In Bocardo SA v Star Energy Onshore Ltd [2010] UKSC 35; [2010] 31 EG 63 (CS), the Supreme Court had to decide whether the legal maxim that landowners own everything up to the heavens above and to the centre of the earth beneath is part of English law. In particular, it was asked to consider how deep property rights extend, and what damages were payable for trespass where the trespasser would have been entitled to exercise compulsory purchase powers to acquire rights to install pipelines to enable it to extract oil from substrata deep below the earth’s surface.
The Supreme Court held that the legal maxim is an imperfect guide because it does not apply above the notional height at which landowners’ usable rights stop. In addition, statutory provisions govern the ownership of certain natural resources and other items found in the ground; for example, gold, silver, oil and gas belong to the Crown, not to the owner of the land in which they are found. None the less, the court held that the owner of the surface of land does own the strata beneath (as well as the minerals that are to be found there, unless they have been transferred to another party, either voluntarily or by the operation of the law).
The court accepted the need for a stopping point at which physical features, such as pressure and temperature, render the concept of ownership absurd. However, the pipelines in Bocardo, which extend from around 800ft to 2,800ft below the surface, were not that deep. Consequently, the landowner was entitled to damages, even though the trespasser’s actions had not adversely affected its use or enjoyment of the land through which the pipelines passed.
The landowner argued that it was in the same position as the owner of a ransom strip and that without the requisite wayleaves the oil was “earth-locked”. It asked the court to calculate damages on the basis of a share of the value of the oil that was being transported through its land.
By a majority decision, the court held that damages should be assessed by reference to the principles that apply in compulsory purchase cases because the trespasser could have exercised compulsory purchase powers to acquire wayleaves for the pipelines. In particular, Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 establishes that, where special value exists only for the particular purchaser with compulsory purchase powers, it cannot be taken into consideration in fixing the price because this would allow the particular purpose or scheme for which land or rights are being compulsorily acquired to enhance their value. Consequently, the landowner was entitled to £1,000 damages.
Although the oil and gas industries will welcome the decision, it means that different rules apply to the ownership of the airspace above and the subsurface below land. It will be interesting to see what implications, if any, this will have for businesses involved in developing heat mining, carbon capture, storage and sequestration technologies to reduce greenhouse gas emissions, which all require access to large subsurface areas.
Allyson Colby is a property law consultant
