Resources lawyers are advised the Department of Resources recently finalised a compliance audit campaign to check whether conduct and compensation agreements (CCAs) and opt-out agreements are being recorded on title and within the required timeframes.
Resource authority holders (excluding the holders of prospecting permits, mining claims and mining leases) have an obligation under s92 of the Mineral and Energy Resources (Common Provisions) Act 2014 (MERCP), within 28 days after entering into a CCA or opt-out agreement, to give the land titles registrar notice of the agreement in the appropriate form.
The Titles Office advises the appropriate form is a Form 14 General Request, available on its website.
A total of 44 permits were audited. Companies were forthcoming with requests for documents and were generally able to demonstrate a high level of engagement. However, a high non-compliance rate was identified, and eight Reminder of Obligations and 15 Warning Notices were issued.
Given the high level of non-compliance, the department is planning further compliance audit campaigns on the same and similar topics for the first half of 2024.
Unlike CCAs, there is no legal requirement to register compensation agreements relating to prospecting permits, mining claims and mining leases on title. A transferee may not be aware there is an existing compensation agreement that binds the buyer under s281(6) of the Mineral Resources Act 1989. Compensation agreements are filed with the Mining Registrar under s279 before grant of the tenure, but are not required to be filed with the Registrar of Titles.
This is a risk if property lawyers and conveyancing clerks are only conducting titles searches and not also conducting free public searches for resource authorities to identify resources tenures that may have compensation agreements attached to them.
Resources lawyers need to be aware of their client’s obligations to register CCAs on title and property lawyers aware that compensation agreements are different to CCAs and won’t be discoverable on title.