Grundt v Great Boulder Proprietary Gold Mines Limited [1937] HCA 58

Grundt v Great Boulder Proprietary Gold Mines Limited [1937] HCA 58 - HCA 1937 case summary — Zoe

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then the tributers would not only lose the right, on that construc- tion, to follow the lode, they would actually lose the right to mine anything. Irrespective of where the lode went, the tributers were con- fined to the lode ; if the lode went outside by turning, the contention of the respondents is that the tributers would lose the right to mine the lode altogether. There is a fixed boundary north-east and south- west ; on the north-west side it is fixed by the boundary of section 50, and the south-east is fixed by a line shown on the plan - those points are ascertained. That is, between those points the parcels consist of the vein with twenty feet on each side of the vein, whatever turn the vein might take. The words "east" and " west" were only used in a rough sense, they are only approximate (See The Moorcock (1) ). There is no doubt that the lode, where it went out to the west, called the western swing, is one and the same body of ore as the body of ore the parties knew about between the Rutter shaft and the face where the swing took place. This matter is of great importance. taking into consideration what the parties to the agreement intended (J. C. Williamson Ltd. v. Metro-Goldwyn-Mayer Theatres Ltd. (2) ). The three questions to be decided are : (1) Were the appellants guilty of trespass ? (2) If so, is the respondent estopped from recovering damages ? (3) Had the Chief Justice jurisdiction to vary the Warden's order as to taking accounts from Ist June 1935? {Counsel referred to secs. 257 (6) and 268 of the Mining Act, and regs. 255 and 260 and Forms 59 and 62 of the regulations under the Act.] On the proper construction of the agreement the appellants were given the right to work a known body of ore between the Rutter shaft and No. 2 air shaft on the 160 feet level - it was the only ore body known at that level, and the appellants were given the right to mine and work that ore and follow it wherever it went in the sec- tions from 100 feet to 400 feet. The ore body in the westerly swing is the same body where it turns south between the Rutter shaft and No. 2 air shaft. The evidence is that the work began at 225 feet level and went up to the 170 feet level, where it struck the ore body, and the evidence is uncontradicted that the western swing is the same ore body as had been worked where the swing took place. The characteristics of the two ore bodies are the same ; they

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without discontinuity and having the same nature but differing in direction. The investigation of the issue showed that the basal difficulty in determining it is to discover and fix some definite discrimen of identity or difference. In that part of the Kalgoorlie Goldfield with which we are concerned there are two well-recognized systems of lodes. One system runs roughly north to north-west and south to south-east. The lodes of this system are called main lodes. The other system runs transversely to the first system. The lodes of this system are described by the Cornish word " caunter" and are called caunter lodes or sometimes cross-lodes. Apart from the difference in this direction or " strike " of the lodes of the two systems, there are differences in the direction and degree of the underlay or dip with which they descend and in the occurrence of gold within the lode. These differences are said to be more or less characteristic of each system. Where a main lode and a caunter lode intersect, the greatest occurrence of gold is expected. The theory commonly held appears to be that at different times in the earth's history two systems of fissures or shearing occurred. The solutions carrying the gold circulated in them and formed the lodes. The system of shearing or fissures or faults running roughly north and south or north-west and south-east now carries what are called the main lodes and the other system of shearing carries the caunter lodes. Different conceptions are current as to the order in which the two systems of shearing occurred. Caunter lodes are regarded as inter- secting with main lodes, as opposed to branching from or junctioning with them; but the view is also accepted that, where fissures perhaps originally intersected so as to break across one another, there has been a lateral movement, sometimes roughly horizontal and sometimes more vertical, by which the parts of a transverse fissure, as, for example, that of a caunter lode, have been moved so as no longer to be opposite or even very close. These views and conceptions appear to be part of the understanding of those conducting practical mining operations on the field, but whether they conform to the theories of scientific geology is not stated.

