Perilya Broken Hill Limited v Valuer-General [2012] NSWLEC 235

Perilya Broken Hill Limited v Valuer-General [2012] NSWLEC 235

The unimproved value must include land improvements such as excavations and shafts, exclude mining equipment, and is properly determined by the present value of a 4% royalty stream based on after-tax profits of mine operations, accounting for relevant costs, a two-year start-up period, and a discount rate of 25%.

Parties
Applicant: Perilya Broken Hill Limited; Respondent: Valuer-General
Jurisdiction
Australia
Judgment Date
19 October 2012
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed; Valuer-General's determination revoked; value as at 1 July 2007 set at $4,900,000.
Legal Topics
Unimproved Value, Discounted Cash Flow, Royalty Calculation, Business Valuation, Valuation of Land Act 1916
Valuation of Land Mining Law Unimproved Value Discounted Cash Flow Royalty Calculation Business Valuation Valuation of Land Act 1916

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Parties

Perilya Broken Hill Limited

Applicant

Valuer-General

Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 What is the unimproved value of the property used for mining under the Valuation of Land Act 1916 as at 1 July 2007?
  2. 2 How should the royalty for the landowner be calculated (before or after tax)?

Ratio Decidendi

The unimproved value must include land improvements such as excavations and shafts, exclude mining equipment, and is properly determined by the present value of a 4% royalty stream based on after-tax profits of mine operations, accounting for relevant costs, a two-year start-up period, and a discount rate of 25%.

Court Disposition

Appeal allowed; Valuer-General's determination revoked; value as at 1 July 2007 set at $4,900,000.

Orders

  • The appeal is allowed.
  • The determination of the Valuer-General is revoked.