Breach of Agreement: CCAs, Easements and Other Agreements
Landholders across the region have entered into a vast number of agreements with resource companies authorising some form of mining development on their land. Many have signed Conduct and Compensation Agreements (CCAs) with coal seam gas companies for the construction and operation of CSG development on their land. CCAs are significant in that the agreement allows for the co-usage of the land over a considerable period of time and in most cases up to 30 years and beyond.
Various types of associated agreements and easements such as pipeline easements, powerline easements, water supply agreements, gravel agreements and land acquisition agreements are likewise in place across the Surat basin.
We are increasingly finding that resource companies are acting in breach of these agreements. Often it is up to landholders to keep the companies honest.
A common breach occurs when CSG companies construct infrastructure over an extended period of time. Most agreements if properly drafted should have a specific construction period. For instance, a period of 12 months may be reasonable for the construction of 10 coal seam gas wells. If the gas company continues to construct for longer than that time, you as the landholder may suffer additional impacts such as being unable to return stock to the area of country affected by the construction works. In these circumstances, you may be entitled to claim damages such as loss of profit for being unable to return stock to that land until construction finishes.
Another common breach relates to rehabilitation. Clients consistently advise of clays being mixed with topsoil during the filling of trenches and rehabilitation generally being inadequate to render land productive again. Gas companies and other mining and infrastructure proponents must comply with strict environmental conditions set out in Environmental Authorities (EA). They also must comply with the terms of any agreement they have with landholders which operate as a binding contract. If your land has not recovered to a reasonable standard, you may have rights within the framework of your agreement to either seek further compensation or demand performance of the contract requirements.
We recommend you revisit your agreement and if you have any concerns, feel free to call us for a no‑obligation discussion about the terms of your agreement and any remedies available to you.
The CSG industry is an emerging industry and many landholders were caught up in the initial wave of development. Remember you may have rights to additional compensation or you may be able to require the relevant company to take corrective action if:
- you have concerns about the impacts to your land, business and lifestyle that you did not understand at the time of signing;
- the impacts of development are not what you reasonably envisaged or are beyond the scope of the agreement; or
- you signed an agreement with or without legal advice and have concerns about the conduct of the relevant company.
Taking reasonable action will also have the effect of improving the ongoing conduct of the company on your land. This is important given the significant duration of many of the agreements.
We recommend you revisit your agreement and if you have any concerns, feel free to call us for a no‑obligation discussion about the terms of your agreement and any remedies available to you.