Commonwealth v Hazeldell Ltd [1918] HCA 75; (1918) 25 CLR 552 (5 December 1918)

The Commonwealth Defendants, Appellants; Hazeldell Limited Plaintiffs, Respondents.

This is a claim by the respondents for compensation for the value of land taken by the Commonwealth for public purposes. The land contains large quantities of limestone. At the hearing of the claim they tendered evidence as to its quantity and value. The evidence was objected to by the appellants on two grounds: first, that the plaintiffs had no exclusive right to the limestone any more than any other subject of the Crown in New South Wales, and it therefore could not be taken into consideration in estimating the compensation; second, that the limestone was a mineral reserved to the Crown in right of New South Wales.

We will deal with the second point first, as it may have a material bearing on the Statute relied upon in support of the first.

The claimants' title to the land is under a Crown grant, dated 12th April 1886, of land which had originally been taken up under the Crown Lands Alienation Act of 1861. At this date grants were required to be issued in accordance with the Crown Lands Act of 1884, which confirmed existing contracts, but provided (sec. 5) that Crown lands should not be sold, reserved or dealt with, except under and subject to the provisions of that Act. Sec. 6 provided that the Governor might grant, reserve or otherwise dispose of Crown lands, but only for some estate, interest or purpose authorized by that Act, and subject in every case to its provisions. Sec. 7 provided that all grants issued under the authority of the Act should contain a reservation of "all minerals" in the land.

The term "minerals" when used in the Act was, by sec. 4, to mean and include coal and kerosene shale and any of certain specified metals, and any other substance which might from time to time be declared a mineral within the meaning of the Act by Proclamation of the Governor. No such Proclamation has ever been issued.

The Act of 1861 had required (sec. 18) that a grant should contain the "reservation of any minerals which the land may contain."

It has been suggested that the grant of 1886, although made under the Act of 1884, must be taken to have been made under the Act of 1861, and must be construed accordingly. It is also suggested that the reservation prescribed by the Act of 1861 was larger than that prescribed by the Act of 1884. If this is so, it may be that in a suit between the Crown and the grantee the grant might be rectified, or it may be that the Act of 1884 would be construed as a partial relinquishment of possibly larger powers of reservation conferred by the Act of 1861. But we are of opinion that in a suit between strangers to which the Crown, in right of New South Wales, is not a party, no question can be raised as to the propriety of the words used, and that the Court is bound to construe the grant as it finds it, so that the rights of the parties of which the Court must take cognizance are those which are ascertained by construing the language of the grant actually issued. It was so held by the Judicial Committee in the case of Osborne v. Morgan[1]. It appears from the provisions already quoted that the Crown had no power either to grant land or make any reservation from a grant, except in accordance with the law. The reservation, and the only reservation, authorized was of "all minerals in such land," and the meaning of the word "minerals" was defined, as already stated, in words which obviously did not include limestone. If there were room for doubt, sec. 90 of the Act of 1884, in which the substance limestone is specifically dealt with by that name, puts the matter beyond question. Any further reservation would therefore have been unauthorized by law, and cannot be presumed to have been intended.

If, in a Statute authorizing a grant of any subject matter, the power is conferred by the use of a particular word with a meaning defined by the Statute itself, it cannot be contended that a grant of a subject matter described by that word can extend to any other subject matter not included in the definition. This seems quite obvious, and we cannot see any reason why the same rule should not be applied to an authorized or prescribed reservation.

The grant in question contained the words "We hereby reserve unto Us ... all minerals which the said land contains." For the reasons already given, we think that these words must be construed as meaning all minerals within the definition of the Statute. If we are right in this conclusion, the reservation in the deed of grant did not operate to reserve limestone from the land granted, which accordingly passed to the grantee subject to any exception of minerals specially excepted in the grant (Real Property Act (26 Vict No. 9) secs. 12 and 3).

We pass to the other point. The appellants contend that, whether the property in the limestone passed or did not pass to the grantee, it is subject to the provisions of the Mining Acts, and that under those Acts any person holding a licence from the Crown (of New South Wales) has a right to mine for and carry away limestone on private land. They rely upon sec. 46 (2) of the Mining Act 1906, which is as follows: "If the Crown grant of any private land contains, or if not yet issued will when issued contain, a reservation to the Crown of all minerals, the said land shall also be open to mining under this Part for all minerals." It is contended that the test established by this section is not whether any specified mineral is or is not reserved to the Crown, but whether the deed of grant contains words purporting to reserve, eo nomine, all minerals. This gives a construction which would make the proprietary rights of the grantee dependent upon the words used in an ancient grant, without regard to the meaning which the words so used had at the date of the grant.

The respondents maintain that the words "contain a reservation to the Crown" mean "contain a provision expressed in words which, if now used in a grant, would, in the opinion of the Court, have the effect of effectually reserving to the Crown," whatever the form of words may be.

