England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR RICHARD SHELDON QC
Sitting as a Deputy Judge of the High Court
HC0SC02264

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/02/2008

Lord Justice Lawrence Collins:

I Introduction

1. In 1921 Mrs Jane Coleman sold her 196-acre farm, Lilly Hall Farm, near Maltby, South Yorkshire to Mr Daniel Hobkinson, a wholesale fruit and potato salesman, by a conveyance dated March 24, 1921 ("the 1921 Conveyance"). The 1921 Conveyance was subject to an exception and reservation of minerals in these terms:

"…..EXCEPT AND RESERVING unto the Vendor her heirs and assigns the mines beds and seams of coal and ironstone and other metals and minerals within and under the hereditaments hereby conveyed with all necessary and proper powers rights and easements for searching for winning working getting and carrying away the same by underground workings only including the power to let down the surface whether built upon or not But so nevertheless that proper compensation shall be paid to the Purchaser or other owner for the time being of the surface in respect of any damage to the surface or to any buildings thereon by reason of the exercise of the powers and right hereby reserved as aforesaid and the amount of such compensation in case of dispute shall be settled by the arbitration of two Arbitrators or their Umpire pursuant to the provisions of the Arbitration Act 1889 or any statutory modification thereof ..."

2. The appellants are the successors in title to the late Mrs Coleman, and they claim that they are entitled to the ironstone, fireclay, brickshale and clay at the site, and of the airspace created by the extraction of these materials. The area of the farm land conveyed was described in the judgment as the "Disposition Site."
3. The respondents, Ibstock Brick Ltd, are the registered proprietors of land, part of which comprises part of the Disposition Site. That land had earlier been acquired by the Maltby Metallic Brick Company Ltd ("MMB") which had operated, since its formation in 1909, a quarry and brick works on land it owned adjacent to the Disposition Site. The brick works closed in 1996. Prior to that date and until at least 2000, surface extraction had encroached on to land which is subject to the 1921 Exception.
4. The land comprised in the respondents' title which is also subject to the 1921 Exception was referred to as the Disputed Site. The respondents use the Disputed Site for stocking brick shales.
5. It is not suggested that the appellants wish to extract from the land the substances in dispute on this appeal, and for reasons which will appear they could not do so without a further agreement with the respondents. But this court was told that the site has potential value as a landfill site, and the appellants' rights have a ransom value if they can establish them.
6. In 1921 there were collieries in the area. Maltby colliery and Thurcroft colliery came into production in 1911 and 1912 respectively. One of the seams being exploited by deep mining methods was the Barnsley seam. By 1921 (as the judge held) it would have been common knowledge that there was at least a possibility, if not a probability, that the Barnsley seam ran, at depth, under the Disposition Site.
7. Much of the area of the Disposition Site and the land on which the respondents operate lies above carboniferous strata, which comprise Upper Coal Measures. The substances which are in issue in the present case and which fall within the Disputed Site form part of the Upper Coal Measures.

