“The question is,” said Alice “whether you can make words mean so many different
things.”:
The Interpretation of Contracts and Statutes1
The Right Honourable The Lord Phillips of Worth Matravers
Master of the Rolls
At the Bar I specialised in admiralty and commercial Law. Only once did I trespass into the
field of construction work. I was leading a bright young junior called Jonathan Sumption. Leading
for the opposition was Donald Keating. The dispute was about an underwater pipeline. My clients
had designed the joints of the pipeline. Donald’s clients had laid it. The joints had proved defective.
Donald’s clients began an arbitration against mine alleging that the design of the joints was defective.
We riposted that there was nothing wrong with the design but that the pipeline had not been properly
laid. The arbitration was due to run for a very long time. As the arbitration progressed the parties
agreed on an experiment. The section of pipeline would be laid under the supervision of my clients.
It would be left to lie for three months and then brought to the surface and inspected. The result
should prove beyond peradventure whether or not there was anything wrong with the design. This
sensible course was adopted not as a form of alternative dispute resolution. For some reason the
arbitration proceeded in the meanwhile. The arbitrator was Edgar Fay. Donald was a delightful if
imposing opponent. His submissions were advanced with magisterial authority, though occasionally a
puckish expression of mischief would cross his features, the only indication that he was successfully
taking liberties with the strict rules of evidence in a manner which did not seem to upset Edgar Fay
but was a little shocking to those brought up within the strict discipline of the Commercial Court.
Happily, we managed to settle the case. I say happily, because the test length of pipeline was then
brought up and the joints proved to be riddled with rust.
1
This is the text of the Second Keating Lecture delivered in the Great Hall in The Royal Courts of
Justice on 10 October 2001. I would like to acknowledge with gratitude the assistance given in the
preparation of this paper by Simon Hughes of Keating Chambers.
1
Donald was the doyen, and indeed the founder, of the construction Bar, though he would have
preferred the expression 'building'. He wrote the leading text book on Building Contracts, now in its
seventh edition2. It is fitting that he should be commemorated both by the outstanding chambers
named after him and by this lecture.
Alice’s question which I have taken as my text was a num question – a question expecting the
answer no. Alice was a purist and was shocked by the liberties taken by Humpty Dumpty with the
English language. When I started at the Bar nearly forty years ago judges were purists too. Whether
interpreting a will, a notice to quit, or construing a statute, the search was for the natural meaning of
the words used. That meaning was treated as objectively demonstrating the intention of the draftsman
of the words whether testator, landlord, commercial man or Parliament. It was the court’s job to give
effect to that objective intention whether or not it was clear to the court that this could not have
represented the actual intention of those responsible for the words used.
Times have changed. This evening I propose to look at how and why they have changed.
The interpretation of written instruments may seem a somewhat arid topic to have chosen for this
lecture but I hope that it may prove more interesting than it sounds. In any event, it is undoubtedly a
subject of importance. The English judge today is not allowed to devote much time to developing the
principles of the common law. All too often his or her task consists of resolving an issue as to the
meaning of the written word.
Developments in the interpretation of statutes have followed a similar, but not parallel, path to
developments in the construction of contracts and other instruments. I propose to start with the latter
and to give one or two examples of what I consider to be the bad old days.
Let me take some statements of principle from the speech of Lord Wright in Inland Revenue
Commissioners v Raphael and Others3.
“It must be remembered at the outset that the court, while it seeks to give effect to the
intention of the parties, must give effect to that intention as expressed, that is, it must
ascertain the meaning of the words actually used. There is often an ambiguity in the use of
the word “intention” in cases of this character. The word is constantly used as meaning
motive, purpose, desire, as a state of mind and not as meaning intention as expressed….”
2
3
The first edition was entitled The Law and Practice of Building Contracts including Architects and
Surveyors and appeared in 1955, and there were further additions in 1963, 1969, 1978, 1991, 1995 and
2000.
[1935] AC 96 at 142.
2
And a little later, Lord Wright said:4
“The principle of the common law has been to adopt an objective standard of construction and
to exclude general evidence of actual intention of the parties: the reason for this has been that
otherwise all certainty would be taken from the words in which the parties had recorded their
agreement or their dispossessions of property.”
Lord Wright acknowledged that there were limited circumstances in which extrinsic evidence
could be admitted to assist in arriving at the meaning of the words used. In the case before him the
intention of the draftsman of the settlement that was the subject of the appeal was clear. It was set out
in a recital. Unhappily, the language used in the body of the deed, as a result of what was recognised
to be a blunder by the draftsman5, did not give effect to that intention. The consequence was that the
son and heir failed to comply with a condition in his father’s will, with the result that he forfeited his
father’s estate. Four out of five members of the Lords found themselves unable to imply the words
that would make sense of the settlement.
"The case is peculiar” said Lord Wright. “Its like may
never occur again but it must be decided in accordance with recognised and established principles”6.
If you read the facts of that case you will find that the result was less distressing than it
sounds.
The loss that was the subject of the litigation was sustained by the Inland Revenue
Commissioners.
One or two of the earlier cases are harder to swallow. In 1870 7 one Robert Peel who lived in
Hampton had a good friend called Francis Corbett Thorpe. He asked him to be an executor of his will
and Mr Thorpe agreed. The solicitor who drew up the will intended to give effect to this agreement
and inserted a provision that the executor would be Francis Courteney Thorpe of Hampton,
Gentleman. Francis Courteney Thorpe was the name of Francis Corbett Thorpe’s twelve year old son.
