Reservation of ‘other metals’ includes potash and rock salt

Louise Clark digs into the detail of a key mines and minerals decision. Key points There is no one meaning of the phrase “mines and minerals” The key is what the worlds of mining, commerce and landowning would understand the phrase to mean at the date of grant In Cleveland Potash Ltd and another v Drummond and others [2024] EWHC 1292 (Ch), the High Court has determined as a preliminary issue the meaning of a reservation of mines and minerals by considering the language used and the wider context in which it was made. The background 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. Three were conveyed as farmland on 9 December 1946 and the fourth on 16 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, whether underground or on the surface. The area of North Yorkshire surrounding the parcels of land had a rich history of mining and commercial activity. There was extensive mining for ironstone – used for producing iron – between 1860 and 1934 in mines run by the first respondent’s family. The applicant owned and operated Boulby Mine in the same locality and the freehold of the four parcels. Between 1973 and 2018, the applicant had mined for evaporite minerals – including polyhalite, gypsum and potash – used for fertilisers, with rock salt as a by-product. Since 2018, the applicant had been extracting polyhalite offshore. It needed the underground tunnels, including those under the four parcels, to continue to do so. It claimed ownership of the tunnels and beds of potash and salt in the parcels, arguing they did not fall within the reservation and sought a declaration to that effect. The first respondent claimed ownership through her father. The law It was common ground that the court’s task was to ascertain the objective meaning of the language used by the parties, considering the conveyances as a whole, at the date they were made (Wood v Capita Insurance Services Ltd [2017] UKSC 24). The central question was whether potash and salt fell within the wording of the reservation. The phrase “mines and minerals” is not a definite term but is capable of bearing a wide range of meanings. Unless the meaning is clear from the instrument itself, the court must ascertain what the phrase means 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 common link between those groups is that they are persons who may be expected to have both knowledge of mines and minerals and some experience of dealing with them in the course of commerce. The meaning may be determined by direct evidence, which is rare, or by inferences drawn by the court. It is irrelevant that the parties may not have had a particular substance in mind. The authorities demonstrate that this type of reservation is not generally entered into for the purpose of immediate commercial exploitation of minerals but to preserve mining rights where land is being sold for other purposes, such as farming. The experts The parties’ experts debated the meaning of “metals” but agreed that iron, sodium and potassium are metals and metallic elements and that soluble potassium salts were first discovered in the area in 1938-1939. ICI had reported to the government on potassium minerals in the area in 1943 and its findings were in the public domain from 1945. The reserved working rights – to sink shafts and pits – reflected mining practices at the time but would cover many different types of mining. The arguments The first respondent maintained that, in 1946, potash and salt was commercially extracted and the parties would have been aware of this even if it had not yet been mined in the UK. The mining, commercial and landowning world would have understood “other metals” to be a reference to minerals that yielded a metal of some utility, which would have included natural sources of potassium – used in industry and agriculture – and sodium. The auction particulars prior to the conveyances and the comprehensive nature of the reservation as to the facilities for mining that were reserved reflected the vendor’s intention to secure its position as to the future exploitation of the land. The applicant argued that evaporite minerals such as potash and rock salt were not regarded as metalliferous metals in the vernacular of the mining, commercial and landholding world, either in 1946 or now. Extraction of a mineral outside England would not be sufficient to establish relevant vernacular understanding of its commercial potential. While “other metals” had a wider meaning than metals in their native state, it only captured metalliferous minerals or ores extracted to produce other metals with typical metallic qualities, such as tin, copper or lead. The decision The court preferred the first respondent’s case that, in 1946, potash was recognised as a commercially viable mineral resource, and the possibility for extraction in the area was also known. 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 that the sale was subject to a wide reservation for all minerals that were a source of metal, which included both potash and salt. Louise Clark is a property law consultant and mediator Image © Stephan Hinni/Unsplash