[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Roadstone Dublin Ltd. v. McDonnell & Ors [2003] IEHC 76 (6 November 2003) URL: http://www.bailii.org/ie/cases/IEHC/2003/76.html Cite as: [2003] IEHC 76

[New search] [Printable RTF version] [Help]

Roadstone Dublin Ltd. v. McDonnell & Ors [2003] IEHC 76 (6 November 2003)

 
THE HIGH COURT

2001 No. 17731P

BETWEEN

ROADSTONE DUBLIN LIMITED

PLAINTIFF

AND WILLIAM McDONNELL, THOMAS McDONNELL, G. CORRIGAN AND CITY WEST QUARRIES LIMITED

DEFENDANT

JUDGMENT of Ms. Justice Carroll delivered the 6^th day of November 2003.

By deed of transfer dated the 5^th August, 1977 the Plaintiff under its then name Roadstone Limited, transferred the lands in Folio 1787F of the Register County Kildare to Samuel Doran in consideration of £27,000. The transfer went on to state:

"EXCEPTING AND RESERVING unto the Registered Owners the Minerals now vested in them, namely, Sand, Gravel, Stone and all Minerals other than State Minerals as defined by the Minerals Development Act, 1940 subject however to the payment to the Transferee and his Successors in Title by way of re-purchase in the event of the Registered Owners and its Successors in Title exercising its right to enter upon the lands comprised in Folio 1787F, County Kildare for the purpose of extracting all or any of such minerals.

The purchase price will be ascertained by reference to a figure equal to ten times the then market value of the agricultural holding of the same size and in the same location – such valuation to be determined by a valuer appointed for that purpose by the parties hereto or their Successors in Title, or in default of such agreement then by a valuer to be appointed by the President for the time being of the Incorporated Law Society.

The Registered Owners and the Transferee hereby consent to the registration of these Exceptions and Reservations as a Burden on the said Folio."

A burden was entered on the Folio at entry number four as follows "The Right of Roadstone Limited to the sand, gravel and stone more particularly referred to in Instrument No. B2849/82" (i.e. the transfer of 1977).

The lands were subsequently transferred to John Peters, registered on the 19^th January, 1989 and then to William McDonnell registered on the 10^th December, 1990. He is registered as full owner and is the first Defendant.

The Plaintiff issued a plenary summons on the 4^th December, 2001 against four Defendants. The first Defendant is registered owner of the lands in question. The second Defendant is his son. The third Defendant was never served and the fourth Defendant is a quarrying company of which the second Defendant is a director.

In its Statement of Claim the Plaintiff claims the Defendants have converted the minerals, the property of the Plaintiff, to their own use and have sold the same and continue to commit trespass to the Plaintiff's goods. It claims damages for trespass to goods and for conversion and seeks an injunction restraining the selling, disposing, dealing with and removing of any sand, gravel, stone and all minerals (other than State minerals) the property of the Plaintiff from the lands in Folio 1787F County Kildare.

In his defence delivered the 12^th April, 2002 the first named Defendant pleads

"1. The Deed of Transfer of the 5^th August, 1977 did not reserve or except to the Plaintiff the materials alleged, and this Defendant will rely on the complete terms of that deed for the true meaning and effect thereof.

2. The said Deed, rather than reserve or except any interest to the Plaintiff, purported by its terms and true meaning to create an option or other future interests in the lands in Folio 1787F of the Register of Title for County Kildare which is void in law for infringement of the rule against perpetuities.

3. Alternatively, the said Deed, insofar as it purports to create some future interest in the said lands, fails to identify the nature of such interest and is void for uncertainty."

On application by the first Defendant seeking determination of a preliminary issue as to the validity of the deed, it was ordered by Lavan J. on 10^th June, 2002 (by consent) that a preliminary issue between the Plaintiff and the first Defendant be tried on the matters set out in paragraphs 1, 2 and 3 of the Defence of the first Defendant.

There are therefore three issues:-

1. What is the true construction of the deed of the 5^th August, 1977 and in particular did it except or reserve to the Plaintiff the alleged materials.

2. Is the true construction of the deed the creation of an option or other future interest which is void as infringing the rule against perpetuities.

3. Alternatively if the deed creates a future interest is it void for uncertainty.

In construing the deed it is accepted that the deed is to be construed neutrally without reference to the rule against perpetuities (c.f. Re Legh's settlement 1938 Ch 39). It is construed according to the words used in the context of the general surrounding circumstances in which the contract was made. (c.f. Igote Ltd. v. Badsey Ltd 2001 4 IR 511).