Lord Penzance sitting in the Probate Division rejected the suggestion that the description "gentleman"
was not appropriate for a twelve year old boy, which would have enabled him to admit extrinsic
evidence to resolve the ambiguity as to the true identity of the executor. The boy was held to be the
executor.
An even harder case was that of In re Fish8. Mr Fish’s wife had an illegitimate grandniece
called Eliza Waterhouse of whom he and his wife were very fond. When he died he left his estate to
4
5
6
7
8
[1935] AC 96 at 143
[1935] AC 96 at 147
[1935] AC 96 at 147
In the Goods of RR Peel [1870] LR 2 PD 46
[1894] 2 Ch 83, CA
3
his wife and after her death to “my niece Eliza Waterhouse”. By sad mischance, his wife had another
grandniece, this time legitimate, also called Eliza Waterhouse. She meant nothing to George Fish but
she waltzed in and claimed his estate. The suggestion that as Mr Fish had no niece called Eliza
Waterhouse extrinsic evidence should be introduced to establish the identity of his legatee was
rejected by the Court of Appeal. Lindley LJ began his judgment “This is one of those painful cases in
which it is probably that the testators intention will be defeated, but the rule of law is too strong for
the appellant.”9 He went on to say that because the person most nearly answering the description in
the will was the legitimate grandniece of the testator’s wife no evidence could be admitted to prove
that her illegitimate grandniece was the intended beneficiary.
Let me move to the field of landlord and tenant, and advance to 1942 and the decision in
Hankey v Clavering10. Under a 21 year lease from December 25th 1934 either party was entitled to
determine the tenancy at the end of seven years on giving six month’s notice. The landlord gave the
tenant’s solicitors a notice as from the 21st June 1941, which purported to determine the lease on
December 21st 1941. The tenant’s solicitors acknowledged receipt of the notice. Subsequently,
however, the tenant successfully contended that the notice was ineffective. In holding against the
landlord, my predecessor Lord Greene said:11
“…the whole thing was obviously a slip on his part and there is a natural temptation to put a
strained construction on language in aid of people who have been unfortunate enough to make
slips. That however is a temptation which must be resisted because documents are not to be
strained and principles of construction are not to be outraged in order to do what may appear
to be fair in an individual case…”.
These cases exemplified the state of the law when I enrolled at Gibson & Weldon to cram for
Bar Finals. Memory was the only attribute required for success. Notes were dictated to be written
down verbatim and learnt by heart. One such note read “no evidence is admissible to add to, vary or
contradict the terms of a written instrument”.
A chink in this wall appeared in the speech of Lord Wilberforce in Prenn v Simmonds12. Mr
Simmonds had a very lucrative call option available provided that at least £300,000.00 had been
earned by Mr Prenn’s company in the relevant period. The company was a holding company. The
issue was whether the profits in question were the profits of the group or the profits allocated to the
holding company for distribution. Mr Simmons adopted what had become a well recognised practice
9
10
11
12
[1894] 2 Ch 83 at 84
[1942] 2 KB 326
[1942] 2 KB 326 at 328
[1971] 1 WLR 1381 at 1383 and following
4
to get prejudicial extrinsic evidence before the court. He pleaded an alternative claim for rectification.
As Lord Wilberforce remarked, this:
“let in a mass of evidence, oral and documentary, as to the parties’ intention, which would
not be admissible on construction”13.
While holding that evidence of the parties’ intention was not admissible as an aid to construction,
Lord Wilberforce went on to indicate the extent to which evidence of background facts was
admissible for this purpose. He remarked that in order for the agreement to be understood it had to be
placed in its context. He went on “the time has long passed when agreements, even those under seal,
were isolated from the matrix of facts in which they were set and interpreted purely on internal
linguistic considerations".14
This was, so far as I am aware, the first reference to that magic word “matrix” in the context
of the construction of contracts. It was a trailer for the speech, which Lord Wilberforce was to give
five years later in Reardon Smith Line v Hansen-Tangen15 (otherwise known as “The Diana
Prosperity”). It was also the Phillips prosperity because it brought me three lucrative briefs as junior
to Robert Alexander. In 1998 Lord Hoffmann, observed judicially16, that the speeches of Lord
Wilberforce in Prenn v Simmonds and the “Diana Prosperity” had been particularly instrumental in
bringing about a fundamental change in the principles by which contractual documents were
construed. Two years later Lord Steyn, when giving the Hart Lecture at University College Oxford17,
remarked that the full impact of the classic judgment of Lord Wilberforce in the “Diana Prosperity”
was not always fully appreciated. I think that these remarks justify me in dwelling nostalgically for a
while on one of the more amusing cases that I encountered at the Bar. I shall simplify the facts a little.
Our clients were a Japanese company, Sanko Shipbuilding Limited. In 1972 Sanko set about
a commercial venture of astonishing daring. They ordered from Japanese yards a total of 50 giant
tankers, for delivery in three years time and they then entered into forward time charters for these
vessels at rates, which were significantly below those prevailing in 1972. By 1976, however, the
bottom had dropped out of the market so that the rates that Sanko had agreed threatened to be ruinous
for the charterers. One such charterer was a Norwegian company, Hansen-Tangen. They were all
right, however, because they had sub-chartered to an English company, Reardon Smith. That
company was facing a loss of about five million pounds on the sub-charter. They sought a declaration
13
14
15
16
17
[1971] 1 WLR 1381 at 1383
[1971] 1 WLR 1381 at 1383-1384
[1976] 1 WLR 989
Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896 at 912
“Pepper v Hart: A Re-examination” Oxford Journal of Legal Studies, Vol. 21, No. 1 (2001) pp 59-72
5
in the Commercial Court that they were not obliged to take delivery of the vessel because she did not
comply with the contract. Hansen-Tangen then third-partied Sanko claiming an identical declaration.
