Home Information Cases Bocardo SA v Star Energy Ltd (2010)

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Bocardo SA v Star Energy Ltd (2010)

Summary

The owner of the surface of land was the owner of the strata beneath it, including the minerals that were to be found there, unless there had been an alienation of them by a conveyance, at common law or by statute to someone else. In the instant case, the construction of wells by an oil company at a depth of 800 to 2,900 feet beneath the surface of land was a trespass actionable at the suit of the landowner. Ordinary compulsory purchase principles applied to the assessment of compensation under the Mines (Working Facilities and Support) Act 1966 s.8(2).

Facts

The appellant landowner (B) appealed against the quantum of damages awarded to it following a decision ([2009] EWCA Civ 579, [2010] Ch. 100) that the respondent oil company (S) had committed an actionable trespass. S cross-appealed on the issue of trespass.

S had a licence to search for, bore for and get petroleum. Its predecessors had drilled three wells diagonally. They entered the substrata below land owned by B at substantial depths beneath the surface. The deepest terminated at some 2,900 feet below ground level. The issues were (i) whether B's title to the land extended down to the strata below the surface through which the wells passed; (ii) whether possession or a right to possession was a precondition for bringing a claim for trespass and, if so, whether B had or was entitled to possession of the subsurface strata through which the wells passed; (iii) whether S had a right under the Petroleum (Production) Act 1934 to drill and use the wells to extract petroleum from beneath B's land which gave it a defence to a claim in trespass; (iv) the proper approach to assessing damages.

Held

(Lord Clarke dissenting, and Lord Hope dissenting in part, on the fourth issue) (1) (Per Lord Hope) B's title did extend down to the strata below the surface through which the wells passed. The owner of the surface of land was the owner of the strata beneath it, including the minerals that were to be found there, unless there had been an alienation of them by a conveyance, at common law or by statute to someone else. That was the view of the Court of Appeal in Mitchell v Mosley [1914] 1 Ch. 438. Much had happened since then, as the use of technology had penetrated deeper and deeper into the earth's surface, but there was no reason why Mitchell should not still be regarded as good law, Mitchell approved. There had obviously to be some stopping point, as one reached the point at which physical features such as pressure and temperature rendered the concept of the strata belonging to anybody so absurd as to be not worth arguing about. But the wells in this case were far from being so deep as to reach the point of absurdity; indeed, the fact that the strata could be worked upon at the depths in question pointed to the opposite conclusion. (2) (Per Lord Hope) Possession or a right to possession was a precondition for bringing a claim for trespass. Further, B, as the paper owner, was entitled to possession of the subsurface strata through which the wells passed. (3) (Per Lord Hope) S had no defence to the claim in trespass. There was nothing in s.10(3) of the 1934 Act (re-enacted in the Petroleum Act 1998 s.9(2)) or the context in which it was enacted that restricted the reference to "land" in that subsection to things that happened only on the surface. In the context of a statute which was concerned with the right to search for, bore for and get petroleum existing in its natural condition in strata below ground, the words "enter on" were apt to apply to underground workings as well as workings on the surface itself. The words "interfere with" were not restricted to interfering with the owner's use and enjoyment of the land for the time being. The owner of the subsurface was entitled to say that his land was being interfered with when it was bored into by someone else. His right to object was inherent in his right of ownership of the land, and it was irrelevant that he was not making any use of it. (4) (Per Lord Brown) For the purpose of assessing damages, it was necessary to determine the proper compensation payable by S to secure its right to install deviated wells beneath B's land had it sought to enforce that right pursuant to the Mines (Working Facilities and Support) Act 1966. The principles, including the principle established in Pointe Gourde Quarrying & Transport Co v Sub-Intendent of Crown Lands [1947] A.C. 565, ordinarily governing the approach to valuation in the field of compulsory land purchase applied equally to the construction and application of s.8(2) of the 1966 Act in respect of the compulsory acquisition of ancillary rights over or under land, Pointe Gourde applied. Further, they operated to deny B what would otherwise be regarded as the powerful bargaining position of a landowner able to control access to a valuable oilfield partially sited beneath its land.

Appeal dismissed, cross-appeal dismissed

Supreme Court
Lord Hope, Lord Walker, Lord Brown, Lord Collins, Lord Clarke
Judgment date
28 July 2010
References
LTL 28/7/2010 : [2011] 1 AC 380 : [2010] 3 WLR 654 : [2010] 3 All ER 975 : [2011] BLR 13 : [2010] 3 EGLR 145 : [2010] RVR 339 : [2010] 31 EG 63 (CS) : [2010] NPC 88 : Times, July 29, 2010

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