A conveyancing hazard for the development of land

Landowners used to be relatively unconcerned by the fact that mines and minerals below their land were excepted and reserved from their title. But a divergence between the ownership of the surface of land and of the mines and minerals beneath can cause serious problems for developers. ARC Aggregates Ltd v Branston Properties Ltd [2020] EWHC 1976 (Ch) concerned land in Burton-on-Trent once owned by ARC, a building materials company, but now owned by a company that had begun development work. ARC claimed that the developer’s excavations had encroached on the mines and minerals below the surface of the land and that the developer had removed some of them from the site. It sought a declaration that it was the freehold owner of the mines and minerals and an injunction to restrain any further trespass, or damages in lieu, together with an award of damages for the trespass and conversion that had already occurred. The case turned on to whom the mines and minerals belonged. Did ARC own them, or did it have incorporeal rights – ie an easement, right or privilege – over them? The parties agreed that any encroachment would constitute a trespass if ARC owned the mines and minerals in fee simple. But the developer argued that the construction of foundations for its development would not constitute a trespass if ARC’s rights were only incorporeal. What then was the meaning and effect of provisions in a 1988 transfer “excepting and reserving” all quasi-easements or rights or privileges out of the land, as well as “all mines minerals and mineral substances lying beneath the surface… at a depth below the lowest level of past excavation… but without the right to work or get the said minerals or mineral substances”. A transfer of the remainder of the development site in 1989 contained similar, but not identical, provisions. The court explained that, if a transferor wishes to retain an interest in mines and minerals beneath the surface of land, it can do so in one of two ways. It can “except” the mines and minerals from the transfer altogether, so that they are not conveyed at all. In that case, the transferor retains an estate in fee simple in them. Alternatively, it can “reserve” an incorporeal right in the mines and minerals by way of a profit à prendre. So there is an important difference between an “exception” and a “reservation”, when those words are used in a transfer of land – although the meaning of words used has to be gleaned from the parties’ agreement as a whole. The judge considered that the “quasi-easements or rights or privileges” were reservations for the benefit of ARC’s retained land. But the mines and minerals had been excepted from the transfer altogether – not least because the exclusion of the right to work them pointed strongly towards the conclusion that the parties did not intend to create an incorporeal right in the form of a profit à prendre. A “profit” is, after all, a right to take something from another’s land, and the provisions of the transfer expressly prohibited ARC from doing the very thing that a profit would have permitted it to do. Consequently, the judge granted summary judgment in favour of ARC on its claim for a declaration that it was the freehold owner of the mines and minerals below the surface of the land. Allyson Colby, property law consultant