The point taken was not an attractive one. When the charters were entered into the vessel did not
exist. Each charter contained a detailed specification of the vessel that was to be built and tendered
under the charter. It was common ground that the vessel complied with this specification in every
respect. The point seized on was the contractual description of the vessel. This was as follows “to be
built by Osaka Shipbuilding Company and known as Hull Number 354 until named”. Now the vessel
to be built was to have a dead weight of 87,000 tons. The Osaka yard could not build ships of over
45,000 tons. The Osaka yard sub-contracted the vessel to another shipbuilding company 300 miles
away in Oshima. The shipbuilding contract provided that the hull number should be 004 of Oshima
but that all the documents should show the vessel as number 354 of Osaka. The charterers, who had
not had the slightest interest in where the vessel was to be built, contended that it was a condition of
the contract that the vessel to be tendered to them should be built by the Osaka yard and that they
were not required to accept delivery of a vessel built by the Oshima yard.
Our instructing solicitor went out to Japan and came back with a lot of background material
which we put in evidence. We persuaded the Court of Appeal that this material demonstrated that
although the vessel was built by the Oshima yard she properly answered the contractual description of
being built by the Osaka yard. Let me quote from a passage of the judgment of Lord Denning to show
how we did so18:
“What is the solution? To my mind it is to be found by looking at the surrounding
circumstances. The most important of these was that the Osaka Company had no facilities at
Osaka for building an 80,000 ton tanker so the vessel would have to be constructed at some
other yard. The next important thing is that it was to be constructed in Japan. This imports, I
think, that it was to be constructed in accordance with usages of the trade in Japan and by
those usages it is customary for a party to sub-contract the building of the whole of the vessel.
Furthermore, the numbering would be in accordance with the numbering customary in Japan,
and by their usage Osaka number 354 was an accepted way of numbering this vessel even
thought it was to be built at Oshima as number 004. I am aware that the charterers were
ignorant of these circumstances, but I do not think they can avail themselves of their own
ignorance. If they chose to charter a vessel to be built in Japan by Japanese they must be
taken to know of the surrounding circumstances there relevant to the construction of the
charter. In my opinion therefore, on the assumptions we are asked to make, the vessel which
the Japanese were about to tender is the vessel Osaka number 354 described in the charter and
the charterers are not entitled to refuse to take delivery.”
Lord Denning carried his court with him but we were more than a little apprehensive as to the
reception we would get from the Lords. We need not have worried. In the leading speech Lord
Wilberforce identified the surrounding circumstances which could properly be taken into account as
18
[1976] 2 Lloyd’s Rep 60 at 71
6
an aid to construction and which demonstrated that the provision that the ship was “to be built by
Osaka Shipbuilding Company Limited and known as Hull number 354 until named” was no more
than a means of identifying the particular vessel to which the charter attached. Let me read you some
of Lord Wilberforce’s statements of principle, which opened a new chapter in the law of the
construction of contracts.
“No contracts are made in a vacuum: there is always a setting in which they have to be
placed. The nature of what is legitimate to have regard to is usually described as “the
surrounding circumstances” but this phrase is imprecise: it can be illustrated but hardly
defined. In a commercial contract it is certainly right that the court should know the
commercial purpose of the contract and this in turn presupposes knowledge of the genesis of
the transaction, the background, the context, and market in which the parties are
operating….19 It is often said that, in order to be admissible in aid of contraction, these
extrinsic facts must be within the knowledge of both parties to the contract, but this
requirement should not be stated in too narrow a sense. When one speaks of the intentions of
the parties to the contract, one is speaking objectively – the parties cannot themselves give
direct evidence of what their intention was – and what must be ascertained in what is to be
taken as the intention which reasonable people would have had if placed in the situation of the
parties… what the court must do is to place itself in thought in the same factual matrix as that
in which the parties were…..20
In the search for the relevant background, there may be facts which form part of the
circumstances in which the parties contract in which one, or both, may take no particular
interest, their minds being addressed to or concentrated on other facts, so that if asked they
would assert that they did not have these facts in the forefront of their mind, but that will not
prevent those facts from forming part of an objective setting in which the contract is to be
construed.”21
I do not think there is any need to underline the difference in approach of the Court of Appeal
and House of Lords in the “Diana Prosperity” and that of the court in Hankey v Clavering and those
other early cases where the courts insisted on excluding evidence of surrounding circumstances that
left no doubt of the intention of the makers of the instruments in question. The “Diana Prosperity”
preserved, however, a cardinal principle of construction.
However much extrinsic evidence is
admitted, the search is for what an objective appraisal of all the relevant material indicates was the
intention of the parties. What is not admissible is evidence of the subjective intention of one or other
of the parties. This is one of the reasons why evidence of negotiations leading up the execution of a
contract is still held to be inadmissible as a guide to what the parties intended.
