had been handed down after an anxious nine months.

“It is a sense of relief and quite obviously there has been some sort of error made,” he said.

“Over the course of the last 12 months I’ve actually had three general managers and myself in constant contact with the appropriate politicians and it has been at the front of everybody’s minds.

“Quite obviously it has been the biggest issue I’ve faced as mayor. I think the attitude myself and the last three general managers have taken has worked.
“Let’s not go in all guns a blazing; that’s not going to get you anywhere in modern society.”

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