Caveats over resource authorities under the MERCP Act
20 December 2022
Key Insights
- Caveats can be lodged over resource authorities under the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) (MERCP Act) in order to prevent registration of any dealings in relation to that resource authority.
- In Miracle Lane International Holdings Limited v Spinifex Mines Pty Ltd & Ors [2022] QLC 2, the Land Court found that a caveat which was due to lapse should remain in force given related Supreme Court proceedings which were on foot.
What are caveats under the MERCP Act?
A caveat registered against a resource authority prevents registration of a dealing (such as the registration of a transfer, sublease or mortgage) in relation to the "affected resource authority" from the date and time of lodgement.
However, a caveat does not create an interest in the affected resource authority.
When can caveats be registered?
A person claiming an interest in a resource authority may lodge a caveat over the resource authority if the caveat:
- complies with the prescribed requirements for it; and
- is not a prohibited caveat; and
- is accompanied by the fee prescribed by regulation.
The "prescribed requirements" for lodgement of a caveat are those prescribed by the Mineral and Energy Resources (Common Provisions) Regulation 2016 (Qld). Caveats cannot be registered over prospecting permits.
How long can caveats remain registered?
A caveat expires at the following times:
- for a caveat for which there was consent, at the expiration of the term, if any, stated in the caveat. If the caveat does not state any term, the caveat continues until it is withdrawn or removed. Note that there is consent to a caveat only if each holder of an affected resource authority has consented to lodgement of a caveat and consent is lodged together with the caveat;
- for a non-consensual caveat, either at the expiration of any Land Court order in force in relation to the caveat, or three months after the date of lodgement of the caveat, or a shorter term as stated in the caveat.
Caveats can also be withdrawn at any time by notification from the caveator to the chief executive.
An application can also be made to the Land Court for an order that a caveat be removed by:
- a person who has a right or interest (present or prospective) in the affected resource authority;
- a person whose right (present or prospective) to deal with the affected resource authority is affected by the caveat.
Compensation for caveats lodged without reasonable cause
A person who lodges a caveat over land without reasonable cause is liable to compensate anyone who suffers loss or damage as a result.
Miracle Lane International Holdings Limited v Spinifex Mines Pty Ltd & Ors [2022] QLC 2
In Miracle Lane International Holdings Limited v Spinifex Mines Pty Ltd & Ors [2022] QLC 2, a caveator who had lodged caveats against a number of resource authorities sought an order from the Land Court that a caveat which was otherwise due to lapse remain in force due to the presence of ongoing Supreme Court litigation relating to those resource authorities. The caveator feared tha,t without the continuing registration of the caveat, the resource authorities could be sold which would detrimentally affect the Supreme Court proceedings and the ability to potentially recover any monies.
It was accepted by the parties in this matter that the test to maintain a caveat is the same as the test for the grant of an interlocutory injunction, being:
- whether there is a serious question to be tried; and
- whether the balance of convenience favours the caveat remaining in force while the question in dispute is yet to be determined.
On the facts before him, Member Isdale concluded that removing the caveat would alter the status quo in the related Supreme Court proceedings with unknown possible effects. This led Member Isdale to ultimately conclude that the balance of convenience favoured the caveat remaining in force.
Authors: Libby McKillop, Senior Associate and Greta Sweeney, Graduate.