We pause for a moment to say that the meaning of the language of a grant, which is a record of a present transaction, must be determined as at the date of the grant, and that a subsequent change, however arising—by lapse of time, changed circumstances, gradual modifications of usage, or otherwise—cannot affect the meaning of the grant itself (Lord v. Commissioners for the City of Sydney[2]).

It may be, indeed, and it is boldly contended, that power may be given to the Governor to alter the meaning of the words in a grant or reservation so as to increase or diminish the quantity of the estate originally granted. Without disputing the absolute power of Parliament to make such an extraordinary enactment, we only remark now that any language of the Legislature so relied upon must be clear and explicit to produce such an effect.

We proceed to examine the provisions of the Mining Act of 1906. This Act, like others which preceded it and are repealed by it, did not purport to deal with rights of property as between the Crown and the subject, but only with the powers of the Crown in respect of subject matter reserved to it. Sec. 3 defines the term "mineral" as meaning and including certain metals and mineral substances and also "any other substance which may from time to time be declared a mineral within the meaning of this Act by Proclamation of the Governor published in the Gazette." It will be observed that the definition is for the purposes of that Act only. In our opinion, the only effect of such a Proclamation is that it alters the meaning of the definition of the term "mineral" in the Statute as from the date of the Proclamation so far as regards any further action in respect of minerals, but that the Proclamation has no effect upon the question whether any specific substance is reserved to the Crown by an earlier grant.

From an early time, many, but not all, deeds of grant had contained reservations of minerals, and, after the Act of 1861, all had contained reservations of gold. Further reservations were not unknown, but for some time no practical provision was made for enabling the Crown to exercise its reserved rights in the granted land. It will be sufficient to begin with the Mining on Private Lands Act of 1894 (57 Vict. No. 32), which contained a scheme empowering mining wardens to authorize holders of a miner's right or mineral licence to enter upon private land which is subject to the Act, and to mine thereon for minerals. This Act applied only to certain minerals other than gold, which were defined to be silver, lead, tin, and antimony (sec. 2). Sec. 3 of the Act prescribed that "where the Crown grant contains, or if not yet issued would when issued contain, a reservation to the Crown of all minerals which the said land contains, such land shall be open to mine thereon or thereunder for silver, lead, tin, and antimony, in addition to gold."

The construction of the words "where the Crown grant contains ..." raised a question similar to that already adverted to, which arises under sec. 46 of the later Act of 1906, and we say nothing further on the point at present.

The Act No. 101 of 1902 enlarged the list of minerals in respect of which authority might be issued by the warden. In that Act the test was "whether the land in question was open to be mined upon for silver, lead, tin, and antimony, in addition to gold," which carries the matter no further.

The next Act is the Act of 1906, already quoted, which is a consolidation Act and repealed all the earlier Mining Acts.

It is apparent on the face of all these Acts that the purpose of the Legislature was to enable practical use to be made of the reserved rights of the Crown to minerals, which rights had previously been merely nominal. There is nothing in the Acts to indicate that the Crown intended to authorize a subject to mine upon private land for minerals which had not been reserved to the Crown.

It is said, however, that it is sufficient that the deed of grant should contain the words "We reserve all minerals," whether these words meant or did not mean, at the time of the grant, all or any specific inorganic substances, provided that the Governor thinks fit to declare them minerals. This argument is founded on the interpretation clause of the Act of 1906 already quoted. A Proclamation declaring limestone to be a "mineral" within the meaning of that Act had been made by the Governor in August 1907.

In the phrase "reservation of all minerals" contained in section 46 (2), the word "reservation" means, in our opinion, a clause which at the date of the grant had, under the law then in force, the legal effect of a reservation.

The contention of the appellants is, in substance, that upon the issue of the Proclamation of August 1907, the meaning of the words "all minerals" where used in the grant of 1886, which, in that year, did not and could not lawfully mean or include limestone, became altered, and that these words had a new meaning in future. If this is the law, persons in the position of the respondents may be suddenly and arbitrarily and without compensation dispossessed of valuable rights of property. It is a settled rule of construction that such an intention cannot be imputed to the Legislature unless expressed in unequivocal terms incapable of any other meaning (Western Counties Railway Co. v. Windsor and Annapolis Railway Co.[3]; Commissioner of Public Works (Cape Colony) v. Logan[4]).