II The problem

8. The issue which was before Mr Richard Sheldon QC (sitting as a Deputy Judge in the Chancery Division) on a number of preliminary issues was whether brickshale and what is described as fireclay in the wider sense are within the expression "other .. minerals" in the exception and reservation. In a very full and careful judgment handed down on March 29, 2007 the judge decided that they were not within the reservation. He refused permission to appeal. I heard a renewed application for permission to appeal (following a refusal on paper by Chadwick LJ), and adjourned the application on notice to the respondents, with the appeal to follow if permission were granted. .
9. The problem arises because, as Lord Macnaghten said in Lord Provost and Magistrates of Glasgow v Farie (1888) 13 App Cas 669, at 689, the word "minerals" in its widest signification probably means every inorganic substance forming part of the crust of the earth other than the layer of soil which sustains vegetable life. Since the nineteenth century the courts have endeavoured to give it a more restricted meaning so as to effectuate not only the intentions of the parties to instruments, but more importantly, to make effective the transfers of land to the railway companies for the building of railways. Compulsory transfers of land for track for the railways were subject to the exception by the Railways Clauses Consolidation Act 1845, section 77, from conveyances of land made under compulsory purchase "mines of coal, ironstone, slate or other minerals under any land purchased by them."
10. In particular, three factors relevant to this appeal have been regarded in the case-law as significant in construing a statutory or contractual reference to minerals: see especially Waring v Foden [1932] 1 Ch 276 (CA); Earl of Lonsdale v Att Gen [1982] 1 WLR 887 (Slade J) . The first is that unless the meaning is clear on the face of the legislation or the instrument, the first duty of the court in construing a grant of mines and minerals is to try to ascertain what the phrase meant in the vernacular of the mining world, the commercial world and landowners at the time of the grant. The second is whether the substance in question is exceptional in use, in value and in character and not the ordinary soil of the district which if reserved would practically swallow up the grant. The third factor is whether there are any express powers of working, or limitations on powers of working, which shed light on whether the substance in question was intended to be included in the reservation.
11. The issues before the judge and this court concerned the application and scope of these pointers.
12. Expert evidence was adduced by the appellants at the trial from Mr Ian Thomas, who is a geologist with particular expertise in extractive industries, by the respondents from Mr Geoffrey Marsden, a mining surveyor with special knowledge of mining operations in South Yorkshire.
13. Ironstone is a term used to describe all sedimentary rocks where the concentration of iron exceeds 15%. It was specifically identified in the 1921 Exception.
14. Brickshale is a term which bore no specific geological meaning but which is, and was in the twentieth century, used colloquially to denote any clays which are used for, or potentially suitable for, the manufacture of bricks, tiles or the like. Fireclay is also used to make bricks and would therefore fall within the broad definition of brickshale. Consequently the judge referred to "brickshale" as any clays which are potentially suitable for or used to manufacture bricks, tiles or the like, other than fireclay.
15. It was common ground that the term fireclay was originally used in a narrow sense to mean clays which were rich in kaolinite and had particularly strong refractory qualities.
16. Mr Thomas, the expert for the appellants, accepted that that was the original meaning of the term fireclay ("fireclay in the narrow sense"), but said that its meaning over time had changed to include all brick making clays, irrespective of their refractory qualities, which had economical potential on account of particular ceramic qualities, and in particular for making buff or cream coloured bricks ("fireclay in the wider sense"). Mr Marsden did not agree.

III The parties' contentions and the judge's findings

17. At trial the appellants said that by the 1921 Conveyance, Mrs Coleman intended to reserve to herself all substances which might be extracted for profit, including the types of substances which were being abstracted from the adjoining land. The substances in issue (other than ironstone which is specifically identified in the 1921 Exception) would have been regarded as "minerals" according to vernacular usage and were substances of exceptional character. The powers of working given by the 1921 Exception were limited to underground methods so as to enable the purchaser (who was a wholesaler in fruit and potatoes) in the 1921 Conveyance to continue working a farm without interruption. But such powers of working were not intended in any way to limit the width of the exception or reservation. If substances of value could only be abstracted by surface methods there would be a "stand-off" which would have to be resolved by negotiation between the purchaser and vendor to the 1921 Conveyance, or their heirs and assigns, a situation which (it was contended) was not unusual.
18. The respondents disputed that that the substances in issue were understood to be "minerals" according to vernacular usage and that they were of exceptional character. If Mrs Coleman had intended to reserve for herself the entitlement to the substances which were the subject of the adjacent quarrying works, she would have made provision for powers of abstraction; the powers granted were limited to underground workings only and it could not have been contemplated that she retained an entitlement to substances which could only be abstracted by surface methods; and that the stand-off situation suggested by the appellants was commercially unrealistic.

Vernacular meaning

19. The judge found that the materials adduced by the appellants (including lists of quarries, various materials produced by or in connection with bodies concerned with mineral resources or planning, the memorandum and articles of MMB, conveyances of nearby land) lent little support to the appellants' case that brickshale was regarded as a mineral in the vernacular sense. Taking into account all the evidence, the vernacular meaning of "mineral" at the relevant time was far from clear. Consequently, vernacular meaning was of no assistance in determining whether brickshale was within the expression "other … minerals". The appellants do not challenge this finding.
20. As regards fireclay, it was common ground that fireclay in the narrow sense would have qualified as a mineral in the vernacular of the mining world, landowners and commercial world in 1921. But the judge rejected the appellants' argument that fireclay in the wider sense would also have been so regarded as a mineral. It would have been regarded in the same way as brickshale in the vernacular of the mining world, commercial world and landowners in 1921. Fireclay in the wider sense only became the vernacular usage well after 1921.
21. The appellants had relied principally on the report on fireclays published by the Geological Survey of Great Britain in 1920 entitled: "Special Reports on the Mineral Resources of Great Britain Vol XIV Refractory Materials: fireclays". But the judge found that the report gave no specific definition for fireclay, and referred to "the difficulty in drawing a line between good fireclays employed for higher refractory purposes and others, good of their kind, used only for sanitary ware or for less refractory purposes. Further, there are areas in which the only fireclays known are of comparatively low grade". That indicated that the definition of fireclay, at least as regards geologists, may not have been clear, but it fell well short of the wider sense of the term suggested by Mr Thomas which was based principally on documentation published in 1982 and thereafter.

