Brantag Pty Ltd v Min for Mineral Resources

[1998] HCATrans 263

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S135 of 1997

B e t w e e n -

BRANTAG PTY LIMITED

Applicant

and

MINISTER FOR MINERAL RESOURCES

Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH  J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 AUGUST 1998, AT 11.49 AM

Copyright in the High Court of Australia

MR D.L. WILLIAMS:   May it please the Court, I appear for the applicant.  (instructed by Bowen-Thomas & Barlow)

MR P.M. HALL, QC:   I appear for the respondent.  (instructed by D. Fearon, Director of Legal Services, Department of Mineral Resources)

MR WILLIAMS:   Your Honours, the reasonable man might find it remarkable that, if he obtained a Crown grant at any time from settlement up until 1955, any rutile, zircon or ilmenite on the land would belong to him because the Crown had not been interested in reserving that from the grant.  But if his grant happened to occur in a 23-year period between 1861 and 1884 the Crown would own those substances.  He might find that even more remarkable when the relevant statute under which the grant was made did not define “minerals” so as to expressly include those substances and, in addition, he might find that more remarkable when, within 5 years of one grant, 7 years of the other grant, the Crown in the 1884 Act is specifying those minerals which it is interested in reserving from Crown grants and defining and specifying them in a way which does not include the relevant substances.

He mind find that even the more remarkable if he knew that those substances with which he is concerned had not been commercially mined at that time, that those substances - - -

McHUGH J:   But they were known, were they not?

MR WILLIAMS:   They were known, yes.

GLEESON CJ:   And they were minerals.

MR WILLIAMS:   They were known to the scientific world as minerals but the question that is posed by the case law in this area is what is known as the “vernacular test” and that is where the Court of Appeal fell into error in this case because it equated dictionary definitions with the satisfaction of the vernacular test.  The vernacular test is quite different.  The vernacular test depends upon the vernacular of the mining world, the commercial world and the land owners at the relevant time.

It was recognised by the Court of Appeal that it was settled that in cases such as this the ultimate search is for the expressed intention of the parties. 

GLEESON CJ:   When you say it all turns on what you describe as the “vernacular test”, there was not any dispute in the courts below as to what were the relevant principles of construction to be applied, were there?  It was a question of the application of well-established principles of construction to the particular circumstances of the case.

MR WILLIAMS:   No, with respect.  At first instance Mr Justice Young - I am sorry, perhaps could I just go back one step.  The authorities which had developed over time in England, which are collected and summarised in Waring v Foden, had provided that there would be a two-stage analysis in looking at questions of this nature.  Could I just take your Honours to the two‑stage process.  There is a folder.  It is behind tab 9.  Waring v Foden was a decision of the English Court of Appeal.  Can I just show you the culmination of those authorities which is at page 294.  Reading from about point 3 on the page:

The two main principles to be gathered from these pronouncements are, first, 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 (such as, for instance, the china clay in Great Western Ry Co v Carpalla United China Clay Co, and does not mean the ordinary soil of the district which if reserved would practically swallow up the grant.....and, secondly -

this is the vernacular test -

that in deciding whether or not in a particular case exceptional substances are “minerals” the true test is what that word means in the vernacular of the mining world, the commercial world and landowners at the time of the grant, and whether the particular substance was so regarded as a mineral.

So, at the outset we had a two-stage process.  The two questions are obviously relate.  What occurred in this case that at first instance his Honour Mr Justice Young found for the applicant, the plaintiff below, on the first basis, namely, that these were not exceptional substances and were not other than ordinary soils of the district.

On appeal, the Court of Appeal overturned that part of his Honour’s reasoning and went on to decide the case on the basis of the vernacular test saying that it had looked at dictionaries.  Dictionaries showed that the particular substances in question were referred to as “minerals” and that therefore that was conclusive of the case.

GLEESON CJ:   I understand that but what is the issue of legal principle that arises? 

MR WILLIAMS:   The first point is this, that their Honours in the Court of Appeal, in effect, abrogated the first of the two-stage test.

GLEESON CJ:   They just said it did not operate to produce a particular result on the facts of this case, did they not?

MR WILLIAMS:   No, they went further than that.  They said it did not really exist because the principles had, in part, been derived from cases dealing with other matters such as Railway legislation and the like in the United Kingdom.

McHUGH J:   But if you look at 72, at line 26, the President says:

With respect to Young J, I cannot accept that the mere fact that the three minerals are contained within the sand is enough to preclude the reservation of them, even if it were permissible to start with the legal proposition that the ordinary soil of the district is not, or prima facie is not, a mineral within the reservation.

MR WILLIAMS:   That is so, but what the court - that was the fall-back argument.  The court first of all said, in effect, that that principle is not a principle applicable to Crown grants because it was based upon decisions that stem from the Railway cases and the Waterworks cases.

GLEESON CJ:   What they said about line 15 is, “great care needs to be taken with the application of this”, page 71.

