Coal Mine Subsidence Compensation Act 2017

The Act casts a wide net across private landowners, public infrastructure owners, coal mine operators, developers, and several public-sector bodies.

Property owners and occupiers in coal-mining districts are the primary beneficiaries. They may claim for damage to buildings, infrastructure, fixtures and a wide class of “goods” (defined in s 4(1) to include carpets, furniture, appliances but to exclude motor vehicles, boats and aircraft). Successors in title inherit the original owner’s entitlement (s 7(3)). Owners of land in declared mine subsidence districts must obtain approval before erecting, altering or subdividing (s 21) and may lose compensation rights if they build without approval or refuse a pre-mining inspection (ss 23, 10A).

Proprietors of coal mines bear direct liability for subsidence from active mines (s 8(1)(a)). The definition of “proprietor” in s 4(1) is deliberately broad: it includes immediate owners, lessees, occupiers, contractors for the working of the mine, and related bodies corporate. It excludes mere royalty recipients, head lessors without operational interest, or surface owners without mineral interest. A proprietor who sells or ceases to be active remains liable for pending claims (s 8(2)), while a purchaser assumes liability for all subsidence from the mine (s 8(3)). Proprietors must comply with directions under ss 27 and 26A, respond to claims in accordance with approved procedures, pay levies into the Fund (s 33), and face recovery actions if the Chief Executive pays a claim on their behalf (s 18). They are also subject to the highest penalties in the Act (s 27(2): 2,365/11,820 penalty units for failure to comply with emergency directions).

Developers and subdividers within mine subsidence districts must obtain Chief Executive approval before commencing physical works (s 22(6)). Failure renders the improvement or subdivision “contravening” and disentitles the owner to compensation for subsequent subsidence damage (s 23).

Public infrastructure owners, including roads authorities (cl 12 of Sch 1), water authorities and electricity network operators, are expressly contemplated as claimants. The definition of “improvement” and “infrastructure” in s 4(1) is expansive, capturing railways, roads, pipelines, electricity networks, sewerage, stormwater, water supply, flood mitigation works and public parks.

Subsidence Advisory NSW, the Chief Executive, the Secretary and authorised officers are the administrative and enforcement actors. The Chief Executive manages the Fund (s 32(4)), determines claims (s 12), issues approvals (s 22), exercises emergency and preventative powers (ss 27, 29), requires pre-mining inspections (s 31A), and may recover monies from proprietors as debts due to the Crown (ss 18(3)–(4), 26(6A), 27(4B)). The Secretary performs an internal review function (s 15) that cannot be delegated to the Chief Executive or Subsidence Advisory NSW staff (s 52(3)). Authorised officers (s 36) exercise entry, inspection and information-gathering powers backed by offence provisions (s 49).

The Crown is bound in all capacities (s 5). The Act interacts with other Crown entities through information-sharing (s 54) and cost-recovery from public authorities (s 27(4C)).

Mining companies that carried out unlawful operations remain liable to reimburse the Fund for any payments made in respect of subsidence they caused (s 34).

Finally, the regulations and approved procedures affect all parties by fleshing out levy formulas, claim lodgement mechanics, timing, and technical standards that are not fully specified on the face of the Act.

Rights to compensation are central. A person whose improvements or goods suffer subsidence damage holds a statutory entitlement (s 6) subject to the limitations in ss 9–10B and compliance with claim time limits (s 11). The right extends to preventative costs (s 7(2)(a)) and to damage caused by Chief Executive works under s 29 (s 7(2)(b)). Claimants have a right to Secretary review (s 15) and, on limited grounds, appeal to the Land and Environment Court (s 16). Owners may also request the Chief Executive to purchase damaged land instead of paying monetary compensation (s 26(1)(a)).

Mine proprietors’ duties include: paying compensation promptly for active-mine subsidence; complying with approved procedures when responding to claims; obeying directions under ss 26A, 27 and 31A; paying levies and contributions (s 33); providing data and reports on ground movement when required by regulation (s 51(2)(b)); and cooperating with pre-mining inspections. A proprietor who fails to respond or pay may find the Chief Executive stepping in and recovering the sum plus costs as a debt (s 18).