Although the test of intention is objective, I believe that the reason why the admissibility of
extrinsic evidence has been relaxed is because the courts today are more anxious to give to an
instrument the effect that those who drafted it intended that it should have. The driving force behind
19
20
21
[1976] 1 WLR 989 at 995-996
[1976] 1 WLR 989 at 996
[1976] 1 WLR 989 at 997
7
the decision in the “Diana Prosperity” was, however, surely the merits. At the time that the charters
were concluded the identity of the building yard was a matter of indifference to the charters. Had the
market not collapsed it would still have been a matter of indifference to them. They were seeking to
rely on a matter of no significance in order to escape from an adverse contract. What, if in the course
of the negotiations, the charterers had insisted that the vessel should be built in an Osaka yard rather
than the Oshima yard? I cannot help thinking that, had this been the case, this expression of the
charterer’s intention in the course of the negotiations would, by some means or another, have led to a
different result.
The “Diana Prosperity” was a watershed case. Let us follow the waters downstream and see how, in
1997, they swept away the precedent of Hankey v Clavering.
The facts of Mannai v Eagle Star22 were very similar to those in Hankey v Clavering. A
tenant purported to exercise a break clause in two leases by giving notice to determine them on the
12th January 1995. On a literal construction of the leases his only right was to determine them on the
13th January 1995. Following Hankey v Clavering the Court of Appeal held that the notices were
ineffective. The House of Lords reversed that decision 3:2. The minority23 felt that there was good
reason for preserving the certainty inherent in the approach in Hankey v Clavering. The majority24
held that this approach was too rigid and formalistic. The law had moved on and the notice to
determine the leases had to be interpreted in accordance with business common sense. In a passage,
which deserves to be read in extenso, Lord Hoffmann drew the distinction between the meaning of
words and what would be understood as the meaning of the person who uses words. Grammar and
syntax went only so far in demonstrating the latter. Sometimes the background demonstrated, without
ambiguity, that the person was using the words in order to convey a meaning at odds with those to be
found in a dictionary. When Mrs Malaprop spoke of an allegory on the banks of the Nile her listeners
were in no doubt that she was referring to a scaly animal. Lord Hoffmann went on to observe that in
commercial contracts the restriction on the use of background had been quietly dropped25. The fact
that the words were capable of a literal application was no obstacle to evidence which demonstrated
what a reasonable person with knowledge of the background would have understood the parties to
mean, even if this compelled one to say that they had used the wrong words. There was no
justification for not extending this approach to the construction of notices and wills.
22
23
24
25
[1997] AC 749
Lords Goff of Chieveley and Jauncey of Tullichettle
Lords Steyn, Hoffmann and Clyde
[1997] AC 749 at 779
8
Note that this approach to construction still involves an objective test, but the result of that
test is much more likely to represent the subjective intention of the user of the words.
Mannai v Eagle Star was not Lord Hoffman’s last word on the new approach to construction.
In ICS v West Bromwich Building Society26 the House of Lords was faced with the question of
whether a phrase in an assignment of rights carried a meaning which, in the Court of Appeal, Leggatt
LJ had held was “not an available meaning of the words” citing Alice Through the Looking Glass.
Lord Hoffman held that the authority cited did not support the conclusion. If Alice had known the
relevant background she would have appreciated that Humpty Dumpty used the word “glory” to mean
“a nice knock-down argument”27. Lord Hoffmann had this to say about the “Diana Prosperity”:“The background was famously referred to by Lord Wilberforce as the “matrix of fact”, but
this phrase is, if anything, an understated description of what the background may include.
Subject to the requirement that it should have been reasonably available to the parties and to
the exception to be mentioned next it includes absolutely anything which would have affected
the way in which the language of the document would have been understood by a reasonable
man.”
The exception referred to by Lord Hoffmann was evidence of previous negotiations between the
parties and their declarations of subjective intent.
It is fair to say that Lord Hoffmann’s expansive definition of what can be admitted as
background has not been received with universal judicial enthusiasm. In Scottish Power v Britoil28
Staughton LJ observed that no authority was cited for Lord Hoffmann’s proposition and it was not
possible to tell whether it was the subject of argument. He went on to observe:“It is often difficult for a judge to restrain the enthusiasm of counsel for producing a great
deal of evidence under the heading of matrix which on examination is found to contribute
little or nothing to the true understanding of the parties contract. All, or almost all, judges are
now concerned about the huge cost of litigation. I have to say that such a wide definition of
surrounding circumstances, background or matrix seems likely to increase the cost, to no very
obvious advantage.”29
Staughton LJ’s concerns were exemplified by a subsequent case in the Commercial Court
before Timothy Walker J30. A preliminary issue was tried as to the meaning of a clause which entitled
Lloyds brokers to profit commission, and I quote: “Subject to renewal with the Lloyds market”.
