Cleveland Potash Limited v The Honourable Mrs Ferelith Drummond & Ors

A reservation of mines, beds and quarries of ironstone, iron ore and “other metals” may extend to minerals which are sources of metallic elements, including compounds rather than metals in their native state. Construction is objective and depends on the language, the commercial purpose, the relevant vernacular, and the surrounding circumstances at the date of the conveyance.

Commercial exploitation need not have been immediate, local or independently profitable. It is sufficient that the substance was recognised as capable of extraction for profit, including as a commercially worthwhile by-product. The canons of ejusdem generis and contra proferentem provided no basis for a narrower construction.

The applicant owned and operated Boulby Mine and owned four parcels of land in North Yorkshire. The land had been conveyed in 1946 and 1947 subject to a reservation of “the mines beds and quarries of ironstone and iron ore and other metals”, together with extensive mining rights.

The applicant sought declarations concerning ownership of potash, rock salt and related underground rights. The first respondent claimed that those interests had been reserved to her predecessor in title. The Secretary of State was named as referee following an application under the Mines (Working Facilities and Support) Act 1966, but took no part in the trial.

The preliminary issue was whether “other metals” included potash and salt, having regard to contractual interpretation, vernacular usage, commercial viability and the surrounding circumstances.

The claim was determined in favour of the first respondent.

1. Applicable construction. The reservation was a contractual instrument. Its meaning was to be determined objectively by considering the language chosen, the instrument as a whole, the commercial background and purpose, and the circumstances known at the date of the conveyance. The approach in Investors in Industry v West Bromwich Building Society [1998] 1 WLR 896 and Wood v Capita Insurance [2017] UKSC 24 was applied.
2. Vernacular and context. Following Earl of Lonsdale v Attorney General [1982] 1 WLR and Wynne-Finch v Natural Resources Body for Wales [2021] EWCA Civ 1473, “other metals” was not treated as a fixed technical expression. There was no conclusive direct evidence of a vernacular meaning, so the court drew inferences from the language and factual matrix.
3. Meaning of “other metals”. The phrase did not mean every substance containing metal, nor metals in their native state. In context it meant minerals which were a source of metallic elements. The extensive working rights and the commercial background of the vendor supported a broad reservation of mining rights.
4. Commercial viability. A mineral need not have been known to exist beneath the particular land, immediately exploitable, locally exploited or independently profitable. Potash was recognised in 1946 as a commercially viable resource, and the possibility of extraction in the area was known. Rock salt was commercially extracted and could be obtained profitably as a by-product. Both therefore qualified as minerals.
5. Canons of construction. Ejusdem generis was only a limited pointer and did not support the applicant’s restrictive construction. Contra proferentem was unnecessary because the ordinary principles resolved the ambiguity.
6. The reservation covered potash and rock salt in areas B, C, Q and V. The first respondent owned, or had an interest in, the existing mines, beds and quarries and related rights and easements.