Exceptionality

22. The judge applied Waring v Foden [1932] 1 Ch 276, at p 294, where Lawrence LJ said: "The word 'minerals' when found in a reservation out of a grant of land means substances exceptional in use, in value and in character… and does not mean the ordinary soil of the district."
23. The judge said that, whilst far from conclusive, at least in a geological sense, the pointer of "soil of the district" lent some support to the appellants' case. The unusual feature of the case was that the substances in question formed clearly identifiable seams in the strata which could easily be distinguished from the surface soil and subsoil.
24. It was clear from the evidence that coal, ironstone and fireclay (in the narrow sense) could not be regarded as part of the soil of the district. The position of brickshale was less clear since the soil and subsoil of the site appeared largely to have comprised clays formed by the weathering of brickshale. But the respondents' expert, Mr Marsden, accepted that brickshale was not the soil of the area.
25. Fireclay in the narrow sense was a substance of exceptional value, use and character. Brickshale did not form part of the soil or subsoil of the district in a geological sense. Whilst it had value, the brickshale in the Disputed Site was not as exceptional in character and value as other well recognised minerals associated with the Upper Coal Measures (such as coal and fireclay) and was typical of brickshale generally found in the Upper Coal Measures in the locality (where there were a number of other brick or clay pits).

Powers of working

26. The judge's findings were as follows. The evidence showed that in 1921 fireclay (in the narrow sense) was commonly worked by underground methods often in association with coal extraction. Ironstone, as well as fireclay in the narrow sense, was being extracted on a commercial basis by underground methods in about 1921.
27. But the experts agreed that brickshale working had never taken place in the South Yorkshire area by underground methods except as a contaminant or by-product in association with coal mining. The position in reality and as would have appeared to a reasonable person in 1921 was that brickshale in the Upper Coal Measures of South Yorkshire was only capable of being extracted commercially by surface working and not by underground working.
28. A reasonable person in the position of the parties to the 1921 Conveyance would have contemplated that only those substances which were capable of being extracted commercially by underground methods could fall within the 1921 Exception. This strongly suggested that brickshale was never intended to have been excepted by the 1921 Exception.
29. As regards the "stand-off" it was clearly possible for parties to a transaction to intend to leave matters unresolved and be dealt with by subsequent negotiation. That might occur where the facts were insufficiently clear at the time of the transaction to resolve the position there and then. However, against the background facts the contention that the parties to the 1921 Conveyance deliberately negotiated a stand off arrangement in relation to brickshale which was known to be worked on adjacent land and likely to be found on or under land the subject of the conveyance was wholly unrealistic.
30. The conclusion, therefore, was that brickshale and fireclay in the wider sense were not "other … minerals."

IV The appeal

31. The appellants seek to challenge the judge's findings in three respects.
32. First, as regards exceptionality they say that the judge misinterpreted the question posed by Lawrence LJ in Waring v. Foden. Second, as regards powers of working they say that the judge wrongly rejected their contention that the fact that the power of working was limited to underground methods was in fact neutral and not a pointer against the appellants because it was evidence only of a "stand off." Third, they seek to challenge the judge's finding that fireclay in the wider sense was not in vernacular usage a mineral in 1921.