26
27
28
29
30
[1998] WLR 896
[1998] WLR 896 at 912 and 914
18 November 1997, unreported (Lawtel reference: C8600032)
Lawtel Transcript, page 5
NLA Group Limited v Bowers [1999] 1 Lloyd’s Rep 109
9
In
order to assist the judge to construe this phrase, counsel for the brokers produced evidence from three
witnesses of fact, one expert and voluminous documentary material. The judge observed that counsel
had fastened on Lord Hoffmann’s words “absolutely anything” as an invitation to include in the
material before the court "just that". The judge commented that this went well beyond the borderline
of what was permissible. Quoting from an unreported judgment of Saville LJ, Timothy Walker J said:
“Where the words used have an unambiguous and sensible meaning as a matter of ordinary
language I see serious objections in an approach which would permit the surrounding
circumstances to alter that meaning. Firstly, such an approach would seem to entail that even
where the words that the parties have chosen to use have only one meaning, and that meaning
is not self-evident nonsensical, the court will not be allowed to adopt that meaning without an
examination of the surrounding circumstances, which could involve discovery,
interrogatories, cross examination and the like; for a party seeking to challenge that meaning
could assert with great force that until the circumstances are fully examined it is impossible to
decide whether or not they should override the plain words of the agreement. This would do
nothing but add to the costs and delays of litigation and indeed of arbitration, much of which
is concerned with interpreting agreements."31
Earlier this year in B.C.C.I v Ali32 Lord Hoffmann took the opportunity to clarify his observations in
ICS v West Bromwich Building Society in this way:
“When I said that the admissible background included “absolutely anything which would
have affected the way in which the language of the document would have been understood by
a reasonable man” I did not think it necessary to emphasise that I meant anything which a
reasonable man would have regarded as relevant. I was merely saying that there is no
conceptual limit to what can be regarded as background.
but the primary source for understanding what the parties meant is their language interpreted
in accordance with conventional usage: “We do not easily accept that people have made
linguistic mistakes, particularly in formal documents”.
I was certainly not encouraging a trawl through “background” which could not have made a
reasonable person think that the parties must have departed from conventional usage”.33
This is as far as this particular story has reached. It seems to me impossible to reconcile Lord
Hoffmann’s approach with one that says that surrounding circumstances cannot be permitted to alter
the meaning that words have as a matter of ordinary language provided that that meaning is
unambiguous and sensible.
I have some sympathy with both camps, but ultimately I align myself with Lord Hoffmann. I cannot
accept an approach which could result in the Court being forced to give to words a meaning contrary
31
32
33
[1999] 1 Lloyd’s Rep 109 at 112 (Col 2) referring to the judgment of Saville LJ in the unreported
decision in National Bank of Sharjah v Dellborg
[2000] 2 WLR 735
[2001] 2 WLR 735 at 749 (see paragraph 39 of the judgment)
10
to that which could be demonstrated on an objective appraisal of the evidence to be that which they
were intended to bear. Having said that, the presumption that those who use words intend them to
bear their natural meaning is a strong one. One does not often encounter a Humpty Dumpty. In this
post Woolf era the court can and should preclude or restrict discovery, interrogatories, crossexamination and the like in relation to background circumstances unless the party seeking to introduce
extrinsic material can demonstrate that there is good reason to believe that those who used the words
in issue did not intend them to have their natural meaning.
May I close this topic by reference to something that may be new to most of you. A code of
principles of European contract law is in the course of preparation, under the auspices of the European
Commission by a group, which includes Professor Hugh Beale. These principles are intended to be
applied as general rules of contract law in the European Union and they represent an attempt to
synthesize the laws of the various member states. The first part has recently been published. Article 2
includes this provision:
“The parties prior statements may be used to interpret the contract. This rule may not be
excluded or restricted except by an individually negotiated clause”.
Article 5 sets out the following general rules of interpretation:
(1)
“A contract is to be interpreted according to the common intention of the parties even
if this differs from the literal meaning of the words.
(2)
If it is established that one party intended the contract to have a particular meaning,
and at the time of the conclusion of the contract the other party could not have been
unaware of the first parties intention, the contract is to be interpreted in the way
intended by the first party.
(3)
If an intention cannot be established according to (1) or (2), the contract is to be
interpreted according to the meaning that reasonable persons of the same kind as the
parties would give to it in the same circumstances.”
These principles would whirl us even further downstream than the position of Lord Hoffmann. We
have not yet reached the point where we consider the natural meaning of the language only as a last
resort. I suspect that most here this evening would add ‘thank God’.
I now turn to consider changes in the approach to the interpretation of statutes. The first edition of
Cross on Interpretation of Statutes opened with the statement:
11
“the essential rule is that words should generally be given the meaning which the normal
speaker of the English language would understand them to bear”
and went on to comment that were this not the case it would be impossible for lawyers and other
experts to act and advise on the statute in question with confidence.