Development duties fall on anyone proposing to erect, alter or subdivide within a mine subsidence district. They must obtain approval (s 21), supply whatever particulars the Chief Executive requires (s 22(2)), and commence within the approval period (normally 2–5 years: s 22(4)). Conditions imposed on approvals may dictate construction methods, materials and height (note to s 22(3)).

The Chief Executive’s duties and powers are extensive and largely discretionary. Duties include determining claims consistently with the Act and approved procedures (s 12), managing the Fund as trustee (s 32(5)), consulting before approving or amending procedures (s 14(4)), and giving 21 days’ notice before stepping in to pay a claim on a defaulting proprietor (s 18(6)). Powers include requiring pre-mining inspections, installing monitoring equipment, demanding information (s 31B), carrying out or directing emergency works (s 27), refusing development approvals on subsidence-risk grounds (s 22(3A),(7)), and exempting classes of work (s 24).

Information and cooperation duties apply to any person served with a s 31B notice or an authorised officer’s request. Self-incrimination is not an excuse for producing documents, although use immunity is provided for natural persons who object (s 48).

Public authorities that incur repair costs may be reimbursed from the Fund in certain circumstances (s 27(4C)).

The Act deploys a graduated enforcement pyramid. At the base are prevention notices (s 50) requiring cessation of unapproved development work (maximum 24 penalty units). Mid-level offences for carrying out unapproved development or subdivision attract 120 penalty units (individual) or 590 (corporation) (s 21). Obstruction of authorised officers or failure to provide assistance, documents or answers carries 590/1,180 penalty units (s 49). The apex offence—failure by a proprietor to comply with an emergency, urgent or temporary repair direction under s 27—carries 2,365 penalty units (individual) or 11,820 (corporation), reflecting the potential for immediate danger to life or property (s 27(2)).

Many offences are strict liability in practice because the statute does not expressly require mens rea, although the defence of “reasonable excuse” appears in ss 39, 49 and 50. Proceedings may be brought summarily in the Local Court (capped at 100 penalty units) or in the Land and Environment Court (s 55). A three-year limitation period applies, extendable to three years from when evidence first came to an authorised officer’s attention (s 56). Penalty notices are available for prescribed offences (s 57).

Civil enforcement is also significant. The Chief Executive may recover payments made from the Fund from defaulting proprietors as debts due to the Crown (ss 18(3)–(4), 26(6A), 27(4B), 34). Contracts purporting to contract out of the Act are void (s 17). A proprietor who complies with the Act and relevant mining lease conditions obtains a statutory immunity from other causes of action (s 19).

Authorised officers’ powers are backed by identity-card and production requirements (ss 38–39) and limitations on force and damage (s 40(2)–(3)). Entry without consent is restricted to non-residential premises at reasonable times or when open to the public, unless notice would defeat the purpose or it is an emergency (s 43).

The Act is designed to sit atop, and interact with, a suite of mining, planning and corporations statutes.

The Mining Act 1992 supplies the definitions of “mining operations”, “colliery holding” and “mining lease” used to identify active coal mines (s 4(1)). Section 380A of that Act permits decision-makers to treat contraventions of the Subsidence Act as relevant to whether a person is “fit and proper” to hold an authority. The Environmental Planning and Assessment Act 1979 continues to govern subdivision and development applications; the Chief Executive may refuse a subsidence approval if the planning approval has not first been obtained (s 22(9)). Conditions imposed under the Subsidence Act sit alongside any planning conditions.

The Corporations Act 2001 (Cth) supplies the concepts of “related body corporate”, “controlled”, “entity” and “related entity” that expand the meaning of “proprietor” and “affiliate” for liability and disentitlement purposes (ss 4(1), 7(4)).