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has lost its right to an account of the tributers' profits or receipts from the gold content of the ore and the question whether in the circumstances it can recover as damages or otherwise any part of the proceeds of the gold paid over to the tributers must both be distinguished from the entirely separate question of estoppel upon which I have just stated my opinion. That question is whether the company is precluded by estoppel from asserting that the tributers committed a wrongful act when they mined the western vein or caunter lode, that is, from asserting that the tributers in doing so went outside the agreement. The reasons I shall give for thinking that the company is not so precluded will be clearer if the rights and remedies available to the company as a result of such a wrongful act are first stated. By mining outside the parcels of the tribute, tributers commit the wrong of trespass and become liable in trespass for damages measured by the injury done to the mine. When a trespasser mines ore and treats it or otherwise deprives the mine owner of the property in the ore, he is guilty of conversion and is liable to the mine owner in that form of action for the value of the ore. Courts of equity administered relief in aid of the legal right by ordering an account of the proceeds. But in the present case the ore was delivered for treatment under the terms of the tribute agreement to the mine owner or lessee now said to be the true owner. In delivering the ore to the company which claims property in it, the tributers can scarcely be considered as converting it to their own use by depriving the true owner of his property. The company in treating ore delivered to it under a tribute agreement acts as principal and not as agent for the tributers. The property in ore won under a tribute agreement of the kind now in question probably never does vest in the tributers. At all events the tributers in the present case conceded the company's right to treat the ore and sell the gold extracted and relied only on the company's paying them half the sum equivalent to the net proceeds as estimated or calculated under sec. 145c. This the company did without making any claim to withhold the money as representing ore won outside the tribute and, therefore, belonging wholly to the company. An account of so much of the proceeds of the ore, or the gold content, as the tributers

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But the estoppel set up by the tributers goes to the first step. the winning of the ore. The principle upon which estoppel in pais is founded is that the law should not permit an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations. This is, of course, a very general statement. But it is the basis of the rules governing estoppel. Those rules work out the more precise grounds upon which the law holds a party disentitled to depart from an assumption in the assertion of rights against another. One condition appears always to be indispensable. That other must have so acted or abstained from acting upon the footing of the state of affairs assumed that he would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption. In stating this essential condition, particularly where the estoppel flows from representation, it is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which

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consequences upon the relief to which the company is entitled. Up to the time when the responsible officers of the company became aware that the tributers were working outside the tribute no difficulty arises. Up till then the company received the ore, treated it and accounted for the tributers' share of the gold content, all in the belief that it was bound to do so and that the tributers had won the ore from a place they were entitled to mine. Up till then no reason is to be found for excluding from any damages recoverable by the company for trespass any part of the company's actual loss, even although the payment by the company itself to the tributers of their share of the gold might enter into that loss. While the company remained ignorant of the source of the gold in respect of which it made the payments. to pay over the money was a natural consequence of the tributers' trespass and of their delivery for treatment under the agreement of what may be called the company's own ore. In the same way there was no reason against the company's obtaining the equitable remedy of an account of the net proceeds received by the tributers in respect of their share of the gold, if the company elected to take that remedy. For such payments would have been made under a mistake of fact and would be recoverable at law as well as being subject to an account in equity as the proceeds of the ore wrongfully mined. But, after the company, by its responsible officers, became aware of the source of the ore, the matter wears a different complexion. There is a question whether if a mine owner receives ore for treatment as under a tribute agreement he can, on discovering that the ore was won outside the tribute, refuse to pay over the share to which otherwise the tributers would have been entitled. This question must be considered. But, in the meantime, let it be assumed that the company was at liberty to assert its equitable right to the entire proceeds of the ore unlawfully taken from its mine and to refuse to make payments in respect of

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the gold contents of such ore. On that assumption every payment was voluntary which the company made to the tributers with know- ledge that the ore came from outside the tribute. The company, after 8th May 1935 at all events. was in the position of a man who disputes a claim of right made against him but is unwilling to take the course of withholding payments growing out of the claim. Pay- ments made in respect of a disputed liability are voluntary and cannot be recovered either directly or as damages representing part of a loss. On the hypothesis stated, the company was entitled to the money and its failure to insist upon its rights to do so cannot be considered a natural consequence of the trespass. It is a volun- tary act based upon its unwillingness to act at once upon the objection that the ore was won from a caunter lode. Moreover, on the hypothesis stated, the equitable remedy of an account is met, not only by the voluntary character of such payments, but by the whole conduct of the company in failing to insist upon its objection, and, under cover of its objection, in allowing the tributers to go on. Equitable remedies are not available to parties who, though openly claiming a right at the time. so conduct themselves as to make it unfair and inequitable to go back and rip up a transaction or dealing in order to enforce the right against those who have infringed it, Such cases do not often arise, because, as a rule, those who act inconsistently with a claim of which they have warning must do so at their peril. But the doctrine of laches is flexible in its application and operates to create a bar where failure to insist upon a known right is coupled with circumstances making it inconsistent with fair dealing afterwards to seek a remedy for its infringement. In the well-known statement in Lindsay Petroleum Co. v. Hurd (1). besides cases of conduct equivalent to waiver, Sir Barnes Peacock mentions cases where there is no waiver of the remedy but the conduct and neglect of one party has put the other party in a situation "in which it would not be reasonable to place him if the remedy were afterwards to be asserted." A most important circumstance in such cases is the hazardous or speculative nature of the transaction upon which that other party is engaged. An account of the profits of the tributers would mean that they were made constructive trustees

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Before

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Judgment (171 paragraphs)