Contractual principles

Bazzo v FCT [2017] FCAFC 139

This case (at [5]) stresses that contractual interpretation is an objective exercise, subjective beliefs etc being irrelevant.  The meaning of terms ‘is to be determined by what a reasonable person would have understood them to mean’7.  The language used, known surrounding circumstances and commercial objects all must be considered8

In 1982, however, the High Court held that evidence of surrounding circumstances was only admissible to assist interpretation in cases of ambiguity9.  This came to be seen as out-of-step with later cases, foreign approaches, and the way we read statutes10.  Courts then sought to reason around the old rule11.     

This case is from Episode 32 of interpretationNOW!


7 Toll (FGCT) v Alphapharm [2004] HCA 52 (at [40]), quoted.

8 Woodside Energy [2014] HCA 7 (at [35]), quoted.

9 Codelfa[1982]  HCA 24 (at [22]).

10 CIC Insurance (1997) 187 CLR 384.

11 Franklins [2009] NSWCA 407.