An exception in a deed is the retention by the transferor of something already owned. A reservation is the creation of a right in favour of the transferor which did not previously exist e.g. the reservation of a right of way or a profit à prendre over the lands being transferred. A reservation of a right to come into existence at some indefinite time in the future is subject to the rule against perpetuities.

Mr. Hardiman for the first Defendant does not claim that there cannot be an exception of minerals in perpetuity but queries whether it is an exception when it requires a future act subject to the rule against perpetuities to extract them. He says if the deeds stopped before "subject however" he could not argue against an exception of minerals with an implied reservation to enter on the lands to extract minerals. But he points out since there would then be an absence of any compensation provisions, it would be impossible to say what the consideration for the transfer would have been.

However the deed did not stop before the words "subject to" and it must be construed as a whole document.

Looking at the wording of the deed the parties provided that the sand, gravel, stone etc. should be "excepted" from the sale i.e. that the title of the vendor (Plaintiff) should not pass. This did not mean that the vendor retained title to any part of the land since minerals (not being part of a mine) do not connote ownership of any stratum of the land. (c.f. Duke of Hamilton v. Graham 1871 LR2HL. (SE.160) Ramsey v. Blair 1876 1 App. Car. 701.)

The phrase "and reserving" added nothing to the deed as nothing was specifically reserved.

In the ordinary case if there was an exception without any reservation of rights the right of the vendor to enter on the lands to extract the minerals would be under an implied reservation deriving from the exception of the minerals. (c.f. Aspden v. Seddon1875 10 Ch App 394). But the deed goes on to provide that the exception (and I am omitting the reference to a reservation since it is inoperative) is subject to the payment of money by way of repurchase in the event of the Vendor/Plaintiff exercising its right to enter on the lands for the purpose of extracting all or any of the minerals. The purchase price was to be ascertained in a certain way.

I interpret this to mean that if and when the Plaintiff wished to extract the minerals it had to repurchase the lands. The right to repurchase was intended to be activated even if the Plaintiff only intended to extract some minerals (c.f. the phrase "all or any") The lands to be repurchased are the entirety of the lands in the Folio as the purchase price was to be calculated by reference to an agricultural holding of the same size. The purchase had to be completed before the Plaintiff was entitled to enter as entry was subject to the payment of money. If no money was paid the Plaintiff was not entitled to enter. This means that the Plaintiff had to have repurchased the lands before the minerals could be extracted. In those circumstances entry would not be the exercise of an implied right derived from the exception of the minerals but rather the action of the owner of the lands by virtue of the repurchase.

In my view the deed provided for an option to repurchase and must be construed as such.

It is not disputed that an option to purchase is subject to the rule against perpetuities. Since the exercise of this option is not limited to the perpetuity period it is void as offending against the rule. (c.f. London and South Western Railway Co. v. Gomm (1882 20 Ch. D.562). Also since the first Defendant is not the original party to the transfer of 1977 the option is not saved on that account as a personal obligation. (c.f. South Eastern Railway Company v. Associated Portland Cement Manufacturers (1900) & Ltd 1910 1 Ch 12.

Whether the fact that the provisions of the deed attempting to provide for future right of repurchase to extract the minerals fails as offending against the rule against perpetuities, affects the validity of the exception of the mineral rights remains to be answered.

Mr. Brady for the plaintiff submits that the exception of the minerals is valid even if the right to enter the lands to extract them is inoperative and void, which is a separate issue.

Looking at the transaction as a commercial transaction the transfer to the purchaser was a valid transfer. The Vendor (i.e. the Plaintiff) intended to retain ownership of the sand, gravel, stone and minerals other than State minerals. The fact that the attempt to create a right to enter and to remove them by way of re purchase was not successful does not alter the intention to retain ownership by way of exception from the grant. The ownership of the sand, gravel etc. did not interfere with the operation of the farming activities on the land. The purchaser got what he bargained for. The ownership of the minerals was registered as a burden. Therefore the two subsequent purchasers took with notice of the retained ownership of the minerals. They got what they bargained for. The vendor/plaintiff through inept draftsmanship did not get a right to extract the minerals but that is no reason to hold that that resulted in losing title to the minerals which was never intended to be passed.

In my opinion the questions raised in paragraphs one and two of the first Defendant's Defence must be answered as follows

1. On a true construction of the deed, the transfer of 5^th August, 1977 did reserve to the Plaintiff the materials alleged..

2. On a true construction, the deed created an option to repurchase in order to extract the minerals which is void for offending the rule against perpetuities.

The alternative question raised in the third paragraph of the defence of the first Defendant does not arise.