THE SOUTHLAND LEASE

Dominion, Volume 6, Issue 1816, 31 July 1913, Page 3

THE SOUTHLAND LEASE

IN APPEAL COURT.

THE CROWN CONTENTION UPHELD. MINERALS NOT SOLD. ' Tho action which is popularly known its "Tho Southland Lease Case" vras yesterday decided by the Court of Appeal in favour of tho Crown. It will lie, i» mambcred that in February last, at LiveroargilJ, his Honour Sir Joshua Williams heard argument on an originating summons, under the Declaratory Judgments Act, which sought l'or an order interpreting certain sections of the Land Laws Amendment Act, 1912, and defining tho - rights of the plaintiff (Gaviii Brighton) in tho action in respect to tho property concerned. The two questions for his Honour were:—

If plaintiff, being the holder of a lease in perpetuity muter Section 121 mul Part 3 of ,tko Land Act, 1892, has exorcised tho option, given to ham by Scotiou 31 of the Land Laws. Amendment Act, 1912, wliat meaning is to he attributed to certain words in Section 31, Sub-secticii 1, of tho Lajul laws Amendment Act, 1912? TiK?e words ore: "The liind comprised in. the lease." Under the circumstances mentioned in the "preceding paragraph, is tho pla-in-•tiff, on the Land Board's certifying that he has completed "his • purchase, entitled to a Crown grant of the lan'.i mentioned in the notice to purchase free from all restrictions or reservations other than these named in taction 37 of the Land Laws Amendment Act, 1912? As indicated, the pl-aintitf in thai, action was llavin Brighton, the lt*sce oi the land in question, and the other party to the case tile Crown »Lands iiepait- ' meat. I'ho land leiu£ i-s 310 und 21 jiMcheß ill eKten.t. It is situated in. the lan<t district cf Southland. the annual rent was 2s. The lease y>'as to be regarded as a lease in perpetuity, under Part 3 of the Land Act, 1992.

Previous Hearing. At the previous hearing, Sir Joshua Williams gave it as his opinion that the answer to the liist question in tho summons should be that the words tho land comprised in the lease" mean the land demised by the lease, that is tho Land without the minerals. The answer to tho second question was that the plaintiff U entitled to a Crown grant of tho laud, delusive of tho minenus. Against this decision, the plainM Brighton appealed, and the. hearing ot the action "on appeal was heard last mouth. There, were on the benchllis Honour the Chief Justice (Sir Kobert Stout). llis Honour Mr. Justice .Denniston, iris Honour Mr. Justice Cooper, and his Honour Mr. Justice Chapman. Sir John Findlay, K.C., and JLr. W. A. Stout of Invercargill, appeared for the appellant Brighton. The Attorney-General (Hon. A. L. Jfordman) and Mr. 11. 11. Ostler represented the respondent Minister fcr Lands. . . Appeal Court's Decision. Mr. Justice Demiistoii, in.the course of his judgment yesterday, said that what the Court had to determine was what was meant by tho fee-simple of the lca:se of the laud comprised in this lease. "Prima facie, I should ray it is tho feesimp'.o ot' the leasehold demised .and leased under the lea;:i?, remarked his Honour. ". . . It is, however, contended for the appellant that under tin? words, 'land comprised ill his Lease or license' lie takes a freehciht interest in the foc-simpfe,. not of the surface, but of tho whole land ad ' inferos, inoludinr, therefore, amy mineral, mineral oil «as," metal, or valuable stone uiufcr the surface,' : tliougii' : expressly exempted from his lease, and, of course,, excluded in the consideration .given for it This is an extraordinary result. Notwklistanding the • ingenious argument of Sir John Find-lav to the contrary, it is, I think, demonstrable tlia.t .tho, Crown dee.s

