Saturday, 5 November 2011

Will owners of manorial rights benefit from fracking?

Tremors - Fracking
The existence of enormous amounts of natural gas under mainland England has been revealed - see The Guardian 23rd September 2011 , the article in Oil price and the pressure group "Frack Off."    Estimates are that some 200 trillion cubic feet of gas is there for the extraction.  One process for its extraction is known as "fracking" (hydraulic fracturing).  Naturally, the economic value of this will be immense.  It is reported that certain "Lords of the Manor" are set to "cash in" - see The Telegraph 5th November 2011 - "Lords of the Manor to cash in on fracking."  How might these individuals - holding what many see as archaic rights - be able to "cash in."

Rights of Landowners:

In general, a landowner (strictly, the owner of the fee simple absolute in possession) will have a right to everything in, on or over the land - or, as it was once described, "Everything up to the sky and down to the centre of the earth" - Cobbett v Hill (1870) LR 9 Eq 671 at 673 per James V-C.  In fact, this is fanciful
since it has been modified in various ways particularly by Acts of Parliament such as the Coal Act 1938, Civil Aviation Act 1949 s.40 and the Petroleum Act 1998 (replacing the Petroleum (Production) Act 1934).

The Petroleum (Production) Act 1934 vested property in petroleum in His Majesty.  The modern law is in the Petroleum Act 1998.  Section 1 defines petroleum:

In this Part of this Act “petroleum” - (a) includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata; but (b) does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation.

Hence, the word petroleum also covers natural gas existing in its natural condition in strata.

Section 2 of the Act states:

Rights to petroleum vested in Her Majesty.

(1) Her Majesty has the exclusive right of searching and boring for and getting petroleum to which this section applies.

(2) This section applies to petroleum (including petroleum in Crown land) which for the time being exists in its natural condition in strata in Great Britain or beneath the territorial sea adjacent to the United Kingdom

(3) For the purposes of subsection (2), “Crown land” means land which - (a) belongs to Her Majesty or the Duchy of Cornwall; (b) belongs to a government department; or (c) is held in trust for Her Majesty for the purposes of a government department.

(4) .....

Under section 3, the UK government issues licenses to search and bore for and get petroleum and the licensing task is part of the role of the Department of Energy and Climate Change (DECC).  The rights granted by landward licences do not include any rights of access, and the licensees must also obtain any consent under current legislation, including planning permissions. In order to benefit from the grant of a licence, it may be necessary for the licensee to acquire what are referred to as "ancillary rights" - see section 7 of the 1998 Act.  Examples of such rights are access to land, boring of shafts etc.  This, in turn, triggers a complicated process set out in the Mines (Working Facilities and Support) Act 1966.  Naturally, this process would be used where the extractor is not able to secure access rights etc. by agreement with those who have legal interests in the land - (1966 Act s.3).  It is an obvious point that such persons would perhaps drive a hard bargain to grant such rights.

The Star Energy case [2009] EWCA Civ 579: (Judgment)This case considered interesting issues about the rights of landowners in England under whose land there are naturally occurring deposits of petroleum. The specific questions raised were: (1) where an oil company has been granted a licence under the Petroleum (Production) Act 1934 ("the 1934 Act") to search, bore for and get petroleum in the licensed area which is beneath land belonging to another and, without obtaining that landowner's agreement, or an "ancillary right" pursuant to statute to do so, the licensee bores pipelines at depth beneath the landowner's land in order to recover petroleum from within the licensed area, is he committing a trespass? (2) if the petroleum licensee is thereby committing a trespass, then what measure of damages is the landowner entitled to obtain for any past and continuing trespass, assuming that the court does not grant an injunction? 

The court answered YES to question 1.  The case is considered in an article on "Practical Law"

Manorial Rights:

What are "manorial rights?"  A useful starting point for setting the scene is the article "To the manor bought" - BBC 31st July 2007 - which describes how a business had been purchasing "manors", including "The Manor of Alstonefield" (Derbyshire), and claiming that various rights attached to the ownership of the manor.

"Lordships of Manors", "Manorial Land" and "Manorial Rights" are akin to ghosts from a bygone era of English legal history.  However, they can be very troublesome spirits as pointed out by Judith Bray (Senior Law Lecturer University of Buckingham" who wrote:

"Manorial rights can be owned separately from land and can give powerful and valuable rights to the owner. The Lord of the Manor had an important role in society which gave him certain rights over those living in the manor but to whom he also owed duties and protection. Today some of the rights remain, often in the hands of people who have no connection with the area other than their title, but the protective role has disappeared. These rights can be highly lucrative but often at the expense of vulnerable people."

