Lloyd's Maritime and Commercial Law Quarterly
SOME FALLACIES CONCERNING THE LAW OF CONTRACT INTERPRETATION:
Rohan Havelock*
(1) A REPLY TO PROFESSOR MCLAUCHLAN
In Investors Compensation Scheme Ltd v West Bromwich Building Society
1 (“ICS”), Lord Hoffmann “restated” the principles of contractual interpretation in five principles which soon became orthodoxy. I have argued that, in a series of judgments since 2009, the United Kingdom Supreme Court has returned to a more traditional approach to interpretation.2 Professor David McLauchlan has denied a “fundamental change” in the law of contract interpretation, and argues that the ICS principles still represent the guiding approach.3 I respond to the main points made by Professor McLauchlan.
Introduction
It is well appreciated that in ICS Lord Hoffmann “restated” the principles of contractual interpretation in five principles, which rapidly became orthodoxy across several jurisdictions. This approach was widely seen as breaking with the more legalistic approach of the past.
Describing recent developments in the law of contractual interpretation, Professor McLauchlan wrote in this Quarterly in August 2015:4
“… analysis of recent cases reveals some dissatisfaction with or departures from the [ICS] principles in important respects. Indeed, on one view, these cases reflect a return to a more traditional approach to interpretation, an approach that was thought to have been discarded as a result of the decisions of the House of Lords in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd,5 ICS, and [Chartbrook v Persimmon Homes Ltd
6].”
* Senior Lecturer, Faculty of Law, University of Auckland and Barrister & Solicitor of the High Court of New Zealand.
1. [1998] 1 WLR 896, 912–913 (hereafter, “ICS”).
2. RA Havelock, “Return to Tradition in Contractual Interpretation” (2016) 27 KLJ 188 (hereafter: Havelock, “Return”).
3. D McLauchlan, “Some fallacies concerning the law of contract interpretation” [2017] LMCLQ 506 (hereafter: McLauchlan, “Fallacies”).
4. D McLauchlan, “The Lingering Confusion and Uncertainty in the Law of Contract Interpretation” [2015] LMCLQ 406, 411.
5. [1997] UKHL 19; [1997] AC 749.
6. [2009] UKHL 38; [2009] 1 AC 1101.
CASE AND COMMENT
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