Exceptionality

33. In their written submissions the appellants argued that the test as formulated by Lawrence LJ identified the question of whether the substance in question is exceptional as being simply the converse of the question of whether it is part of the ordinary soil. In this case it was common ground that brickshale was not part of the ordinary soil. The judge's formulation of the test, if correct, would in practice restrict the meaning of "minerals" to minerals of particularly high value. That would be an unnatural restriction on the ordinary meaning of the word which would be wholly unwarranted.
34. At the hearing of the appeal Mr John McGhee QC, for the appellants, accepted that there was a separate test of exceptionality. The first question was what was the nature of the ordinary soil and subsoil, and the second question was whether the substance was exceptional in comparison with the ordinary soil and subsoil. The comparator was not other minerals. The brickshale was exceptional in comparison with the ordinary soil in its use and character and had value.
35. The respondents argued that the test formulated by Lawrence LJ was simply whether the substance was exceptional in use, in character or in value and that where a substance was part of the ordinary soil of the district it would not satisfy this test. But it did not follow that something which could not be so characterised would necessarily satisfy it.
36. If something was not the "common soil of the district", it did not follow that it was exceptional in use, in value and in character. The exceptional item may not be the typical soil type of the district, but certain qualities must be shown such as to make it exceptional in use, in value and in character. If the typical substances, which are not part of the common soil, do not have those additional characteristics, they would not be "minerals". Where the geology was complicated (as here) it might be true that a substance in issue could not be described as the common soil, where it was one of a number of other substances that were present. But that did not necessarily give that substance the characteristics of being exceptional in use in value and in character.
37. At the hearing Mr Jonathan Gaunt QC for the respondents argued that the ordinary "soil" of the district was not limited to the layer of topsoil, but included clay in substrata and rock: see North British Railways Co. v. Budhill Coal & Sandstone Co. [1910] AC 116, at 126. The comparator was the clay normally found in the district. Brickshale was ubiquitous.

Underground working

38. For the appellants it was said that the fact that the power of working was limited to underground methods was in fact neutral and not a pointer against the appellants on the basis that it was evidence only of a "stand off" i.e. a position whereby the ownership of the brickshale remained with the vendor and her successors but where she needed the agreement of the purchaser or his successors to extract it.
39. The judge failed to give any or any adequate weight to the fact that situations where there was a stand off of this nature were commonplace at the time of the 1921 conveyance. This occurred in particular in relation to the mining of copyhold land where the consent of both the copyholder, in whom the surface of the land was vested, and the Lord of Manor, in whom the minerals were vested, was required in order for minerals to be excavated: Inland Revenue Commissioners v. Joicey (No. 2) [1913] 2 KB 580 at 588, per Buckley LJ and the Mines (Working Facilities and Support) Act 1923 which was passed subsequently to remedy the position; Bell v. Wilson (1866) 1 Ch App 303 and Hext v. Gill (1872) LR 7 Ch App 699, where the minerals in question (freestone and china clay respectively) could in fact only be extracted by surface methods but where the exception in the conveyance was limited to underground working.
40. Given that the land sold was a farm it is natural that the parties wanted to limit the type of working so as to not to disturb the carrying on of that business by the purchaser. That was the clear commercial purpose of the provision limiting the power of working to underground methods. It does not follow that the vendor intended to convey to the purchaser the brickshale beneath the land, in circumstances where at the time of the conveyance brickshale was known to be worked on adjacent land and likely to be found under the land in question. It is much more likely that the vendor intended to reserve brickshale to herself. In this way she would prevent the purchaser from exploiting the brickshale himself in competition with neighbouring sites and would leave for future negotiation the question of future extraction by the vendor or her successors.
41. The judge also failed to recognise the inconsistency in his reasoning which this conclusion caused. He rejected the respondents' argument that only substances which could be abstracted by underground workings fell within the exception, since he recognised that the exception included coal near the surface which could not be removed by underground workings, and coal or ironstone the extraction of which would inevitably disturb the brickshale so that one could not be removed without the other. Accordingly the judge's own findings of fact created stand off situations in these respects.
42. For the respondents it was said that fireclay (in the narrow sense) and ironstone were extracted on a commercial basis by underground methods in about 1921. But brickshale was only capable of being extracted commercially by surface working and not by underground methods in 1921. In these circumstances and in light of the fact that the existence of the Maltby Quarry from which brickshale was being excavated by surface methods immediately adjacent to the Disposition Site would have been well known to the parties to the 1921 Conveyance, the judge was right to hold that the fact that the power of working was limited to underground working was a strong indication that the parties did not intend that brickshale or fire clay in the wider sense should fall within the reservation.
43. The notion that parties, whose land is next to an open clay quarry, intend by reserving minerals together with a right of underground working only (and compensation provisions applicable only to such working) to reserve minerals which were only to be got by surface working, is fanciful. There was no evidence that it was "commonplace" for parties deliberately to negotiate a standoff situation, albeit that situations where one party owned the minerals but have no working rights could arise in the case of copyhold land. It is also relevant that the parties were able to agree arbitration in the event of disputes about compensation payable for damage caused by underground working.

