Thursday, August 23, 2012

Midweek report - Castlemaine pokies fight in VCAT

The Castlemaine pokies battle in VCAT came within a whisker of finishing two days early on Wednesday after the Maryborough Highland Society failed to present enough “quality” information to support part of its case.
Mount Alexander Shire Council is appealing the Victorian Commission for Gambling Regulation's (VCGR) decision earlier this year to grant Maryborough Highland Society (MHS) a licence to open a club, complete with 65 poker machines, in the old railway goods shed, in Kennedy Street, Castlemaine.

The matter is being heard by VCAT Deputy President Mark Dwyer.

The five-day hearing started on Monday with a strong turnout of Castlemaine residents from both sides – Enough Pokies In Castlemaine (EPIC) and Castlemaine Sports and Community Club Inc (The Club) attending.

The hearing was rolling along smoothly until Wednesday morning when the tension suddenly started to rise.
Mr Dwyer had sought further details from MHS barrister Peter Caillard on the relationship between MHS and The Club.

Mr Dwyer wanted evidence or a detailed outline of the operation of the new regime (The Club) that will take control of the proposed venue if the VCAT application is successful.
As previously reported, MHS will only manage the venue but The Club committee will be the legal entity for the operation and take over all of the entitlements including the gaming machines and the lease of the building.

Mr Dwyer wanted to know the financial implications and if the new arrangements would change any of the evidence that had been presented to the tribunal in the previous two days or the evidence to follow.
MHS barrister, Mr Caillard presented an outline on Wednesday morning but Mr Dwyer was not impressed with its lack of financial detail.

“The Society proceeds in this case at its own peril,” Mr Dwyer said. “The quality of information at this stage is seriously lacking - you need to take that into account and tell me what material you can provide and in what timeframe?”
Mr Caillard sought a 10-minute break; lawyers scurried and huddled with their clients in different parts of the building while the gallery sat stunned waiting for the next development.

After the break, the latest MHS/The Club budget was tabled with Mr Caillard saying there were no significant differences between the previous MHS budget and the new one.
But Mr Dwyer took a quick look at the first page of the new budget and said he could already see a “significant” difference.

As the legal argument heightened, Mr Caillard called for an adjournment.
VCGR lawyer Liam Brown said the identity of the applicant had changed to a different body from the one that the Commission had granted a licence to while EPIC’s barrister, Ron Merkel QC argued that this was a totally different case and should go back to the VGRL.

Meanwhile, council’s barrister John Rantino said he would not support any adjournment.
Mr Dwyer took a 10-minute break before returning and deciding to proceed.

“I am concerned this application has become a moveable beast over the last few days … a lot of time and money has been spent to get this far. I am in a mind to proceed,” Mr Dwyer said.
And so the hearing continued, with MHS general manager Malcolm Blandthorn called to the witness box to explain the differences between the old and the new budgets.

He said there were six key differences with the biggest being the estimated amounts for depreciation and gaming revenue in the new budget.
Following questioning by Mr Rantino and Mr Merkel QC it became clear that:

·         The Club will be responsible for the repayment of all establishment, redevelopment and poker machine costs for the venue – totalling $5.2million plus interest on certain components.

·         The rent for the Goods Shed is $32,000 per annum with a 5 per cent increase per year. The lease runs for 15 years, with no option for an extension.

·         After that time, the redeveloped Goods Shed will revert to the landlord – the State Government.

·         There is no guarantee that the much promised $50,000 community cash contribution will be paid.

·         MHS will be paid a management fee of $250,000 per annum.

·         MHS will charge The Club an estimated $250,000 for legal fees and costs associated with obtaining permits and licenses required to operate the Castlemaine business.

·         MHS will be paid a $400,000 project management fee.

It also came to light that MHS will mortgage its entire operations in Maryborough as security for the redevelopment of the Goods Shed and that the MHS members had not been told of this, until it came out at the hearing.
Mr Blandthorn is expected to be cross-examined later in the week.

Outside VCAT on Wednesday, several members of The Club pointed out that no Mount Alexander Shire councillors had yet attended the hearing.
Cr Tracey Cross was there on Monday afternoon after she had been subpoenaed to give evidence - not in her capacity as a councillor but as a local resident/business person. She had not given evidence by Wednesday.

Council’s CEO Phil Rowland attended on Monday and the shire’s economic and social development director, Carolyn Wallace has been there every day.
The VCAT hearing continues this week but is highly unlikely to finish this week. It is expected to be adjourned to the next available date, which will not be until November.

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