June 22, 2015

The western suburbs’ Shire of Peppermint Grove is determined to tear down the semi-constructed “Taj-on-Swan” – but it might cost ratepayers up to $500,000.

Any money spent on removing the unfinished pillar, arch and dome-concrete structure, owned by the family of fallen fertiliser tycoon Pankaj Oswal, could only be retrieved through a process whereby creditors divide money flowing from a future sale of the property.

But the Australian Taxation Office has already lodged its claim: a mammoth $186 million from an unpaid tax debt owed by Mr Oswal’s socialite wife, Radhika.

Peppermint Grove chief executive John Merrick said that while he was confident ratepayers would not be left out of pocket for the demolition expense, the council did not have an agreement with the Tax Office.

“We’re going down this path to support the rate payer’s wishes that it be removed. It’s an eyesore, it’s abandoned and they’d like it removed,” Mr Merrick said.

Mr Merrick conceded the Shire could be left without reimbursement for the demolition costs if it was outranked as a creditor by the Tax Office.

The Tax Office, which is an unsecured creditor like the shire, could issue a so-called “statutory garnishee” to propel the ATO’s interests ahead of other creditors, including the council.

Perth demolition contractors told Fairfax Media that it would cost between $350,000 and $500,000 dollars to tear down and remove the unfinished structure. This is substantially more than the sub-$150,000 the council expects to pay.

Most of the cost is linked to the removal of the rubble, given building company BGC originally poured an estimated $7 million of concrete into the structure.

The Oswals have not returned to Australia following the collapse of their Burrup Fertiliser business interests in late 2010. The 6600 square metre building site has remained idle ever since.

The mansion was expected to become Australia’s most expensive home with an estimated value of $70 million at completion.

In March, the council voted unanimously to demolish the property, but lawyers for the Oswals have since appealed this decision. A directions hearing at the State Administrative Tribunal challenging the demolition order is scheduled for Tuesday.

The Oswal’s lawyer Rebekah Giles was contacted for comment. The Oswal family is disputing the size of the tax debt.

Local real estate agent and Peppermint Grove resident Jody Fewster said as a ratepayer, she’d be happy to contribute to the demolition.

“It’s a danger and as a local, I want to see it demolished,” Ms Fewster said. “I think it brings down the total value of the neighbourhood in its current state, I’d be willing to put my hand in my pocket to help”.

But local hopes for a speedy end to the saga on the Swan River may be dashed. Any findings out of the Administrative Tribunal may be challenged in the Supreme Court, triggering potentially lengthy litigation.