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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> McLean Estates Ltd v Earl of Aylesford & Ors [2009] EWHC 697 (Ch) (12 March 2009) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2009/697.html Cite as: [2009] EWHC 697 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY

		The Priory Courts 33 Bull Street Birmingham
		12 March 2009

JUDGE PURLE:

1. I have to determine preliminary points of construction of a conveyance dated 30^th May 1922 ("the 1922 conveyance") of land within the Knowle Basin, formerly known as Pasture Farm. The land consists of approximately one hundred acres. By the 1922 conveyance, the Claimant's predecessor acquired Pasture Farm from the Defendants' predecessors. The unusual feature of this case is that the conveyance that I am called upon to construe does not exist, it apparently having not survived a fire in the past. Fortunately for the parties, or at least one of them, its terms are reproduced in a subsequent conveyance of 5^th November 1936 ("the 1936 conveyance"), which the parties are agreed accurately reflect the terms of the 1922 conveyance.
2. By the 1936 conveyance, the land was conveyed by reference to: "All that messuage farmhouse and land with the outbuildings and premises occupied therewith and known as 'Pasture Farm' in the County of Warwick containing in the whole Ninety Eight decimal nought Eight nine (98.089) acres or thereabouts and delineated by identification purposes only in the plan annexed hereto and thereon edged pink".
3. There is a later exception and reservation of the mines and minerals in the following form: "Excepting and reserving unto the Vendor and his successors and predecessors in title all manorial rights and all mines and minerals in or under the land hereby conveyed with all such rights liberties and powers as may be necessary for winning working carrying away and disposing of the same with power to let down the surface thereof on condition of paying for all damage caused by such letting down to the buildings existing and erected thereon at the date of the [1922 conveyance]".
4. The following issues arise potentially for determination. The first is: does the material known as Mercia Mudstone (the nature of which I shall come to explain shortly) fall within the exception and reservation in the 1922 conveyance? If it does, the following issues then arise: (1) does the exception and reservation permit the working of the Mercia Mudstone by surface workings or by underground workings only? (2) does the right to the mines and minerals include the right to the void created by their extraction? (3) does the right to the mines and minerals include the right to fill the void and to cross the Claimant's land to gain access for that purpose?
5. The Knowle Basin lies to the south-east of Birmingham between two geographical faults. It consists of a stratum outcrop of Mercia Mudstone of the Triassic System. In the vicinity of the site, the Mudstone is and was sometimes overlayed by a thin veneer of glacial sand and gravel or in some places alluvium and river-terrace gravel deposits in river valleys. The Mercia Mudstone was in 1922 known as Keuper Marl (which is how I shall now refer to it). Keuper Marl was thought to be, and was, suitable in 1922, the date of the relevant conveyance, for brick making. Though classified as a common clay, it is in its purest form a fine grained rock which can readily be turned into clay. Although Keuper Marl was in 1922 suitable for the purpose of brick making, there were known to be superior clays for that purpose, especially Etruria Marl, another common clay, which was used for the production of engineering bricks.
6. Turning now to the subject site, it is, as I have said, approximately a hundred acres in extent. Prior to certain quarrying activities that have taken place, it consisted, and still to a large extent consists, of topsoil of approximately thirty centimetres depth. The topsoil itself is formed by the effect of weathering on the underlying Keuper Marl, coupled with biological and botanical activity. Beneath the topsoil are sub-soils consisting of weathered Keuper Marl and organic matter washed down from above, which turns into clay. The clay changes gradually to unaltered Keuper Marl at a depth of four metres of more. The total depth of the Keuper Marl is or was prior to any of its extraction approximately three hundred metres at which point it met solid rock of Cambrian and pre-Cambrian age. These characteristics were characteristics common to the Knowle Basin generally. Keuper Marl can be fairly be said to have been, in 1922 and indeed today, the soil or rock of the district. I should add for completeness that, as I have already mentioned earlier, a certain amount of glacial sand and gravel lay on the surface in some parts of the subject site.
7. In 1922, adjacent to Pasture Farm, was a brickworks and clay pit making bricks from Keuper Marl taken from the clay pit. By 1937 at the latest, Pasture Farm itself was worked in part for the extraction of clay and brick production on site. That though was not the position in 1922. The clay removal and brickworks operation were carried on openly until about 1993. They were carried on not by the present defendants, who have the benefit of the exception of mining and mineral rights, but by the owner of Pasture Farm.
8. Another feature of the position as it was known in 1922 is that there was a general hope and expectation that recoverable coal might be present underneath the Keuper Marl in the Knowle Basin, including underneath Pasture Farm. Should coal have been found, it would have been at a considerable depth and therefore recoverable, if at all, only by underground mining methods. It is now known that there are no recoverable coal deposits, but that was not the position in 1922. It is therefore suggested by the claimant, who is the current owner of Pasture Farm, that the exception was directed primarily, if not exclusively, to the mining of coal. The Keuper Marl in contradistinction was just below the surface though sometimes forming an outcrop breaking through the surface. In 1922 it could only, as is agreed, have been mined by open cast methods or quarrying. It is also established on the evidence that for Keuper Marl deposits to have been economically workable in 1922, they had to be close to a brickworks and a road as Pasture Farm was. I have already mentioned the adjoining brickworks. The site abutted, as it still does, the Coventry road. Keuper Marl in the Knowle Basin also had the advantage of relative freedom from impurities when compared with Keuper Marl from some other parts of the country, which made it more suitable for brickmaking.
9. I have set out the issues of construction that I have had to decide. There are a number of authorities in this area, but it is not necessary to undertake an exhaustive historical analysis as all the authorities were brought together and summarised in the judgment of Slade J, in The Earl of Lonsdale v. Attorney General [1982] 1 WLR 887, pages 924-5, under eight headings, as follows:

"(1) Though the wide sense given to the phrase 'mines and minerals' by Lord Romilly M.R. in  Midland Railway Co. v. Checkley, L.R. 4 Eq. 19 and by Mellish L.J. in Hext v. Gill, L.R. 7 Ch.App. 699 is a sense which the phrase is capable of bearing and can still be attributed to it in a proper context see, for example, O'Callaghan v. Elliott [1966] 1 QB 601, it cannot now properly be regarded as a primary or literal sense which is always to be applied in the absence of a sufficiently clear contrary context: see, for example, the Budhill case [1910] AC 116 and Waring v. Foden  [1932] 1 Ch 276 .

(2) The phrase 'mines and minerals' is not a definite term, but is one that is capable of bearing a wide variety of meanings: see, for example, the Budhill case [1910] AC 116, 130 per Lord Gorell and the  Glenboig case [1911] AC 290, 299 per Lord Loreburn L.C. One possible meaning that had been attributed to the word 'minerals' in Darvill v. Roper, 3 Drew 294 and other pre-1880 authorities was 'all such substances as are dug out of the earth by means of a mine.' This remains a possible meaning in a proper context.

(3) Unless the meaning is clear from the four corners of the relevant instrument itself, the first duty of the court in construing a grant of mines and minerals is to try to ascertain what the phrase meant in the vernacular of 'the mining world, the commercial world and landowners at the time of the grant,' in accordance with the test suggested by James L.J. in Hext v. Gill, L.R. 7 Ch.App. 699, 719 and approved by the House of Lords in the Budhill case [1910] AC 116. The common link between the three categories of persons referred to by James L.J. is, I think, that they are all persons who may ordinarily be expected to have both some knowledge of mines and minerals and also some experience of dealing with them in the course of commerce in this country.

(4) The meaning of the phrase in this vernacular sense may be derived either from direct evidence as to the vernacular meaning at the relevant time or by inference drawn by the court, as in Barnard-Argue-Roths-Stearns Oil and Gas Co. Ltd. v. Farquharson [1912] AC 864. If there is clear evidence as to the vernacular meaning at the date of the trial, then, in the absence of evidence to the contrary, the court may be justified in assuming that there was a similar vernacular usage at the date of the grant: see the Glenboig case [1911] AC 290, 299 per Lord Loreburn L.C.