Fireclay – the vernacular meaning

44. The appellants say that the judge's conclusion was based on a wrong assessment of the evidence. The report on fireclays published by the Geological Survey of Great Britain in 1920 entitled "Special Reports on the Mineral Resources of Great Britain Vol XIV Refractory Materials: fireclays" made it clear that "fireclay" is used to mean not only those clays "employed for higher refractory purposes" but also those "used only for sanitary ware or for less refractory purposes" and in addition fireclays "of comparatively low grade".
45. The judge wrongly stated that the focus of the 1920 report is "on the refractory qualities of fireclay although perhaps of lesser refractory qualities". As the reference to sanitary ware and to fireclays of comparatively low grade makes clear, that is plainly not the case. The judge ignored the conclusion of Mr. Thomas, the applicant's expert, that it appeared that the government was in no doubt in 1920 that "fireclay" even in this widest usage, was a mineral and sufficiently important and exceptional to justify a national audit of the available resources.
46. The respondents' short answer is that the judge was entitled to come to his conclusion and that he did not misunderstand the evidence.

VI Conclusions

The approach to construction

47. In Symington v Caledonian Ry Co [1912] AC 87 (a decision on the Railways Clauses Consolidation (Scotland) Act 1845) Lord Loreburn LC said (at 92-93) that whether freestone was a mineral within the meaning of the Act was a question of fact: "Now how the question whether freestone or any other kind of stone or substance which might be found in the soil is or is not a mineral within the statute can be treated satisfactorily as a matter of law really passes my understanding." In Waring v Foden [1932] 1 Ch at 294-5 Lawrence LJ cited that decision and said: " …the question whether a given substance is or is not a 'mineral' within the meaning of the instrument in which it is mentioned is a question of fact to be decided according to the circumstances of the particular case."
48. That statement requires qualification. First, what is involved in such cases as the present one is a question of construction. It is common ground that the proper approach to the construction of the exception and reservation in the 1921 Conveyance is to be found in the speech of Lord Hoffmann in Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 WLR 896 at 912-913, which is too well-known to require quotation or summary.
49. Second, the question of construction in cases such as the present may require a sophisticated factual enquiry into the background, the minerals in question, and the district. It is therefore to that extent within the category of those cases in which an appellate court will be slow to interfere with a judge who has to take a number of different factors into account (including findings of fact) to reach a conclusion: cf Moyna v Secretary of State for Work and Pensions [2003] UKHL 44, [2003] 1 WLR 1929, paras [20], [25]-[26].
50. In Earl of Lonsdale v Attorney General [1982] 1 WLR 887, at 924-5, Slade J summarised the principles applicable to reservations and exceptions of minerals, which included these: (1) Unless the meaning is clear from the four corners of the relevant instrument itself, the first duty of the court in construing a grant of mines and minerals is to try to ascertain what the phrase meant in the vernacular of "the mining world, the commercial world and landowners at the time of the grant": Hext v. Gill,  L.R. 7 Ch.App. 699, 719, per James LJ, approved in North British Rly Co v Budhill Coal and Sandstone Co [1910] AC 116. (2) The meaning of the phrase in this vernacular sense may be derived either from direct evidence as to the vernacular meaning at the relevant time or by inference drawn by the court. (3) Where it is clearly established that, at the date of the grant, a particular vernacular meaning was attributed to the phrase "mines and minerals" by "the mining world, the commercial world and landowners," the court will be predisposed to adopt that meaning, but the vernacular test is not a rigid test to be applied without regard to all the other terms of the instrument in question and the circumstances in which it is used. (4) The court must never overlook the commercial background and apparent commercial purpose of the transaction. (5) One pointer to the parties' intentions may be to consider whether or not the substances in question are exceptional in use, in value and in character: Waring v. Foden  [1932] 1 Ch. 276, 294 per Lawrence L.J. (6) Another pointer is the evidence as to the general state of knowledge of the relevant substance at the date of the grant and the way in which it was then regarded and treated as a commercial matter. (7) A third, significant pointer may be derived from any express powers of working that are conferred by the instrument in question: ibid. (8) In considering whether a grant or reservation of mines and minerals includes a specified substance, it is irrelevant that the parties did not actually have that substance in mind. The test of their intention is an objective one.

