Broken Municipal Council Hill v Broken Hill Proprietary Company Limited

The appeal concerned the calculation of the unimproved capital value of a mine for rating purposes under the Local Government Act 1919 (N.S.W.). The Broken Hill Proprietary Company Limited (the respondent) was assessed by the Council of the Municipality of Broken Hill (the appellant) based on the mine's output. The dispute arose from the method used to calculate the average annual saleable value of the ore, particularly when the mine had not been worked continuously throughout the preceding three years due to a strike.

The court was required to determine two principal legal issues. Firstly, when a mine has been worked for only a portion of the three years preceding the valuation year, whether the total saleable value of the ore won should be divided by three (representing the full three-year period) or by the actual number of days or fraction of a year the mine was worked to ascertain the average annual saleable value. Secondly, the court had to decide the meaning of "worked" in the context of the Act, specifically whether activities such as pumping and repairs, undertaken when no ore was being produced due to a strike, constituted "working" the mine.

The High Court, in a majority decision, held that the unimproved capital value should be ascertained by dividing the total saleable value of the ore won by three, regardless of whether the mine was worked for the entire three-year period. The majority reasoned that the phrase "average annual saleable value" required division by the number of years in the period (three), and the additional words "or during such part of that time as the mine has been worked" were intended to clarify that the valuation method could still be applied even if the mine had not been worked continuously, rather than altering the divisor for calculating the annual average. Furthermore, the majority agreed with the Supreme Court that "worked" in this context meant worked for the production of ore, and therefore, a mine where no ore was being won was not considered to be "worked." Consequently, the appeal was dismissed.