United Kingdom House of Lords Decisions

Lord Chancellor (Halsbury)—It appears to me that the judgment of the Court of Appeal is absolutely right, and I do not think it necessary to expand the views which they have expressed. The question comes very shortly to this, whether, when there is an undoubted obligation to work coals, that obligation can be qualified and cut down by words which, as it has been more than once admitted by the learned counsel who have addressed us, are intended to qualify not the obligation to work but the obligation to do what work is done in a proper manner. The adverbs which are used in the lease in connection with the words winning and working seem to me wholly inappropriate to qualify and cut down the original obligation. I hesitate very much to think that the words being such as they are, one could qualify and cut down the initial obligation by looking at what the nature of the transaction is; still, if one does look at it, it appears to me to point in the other direction. Both parties supposed that there was coal here; and if there was coal, is it to be supposed that for £5 a year the attempt to get profit out of this, which both parties assumed , was a field of coal, was to be suspended for twenty-one years at the option of the person who took the lease? One could well understand that where the dead rent is of such magnitude that it would of itself be the heaviest burden upon the lessee if he does not work—in that case having regard to the nature of the obligation entered into, you may not require an absolute covenant to work; but where the dead rent is of so comparatively trifling a character as this—£5 a year for twenty-one years—to say that it is to be at the option of the lessee whether he will work or not seems to me a very unreasonable and unbusiness like arrangement. To my mind, if one were once at liberty to consider the question whether it is a likely covenant to be entered into or not, I should come to a conclusion the other way; but I do not depend upon that. To my mind the sole question is whether there is or is not an absolutely clear obligation to work. I think that there is; and under those circumstances I move your Lordships that the appeal be dismissed with costs.

Lord Robertson—The broad facts of this case are exceedingly simple. There is a lease of this field of coal for twenty-one years from 1885. In 1898 or the beginning of 1899 the colliery people intimate that they have dismantled and abandoned the working by which alone they proposed to work this coal seam. Accordingly, prima facie, it would appear that there is the clearest possible claim for damages for a breach of the contract which was knowingly entered into by those parties. The answer to that is, curiously enough, found in the specific obligation which relates to the working which they have abandoned. It is said both as regards the winning and the working that they are to win and work honestly, and a variety of laudatory epithets are applied. How those words limiting their operations to operations of a legitimate kind can take away their obligation to go on working I cannot see. If there had been a very long time taken in reaching the mine I can quite understand that questions might have been raised as to whether that period had not been unduly prolonged; but in this case the avowed abandonment of the working lifts us out of that region altogether. We have therefore simply to construe the clause to which I have referred. I read that clause as containing first of all the obligation both to win and to work, and then a qualification of that by saying that it must be well done. But why you should say that because you are obliged to do a thing well you are absolved from doing it at all passes my conception. The argument was presented in a very sharp and clear form by both the learned counsel. Therefore we understand the question as it is raised in this case. Upon that question I must say that I think the argument too clear to require more than a reference to the context for its refutation. I cannot accede to the view that by the particularity and care in defining the mode of the operations there is absolution given from entering upon those operations at all.

Lord Lindley—I have come to the same opinion. I was rather struck by the observations made by the learned counsel for the appellant and by a passage which was read from the judgment of Jessel, M.R., in Abinger v. Ashton. L.R., 17 Eq. 358. I have since looked at that case, and I think I see what was meant by it. Jessel, M.R., there had to construe a covenant which was badly drawn and open to more interpretations than one. One of the interpretations which he suggested that it might bear was that which was urged upon us as the true interpretation to be put upon this lease. But really and in substance it comes to this—that under a lease like this the lessee has an option whether he will work or not.

That is a very startling proposition. I have looked into all the authorities that I could find upon the subject, and I can find no warrant whatever for it. I am bound to say that upon the true construction of this covenant I agree entirely with the Court of Appeal.

Judgment appealed from affirmed and appeal dismissed with costs.