A reservation of mine and minerals must be interpreted by considering the language used and the wider context in which it was made.
The High Court has considered the meaning of such a reservation in Cleveland Potash Ltd and another v Drummond and others [2024] EWHC 1292 (Ch).
The case concerned the ownership and exploitation of four parcels of land of around 350 acres in North Yorkshire close to the North Sea coast between Saltburn and Whitby conveyed in December 1946 and January 1947.
All were subject to a reservation in favour of the first respondent’s father and his successors in title of “the mines beds and quarries of ironstone and iron ore and other metals within or under the property” with wide rights of extraction.
The applicant owned and operated Boulby Mine in the same locality and the freehold of the four parcels. It claimed ownership of the tunnels and beds of potash and salt in the parcels – which it had extracted between 1973 and 2018 – because they did not fall within the reservation. It sought a declaration to that effect. The first respondent claimed ownership through her father.
It was common ground that the court’s task was to ascertain the objective meaning of the language used by the parties, considering the contract as a whole, at the date it was made Wood v Capita Insurance [2017] UKSC 24.
The phrase “mines and minerals” is not a definite term but is capable of bearing a wide range of meaning. Unless the meaning is clear from the instrument itself the court must ascertain what the phrase meant in the vernacular of the “mining world, the commercial world and landowners at the time of the grant”, Earl of Lonsdale v Attorney General [1982] 1 WLR.
The court preferred the first respondent’s case that potash was recognised by the mining, commercial and landowning world as a commercially viable mineral resource in 1946, and the possibility for extraction in the area was also known. While the experts debated the meaning of “metals” they agreed that iron, sodium and potassium are metals and metallic elements.
The court concluded that there was no direct evidence of a vernacular meaning for the reservation which was not a standard wording. Taking account of the language used and the factual context the parties’ objective intention was, as the first respondent contended, that the sale was subject to a wide reservation for all minerals which are a source of metal which included both potash and salt.
Louise Clark is a property law consultant and mediator
