the several water levels, drifts, and subterraneous roads and ways and the roofs thereof in a good state of repair, order, and condition. . . . and further that they, the said lessees and their agents, servants, colliers, and workmen shall not nor will, in working or getting the said mine, bed, vein, and seam of coal hereby demised, sink or open any pit or shaft, nor break open, nor injure the surface of the lands or grounds under which the same is situate, nor win, work, or get any coal under or within the space of twenty yards from the bank of the said river Calder." The lease contained a provision for the reference to arbitration of any dispute arising thereunder, and under that provision the arbitrator by whom the case was stated had been appointed. The demised area was ten acres in extent, and the area of coal agreed to be left as a barrier between the workings and the river Calder was approximately one acre. At the date of the lease the lessees were getting the Haigh Moor seam of coal by means of workings from a pit called the Parson's Pit, which was situated about a thousand yards from the nearest point of the lessors' property. At that time these workings had reached the point marked B on a plan annexed to the case, and the existence of a large (200 yards) fault, shewn on the plan at a distance of 140 yards from the demised area, was well known to the parties to the lease. In the course of the workings from the Parson's Pit faults were also discovered at the points marked A and B on the plan, and, the lessees, having come across another fault which had not been proved, but was known to exceed twenty-four yards, drove a number of drifts, in the directions shewn on the plan, with the object of proving the coal. These operations, which extended over a period of several years and involved a large expenditure of money, were unsuccessful; and, although the workings were continued until 1898, they were then abandoned and the Parson's Pit dismantled. The lessees had paid rent at the rate of 51. per annum from the date of the lease to August 2, 1901. On February 3, 1899, a letter was written on behalf of the lessors to the lessees complaining that they were not working the coal. On February 6, 1899, the lessees replied, stating that C. A. 1904 WATSON V. CHARLES WORTH. 1904 C. A. it had proved impossible to get to the coal, and contending, in effect, that the lease left it optional with them whether they would do so. The matter was subsequently referred to arbitration. WATSON v. CHARLES WORTH. The arbitrator found and awarded in the special case as follows: "Any coal that may exist within the demised area could, by means of drifts specially driven for that purpose, have been won and gotten before November, 1902, the date of the reference to arbitration; but, having regard to the difficulties encountered by them in the adjoining parts of the mine, the lessees came to the conclusion that such working would not prove profitable, and I find that, in a commercial sense. they acted prudently in abandoning the undertaking. The coal worked from the Parson's Pit was demised to the lessees by various owners, and the solicitor who negotiated the said lease on behalf of the lessors stated in cross-examination that it was known during the negotiations that the lessees proposed to work the several demised areas as one colliery, but, save as aforesaid, I find that neither the lessors nor their agents had any notice or knowledge of the terms or conditions of the leases granted by the owners of the other demised areas of coal. Even on the assumption that the several mines in lease to the lessees were to be worked together as one colliery, and that the coal demised by the said indenture of lease could not be worked in advance of the coal of the other lessors, I find that the coal within the demised area could, in the ordinary course of working, if carried on regardless of expense, have been won and gotten before November, 1902, but that the operations would have been extremely costly, and would have entailed very heavy pecuniary loss upon the lessees. It has not been established either that coal does exist or that it does not exist within the demised area. In all probability workable coal does exist within the area, though the seam is in such a faulty condition that a part only, say four and a half acres (exclusive of the barrier), would be paid for by the lessees under the covenants of the lease, if worked under ordinary conditions, but without any regard to the cost of working. The lessors, after the date of the lease and prior to the year 1902, sold the surface superjacent to the demised area, and are not in a position to win the coal (if any) within the demised area. If the Court should be of opinion that the lessees enjoyed a right of option to work the coal or not to work the coal as they pleased, then I award and direct that the lessees are not under any liability to the lessors (except as to the payment of the rent of 51. reserved by the lease), and that the lessors do pay to the lessees their costs of and incidental to the reference and do pay the costs of this my award; and, if the Court should be of opinion that the lessees were under obligation to work the coal, but that the lessors are not entitled to damages, except in respect of coal which they have proved affirmatively and positively to exist within the demised area, I make a like award. If the Court should be of opinion that the lessees were under obligation to work the coal, and that the lessors are entitled as damages to the value of ten acres of coal assessed at 100l. per acre (less the value of the barrier and the sum of 781. already paid), I award and direct that the lessees do pay to the lessors the sum of 8221. and their costs of and incidental to the reference, and also do pay the costs of this my award; and, if the Court should be of opinion that the lessees were under obligation to work the coal, and that the lessors are entitled as damages to the amount which I find would in all probability have been paid to them under the lease, if the lessees had won and gotten the coal regardless of pecuniary loss to themselves, I award and direct that the lessees do pay to the lessors the sum of 3721. and their costs of and incidental to the reference, and also do pay the costs of this my award." Channell J. gave judgment for the lessees. R. Neville, K.C., and MacSwinney, for the appellants, the lessors. The covenant to win and work the coal is an absolute covenant. The lessees seek to read the words "fairly, duly, and honestly" as importing a limitation of, and not an addition to, the obligation to win and work. It is submitted that they cannot be so construed: Walker v. Jeffreys. (1) Quarrington v. Arthur (2), which was relied upon in the Court below by (1) 1 Hare, 341; 58 R. R. 90. (2) (1842) 10 M. & W. 335; 62 R. R. 635. C. A. 1904 WATSON V. CHARLES WORTH. C. A. 1904 WATSON V. CHARLES WORTH. the lessees, is clearly distinguishable; for there the demise was only of mines which had been or thereafter during the term might be discovered or opened; and it was held that a covenant to work those mines was not broken by not working mines which had not been discovered or opened. The scheme of the lease in the present case is this. At the time when it was granted, the lessees were working the Haigh Moor seam under adjacent lands. Until in the regular course of working they got to the coal demised, they were to pay only the nominal rent of 51. per annum; and the intention was that they should be bound to continue fairly, duly, and honestly the regular course of working until they got to the coal demised, and then the heavier rent of 100l. per acre of coal was to become payable. The meaning of the word "win" in this connection is defined by Lord Hatherley in Lewis v. Fothergill (1) as being to put the coal in a state in which continuous workings can go forward in the ordinary way: see also per James L.J. in Lord Rokeby v. Elliot. (2) Instead of carrying on the workings under adjacent lands so as to win the coal demised as provided for by the covenant, the lessees, when they came to a fault, abandoned the colliery. With regard to the question as to the amount of damages, the lessors are, it is contended, entitled to the larger sum found by the arbitrator. The presumption as against the lessees, by reason of whose breach of covenant the amount of coal which could have been got remains unknown, is that the full nine acres of coal existed under the surface, and could have been worked. The lessees are not under the circumstances entitled to throw on the lessors the onus of shewing that coal to the amount contemplated by the lease existed and could have been got. If they rely on the non-existence of the coal as a defence, it is for them to prove it. [They also referred to Clifford v. Watts. (3)] C. A. Russell, K.C., and O. Leigh Clare, for the respondents the lessees. The reasonable construction of the covenant is not that contended for by the lessors. The lease in the (2) (1879) 13 Ch. D. 277. (3) (1870) L. R. 5 C. P. 577. (1) (1869) L. R. 5 Ch. 103. present case cannot be read as importing a warranty by either VOL. I. 1905. 2 C. A. 1904 WATSON V. CHARLES WORTH. |