The principle that the citizen should be able to look with confidence to the wording of a
statute in order to ascertain his or her rights or duties was one of the arguments advanced against
resorting to what was said in Parliamentary debate on the bill in order to inform interpretation of a
statute. The decision in Pepper v Hart34 broke new ground in permitting this. The facts of that case
were extreme. The issue of construction which the House of Lords had to resolve had been expressly
discussed in Parliament. Provisions of the Finance Act 1976 made taxable the cost of benefits in kind
provided by employers to employees. The benefits in issue were cut price education offered by a
public school to the children of its teachers. The issue was whether the taxable cost of this benefit
was the marginal cost to the school of providing the extra places, which was minimal, or alternatively
an appropriate proportion of the overall expenses of running the school. The question of taxation of
the benefit of concessionary fees at private sector fee paying schools had been raised by way of
example in debate in the Commons and the financial secretary to the Treasury confirmed that taxation
would only be on the marginal costs. Despite this the Inland Revenue sought to recover tax on the
basis of the proportionate cost of the benefit. In these circumstances the House of Lords decided by a
majority that there should be a limited relaxation of the historic rule that the courts could not look at
the parliamentary history of legislation or Hansard for the purpose of construing the legislation. The
limited nature of that relaxation appears from the following passage of the leading speech of Lord
Brown-Wilkinson:
“…..reference to Parliamentary material should be permitted as an aid to the construction of
legislation which is ambiguous or obscure or the literal meaning of which leads to an
absurdity. Even in such cases, references in court to parliamentary material should only be
permitted where such material clearly discloses the mischief aimed at or the legislative intent
lying behind the ambiguous or obscure words. In the case of statement made in parliament, as
at present advised I cannot foresee that any statement other than the statement of the minister
or other promoter of the bill is likely to meet these criteria.”35
In his concurring speech Lord Griffiths asked rhetorically “why then cut ourselves off from
the one source in which may be found an authoritative statement of the intention with which the
34
35
[1993] AC 593
[1993] AC 593 at 634
12
legislation is placed before Parliament”36. This question draws attention to the fact that, underlying
the decision in Pepper v Hart, is the premise that the intention of the executive promoting a bill can
be equated with the intention of Parliament when enacting it. Last year, in the Hart Lecture to which I
referred earlier37, Lord Steyn drew attention to the fact that this premise is unsound. He identified
constitutional objections to Pepper v Hart to the effect that it is “in principle profoundly
objectionable” to treat a minister’s view of a clause as a trump card or even relevant in the
interpretation. He suggested that the courts might confine the application of Pepper v Hart to its use
against the executive when it appeared to be going back on an assurance given to parliament – i.e. to a
type of estoppel. Sure enough, last year, in his speech in Ex parte Spath Holme38, Lord Hope observed
that :
“The limited exception to the general rule that resort to Hansard is inadmissible which was
recognised in Pepper v Hart [1993] AC 593 is available to prevent the executive seeking to
place a meaning on words used in legislation which is different from that which ministers
attributed to those words when promoting the legislation in Parliament.”39
The other members of the Appellate Committee did not go as far as Lord Hope. Each one of
them emphasized, however, that Pepper v Hart was an exception to the general rule against reference
to parliamentary material which applied only where legislation was ambiguous, obscure or led to an
absurdity40.
The common law normally advances incrementally. Occasionally, however, it takes a jump,
has second thoughts and then retreats. I question whether we are going to see any incremental
development of Pepper v Hart, although it is right to note that the Court of Appeal has recently
derived assistance, when construing the Access to Justice Act 1999, from the Explanatory Notes that
accompanied the Bill when it was placed before the Commons 41. I fear that Lord Steyn may conclude
that this course went beyond bounds of constitutional propriety.
If the effect of Pepper v Hart on statutory interpretation has been muted, the same cannot be
said for the Human Rights Act 1998. Section 3 of that Act provides:
36
37
38
39
40
41
[1993] AC 593 at 617
“Pepper v Hart: A Re-examination” Oxford Journal of Legal Studies, Vol. 21, No. 1 (2001) pp 59-72
Regina v Secretary of State for the Environment, Transport and the Regions, Exp Spath Holme [2001]
2 WLR 15
[2001] 2 WLR 15 at 48
See [2001] 2 WLR 15 at 31 per Lord Bingham of Cornhill; at 39 per Lord Nicholls of Birkenhead; at
43 per Lord Cooke of Thorndon; and at 54 per Lord Hutton.
Callery v Gray (No. 2) unreported, 31 July 2001. Citation number: [2001] EWCA Civ 1246
13
“So far as it is possible to do so, primary legislation and subordinate legislation must
be read and given effect in a way which is compatible with the Convention rights”42.
Section 4 enables the court to make a declaration that a provision is incompatible with a Convention
right.
There was a precedent for a clause such as section 3. Section 6 of the New Zealand Bill of Rights Act
1990 provides:
“Whenever an enactment can be given a meaning that is consistent with the rights and
freedoms contained in this Bill of Rights, that meaning should be preferred to any
other meaning”.
In interpreting this section the New Zealand courts have set their face against giving statutory
provisions an interpretation which can only be reached by straining the natural meaning of the word43.
Thus in Ministry of Transport v Noort Cooke President said44:
“The preference [in Section 6 BOR] will come into play only when the enactment can
be given a meaning consistent with the rights and freedoms. This must mean, I think,
can reasonably be given such a meaning. A strained interpretation would not be
enough".
Sitting in the House of Lords in Ex parte. Kebilene45, Lord Cooke described the English section 3 as a
“a strong adjuration”46 and commented that it conveyed “a rather more powerful message” 47 than the
New Zealand section 6. Before our Act came into force commentators foresaw that it might lead our
courts to depart rather further from the natural meaning of statutory language than the New Zealand
courts. Writing in the Law Quarterly Review48, Professor Jack Beatson observed that Section 3 would
entitle and indeed oblige courts to depart from a previous binding decision concerning the
interpretation of a statutory provision where that interpretation was inconsistent with the Convention.
It was anticipated that the English courts might give statutory wording a strained construction but that
42
43
44
45
46
47
48
See generally on this topic: Grosz, Beatson and Duffy, Human Rights: the 1998 Act and the European
Convention (2000) pp 28-58; Marshall, “Two kinds of Compatibility: More about Section 3 of the
Human Rights Act 1998” [1999] PL 377; Bennion “What Interpretation is “Possible” under Section
3(1) of the Human Rights Act 1998?” [2000] PL 77; and Craig, “The Courts, the Human Rights Act
and Judicial Review” (2001) 117 LQR 589
See in particular Taggart “Tugging on Superman’s Cape: Lessons from Experience with the New
Zealand Bill of Rights Act 1990” in Constitutional Reform in the United Kingdom: Practice and
Principles (1998) pp 85-97
[1992] 3 NLR 260 at 272
R v Director of Public Prosecutions, ex parte Kebilene [2000] AC 326
[2000] AC 326 at 373
[2000] AC 326 at 374
Beatson, “The Role of Statute in the Development of Common Law Doctrine” [2001] 117 LQR pp 247272.