The commercial background

51. It is important to stress the following features of the background. First, the purchaser of Lilly Hall Farm was a wholesale fruit and potato salesman. The judge found that it was a reasonable inference that he intended to continue to use the farm conveyed for agricultural activity. Second, MMB had operated, since its formation in 1909, a quarry and brick works on land it owned adjacent to the Disposition Site. The existence of the Maltby Quarry, from which brickshale was being excavated by surface methods immediately adjacent to the Disposition Site, would have been well known to the parties to the 1921 Conveyance. It would have been obvious to a reasonable person that land adjoining the quarry might have contained similar materials to those being worked at the quarry.
52. A reasonable person would have known that brickshale in the Upper Coal Measures was not capable of being abstracted by underground methods and was not being abstracted on a commercial basis anywhere in South Yorkshire by underground methods. The existence of collieries and quarries in the area would have been well known. Maltby colliery and Thurcroft colliery had gone into production in 1911/1912. One of the seams being exploited by deep mining methods was the Barnsley seam.

Exceptionality

53. In Waring v Foden [1932] 1 Ch 276 sand and gravel were held not be minerals or mineral substances for the purposes of a conveyance which reserved "all mines, minerals and mineral substances." Lawrence LJ said (at 296) that the first principle which was to be gathered from the authorities was that:

"The word 'minerals' when found in a reservation out of a grant of land means substances exceptional in use, in value and in character… and does not mean the ordinary soil of the district which if reserved would practically swallow up the grant…"

54. Lawrence LJ said (at 296) that the sand and gravel were not substances which were exceptional in use or value. They were used mainly if not wholly for building and road making purposes, and their commercial value depended entirely on local requirements and facilities for transport. Romer LJ said (at 302) that the sand and gravel formed the common surface rock of the district. As the judge said, although there are differences of emphasis in the three judgments, the underlying thrust of the decision is that if the sand and gravel were included in the reservation, it would defeat the purpose of the grant which was a conveyance of land with a view to building houses upon it.
55. The parties differ on what Lawrence LJ meant by the passage quoted above. I detected a tendency on both sides to construe the judgment as if it were a statute. What was said in that case has to be understood in the light of the previous authority. Many of the leading cases in the late nineteenth century were concerned with the balance between the rights of landowners and the rights of the railways companies to which land had been compulsorily transferred. On the one hand, it was considered important that mineral wealth under the land should not be taken by implication from landowners. On the other hand, it was important that the railway companies should not be prevented from carrying on their business and the expansion of the rail network.
56. As I have said, the Railways Clauses Consolidation Act 1845, section 77, excepted "coal, ironstone, slate, or other minerals under any land purchased by them." Lord Provost and Magistrates of Glasgow v Farie (1888) 13 App Cas 669, was not a railway case, but was decided under the Waterworks Clauses Act 1847, which contained an identical exception. It was held that common clay, forming the surface or subsoil of land, was not included in the reservation of "other minerals under any land purchased". Lord Halsbury LC said (at 669): "… no one can doubt that if a man had purchased a site for his house with a reservation of mines and minerals neither he nor anybody else would imagine that the vendor had reserved the stratum of clay upon which house was built under the reservation of mines and minerals". At 672 he approved what the Lord Ordinary (Lord McLaren) had said in the Court of Session:

"Here the thing which the defender claims to work is the common clay which constitutes the subsoil of the greater part of the land of this country, which never can in any locality be wrought by underground working, but under all circumstances is only to be won by tearing up and destroying the surface over the entire extent of the working. When such a right is claimed against the owner of the surface, I ask myself, did anyone who wanted to purchase or acquire a clay-field, whether by disposition or reservation, ever bargain for it under the name of a right of working minerals?"

