More Construction Controversy

Abstract

This article discusses two important developments in the law of contract interpretation since the authors’ earlier article in (2011) 28 JCL 101. The first is the decision of the High Court of Australia to decline special leave to appeal from the decision of the NSW Court of Appeal in Jireh International Pty Ltd v Western Export Services Inc and also to take the unusual step of publishing the reasons for doing so. The second is the decision of the United Kingdom Supreme Court in Rainy Sky SA v Kookmin Bank. While at first sight the two cases seem to be at opposing ends of the literal-contextual spectrum of approaches to contract interpretation, closer analysis reveals that they both affirm principles that are inconsistent with Lord Hoffmann’s well-known restatement in the ICS case insofar as they employ the concept of ambiguity as a gateway or limiting device: in Jireh to limit regard to evidence of surrounding circumstances; in Rainy Sky, to limit regard to considerations of business common sense.