On examining the words of sec. 46 (2) of the Act of 1906, the words "all minerals," which are twice used, appear to have been used in each instance in the same sense; and it appears that the object was to confer upon the subject rights coextensive with those of the Crown. We do not think that, where secondly used, they can be construed as conferring upon individuals adverse rights over private property not possessed by the Crown. It may be observed that sec. 70 of the Act speaks of "mineral not reserved to the Crown," recognizing at least the possibility of such a state of things existing. The answer that is made to this argument is that the words "We reserve all minerals" are a common form, and that there is no known instance of any reservation to the Crown of all minerals except by those words, so that if the respondents' construction is adopted the provision may be futile. Such a result is not unprecedented, but we do not think the possibility of it would be sufficient to exclude the rule laid down in Logan's Case[5]. The provision would not, however, be futile, for, if the fact be that no Crown grant of land in existence contains a reservation in fact of all minerals eo nomine, it may be provided that future Crown grants shall contain such a reservation: or the slip, if it be one, can perhaps be remedied by legislation.

Upon any construction of sec. 46 (2) the term "all minerals" where secondly used in the section must denote and include all such physical entities, except coal (sec. 45), as are comprised in that designation, including those mentioned in the Proclamation. But, according to the appellants' suggested construction, the same words, where firstly used, do not refer to physical entities at all, but refer to the term "all minerals" as an etymological expression which may be found in a deed of grant, without regard to their meaning as there used. This is not consistent with ordinary canons of construction.

Before concluding, we would remark that sec. 46 (2) only deals with the case of the reservation of "all minerals." If the words of the clause of reservation are "all minerals," and the test to be applied is not the fact of reservation but the form of words used, the question still remains whether at the date of the grant in which the words are used the substance in question was a mineral or not. On that point we think that the true test is to be found in the judgment of the Judicial Committee in Farquharson's Case[6]: "The only question for decision is, what, having regard to the time at which this instrument was executed, and the facts and circumstances then existing, the parties to this deed intended to express by the language they have used, or, in other words, what was their intention touching the substances to be excepted as revealed by that language"; and not the test proposed by Mellish L.J. in Hext v. Gill[7]. Lord's Case[8], already quoted, is to the same effect.

We should add that it is by no means clear to us that, even if the land were open to the risk of being invaded by private persons in search of limestone under the Mining Act, it would follow that the value of the limestone ought not to be taken into consideration in estimating compensation. Enormous areas of land in New South Wales are subject to similar risks, but we have never heard it suggested that the practical effect has been to reduce the value of those lands to prairie value, although the matter would be one for consideration in estimating the compensation.

In my opinion the judgment of Ferguson J. is undoubtedly correct. He decided that the plaintiff company was not entitled to be compensated for the loss of the limestone contained in its land as if it were the absolute owner of such lime stone, but that regard must be had to the fact that its value to the plaintiff company was affected by the provisions of the Mining Act 1906. The plaintiff company derives its title to the land in question from a Crown grant issued to one Thomas Shanahan in the year 1886, which reserved to the Crown all "minerals which the said land contains." The learned Judge assumed for the purpose of his judgment that the grant had been issued under the authority of the Crown Lands Act of 1884, but he thought that he was not at liberty to attribute to the word "minerals" in the Crown grant the meaning which was assigned to it in that Act by sec. 4. He was of opinion that it was unnecessary to consider whether limestone was included in the reservation of all minerals in the Crown grant, because he thought that if a Crown grant of private land purports to contain a reservation of all minerals such land is open to mining for limestone under Part IV. of the Mining Act 1906, and to that extent interferes with the grantee's proprietary interest in the limestone, if any such interest exists. I do not desire to dissent from this view of the law, but the facts of the case render it unnecessary to express any judicial opinion upon it. I think the learned Judge assumed too much in favour of the plaintiff company. The Crown grant, though issued after the passing of the Crown Lands Act of 1884, was not and could not have been made subject to its provisions. Before the year 1884 the land had been conditionally sold under the provisions of sec. 13 of the Crown Lands Alienation Act of 1861, and under sec. 18 of that Act the purchaser was entitled, at the expiration of three years from the date of the conditional purchase and on the performance of certain specified conditions, to have issued to him a grant of the fee simple but with the reservation of any minerals which the land might contain. Before the period of three years had expired the Crown Lands Alienation Act of 1861 was repealed by the Crown Lands Act of 1884, but the new Act did not deal with the issue of Crown grants with respect to existing conditional purchases except by sec. 2, which declared that the repeal should not of itself prejudice or affect anything contracted to be done under the authority of the repealed enactment, and provided that, notwithstanding such repeal, all rights accrued and obligations incurred or imposed under or by virtue of any of the said repealed enactments should, subject to any express provisions of this Act in relation thereto, remain unaffected by such repeal. Secs. 5, 6 and 7, which were relied on by the plaintiff company, have no reference to grants issued in pursuance of a conditional purchase under the Crown Lands Alienation Act of 1861. When we examine the Crown grant itself, we find that it purports to be issued wholly under the authority of the Crown Lands Alienation Act of 1861. It is intituled "A grant of land purchased by conditional sale without compensation"; it recites the conditional sale and the purchaser's claim to the land under sec. 13 of the Crown Lands Alienation Act of 1861 and the performance of the conditions required by sec. 18 of the Act, and thereupon proceeds to grant the said land to Thomas Shanahan for an estate in fee simple but reserving "all minerals which the said land contains," which is a proper method of describing a reservation made under the authority of sec. 18 of the Crown Lands Alienation Act of 1861. The Crown Lands Alienation Act of 1861 contains no definition of the word "minerals," and therefore it cannot be contended that the word "minerals" in the grant is fettered by any statutory definition.