Land acquisition is governed by the Land Acquisition (Just Terms Compensation) Act 1991 when the Chief Executive compulsorily acquires damaged land (s 26(2)). The Public Works and Procurement Act 1912 deems the Chief Executive the Constructing Authority but disapplies certain sections (s 26(3)–(4)).

The Interpretation Act 1987 applies to the construction of the Act (note to s 4(1)). The Fines Act 1996 governs penalty notices (s 57). The Government Sector Employment Act 2013 and State Owned Corporations Act 1989 appear in the definition of “public authority” for reimbursement purposes (s 27(7)).

Transitional provisions in Schedule 1 expressly continue aspects of the repealed Mine Subsidence Compensation Act 1961 for pending claims, existing districts, approvals and certificates until certain cut-off dates.

Information-sharing arrangements authorised by s 54 override other secrecy obligations where the information assists functions under this or related legislation.

The most significant recent changes are contained in the Coal Mine Subsidence Compensation Amendment Act 2024 (No 48), whose Schedule 1 makes more than 50 amendments.

Key insertions include:

• s 11A, requiring Subsidence Advisory NSW to prepare an independent assessment report for every claim;
• s 10A, disentitling a claimant who refuses a required pre-mining inspection;
• s 10B, preventing double recovery where works funded by the Fund cause the damage;
• s 26A, empowering the Chief Executive to direct an active-mine proprietor to purchase land or carry out remedial works (with owner consent for purchase);
• s 31A, authorising compulsory pre-mining inspections and monitoring equipment in the estimated zone of influence, with cost recovery;
• s 31B, conferring a broad power to demand documents or information “reasonably required to inform future assessments and development requirements”, extending to material outside Australia.

Amendments to existing sections expand the Chief Executive’s emergency powers (s 27), allow recovery of repair and sale costs (s 26(6A)), refine the approved-procedures power (s 14), and adjust time limits and review mechanisms.

These changes respond to two perceived deficiencies. First, the absence of baseline data often made it difficult to prove that subsidence rather than other causes produced the damage; pre-mining inspections address that evidentiary gap. Second, the Fund faced increasing liabilities from legacy mines while active operators sometimes delayed or disputed claims; the new direct-direction powers, cost-recovery provisions and independent assessment reports aim to accelerate resolution, reduce Fund exposure and improve actuarial certainty. The 2024 amendments also align the legislation more closely with contemporary risk-based regulation by emphasising prevention, data collection and proactive intervention before damage crystallises.

The Act itself does not record specific judicial decisions, but it expressly contemplates litigation in the Land and Environment Court. Section 16 permits appeals against Secretary decisions on three narrow grounds only: whether damage has arisen from subsidence, the quantum of compensation, or rejection under the preventative-works limitations in s 10. Infrastructure claimants whose review request is refused may appeal the original determination. Appeals must be filed within three months.

Section 23(1)(a) preserves title instruments despite contravening development but gives a purchaser the right to rescind and recover the deposit. That provision has the potential to generate vendor-purchaser disputes outside the Land and Environment Court.

Controversies are likely to centre on the breadth of the Chief Executive’s discretionary powers. The power to require pre-mining inspections “on land … that the Chief Executive is satisfied may be at risk” (s 31A(1)) and to demand any information “reasonably required to inform future assessments” (s 31B(1)) could be challenged on Wednesbury unreasonableness or jurisdictional-fact grounds. The 2024 expansion of “proprietor” liability to related bodies corporate and the retrospective assumption of liability by new proprietors (s 8(3)) may provoke constitutional or acquisition-of-property arguments, although the Act binds the Crown (s 5) and provides a compensation regime said to be fair.

The interaction between approved procedures and the statutory text may generate procedural-fairness disputes, especially where the Chief Executive departs from an assessment report without adequate reasons (s 12(2)).

Because many limitations turn on the Chief Executive’s state of satisfaction (e.g. s 10A(2), s 23(2)), judicial review applications in the Supreme Court are foreseeable. No doubt exists, however, that the statutory immunity in s 19 for compliant proprietors is intended to reduce common-law nuisance or negligence claims once the statutory scheme has been followed.

