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1919 Supreme(SC) 66
Privy Council
Justice Duff, Lord Dunedin , Lord Buckmaster, Justice Viscount Haldane, JJ.
Quesnel Forks Gold Mining Company Limited -Appellant
Versus
Ward and others -Resopndent
On appeal from the Court of Appeal of British Columbia
Decided On : 21-10-1919
Linklater and Co., Redden, Blake , R.H.R. Reeve, Gore-Browne , J.M. Anderson, Joseph Martin
A lease forfeiture clause stating the demise becomes "absolutely forfeited" and "void" is voidable at the lessor's option, not automatic. Additionally, requirements of a general mining statute do not apply to leases granted under a separate, comprehensive special statute.
Headnote:(A) Mining Law - Forfeiture of Lease - Interpretation of "void" and "forfeited" - A covenant providing that a lease shall become "absolutely forfeited" and "ipso facto... cease and be void" if mining operations cease for a specified period is a condition of forfeiture. Such a clause does not result in automatic termination of the lease but renders it voidable at the option of the lessor. Unless the lessor performs an act to establish the forfeiture, the lease remains valid and subsisting.
(B) Mining Law - Statutory Requirements - Free Miner's Certificate - Where a mining lease is granted under a special statute that creates a complete and independent scheme, the requirements of a general mining act, such as the necessity of holding a free miner's certificate, do not apply. The penalty for failure to obtain such a certificate under a general act applies only to leases granted under that specific act and not to leases granted under a separate special act.
Facts of the case:
A party held mining leases granted under a special statute. The leases contained a proviso that if the lessee ceased mining operations for two years or abandoned the premises for one year, the demise would become absolutely forfeited and void. The holders of the lease ceased mining operations for more than two years and stopped renewing their free mining certificates. Another party, having obtained subsequent leases over the same ground, challenged the validity of the original leases on the grounds of automatic forfeiture and failure to comply with the general mining statute's requirement for a free miner's certificate.
Findings of Court:
The court held that the forfeiture clause was not automatic; the word "void" in this context meant "voidable" at the option of the lessor. Since the Crown took no action to establish forfeiture, the lease continued. Additionally, the court found that the lease was a thing complete in itself, created by a special act, and therefore the provisions of the general Placer-mining Act regarding free miner's certificates were inapplicable.
Issues: Whether the failure to conduct mining operations for the stipulated period resulted in the automatic termination of the lease, and whether the failure to maintain a free miner's certificate under a general mining statute invalidated a lease granted under a special act.
Ratio Decidendi: A forfeiture clause, even when strongly worded, is generally construed as a right of the lessor to terminate the lease rather than an automatic cessation of the term. Furthermore, a special statute creating a specific mining right operates independently of a general mining statute, and the requirements of the general act do not extend to rights created by a separate, comprehensive special act.
Result: Appeal dismissed.
Legal Category Hierarchy
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property law
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mining law
- mining leases
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mining law
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contract law
- lease forfeiture
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statutory interpretation
- special acts vs general acts
Lord Buckmaster :-
The question in this case is whether certain leases, granted by the Government of the Province of British Columbia to the Cariboo Hydraulic Mining Co., are valid and subsisting leases; or whether as the appellants contend the terms for which they were granted have come to an end.
It is not suggested that the terms have expired by reason of effuxion of time, but upon the grounds that first, the respondents, who are entitled to the benefit of such leases if subsisting have failed to take out a free miner's certificate as required by the Placer-mining Act (R. S. B. C. 1911, c. 165) and secondly that the conditions upon which the leases were granted have not been satisfied and that they have consequently become void.
The appellant's position in the dispute is due to the fact that they are entitled to the benefit of seven placer-mining leases granted on 13th January, 1916, by the Gold Commissioner for the Quesnel Mining Division of the Province of British Columbia pursuant to the powers vested in him under the Placer Mining Act already mentioned. These leases cover the same ground as the leases under which the respondents claim and if these latter leases are for any reason no longer subsisting there is no question as to the appellants' title.
Before examining the provisions of the Placer-mining Act , it is desirable to consider the circumstances in which the leases for which the respondents are entitled were originally granted. Before 1894 the land in question was held under placer-mining leases issued, under a statute similar to that above referred to, to a company known as the Cariboo Hydraulic Mining Company, Limited, through which company the respondents claim. In April, 1894, that company presented a petition asking for an Act confirming them in the property already acquired by them and in the words of the petition "consolidating the several placer-mining claims and other properties now held by them into one, with a more lasting and secure title thereto than they now have;" and accordingly a statute was passed by the Legislative Assembly of the Province of British Columbia in 1894 which declared that it should be lawful for the Lieutenant-Governor-in Council to demise to the company and their assigns for twenty-five years the properties which were described in the schedule with power to work, extract, remove and retain to their own use all mines and minerals including the precious metals therein contained at a yearly rental of 300 dollars per annum and also granting the privilege of renewal at a rental to be agreed or fixed by arbitration.
It was provided that the lease to be granted under this statute should contain a covenant that the company should spend a sum not less than 500,000 dollars a year in developing and also that they would not employ a Chinese or Japanese person in or about the property and the works connected therewith and by Sections 3 and 4 power was also conferred to demise lands immediately adjoining those in the principal lease not exceeding 250 acres for a term of twenty-five years and also so much of the waters of Six Mile Creek and Morehead Lake not exceeding in the aggregate 3,000 miner's inches as defined by the Placer-Mining Act 1891 as might be necessary for any purpose connected with the undertaking.
A mining lease was granted consequent upon this statute, dated 16th May, 1894, but it did not comply in exact terms with the conditions above referred to, and in particular it modified the provisions with regard to the employment of Chinese or Japanese.
Without further legislation, therefore, this lease would have been outside the powers conferred by the statute and in order that the position might be validated a further Act was passed in 1895 containing extended terms with regard to the water rights and the construction of dams and providing by Section 5 that the lease granted on 16th May, 1894 "a copy of which is contained in the schedule of this Act be and the same is hereby decla
