Coalcliff Collieries Ltd v Campbell

Coalcliff Collieries Ltd was the appellant and Campbell was the respondent. The dispute concerned the interpretation of a clause in a deed of settlement, which stipulated that the respondent would be entitled to a royalty of 1.25% of the net f.o.b. (free on board) value of all coal won from the appellant's mine. The appellant argued that the royalty was payable only on coal sold to a particular company, whereas the respondent contended it was payable on all coal won from the mine, regardless of the purchaser. The High Court of Australia was required to determine the correct construction of the royalty clause.

The central legal issue before the High Court was whether the phrase "all coal won from the said mine" in the deed of settlement referred to all coal extracted from the appellant's mine, or only to coal sold to a specific entity. This required the court to consider the principles of contractual interpretation, particularly in relation to ambiguous or potentially ambiguous language within a deed. The court had to ascertain the intention of the parties at the time the deed was executed, by reference to the words used in the document itself.

The High Court, by majority, held that the plain and ordinary meaning of the words "all coal won from the said mine" indicated that the royalty was payable on the entirety of the coal extracted, irrespective of its subsequent sale or destination. The court rejected the appellant's submission that the clause should be read as implicitly limited to coal sold to a particular purchaser, finding no textual support for such a restriction within the deed. The principles of contractual interpretation favoured a literal construction of the operative words unless there was a clear indication to the contrary. The appeal was dismissed.