14
this would not go beyond a meaning that the words were capable of bearing. In this, it seems to me,
they were wrong.
In so saying I have in mind the recent decision of the House of Lords in the case of Regina v
A49. Almost everything about this case is extraordinary, not least the procedural quirk that it involved
an appeal to the House of Lords against an obiter dictum of Rose LJ sitting in the Criminal Division
of the Court of Appeal. The issue before the House of Lords was, in effect, whether section 41 of the
Youth Justice and Criminal Evidence Act 1999 was incompatible with the right to a fair trial under
Article 6 of the Human Rights Convention. Section 41 is intended to protect complainants in rape
cases from objectionable harassment. It prohibits the giving of evidence and cross examination about
any sexual behaviour of the complainant except with leave of the court. The Section provides that
where leave is sought in relation to the issue of consent it may only be given if either the sexual
behaviour alleged is said to have taken place “at or about the same time as the event which is the
subject matter of the charge against the accused”50 or where the sexual behaviour is alleged to have
been “in any respects so similar” to the sexual behaviour which according to the evidence of the
accused took place as part of the event which is the subject matter of the charge against him or which
took place at about the same time as that event "that the similarity cannot reasonably be explained as a
coincidence".51
The defendant’s defence was that sexual intercourse took place with the complainant’s
consent or alternatively that he believed that she consented. At a preparatory hearing he sought leave
to cross-examine and adduce evidence to the effect that he had had consensual sexual relations with
the complainant over a period of about 3 weeks, ending one week before the alleged rape. The trial
judge ruled that such cross-examination and evidence could not be permitted. On appeal the Crown
conceded that it could be permitted on the issue of the defendant’s belief that the complainant
consented but submitted successfully that it could not be admitted on the issue of whether she actually
consented. Rose LJ held that the judge would accordingly have to direct the jury that the evidence of
the complainant’s consensual activity with the defendant was solely relevant to the question of the
defendant’s belief as to consent but not relevant to the question of whether the complainant in fact
consented. Rose LJ observed that this was Wonderland and that it might produce an unfair trial. It
was this remark which lead the prosecution to seek and obtain leave to appeal. The question certified
by the Court of Appeal52 was:
49
50
51
52
Regina v. A unreported 17 May 2001 (available on the House of Lords website).
Section 41(3)(b)
Section 41(3)(c)
Transcript in Regina v. A paragraph 24.
15
“May a sexual relationship between a defendant and complainant be relevant to the
issue of consent so as to render the exclusion under Section 41 of the 1999 Act a
contravention of the defendant's rights to a fair trial?"
This general question was of importance because a similar point to that in A had been raised
in a number of other pending cases. The only basis on which evidence of previous sexual behaviour
between the complainant and the defendant could be admitted was under section 41(3)(c) i.e. the
behaviour had to be so similar to behaviour at the time of the alleged offence as to be incapable of
being explained as a coincidence. The section was plainly aimed at similar fact evidence. It was hard
to see how it could apply in a case such as A where no particular features of the complainant's sexual
behaviour were alleged.
The leading speech was that of Lord Steyn53. He found it impossible, even applying a
purposive approach, to interpret section 43(1)(c) in such a way as to let in previous incidents of sexual
behaviour between complainant and defendant that lacked any special features. He concluded:
“…Ordinary methods of purposive construction of section 41(3)(c) cannot cure the problem
of the excessive breadth of the section 41, read as a whole, so far as it relates to previous
sexual experience between a complainant and the accused. While the statute pursued desirable
goals, the methods adopted amounted to legislative overkill….”54
Lord Steyn went on, however, to emphasise the imperative nature of the adjuration in section 3 of the
Human Rights Act. He referred to ministerial statements in parliamentary debates to the effect that it
would prove possible in almost all cases to interpret legislation compatibly with the Convention. I
observe en passant that I do not find it easy to reconcile this reference with Pepper v Hart, let alone
with Lord Steyn's Hart lecture. He continued:
“ A declaration of incompatibility is a last resort. It must be avoided unless it is plainly
impossible to do so. If a clear limitation on Convention rights is stated in terms, such an
impossibility will arise: [R v Secretary of State or the Home Department, Ex p Simms [2000]
2 AC 115, 132A-B, per Lord Hoffmann.] There is, however, no limitation of such a nature in
the present case…”55
He went on to say:
“ In my view section 3 requires the court to subordinate the niceties of the language of section
41(3)(c), and in particular the touchstone of coincidence, to broader considerations of
relevance judged by logical and common sense criteria of time and circumstances. After all,
it is realistic to proceed on the basis that the legislature would not, if alerted to the problem,
53
54
55
Transcript in Regina v. A paragraphs 17-48.
Transcript in Regina v. A paragraph 43.
Transcript in Regina v. A paragraph 44.
