Home Information Cases Homepace Ltd v Sita South East Ltd (2007)

Skip to content. | Skip to navigation

Homepace Ltd v Sita South East Ltd (2007)

Summary

A mineral exhaustion certificate provided by a surveyor under a lease was invalid as the surveyor had departed from his instructions and had mistakenly considered the wrong subject matter.

Facts

The claimant lessor (H) brought a Part 8 claim relating to the validity of a mineral exhaustion certificate served under a lease of land. The lease had been entered into between H and the lessee, who had assigned it to the defendant (S). Under the lease H reserved the right to excavate and exploit "reserved minerals", which were defined as "up to 12,000 tonnes in each year of this lease of limestone suitable for use as building walling or rockery stone or stone tiles and roofing slate". S's liability to pay a base rent to H under the lease ceased "upon the exhaustion of all the reserves of minerals in on or under the land or upon those minerals becoming economically unrecoverable" provided that a notice of the intention to cease payment was given in writing and a surveyor's mineral exhaustion certificate was attached. H later approved S's appointment of a surveyor (J). J's certificate confirmed that minerals were not economically recoverable. S subsequently sought to cease payment of the base rent on that basis. H questioned the validity of the certificate. H contended that J had failed to carry out his instructions by excluding from his valuation all limestone that was suitable for building, walling or other uses specified in the definition of reserved minerals, and therefore the certificate was invalid and not binding on the parties. H contended that the failure to carry out instructions was apparent from the correspondence between the parties. S contended that, since J had provided a certificate that on its face complied with the terms of the lease, that was the end of the matter, and it was not open to H to rely on evidence to establish any form of mistake.

Held

(1) Unless parties had provided otherwise in their contract, they were free to establish their case on the basis of the available admissible evidence in the usual way. The contract in the instant case did not provide for the certificate to be questioned for mistake, but there was no provision that limited the evidence that a party might rely on to establish that the certifier did not carry out his instructions. The question was whether it was possible to say from all the evidence properly before the court, not only from the certificate itself, what the certifier had done and why he had done it, Jones v Sherwood Computer Services Plc (1992) 1 WLR 277 applied. Therefore, H was entitled to rely on correspondence between the parties to support its contention that J had failed to carry out his instructions. (2) In the circumstances, J had considered the wrong subject matter. He had assessed the economic recoverability only of crushed rock and not of all the minerals after allowing for H's 12,000 tonnes per annum so long as that quantity remained in the land. J had departed from his instructions, which were to consider the economic recoverability of the minerals, by considering only the economic recoverability of a part of them. It followed that that certificate was a nullity.

Judgment for claimant

Chancery Division
Nicholas Strauss QC
Judgment date
30 March 2007
References

​LTL 11/4/2007

Members