Easement for laying and maintenance of gas pipeline — Deed incorporating provisions of 1923 Mining Code as enacted in sections 78 to 85 of the Railway Clause Consolidation Act 1854 — Compensation for leaving specified minerals unworked in servient tenement — Whether compensation includes loss of profits from loss of landfilling opportunity — Appeal dismissed
The defendant owned the freehold of land that was used as a quarry. In 1971, its predecessor in title had granted an easement to the claimant’s predecessor in title to lay, maintain and use a gas transmission main and ancillary apparatus across the land. The deed granting the easement also contained covenants by the landowner to refrain from damaging, obstructing access to, or, building upon, the relevant parts of the land. Clause 6 provided for the payment of compensation by the holder of the easement in the event that the landowner obtained planning permission for “building operations” but which it was prevented from carrying out because of those covenants. Clause 7 of the deed incorporated the provisions substituted for sections 78 to 85 of the Railway Clause Consolidation Act 1854 by the Mines (Working Facilities and Support) Act 1923 (the 1923 Mining Code), which related to the payment of compensation to the landowner in the event that it was obliged to refrain from working minerals lying under the protected area. Such compensation was payable under section 78(4) in respect of “the loss caused by the specified minerals being left unworked.”
The defendant obtained planning permission for the extraction of sand and gravel on the site and the subsequent deposit of landfill waste. The claimant required that the defendant leave certain areas unworked on the ground that the working of them would be likely to damage parts of the gas pipeline. The question of compensation was referred to arbitration, where the issue arose as to whether a loss arising from the defendant’s inability to use land for the purposes of landfill was a recoverable head of loss or subject to compensation under clause 7 of the deed. The arbitrator answered that question in favour of the defendant, and the claimant appealed. It contended that: (i) if loss of a landfilling opportunity had been intended to be compensated, it would have been included in clause 6, which was the clause dealing with lost development value; (ii) the 1923 Mining Code was itself a contract, being an agreement between the railway companies and the collieries of England and Wales, and landfilling had not been contemplated by the parties to it; and (iii) the compensation envisaged by the code was confined to the value of the minerals left unworked, and therefore did not cover landfill.
Held: The appeal was dismissed.
Although the 1923 Mining Code was the result of a compromise agreement between the relevant parties, the material incorporated into the deed was part of a statute. The deed was not a contract that incorporated another contract and the issue, therefore, was what was in the contemplation of the parties to the deed at the time of the deed, not what was contemplated by the parties to the 1923 compromise agreement. Landfill of sand and gravel pits had been a known activity at the time the deed was executed.
Moreover, the wording of the statutory provisions fell to be construed objectively by reference to the wording used, and if that wording was to include loss of profit resulting from the loss of landfilling profit, then there was no reason why effect should not be given to those words, even if the draftsman of the statute had not had any head of loss in mind resulting from use of void spaces following the extraction of specified minerals: BA Collieries v London & North Eastern Railway Co [1944] Ch 243 (CA); [1945] AC 143 (HL) applied. As a matter of construction, the words “loss caused by the specified minerals being left unworked” in section 78(4) were wide enough to cover such loss. There were no words of restriction save those relating to causation, and compensation was not limited to the value of the specified minerals. The arbitrator had rightly concluded that compensation was payable to the mine owner for any loss sustained by being compelled to leave the specified minerals in the grounds. There was scope for compensation for heads of loss that related not just to the minerals that could not be worked, but also to other consequences that might follow the prevention of such working.
There was nothing in clause 6 that would preclude recovery of compensation under clause 7 for loss of profit resulting from loss of a landfilling opportunity. Clause 6 was concerned essentially with development where building was the main purpose, while clause 7 dealt with mining operations.
Martin Kingston QC and Richard Kimblin (instructed by National Grid Legal Services) appeared for the claimant; Jonathan Gaunt QC and Matthew Reed (instructed by the legal department of Lafarge Aggregates Ltd) appeared for the defendant.
Sally Dobson, barrister