Most practitioners miss several subtle but costly traps.

First, the 12-month claim period for subsidence damage runs from when the owner knew or ought to have known the damage was subsidence-related (s 11(3)(b)). A prudent owner who sees new cracks after nearby mining should obtain expert advice immediately; failure to do so can bar the claim even if the owner subjectively remained ignorant.

Second, refusing a pre-mining inspection is now fatal to later compensation unless the Chief Executive exercises the discretionary override in s 10A(2). The override is expressed to be available only “in all the circumstances”, giving the Chief Executive wide latitude. Landowners in future mining zones should treat a pre-mining inspection notice as effectively compulsory.

Third, the definition of “proprietor” pulls in contractors and related bodies corporate. A mining contractor or a parent company may find itself jointly and severally liable for subsidence claims even though it does not hold the mining lease.

Fourth, preventative or mitigative claims under s 7(2)(a) must satisfy five cumulative preconditions in s 10(1). If any one is unmet—particularly the requirement that subsidence “has commenced”—the entire claim fails. The “more likely than not” test is actuarial, not merely plausible.

Fifth, building without approval inside a declared district does not invalidate title but completely disentitles the owner (and subsequent purchasers) to compensation for that improvement or anything attached to it (s 23(1)(b)(i)). The “exceptional circumstances” discretion in s 23(2) is narrow and has been exercised sparingly in the past.

Sixth, the approved procedures are not reproduced in the Act or on the legislation website; they are maintained by Subsidence Advisory NSW and amended after consultation. A claimant or proprietor who relies solely on the statute will miss critical rules on evidence, expert engagement, timing and cost recovery.

Seventh, the successor-in-title rule (s 7(3)) operates “for the avoidance of doubt” but only for subsidence and damage that occurred before transfer. Post-transfer damage must be claimed by the new owner, who must therefore ensure appropriate contractual protections when buying.

Eighth, the Chief Executive’s power to demand information located overseas (s 31B(3)) combined with the offence of non-compliance (s 31B(4)) creates extra-territorial reach that may surprise foreign-owned mining groups.

For landowners and developers:

• Before purchasing or developing in a known coal area, search the register of mine subsidence districts and request a s 31B information notice or pre-mining inspection.
• If a pre-mining inspection is required, cooperate fully and retain copies of all baseline reports.
• Lodge any subsidence damage claim within 12 months of discovery (or earlier if the Chief Executive determines you should have known) and include all supporting engineering and valuation evidence.
• Obtain Chief Executive approval before any physical work on an improvement or subdivision inside a declared district; keep written records of commencement dates.
• Do not commence preventative works until subsidence has actually started and the “more likely than not” threshold is met.

For active-mine proprietors:

• Maintain a compliance register for all subsidence claims, directions under ss 26A, 27 and 31A, and levy notices.
• Respond to every claim strictly in accordance with the current approved procedures; late or incomplete responses allow the Chief Executive to pay and recover (s 18).
• Budget for potential liability on sale: the vendor remains liable for undetermined claims (s 8(2)).
• Ensure related bodies corporate and contractors are aware of their exposure under the expanded “proprietor” definition.
• Implement ground-movement monitoring and reporting systems capable of satisfying regulatory requirements under s 51(2).

For all parties:

• Treat approved procedures, not merely the Act, as the operative rulebook.
• Retain contemporaneous photographic, survey and expert evidence; the onus of proving causation rests on the claimant.
• Factor the three-month appeal window to the Land and Environment Court into internal decision-making.
• Use the information-sharing and advice provisions (ss 31, 54) to obtain early guidance from the Chief Executive rather than waiting for a formal claim or direction.
• Keep records for at least six years given the three-year limitation period that can run from when evidence first comes to an authorised officer’s attention (s 56).

Compliance is not a set-and-forget exercise. The 2024 amendments have shifted the regime from largely reactive compensation to a continuous risk-management and data-collection system. Organisations that integrate subsidence considerations into due-diligence, contracting, insurance and operational planning will minimise both financial exposure and regulatory sanction.