not reccive any consideration for this , transfer of its specially excepted rights to these mineral*, ctc. 'Flic amour.t of tho purchaso money i; to be computed on the basis of the crisicffll capital value plus a cumulative perceiiitafre of 1} per cent, per annum on such orifrinal value. It is lwfc disputed that the original capital value, however arrived at, is the capital value of the land without tiro minerals. A comparatively trifling percentage added in each case to the original value, without any relation to value, ascertained or potential, of the minerals transferred in each ca*e. would be a mo*t irrational and unsatisfactory means of estimating the compensation for the mineral assumed, on Sir Jcnn Findlav's contention, to be surrendered by the' Crown: Tt i* besides common knowledge that the added percentage was intended not as having reference to the mineral value cf the land, but as a method of compensating the Oroya to •onie "stent for the difference in. value at the (late of the lease bstwepn the perpetual leasehold interest awl the freehold. For this DUirposs a porwaitase on th« leasehold -value was a proper ami lexical basis. If that l;e SO. then it is for the apnellant to establish that the LwMatuTC, bv axemen,t for the tratwfirrnat.inn of the land complied 111 liis lease into freehold at practicall-v .he original value of the lease, has incinonite.llv pi-esented him with the minora* in' it. the value '-of which it is °u»e:o.vtcd vim's into thousands. • • • "ptamlins "lone, the demise of a parcel of land'wnuld include oll t that lb" j ; .lid contnins physically—that is,- in all its dimensions. This lca=e limits one of these dimensions—its depth to ,he surfaco denth, which is all that l% n \, r, am .:. priced in'the Ic.w." The Court felt itself conmelled to put a non-natural meaning on the words to avoid the impossible-re-sult of the lessees having to pay for the minerals without obtaining .hem. II the Commissioner of Lands v. Benum and in eynress words purported to -define nb»olnHv and in all cases the words t.te land'comprised in the lease, J of course should have felt bound to follow it. I have mvci>. my reason? for holding tual. it Ins not daiio so. but that it has con-«li-ivd the -words as controlled l>v _ n special provision a« to payment for mmoftis. That provision beim? omitted from Ihe later statute, 1 think it 'S dear that it Wis a definition of Hie words ns raveniin<r oulv the particular cas- dealt with I,v 111- 'iiidameiit: and that they are now to interpreted in the general terms of (lie imminent. "the surface soil and 11,0 minoroU- inak« 11" the whole land The only other point I tlunk it ncc»*w In rofov to te av?»Ment or tnsCroun that" as inuler the ordinary lea=o in p°rnotintr no riiflit to mine T>a«FG<l iimlcr 111" lease, end as the riffht of sale 111 le-sn-ct to fclvsiu undoubtedly pave to the onondnm lessee, without any ™nsiderntion the ricjlit to any minerals which m i K ht lie in the.-land d-mise<it was reasonable presumption that _ th« same result was intended -to follow 1111 the ease of laud under S. f2l of the Act of 1802. Tim answer to that is. T think, tliafe that motion deals with land sneeinlly withdrawn from pale, and dealt with special provisions as to leasing, on the grounds IKil it is land resarved or to be rewved f or cal-mini'ii. or m the case wlir-re the presence of such mineral, mineral oil, .ga=. metal, or valuable stono 1* ni-ol'ible. These f"rm a very small part of the total saleable lands of the I>»and have a <nednl value. It would, in uiv opinion, be absurd to treat ordinary laud. in I'esnect- of whieii toe r,n:siblo minerals are treated as a neali-, rible quantity, as furnishing an .iinalouv to land sneciallv reserved vis mineral. There is 110 exception 111 tli'r-e leases of minerals. On Ihe coiistrii'-t whicli T suecrest be nut Ihe words, "laud eoinprised in tip lease, the possible mineral in siieli leases would nas-. 'I'h'"- were never treated as having a pa.— pibli" value. I do not wish t« be nnderslnod as .not deciding that; the Crown has powr ti> sell this hind. lor Hie-e reasons 1 am of opinion that the iu. trment appealed from is yijrl>t; and that (he npneal should be dismissed. Mr Justine Conner and Mr. Justice , Chapman delivered separate jmlsmcnts api'neiitK that the appeal should bo dismissed. , „ The Chief Justice dissented, lie was ■:jf\ opinion that the anneal .-dumid be allowed. (11l the ninlinn ot Sir John Pnullav, have was granted to carry the uiipeal to the I'riv" Council-