The Law of Property Act 1925 s.205(1)(ix) defines the term "land":-

Land” includes land of any tenure, and mines and minerals, whether or not held apart from the surface, buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments; also a manor, an advowson, and a rent and other incorporeal hereditaments, and an easement, right, privilege, or benefit in, over, or derived from land; . . . and mines and minerals” include any strata or seam of minerals or substances in or under any land, and powers of working and getting the same . . .; and manor” includes a lordship, and reputed manor or lordship; and “hereditament” means any real property which on an intestacy occurring before the commencement of this Act might have devolved upon an heir;

Hence, the Act recognised a "manor" as land - (a species of "real" property) - and it follows that a manor could be transferred to a new owner and a manor could be held on any of the estates permitted by the Act (e.g. on fee simple absolute in possession etc).

The Land Registry Practice Guide 22 is helpful in explaining the modern position of manors.   The document commences by noting that manors are of ancient origin dating from before Norman times. The extent of the manor was usually determined by the original grant from the Crown or superior lord. A manor was self-contained with its own customs and rights within its defined area.

There are three separate elements of manors that can affect Land Registry.
  • Lordship of the manor – whoever owns the lordship of the manor is entitled to refer to themselves as lord of that manor, for example, Lord of the manor of Keswick.
  • Manorial land – because a manor was a defined area it included the physical land within that area. Such land could either be freehold or leasehold.
  • Manorial rights – rights which were part and parcel of the manorial title and which were usually kept by the lord on disposal of parts of the manorial land, for example, the right to hunt, shoot or fish.
These elements may exist separately or be combined. The lordship title cannot be subdivided, but the manorial land and the manorial rights can be.  Confusion can be caused, as ‘manor’ can refer to either the lordship and/or the manorial land.

Under the Land Registration Act 2002, it is no longer possible (since 13th October 2003) to make an application for the first registration of a lordship title. However, dealings with existing registered titles are subject to compulsory registration. This includes the grant of a lease (of any term) out of a registered lordship title.  Furthermore, the 2002 Act s.119 provided for voluntary de-registration and, if this is done, the Lordship title will continue to exist off the register but (like the majority of these titles) the Land registry would hold no record of it.

Under the 2002 Act, manorial rights are categorised as "Overriding interests" so a purchaser of land would take subject to those interests even though they do not appear on the land register.  However, this overriding status is to be removed after 12th October 2013.  Hence, those who claim to have manorial rights are seeking to protect their rights by registration.

The extent of manorial rights is unclear but, where they exist, it seems that owners of those rights might have to be asked to grant permission for exploration / extraction etc. or they would be compensated in the event of a licensee using the statutory process to obtain ancillary rights.

Law Commission and Feudal land law rules:

A further point of interest is that the Law Commission was working on the remaining influence of feudal law in England.  Unfortunately, this project has been placed on the back-burner for reasons explained here.  

Reform of the law should be treated with greater urgency.  Perhaps the possibility of these "lords" benefiting financially from "fracking" may be a spur to reform?  Well, one can but live in hope ...!  It is very unsatisfactory that these ghostly survivals of bygone times can still cause problems in the 21st century and a date for their exorcism is long overdue.


Law Commission 11th Programme - see para. 3.1 regarding feudal land law.
Land Registration for the Twenty-First Century: A consultative document - Law Commission No.254 (1998)
Land Registration for the Twenty-First Century: A Conveyancing Revolution - Law Commission No.271 (2001)

The Law Commission documents form the background to the Land Registration Act 2002 and they contain useful material in relation to manorial rights and certain other rights which arise, from time-to-time, in connection with land.

In relation to "advowsons" - (mentioned above) - see the Patronage (Benefices) Measure 1986 s.6.  Advowsons are the right to present a person to a "living" in the Church of England.  They are no longer regarded as interests in land for the purposes of registered land.

1 comment:

  1. Of particular concern is the fact that the Land Registry has adopted a policy of not notifying the surface owners when registering substrata containing minerals on a separate qualified title carved out of the surface title (but not noted on the register of the surface title). This can be done whenever there is no note on the surface title to say that it includes mines and minerals. The justification is that the general boundaries rule means that there is definition of the substrata affected, so the surface owner's rights are not prejudiced; that notification to surface owners would result in numerous groundless objections, which would be ignored anyway. The real reason appears to be that the Land Registry simply does not want to have to deal with the numerous objections so the rights of the surface owners to their substrata are being overriden. These applications can be based on statutory declarations by researchers who say they have looked into the archives of Inclosure Acts and Awards and the mineral rights were in former common land and preserved to the lord of the manor, or reserved to the lord of the manor on the enfranchisement of copyhold land. This was all revealed to me in response to an FOI request.