Reservation of Stone and Mineral Rights Challenged

Court of Appeal recently upheld the High Court’s decision concerning the ownership and exploitation of mudstone. It held that whilst "mudstone" was a stone (and mines and minerals reservations may refer to "stone"), it was not sufficiently valuable to justify it being within the definition of mines or minerals reserved to a Seller in a conveyance.

The case gained significant notice as many believe that the High Court’s decision had knocked the bottom out of traditional law and practice in relation to mineral reservations by concluding that at no point did the Claimants’ title extend to ownership of mudstone or any form of sandstone found in the sub-surface of the Defendants Land.

The case centred on the Wynnstay Estate in Wales who had sold off certain parcels of the Estate in 1919 while reserving the mines and minerals back to the Estate. For decades, the Estate had been digging up ‘mudstone’ (a material with limited uses and of low value) beneath the thin layer of topsoil and using the material to build roads, forestry tracks and foundations for wind turbines and telecommunication masts.

The court needed to answer whether the mudstone had been separated from the Estate’s title. To do so, the Court divided the land sold by the Estate into various titles and then placed each title into one of three categories.

  • Category A
  • Category C
  • Category D

Category A contained an express exception and reservation in favour of the Estate of "All mines … and all other metals stone and minerals". The Court of Appeal confirmed the High Court’s decision that this wording did not incorporate mudstone. It was noted that the word "stone" was bookended by the phrases "mines" and "minerals" and therefore it was correct for the High Court judge to interpret it in the context of the authorities on "mines and minerals". "Stone" could not be interpreted in isolation.

Category D related to titles affected by an 1816 Enclosures Act. This reserved "any mines, ores, coals, metals or minerals whatsoever". The Court of Appeal upheld the High Court’s decision, highlighting the critical point was that the 1816 Act would not include mudstone because of its ubiquity and lack of commercial value.

The appeal was similarly quashed in respect of the Category C titles, which had been subject to contractual enclosure agreements which reserved "all mines, minerals, stone, and other substrata …". The Court of Appeal found that the Estate title was barred as to sub-surface strata, even though their predecessors had allowed that those strata should be excepted to a third party.

For further information on reservations of mineral rights contact Frank Smith & Co Solicitors on 01242 801748 or www.franksmithandco.com

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