57. Lord Watson relied on the fact that the seam in dispute was composed of ordinary subsoil clay, such as was generally found throughout the district, and the exceptional depth of the subsoil afforded no ground for bringing it within the category of excepted minerals: 674, 679.
58. Great Western Railway Company v Blades [1901] 2 Ch 624 (Buckley J) was a decision on the question whether clays which in many cases constituted or more or less closely underlay the soil had passed to the railway companies or were excepted by the 1845 Act. It was held that where the clay was what Lord Halsbury LC (in Farie) called the stratum on which the house was built or constituted the land (as Lord Watson described it) it was not a mineral within the Act: "It is a thing which has a value of its own, but not a thing which has a value of its own apart from the soil in which it is found, for the simple reason that it is itself the soil" (at 638).
59. In Great Western Railway Company v Carpalla United China Clay Co, Ltd [1909] 1 Ch 218 (Eve J and Court of Appeal); [1910] AC 83 it was held that china clay underlying land in Cornwall purchased by a railway company and occupying only a small fraction of the subsoil was a "mineral" within the meaning of the 1845 Act. Eve J (at 225) said that china clay was found in "intimate combination with elements which go to make up the subsoil of the district … but in its present condition occurring sparsely and sporadically, and always under an overburden of a character distinctive from the rock in which it is found, it cannot, I think, with any justice be regarded as constituting the land sold."
60. Cozens-Hardy MR said (at 229) that Farie was taken by him "as finally deciding that where a bed of clay underlies the surface, and is the ordinary soil of the whole district in which the land is situate, such clay, though it might elsewhere be a mineral, is not within the statutory reservation to the vendor, but passes to the railway company as part of the land which was conveyed to the railway company ...China clay is not the substance of the subsoil …" In the House of Lords, Lord Macnaghten said (at [1910] AC at 86) that Eve J had held that the presence of china clay was "rare and exceptional" and had rightly held that it was a mineral.
61. In North British Railway Co v Budhill Coal and Sandstone Co [1910] AC 116 it was held that sandstone was not a mineral within the meaning of the corresponding provision in the Railways Clauses Consolidation (Scotland) Act 1845. Lord Loreburn LC said that in many parts of England and Scotland sandstone formed the substratum of the soil with, no doubt, other kinds of rock intermixed. He went on (at 126-127):

"If it be a mineral, then what the railway company bought was not a section of the crust of the earth subject to a reservation of minerals, but a few feet of turf and mould, with a right to lay rails upon it, and liable to be destroyed altogether, unless the company chose on notice to buy the ordinary rock lying beneath it. For no one pretends that there is anything exceptional in this sandstone, either in point of higher value or rarity. It was agreed at the Bar that this was the ordinary freestone or sandstone. If the respondents are entitled to work this substance under this railway, the same must be true of chalk, or clay, or granite, or any other rock which forms the crust of the earth.

…

I cannot believe Parliament ever intended that the common rock of the district should be included in these words of reservation. If that were intended, I can see no need for inserting such words as 'mines or coal, ironstone, slate, or other minerals.' The Act is throughout consistent with the view which, with all respect, appears the obvious and commonsense view that the railway company is by the conveyance to acquire the land in general, and the reservation is only of what is exceptional …

…

… I think it is clear that by the words 'or other minerals' exceptional substances are designated, not the ordinary rock of the district…"

62. In Caledonian Railway Co v Glenboig Union Fireclay Company [1911] AC 90 (another decision on the Scottish 1845 Act) what in the present case has been called fireclay in the narrow sense was held to be a mineral because it was valuable for the manufacture of bricks capable of resisting high temperatures. Lord Loreburn LC said (at 299) that "if anything exceptional in use, character, or value was thereunder, that was reserved, provided it could be included under the word 'minerals' as understood in the vernacular of the mining world, and the commercial world, and the landowner"; and the particular seam was certainly of an "exceptional character as to its properties and value upon the evidence ... and it is not established in the evidence ... that other material is present in such large proportions as to destroy its exceptional character."
63. It is therefore clear that the test of exceptionality as re-stated in Waring v Foden and Earl of Lonsdale v Att Gen derives from what Lord Loreburn LC said in Caledonian Railway Co v Glenboig Union Fireclay Co about fireclay in the narrow sense, via what Lord Macnaghten said in Great Western Railway Company v Carpalla United China Clay Co, Ltd about china clay being exceptional and what Lord Loreburn LC had said about sandstone not being exceptional in North British Railway Co v Budhill Coal and Sandstone Co..
64. Those cases were not endeavouring to say what was meant by exceptionality, or what the comparator was meant to be. All exceptional seems to mean in this context is something special. To take an example put by Lindsay J in argument, if gold were ubiquitous in an area it would still be special because it was exceptional in value. As I have said, the judgment of Lawrence LJ is not a statutory code. He was endeavouring to apply to a consensual arrangement the principles in the cases on compulsory acquisition in order to give guidance on what the parties must be taken to have intended. Applied to this case, it means that where a not especially valuable substance, not exceptional in any sense, is ubiquitous in the area, that is a pointer (but only a pointer) to brickshale not being regarded as a mineral. I agree, therefore, with the judge's conclusion that the nature of the substance was not a pointer to its inclusion in the expression mineral.
65. It is now accepted by the appellants that the tests of "exceptionality" and "not … the ordinary soil of the district" are not identical or co-terminous. It is plain from my review of the earlier decisions is that they justify Lawrence LJ's formulation, and Slade J's restatement in Earl of Lonsdale v Att Gen.
66. All that Mr Marsden and the judge seem to have been doing when they said that brickshale was not the soil of the area was that it was not the surface soil and subsoil. This court was taken to the transcript of evidence of Mr Marsden who gave evidence that it did not make sense to refer to brickshale as part of the soil. He was not saying that it was not typical of the area.
67. The evidence was that strata of brickshale were ubiquitous in the area, and not especially valuable. I am satisfied that the judge was right to conclude that he did not gain any assistance in construing the words of the reservation and exception from the exceptionality test as applied to brickshale.