(5) Where it is clearly established that, at the date of the grant, a particular vernacular meaning was attributed to the phrase 'mines and minerals' by 'the mining world, the commercial world and landowners,' the court will be predisposed to adopt that meaning. The vernacular test, however, is not a rigid test to be applied without regard to all the other terms of the instrument in question and the circumstances in which it is used: see Borys v. Canadian Pacific Railway Co. [1953] AC 217, 223 per Lord Porter. The court must never overlook the commercial background and apparent commercial purpose of the transaction.

(6) One pointer to the parties' intentions may be to consider whether or not the substances in question are exceptional in use, in value and in character: see for example  Waring v. Foden  [1932] 1 Ch 276, 294 per Lawrence L.J. Another pointer is the evidence as to the general state of knowledge of the relevant substance at the date of the grant and the way in which it was then regarded and treated as a commercial matter; see, for example,  Barnard v. Farquharson  [1912] AC 864, 869 per Lord Atkinson. A third, significant pointer may be derived from any express powers of working that are conferred by the instrument in question: see for example the same case at p. 869 per Lord Atkinson.

(7) In considering whether a grant or reservation of mines and minerals includes a specified substance, it is irrelevant that the parties did not actually have that substance in mind. The test of their intention is an objective one: see for example the Reardon-Smith case [1976] 1 WLR 989, 996 per Lord Wilberforce.

(8) With only a few exceptions, the cases cited deal with solid substances and not with liquid or fugacious substances, such as oil or natural gas. In considering the latter substances, cases which dealt with solid substances should be approached with some caution, because different considerations may apply, in particular relating to methods of working and the effects of working on adjacent land."

10. The judgment of Slade J was referred to with apparent approval by the Court of Appeal more recently in Coleman & Another v. Ibstock Brick Ltd [2008] EWCA Civ 73, at para [50]. Accordingly, I take the law and the general approach to be settled. Ultimately what I am doing is construing the terms of the 1922 conveyance. I have to construe that as I do any other contractual document in the light of the admissible surrounding circumstances and reach by objective ascertainment the presumed intention of the parties
11. Apart from the obviousness of the point, the significance of surrounding circumstances and commercial context is demonstrated by the Ibstock decision itself. That case raised the question of whether brickshale was within a reservation of mines and minerals which permitted only underground working. In upholding the first instance Judge's ruling that it was not, the Court of Appeal made the following comments in para [71]:

"The surrounding circumstances strongly support the judge's conclusion that the underground working restriction was a strong pointer against brickshale being a mineral for the purpose of the 1921 Conveyance. First, the existence of the Maltby Quarry, from which brickshale was being excavated by surface methods immediately adjacent to the Disposition Site, would have been well known to the parties to the 1921 Conveyance. Second, there were two coal mines in the area, and (as I have said) by 1921 it would have been common knowledge that there was at least a possibility, if not a probability, that the Barnsley seam ran, at depth, under the Disposition Site. Consequently it is a reasonable inference that the reservation and the underground working restriction together were intended to apply primarily (though not exclusively) to coal. Third, the then state of the law should be taken to have been known to the draftsman. Conveyancers of property in the area drafting minerals reservations would have been aware that the House of Lords had decided four cases between 1888 and 1911 in which it was held that ordinary clay was not a mineral but that clays with special properties were minerals. It is a reasonable inference that a draftsman intending to reserve common clay would have inserted an express reservation. Fourth, I consider that in these circumstances the notion that a stand-off was intended was as fanciful as the reliance on the 1923 Act in Waring v Foden."