16
have wished to deny the right to an accused to put forward a full and complete defence by
advancing truly probative material. It is therefore possible under section 3 to read section 41,
and in particular section 41(3) (c), as subject to the implied provision that evidence or
questioning which is required to ensure a fair trial under article 6 of the Convention should
not be treated as inadmissible…
It is of supreme importance that the effect of the speeches today should be clear to trial judges
who have to deal with problems of the admissibility of questioning and evidence on alleged
prior sexual experience between an accused and a complainant. The effect of the decision
today is that under section 41(3)(c) of the 1999 Act, construed where necessary by applying
the interpretative obligation under section 3 of the Human Rights Act 1998, and due regard
always being paid to the importance of seeking to protect the complainant from indignity and
from humiliating questions, the test of admissibility is whether the evidence (and questioning
in relation to it) is nevertheless so relevant to the issue of consent that to exclude it would
endanger the fairness of the trial under article 6 of the Convention. If this test is satisfied the
evidence should not be excluded.”56
Section 43 (3) (c) is not the only provision that has to be satisfied before the evidence can be let in.
The Court also has to be satisfied that:
“A refusal of leave might have the result of rendering unsafe a conclusion of the jury or (as
the case may be) the court on any relevant issue in the case.”
I am not sure whether the average trial judge will be able to discern any difference between this test
and that advanced by Lord Steyn. If that is correct, then Lord Steyn's approach has deprived section
43(1)(c) of all effect - at least in relation to evidence of sexual behaviour between complainant and
defendant.
Lord Slynn endorsed Lord Steyn's direction on the appropriate approach of the trial judge. At the end
of a short speech he stated:
“In my view section 41(3)(c) is to be read as permitting the admission of evidence or
questioning which relates to a relevant issue in the case and which the trial judge considers is
necessary to make the trial a fair one.”57
Lord Clyde and Lord Hutton also endorsed Lord Steyn's direction as to the approach to
section 41.
Lord Clyde said:
56
57
Transcript in Regina v. A paragraphs 43-46.
Transcript in Regina v. A paragraph 13.
17
“If a case occurred where the evidence of the complainant’s sexual behaviour was relevant
and important for the defence to make good a case of consent, then it seems to me that the
language would have to be strained in order to avoid the injustice to the accused of excluding
from a full and proper presentation of his defence…..I do not consider that the terms of the
section are so rigid as to make it impossible for such evidence to be admissible and so to
create an incompatibility with the Convention.”58
Lord Hutton found that, on the facts of A, there was sufficient similarity in the behaviour
alleged, namely affection and feelings of attraction towards the defendant, to satisfy section 41 (3) (c).
Lord Hope was not prepared to go as far as Lord Steyn and the other members of the Committee. He
concluded that the allegations in issue in the case were insufficiently precise to demonstrate that the
relevant provisions of section 41 were incompatible with the Convention. The following observations
demonstrate his dissent from the majority approach:
“I would find it very difficult to accept that it was permissible under section 3 of the Human
Rights Act 1998 to read in to section 41(3)(c) a provision to the effect that evidence or
questioning which was required to ensure a fair trial under article 6 of the Convention should
not be treated as inadmissible…
In the present case it seems to me that the entire structure of section 41 contradicts the idea
that it is possible to read into it a new provision which would entitle the court to give leave
whenever it was of the opinion that this was required to ensure a fair trial…
I would not have the same difficulty with a solution which read down the provisions of
subsections (3) and (5), as the case may be, in order to render them compatible with the
Convention right. But if that were to be done it would be necessary to identify precisely (a)
the words used by the legislature which would otherwise be incompatible with the
Convention right and (b) how these words were to be construed, according to the rule which
section 3 lays down, to make them compatible.”59
Lord Hope added this in relation to the task of the trial judge:
“If he finds it necessary to apply the interpretative obligation under section 3 of the Human
Rights Act 1998 to the words used in section 41(3)(c) of the 1999 Act, he should do so by
construing those words, so far as it is possible to do so, by applying the test indicated in
[paragraph 46 of] the speech of my noble and learned friend Lord Steyn.”60
The words "so far as it is possible to do so" are critical.
It may be apparent that in relation to the decision in R v A, my sympathies lie with Lord Hope's
conclusions. The technique of implying a proviso that the statutory provision does not infringe this or
58
59
60
Transcript in Regina v. A paragraph 136.
Transcript in Regina v. A paragraph 108.
Transcript in Regina v. A paragraph 110.
18
that Convention right is a more radical approach than simply straining the meaning of language. It
enables the court to nullify the effect of statutory provisions. I can see the attraction of this in relation
to criminal statutes, where the alternative may be to make a declaration that will recognise that
defendants are not receiving fair trials. I fear, however, that the approach taken in the decision in R v
A may be adopted in other circumstances where the preferable solution would be a declaration of
incompatibility enabling parliament to take speedy remedial action under section 10 of the Act.
In the course of this lecture I have shown how the approach of the English courts to the
interpretation of contracts has been relaxed. The search is now, not simply for the natural meaning of
the words used, but for the meaning that the users of the words are shown, by extrinsic evidence, to
have intended that the words should bear.
When interpreting statutes the courts have again moved from a strict approach so that, in
limited defined circumstances resort can be had to parliamentary material in order to inform the
search for the meaning that the words were intended to bear. But where human rights are in play,
normal principles of statutory interpretation give way before an overwhelming presumption that the
statutory provisions were intended to be compatible with Convention rights. Humpty Dumpty would
have approved of such an approach, but I do not believe that it would have pleased Alice.
19