Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council

Peregrine Mineral Sands Pty Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning an agreement entered into between the appellant mining company and Wentworth Shire Council. The dispute centred on an agreement regarding the payment of rates by the mining company to the Council, which was made before the land valuation upon which such rates would ordinarily be based had been obtained. The Council subsequently sought to argue that this agreement was invalid.

The central legal issues before the Court of Appeal were whether the primary judge had erred in finding that the agreement as to rates was not authorised by, or was inconsistent with, the *Local Government Act 1993* (NSW), and whether the primary judge had erred by not holding that the Act authorised such an agreement. Further, the Court considered whether the execution of the agreement, referred to as the Road Agreement, was *ultra vires* of the Council's powers, specifically whether it constituted an unlawful fetter on the exercise of its discretionary power. Finally, the Court addressed the appeal concerning the costs awarded by the primary judge, particularly in light of the Council's success in arguing the invalidity of an agreement it had itself executed.

The Court of Appeal, comprising McColl, Meagher and Ward JJA, dismissed the appeal. Their Honours reasoned that the primary judge had correctly determined that the *Local Government Act 1993* (NSW) did not authorise the Council to enter into an agreement that predetermined the rates payable by the mining company prior to the statutory valuation process. The Court affirmed that such an agreement would fetter the Council's future exercise of its statutory discretion regarding the assessment and levying of rates, rendering it *ultra vires*. The Court also upheld the primary judge's exercise of discretion in awarding costs to the Council.