MR WILLIAMS:   Yes, but what the court went on to say at lines 30 and following is those cases were distinguishable on their facts because of the nature of the substance and the intermixing, in effect, of the minerals, if I can refer to them in that way in this case, and the other remaining parts of the sand.  What the Court of Appeal said, however, of the two-stage process, “We do not accept that there is really a two-stage process.  What the real test is merely the vernacular test of what is meant by those words in the vernacular of the mining commercial worlds and those of landowners at the time.”  But when they came to satisfy themselves or to apply that test, they went off on a completely erroneous basis.  That is because, in contradistinction to a vernacular test, the Court of Appeal says, “We have some dictionaries.  The dictionaries show that there’s a reference to - those substances at the time, in dictionaries, were referred to as ‘minerals’.”

The findings in this area are at pages 62 to 65.  At page 63 of the application book the President referred to a number of dictionaries.  The first one, the Imperial Dictionary of 1881, then the Webster’s Dictionary of 1854, and then his concluding remarks or the important part of his decision is at page 65.

GLEESON CJ:   But they were doing that to deal with the proposition that these minerals were unknown, were they not?

MR WILLIAMS:   No, they were dealing with that as a purported application of the vernacular test because the very passage which I was just referring, at the top of page 65, the President said, after referring to the dictionaries:

This material amply demonstrates that the three minerals were regarded as such according to the vernacular test - - -

GLEESON CJ:   If rutile was not regarded as a mineral at the time of the grant, what was it regarded as?

MR WILLIAMS:   I suppose the answer to that is scientists, no doubt, regarded it as a mineral or those who were sufficiently knowledgable about it.

GLEESON CJ:   And what did shopkeepers regard it as?

MR WILLIAMS:   I do not know but the test is what did landowners, commercial - - -

GLEESON CJ:   Well, what did landowners regard it as?

MR WILLIAMS:   We have some very good indicia of what landowners regarded it as because one of the largest landowners was the Crown and within 5 or 7 years of these actual grants it is telling us.

GLEESON CJ:   If it was not a mineral, what was it?  What could anybody have regarded it as but a mineral?

MR WILLIAMS:   It is a mineral for some purposes, there is no doubt about that.  The question really about what is intended by the use of that word in the conveyance and in the statute is not to be answered by dictionary definitions, the search for intention.

GLEESON CJ:   What I was seeking to put to you for your comment was that it is one thing to say nobody knew of the existence of rutile or ilmenite at the time of this grant, therefore it should not be treated as coming within the concept of a mineral.  But you referred us to the test in Waring v Foden which is a different thing.  It asks whether the particular substance was regarded as a mineral.  Well, I am asking you is there any serious suggestion that it was regarded by anybody as anything other than a mineral?

MR WILLIAMS:   If one is putting the term “mineral” in contradistinction to “animal” and “vegetable”, no

GLEESON CJ:   So, your real point must be people did not know of its existence.

MR WILLIAMS:   That is part of it but only part of it because - - -

GLEESON CJ:   That is why they went to the dictionaries to show people did know of its existence.

MR WILLIAMS:   That is only part of it, with respect, your Honour, because the true searches for intention is perhaps aptly set out by his Honour Mr Justice Egbert in the Canadian decision which is referred to in the Court of Appeal judgment.  That is Western Minerals v Gaumont which is behind tab 10 at page 382 where the court says - this is in the context of determining whether gravel and sand, which was collectively referred to as gravel, was relevantly a mineral in a reservation case.  The court said:

This leaves what I have already intimated is, to my mind, the real issue in the action - is gravel to be considered a “mineral” within the meaning of the reservation in question?  I should probably say at this point that in my opinion the issue is not whether gravel is a “mineral” because it seems self-obvious that in the wider sense, since it is composed entirely of mineral ingredients and belongs neither to the animal nor vegetable kingdom, it can be nothing but a “mineral” using that word in its widest meaning.  The question then is not whether gravel is a “mineral” but whether it is such a mineral as was intended to be and was included in the term “minerals” as used in the reservations with which we are concerned.

GLEESON CJ:   But the trust of your argument was that at the time of this grant not enough people or not enough of the relevant people knew of the existence of rutile and ilmenite to warrant the conclusion that a reservation of minerals covered those substances.

MR WILLIAMS:   That is so.

GLEESON CJ:   That raises the question of fact.

MR WILLIAMS:   At the very end of the legal analysis there is, obviously, an issue of fact to be determined but it is how one goes about coming to the decision as to the matter of fact is what we say is the point to be considered here.  The point to be considered here is we have long-standing authority that there is a vernacular test which is the solution to the question with which we are concerned.  The vernacular test involves quite the opposite of a technical meaning or a dictionary meaning.  Rather, it requires consideration of what these words mean to commercial, mining men and landowners at the time.  Because it is a grant that is so far back in time, we inevitably, have to have regard to historical works, things of that nature, to give some clue as to the answer to the question.

GLEESON CJ:   There has never been any doubt, has there, that a reservation of minerals would cover undiscovered minerals?