Sec. 46 (2) of the Mining Act 1906 is as follows: "If the Crown grant of any private land contains, or if not yet issued will when issued contain, a reservation to the Crown of all minerals, the said land shall also be open to mining under this Part for all minerals." Sec. 3 enacts that, unless the context or subject matter otherwise indicates, the word "minerals" means certain specified substances and any other substance which may from time to time be declared a "mineral" within the meaning of the Act by Proclamation of the Governor published in the Gazette. Sec. 45 provides that under Part IV. of the Act the word "minerals" shall not include coal or shale, nor shall coal or shale be included within the substances which may be declared minerals by Proclamation of the Governor. Limestone has been declared a mineral within the meaning of the Act by Proclamation of the Governor, and it is therefore a mineral within the meaning of sec. 46 (2) unless the context or subject matter otherwise indicates. The word "minerals" is used twice in sec. 46 (2), first in the phrase "If the Crown grant of any private land contains ... a reservation to the Crown of all minerals," and secondly in the phrase "the said land shall be open to mining under this Part for all minerals." I think the word "minerals" when first used in the sub-section should not be fettered by the statutory definition. In my opinion the sub-section must be construed as dealing either with grants which purport to reserve to the Crown all minerals in the ordinary signification of that word, or in the alternative with such as in law have the effect of creating such a reservation. It cannot be intended to deal with Crown grants which contain a reservation of all minerals within the meaning of sec. 3 as amended by sec. 45. To give it such a construction would be to render it wholly inoperative, for it would exclude from its operation all Crown grants containing the ordinary reservation of "all minerals" where those words are not governed by the statutory definition contained in the Mining Act 1906, and no Crown grant containing a reservation of minerals as defined by sec. 3 and sec. 45 has issued or could have issued under any Act now or heretofore in force in New South Wales. On the other hand, I do not know of any reason why the word "minerals" when used in the last part of sec. 46 (2) should not have the meaning provided in the interpretation clauses, and there is a very weighty reason why it should have such a meaning, because otherwise the definition of "minerals," which is especially adopted and amended for Part IV. of the Act, will have practically no application in that Part. Sec. 46 (2) defines the private lands which shall be open to mining under that Part. If the word "minerals" in the second part of the sub-section is not subject to the statutory definition, the whole object of Part IV. of the Act fails, for coal and shale, though excepted by sec. 45, would be open to mining, and no substance which was not a mineral independent of the interpretation clauses would be open to mining. The Crown grant in question in this case validly reserves all minerals in the ordinary signification of that word, and limestone is a mineral within the meaning of the second part of the sub-section. The result is that the sub-section authorizes mining for limestone on the land granted, and to that extent interferes with the proprietary right of the plaintiff company. It is said that on any interpretation of the reservation in the Crown grant it does not include limestone, and that the effect of thus construing the sub-section is to confiscate the property in the limestone which passed under the grant, and that we ought not to attribute such an intention to the Legislature. If a man takes land under a grant reserving to the Crown all minerals, the question of what is or is not a mineral under the reservation may be often a very difficult one to determine, and I cannot see that any hardship is inflicted on the grantee by Parliament when it leaves to the Governor in Council the task of defining the substances which may fairly and properly be dealt with by the Crown in pursuance of such reservation, and to the Secretary of Mines the function of determining what substances shall in fact be mined, and this is what the Legislature has done. In my opinion the appeal should be allowed, and the judgment of Ferguson J. restored.

Solicitor for the appellants, Gordon H. Castle, Crown Solicitor for the Commonwealth.

[1] 13 App. Cas., 227.

[2] [1859] EngR 307; 12 Moo. P.C.C., 473, at p. 497.

[3] 7 App. Cas., 178.

[4] (1903) A.C., 355.

[5] (1903) A.C., 355.

[6] (1912) A.C., at p. 869.

[7] L.R. 7 Ch., at p. 712.

[8] [1859] EngR 307; 12 Moo. P.C.C., 473.

High Court of Australia

Commonwealth v Hazeldell Ltd [1918] HCA 75; (1918) 25 CLR 552 (5 December 1918)

HIGH COURT OF AUSTRALIA