12. It is apparent from Point 3 in Slade J's judgment in The Earl of Lonsdale's case that the starting point or, as he puts it, the first duty of the court, is to try to ascertain what the phrase that I am called upon to construe meant in the vernacular of the mining world, the commercial world and landowners at the time of the grant, that test being derived from the judgment of James LJ in Hext v. Gill, LR 7 Ch 699-719. The phrase that I am called upon to construe here is the phrase "All manorial rights and all mines and minerals in or under the land hereby conveyed".
13. Was Keuper Marl in 1922 regarded in the vernacular as a mineral? Unsurprisingly there is no one left around from 1922 who has been called to give evidence who can shed light on that issue. I have heard from two distinguished experts in the mining surveyors field – Mr Deakin for the claimants and Mr Barry for the defendants. They both – although in Mr Deakin's case with one significant reservation – appeared to accept that the mining world, the commercial world and landowners at the time of the grant regarded Keuper Marl in the vernacular as a mineral. In one sense it must be a mineral in the vernacular sense if one treats everything which is neither animal nor vegetable as being mineral. However, it is clear on the authorities that that is not itself an appropriate approach to construction. In 1922, there were established authorities holding that ordinary clay was not a mineral, and this important point led Mr Deakin to make the qualification I have mentioned.
14. Mr Barry collects together a number of necessarily fragmented items of evidence in order to establish what he claims was the vernacular sense of minerals at the time to demonstrate that clay generally speaking was within in. He refers to various papers and a textbook in the surveyors field, but these are inconclusive as some of the texts themselves reflect the fact, as Mr Deakin himself observed in the joint report, that there had been decided cases which demonstrated that clay was not, in the absence of some special quality, to be regarded as a mineral. Mr Barry also refers to isolated documents, namely, a form issued by the Mines Department in which clay was treated as a mineral, an abstract of a title from 1909 and an agreement for lease of 1921 supporting his point. I do not find these fragmented examples helpful in dealing with the vernacular and I am not satisfied on the evidence, despite the apparent concurrence of these of the experts, that there was any clear vernacular meaning in 1922. The experts' views are entitled to respect, but I doubt whether, on this issue, their views are strictly admissible evidence of opinion because the experts are experts in the field of mining and not in the field of linguistics or semantics. Against their approach must also be set the significant fact that the landowner (not the minerals owner) worked the Keuper Marl openly and without objection from (at the latest) 1937. I cannot of course rely upon that conduct as an aid to construction, though it is some evidence going to the factual issue: was Keuper Marl regarded in the vernacular as a mineral in 1922? There is no evidence of any relevant change in the vernacular meaning between 1922 and 1937.
15. The defendants point to two other conveyances in the trial bundle. One, a conveyance of 18^th August 1897, is expressly concerned with mining at a depth below the surface of five hundred yards and therefore is of no relevance to the present case, though I note that on the evidence one might find at that depth other forms of clay with special qualities such as fire clay, which could more readily be regarded as falling within the vernacular meaning of minerals. Reference is also made to a conveyance of 17^th August 1927 concerning adjoining land, which permitted extraction of minerals by underground workings only. That is of limited, if any, assistance in the present case. It was referred to because there was a special exclusion of clay from the terms of the exceptions and reservation. That is hardly surprising as the land itself was the land upon which there was an existing clay pit and brickworks, and I can well see that the purchasers' solicitors would be concerned, whatever the meaning generally, expressly to exclude that. I do not consider those examples therefore as being determinative of or especially helpful in relation to the present issue.
16. Turning then to the particular terms of the exception in this case, I have reached the view that the expression 'manorial rights and all mines and minerals' does not include the Keuper Marl which was present in the ground in 1922 and does not include such Keuper Marl as remains today. I reach that conclusion for the following reasons. On the evidence the whole of the hundred acres of land consisted of Keuper Marl. All of the Keuper Marl might have been removed (albeit over time) leaving bare rock of great depth and rendering the rest of the land useless. Moreover, even if all of it was not removed, its extraction involved destruction of the surface and to the extent that the person working the Keuper Marl underneath chose to leave it there, what would remain would still be Keuper Marl and (on the defendants' case) a mineral belonging to them as owner of the minerals under the exception. The land would be rendered quite useless for any purpose of the landowner. As it happens, the land in 1936 (and, I infer, in 1922) was a farm. It is so described in the 1936 conveyance, where the vendor is unsurprisingly described as a farmer.
