FANCY $5202.20 worth of free rent for your business?
Lease a parcel of land from the Queensland Government, rack up a bill, go into liquidation and hand it back - that's what CMI Industrial did.
CMI took over a 25-year-old mining lease (ML 50067) in 2009 from Southern Cross Machinery, which operated the old Woorim sand mine on state-owned land.
The Department of Agriculture and Fisheries is the trustee of the land which is held as a quarry reserve, and the Department of Natural Resources and Mines is the occupant.
In 2012, CMI went into liquidation, but a DNRM spokeswoman said the department was only alerted to these changes in April 2016.
"CMI Industrial Pty Ltd subsequently became listed as under external administration and we have been advised that the company remains in that status,” she said.
"The Department of Natural Resources and Mines cancelled ML 50067 in April 2016 for non-payment of annual rent.”
Moreton Bay Regional Council was forced to write-off the $5202.20 bill CMI had racked up during that time, because the State Government doesn't pay rates and charges.
Although a council spokesman said the terms of the lease included that the lessee was responsible for the payment of any rates and charges.
"On May 17, 2016, council was advised that CMI Industrial Pty Ltd had gone into liquidation, there were no funds available to pay any outstanding rates and charges, and the lease had been handed back to the State Government.
"The land is now occupied by the State Government and, under the Local Government Act 2009, State Government property is exempt from rates and charges.”
Division 1 councillor Brooke Savige said this was the first time she'd encountered a set of circumstances where council was forced to write-off rates and charges.
"It's very rare that council has those kinds of debts go unpaid, because we have a variety of mechanisms in place to recover payments,” she said.
"If I defaulted on my payments, I'd get warning letters and it would be a long process, but eventually council would step in and say, 'we are legally allowed to sell the property and recoup the funds'.
"Generally, when that happens, it's not just council rates in arrears, it's the mortgage as well and it's the absolute last resort. I'm not involved with that process so I can only speculate that maybe the State Government may not have necessarily realised (CMI) had gone into liquidation.”
McGrath Nicol partner Matthew Caddy was tasked with liquidating CMI's four Victorian-based sites.
He said the company's primary function was an automotive component manufacturer, but couldn't comment on its two Queensland sites. What it was doing in Woorim, we may never know.
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