MR WILLIAMS:   I think there is, with respect, your Honour.

GLEESON CJ:   I do not mean unknown minerals, I mean undiscovered.  Minerals that have not yet been found to be there by a prospector.

MR WILLIAMS:   No.  For instance, if there is silver lying under the ground but nobody knows it, there is no doubt that that is excluded within a minerals reservation.  We do not cavil with that proposition at all.  What we have here is a land that consists predominantly, if not wholly, of sandhills, black sandhills, and a question as to whether or not in that case the constituent parts of the sandhills or a substantial part of them are, in fact, reserved to the Crown.

GLEESON CJ:   Or more accurately, what made it black.  That which made it black is what now makes it valuable.

MR WILLIAMS:   Yes, that is so.  When one looks at the application of the vernacular test and, in particular, its application in this case, one cannot get an answer by looking at dictionaries.  There would be no need for a vernacular test if the answer was to be found in dictionaries.  They are two different things.  That is where the Court of Appeal fell into error in this case.

The available material from which it could look at the vernacular test included not only - I suppose dictionaries might have some relevance but it included some of the historical works which have been referred to in passing in the judgment.  In particular at page 55 of the President’s judgment there is reference to one of the historical texts, “Black Sands:  A History of the Mineral Sand Mining Industry in Eastern Australia”.  The quotation that appears:

“It was not until the late 1920s that separation of the rutile and zircon from the black sands was considered.  Prior to that time the black sands were minded for their small gold, tin and platinum content only.”

That rather suggests an answer, not the same as that provided by the Court of Appeal but, rather, the opposite answer as to what mining people, commercial people and landowners might have encapsulated within their meaning of that word at the relevant time.

The other pieces of historical information we have are set out in Mr Justice Stein’s judgment at page 75 where he says:

True it is that their commercial value may not have been recognised until this century, when separation of the minerals from the sands was undertaken.

And also in Mr Justice Sheppard’s judgment at page 77 where he says that:

It is unlikely that, when the Crown Grants in question issued, anyone in New South Wales was aware that the sands comprising most of the upper surface of the land contained these substances.

They knew they were black but in terms of the substances.

Furthermore, if this had been known or suspected, it is unlikely that there would then have existed the technology to extract them.  Nor, if it had existed, would there have been any demand for the minerals at least in commercial quantities.

Now, all of that material rather tends in the opposite direction to the decision that the Court of Appeal came to in this matter.  It only came to this decision about the vernacular test because of the dictionaries.

If your Honours please, there is another matter and that is the particular Act itself under which the Crown grants were made.  In this particular case, there was nothing magic about reserving minerals.  All that happened under this Act was that you paid an extra pound per acre if you were getting the land for mining purposes with no minerals reservation, whereas you paid a pound less if you were getting it with the minerals reservation.

Now, when considering the context of the Act, the historical development of mining, the commercial value known or unknown at the time of the substances, it would be relevant, we would respectfully submit,

to take into account those facts.  There is nothing magic about the minerals exclusion.  I see the light is on but I will continue shortly if I may.

GLEESON CJ:   You can go on until the red one comes.

MR WILLIAMS:   Your Honours, then we come to this question of the legislation and as it developed over time at times past the date of these grants and the extent to which I can get any comfort from those in accordance with any recognised legal principle.  Can I just draw your Honours’ attention to the table which appears in the text which I have included behind tab 4 of the bundle, that is at pages 18 and 19.  It is just a table of these various minerals and how they came to be treated through time. 

The situation was that under the 1861 Act with which we are concerned, minerals were not defined.  In 1884, under the Crown Lands Act they were defined and they were defined in the same way as that which appears in the first table and is later repeated in the Crown Lands Consolidation Act.  In other words, the Crown, in the context of making Crown grants, as early as 1884, said, “These are the minerals we’re interested in, plus any others that may be notified by way of proclamation.” 

That continues right through the legislative context until 1955.  We say that is a very good indication of the manner in which mining, commercial and landowners, particularly landowners, considered these matters at the time.

GLEESON CJ:   Thank you.  Yes, now your time is up, thank you.

MR WILLIAMS:   Can I just say one thing?  There is an affidavit about the number of these that are in existence, these grants that are in existence, is between 86,000 and 87,000 Crown grants that have been made under that Act, and there is an affidavit that refers to that matter.

McHUGH J:   This is Mr Chadwick’s affidavit of 23 July?

MR WILLIAMS:   It is.  It has not been formally filed because the Registry rejected it.

GLEESON CJ:   Thank you.  We do not need to hear you, Mr Hall.

The decision in this case turned upon the application to the facts of the case of well-settled principles of construction.  The case raises no issue suitable for the grant of special leave to appeal to this Court.

Do you resist costs?

MR WILLIAMS:   No, your Honour.

GLEESON CJ:   And the applicant is to pay the costs of the respondent of the application.

AT 12.11 PM THE MATTER WAS CONCLUDED