Underground working

68. In Waring v. Foden the vendor had the right "to work and get the same by underground working only." Romer LJ said (at 299) in circumstances where the existence of a nearby gravel pit was known to the parties at the date of the conveyance:

"If the vendor had the provisions of this Act in mind, it is difficult to understand why he did not rely upon them in respect of underground workings as well. It is still more difficult to understand why, if he was relying upon the provisions of that Act to enable him to work the sand and gravel in question, he did not avail himself for the definition of the word 'minerals' in that Act and include in the exception or substances in or under the land obtainable underground or surface working. ... The reservation of a power of getting the excepted minerals by underground workings was in my opinion meant to exclude a power of working from the surface, and clearly indicates that the beds of sand and gravel in question were not intended to be excepted."

69. He also said that the suggestion that the vendor was content to rely on the provisions of the Mines (Workings Facilities and Support) Act 1923 to obtain rights to work the minerals was a "farfetched and extravagant contention".
70. In Earl of Lonsdale v Attorney General [1982] 1 WLR 887, 925, Slade J referred to express powers or working conferred by the instrument in question as being potentially a "significant pointer" to the meaning of "mineral" in the instrument.
71. The surrounding circumstances strongly support the judge's conclusion that the underground working restriction was a strong pointer against brickshale being a mineral for the purpose of the 1921 Conveyance. First, the existence of the Maltby Quarry, from which brickshale was being excavated by surface methods immediately adjacent to the Disposition Site, would have been well known to the parties to the 1921 Conveyance. Second, there were two coal mines in the area, and (as I have said) by 1921 it would have been common knowledge that there was at least a possibility, if not a probability, that the Barnsley seam ran, at depth, under the Disposition Site. Consequently it is a reasonable inference that the reservation and the underground working restriction together were intended to apply primarily (though not exclusively) to coal. Third, the then state of the law should be taken to have been known to the draftsman. Conveyancers of property in the area drafting minerals reservations would have been aware that the House of Lords had decided four cases between 1888 and 1911 in which it was held that ordinary clay was not a mineral but that clays with special properties were minerals. It is a reasonable inference that a draftsman intending to reserve common clay would have inserted an express reservation. Fourth, I consider that in these circumstances the notion that a stand-off was intended was as fanciful as the reliance on the 1923 Act in Waring v Foden.

Fireclay in the wider sense

72. If the appellants are right on this point, then fireclay in the wider sense falls to be dealt with on the same basis as fireclay in the narrow sense. If the judge is right then it falls to be dealt with on the same basis as brickshale.
73. I accept the respondents' submission on this point. The 1920 Report specifically said that no classification of British fireclays was made, except the simple geological one. The judge had the benefit of the evidence of the two experts as to the vernacular meaning of fireclay in 1921, and preferred that of the respondents. There is no basis for interfering with his conclusion.

Disposition

74. I would grant permission to appeal and dismiss the appeal.

Mr Justice Lindsay:

75. I agree.

Lady Justice Arden:

76. I also agree.