17. It seems to me that for a mere exception to have the potential of depriving the land of all its utility comes close to (if not actually) being void for repugnancy and is in any event a strong reason for construing the exception in a more limited way. This conclusion seems to me to be supported by the approach of the Court of Appeal in Waring v Foden [1932] 1 Ch 276, where Lawrence LJ (whom I am reminded I must not regard as the draftsman of a statute) at p. 294 said this: "The word 'minerals' when found in a reservation out of a grant of land means substances exceptional in use, in value and in character … and does not mean the ordinary soil of the district which, if reserved, would practically swallow up the grant". I heard a great deal of evidence as to whether or not the Keuper Marl in this case is exceptional in use, in value and in character. Clearly it had some potential value, but there was nothing exceptional in relation to the district as a whole. The proximity of the land in question to the adjoining brickworks and the Coventry road may be a slight pointer in the defendants' favour. Nevertheless, to construe the exception as including the Keuper Marl would practically swallow up the grant. That is reason alone, so it seems to me, for inclining against the construction which is urged on me by the defendants.
18. Furthermore, the consequences urged upon me by the defendants of construing the document in their favour would include the result that there would remain within the ownership of the landowner, after the extraction of the keuper marl, an additional thirty-centimetre strip of thin air being the space represented by the former topsoil. The space replacing the former Keuper Marl below the topsoil would remain, it is said, in the defendants' ownership for the simple reason that that space represents what was formerly theirs. Therefore the defendants could do with the void exactly what they wanted with it and would have implied rights of access for that purpose. It is impossible to get any of that from the terms of the grant and exception itself and it strikes me as such a surprising result that I would not attribute that intention to any sensibly minded parties.
19. Moreover, a close consideration of the working powers under the grant, another relevant feature highlighted by Slade J in the authority to which I have referred is against the defendants' contentions. The working powers are as follows: "With all such rights liberties and powers as may be necessary for winning working carrying away and disposing of the same with power to let down the surface thereof on condition of paying for all damage caused by such letting down to the buildings existing and erected thereon …"
20. The first point to be noted is that the powers which are referred to are the powers necessary for winning, working, carrying away and disposing of the minerals. The draftsman did not contemplate, once those minerals were disposed of, that any further powers over the claimants' predecessors' land would be appropriate for the purpose of tending to and nurturing the remaining void. They would have to be implied, a difficult process where the draftsman has turned his mind to express powers.
21. The second point is that the language of letting down the surface and the provision for paying compensation only for the existing buildings and not for damage to the land itself is language appropriate, in my judgment, to the concept of underground workings. It assumes that the surface will remain, albeit that it will be let down. It is thus a reference to mining subsidence. I do not think it is appropriate to regard the solid Keuper Marl that would remain after excavation of the usable clay as being the equivalent of the landowners' surface, that is to say, the former topsoil. It is not. If the defendants are right and the Keuper Marl is a mineral, it would remain a mineral and therefore be the defendants'. The surface would not, on this hypothesis, be let down but destroyed.
22. In my judgment, if a grantor wishes by an exception and reservation to stipulate for the destruction of the grantee's land, much clearer words are needed to achieve that result. This was, I think, fairly well known in 1922 because it was referred to in a standard publication, MacSwinney's Law of Mines, Quarries and Minerals, the fourth edition for which was published in 1912, and reads as follows: "Where mines are severed from the overlying surface by a grant of the land excepting the mines, if the process of digging and getting the minerals would, as in the case of quarrying, necessarily be destructive of, or seriously, continuously and permanently injurious to the surface, the mine owner cannot prima facie work or win the minerals. And where the severance is effected by a grant of the land, excepting the surface, the same principle would, it would seem, prima facie, apply … The prima facie presumption will not, moreover be rebutted, unless by the language of a perfectly clear and unambiguous kind in the instrument of severance." See also on this point Waring v Foden (to which I have already referred) at page 292.
23. In my judgment, only by the clearest words can the owner of mines and minerals under an exception and reservation reserve to himself the right to destroy the surface of the land conveyed and thereby exclude the owner. Those words are not present in the present case and the reason they are not present is because, in my judgment, the parties never contemplated that the Keuper Marl was a mineral within the meaning of the 1922 conveyance. What the parties must primarily have had in mind was coal and the hope that the Warwickshire coalfield would be found to extend at a workable and recoverable depth beneath this land.
24. I accordingly hold that Keuper Marl is not within the exception of mines and minerals in the 1922 Conveyance.
25. In those circumstances it is accepted that the void also belongs to the claimant and that the question of the working of the void by the defendants does not arise. I shall therefore make an appropriate declaration to give effect to this judgment when Counsel have had an opportunity to consider it. I do not know whether the solicitors present wish to make observations today or whether they wish me to arrange a telephone hearing with Counsel as was suggested yesterday.