When is Salt Really a Metal: How Ambiguous Language Can Create Legal Complications
Image: Ben Baker, Chief Underwriting Officer
by Ben Baker, Chief Underwriting Officer
A recent High Court judgment revealed an interesting perspective on the interpretation of contract clauses, specifically concerning the classification of certain minerals. The case revolved around reservations in four separate conveyances regarding the “mines, beds, and quarries of ironstone and iron ore and other metals.” The court was asked to determine whether this description of “other metals” included potash and rock salt.
The point arose because the applicant, who owns and operates Boulby Mine, a significant non-hydrocarbon mine, needed to use tunnels created during historical mining operations.
They claimed ownership of these tunnels based on the argument that they were not excluded from their title interest. The first respondent, however, argued that these substances were excepted from the land previously transferred due to the “other metals” reservation.
It was accepted between the parties that iron, sodium, and potassium are metals, with sodium being a component of rock salt and potassium a component of potash. The respondent contended that “other metals” should be interpreted as “other sources of metal.” The applicant acknowledged that “other metals” could not be limited to metals in their native state, which would restrict the drafting’s application, but argued it should be limited to materials used to produce metals with typical metallic qualities.
The court’s task was to determine whether “other metals” included metal compounds like rock salt or potash, or just metalliferous minerals like iron, tin, or copper.
Arguments were advanced around whether the interpretation should be made as a matter of chemistry or common sense, the parties even went so far as to question the status of milk and bananas given the presence of calcium and potassium in those products.
Ultimately, the court ruled that potash and rock salt fell within the intended scope of “other metals” pursuant to the 1946 and 1947 conveyances.
From an underwriting and title insurance perspective, this judgment highlights the broad impact of language used in deeds. It demonstrates how a counter-interpretation can challenge the expected or established application of a clause. This ruling is not only relevant to mineral rights but also serves as a caution for all parties involved in real estate transactions to carefully consider their use of language in deeds and how susceptible it might be to alternative interpretations.
This doubt and opportunity for contrary interpretation is where title insurance could be a valuable comfort to parties with interests in property. The potential for unknown ‘other’ rights to affect a proposed development or even a long-established use of land such as the Boulby Mine, may be a concern to property owners, funders, and developers. By identifying the potential for other interpretations of provisions within rights, covenants, reservations, and exceptions lawyers would be able to seek title insurance to provide protection to their clients of the adverse effects of such a position.
At Westcor we have a strong team of underwriters who seek to stay on top of issues of interpretation such as this, and who collaborate daily to benefit from years of varied experience to test, assess and hopefully offer insurance in these type of situations for the benefit of parties involved with such sites.
