Steyn, Johan --- "The Intractable Problem of the Interpretation of Legal Texts" [2003] SydLawRw 1; (2003) 25(1) Sydney Law Review 5

The Intractable Problem of The Interpretation of Legal Texts^[*]

JOHAN STEYN[♦]

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John Lehane had a brilliant academic career at the University of Sydney. In the 1980s he became Australia’s pre-eminent banking lawyer. He produced many scholarly publications. The book on equity, which he wrote with RP Meagher (now a justice of the New South Wales Court of Appeal) and WMC Gummow (now a justice of the High Court of Australia), is a text known and used throughout the English speaking world. His appointment as a judge of the Federal Court of Australia was an inspired choice. The hallmarks of his work were courtesy, calmness, a deep sense of justice, preciseness of thought, profound scholarship and an elegant prose style. It is fitting that Allens Arthur Robinson, the result of a merger which had John Lehane’s blessing, and the University of Sydney, should dedicate this occasion to the memory of a great Australian. I am particularly pleased that his widow, Ros, and his children, Lucy, William, Richard and Felicity are here tonight. It is a great privilege for me to give the first John Lehane Memorial Lecture.

Some might say that to speak of the intractable problem of interpretation of legal texts is an exaggeration. After all, unlike other professionals, a judge usually starts with the comfort that he has a 50 per cent chance of getting the answer to the question right. Moreover, he has the reassurance of Lord Reid’s advice to judges that if your average drops significantly below 50 per cent you have a moral duty to spin a coin.

The centrality of the interpretation of legal texts is not always fully appreciated. Day by day, in Britain, up and down the country, tribunals, lower courts, the High Court, the Court of Appeal, and the House of Lords, are concerned with the interpretation of a variety of legal texts ranging from wills, contracts, statutes, regulations, bye-laws, various types of ‘soft laws’ and so forth. It amounts to the preponderant part of the legal work of English judges, perhaps as high as 90 per cent. I would be surprised to hear that the position is significantly different in Australia. But the academic profession and universities have not entirely caught up with the reality that statute law is the dominant source of law of our time. The interpretation of legal texts is of supreme importance for a modern lawyer.

There are, of course, rules applicable to interpretation, some which are known by Latin expressions, such as ejusdem generis, expressio unius est exclusio alterius, and noscitur a sociis. These underlying rules of interpretation have a role to play. But, subject to what I will say about constitutional adjudication, ultimately interpretation does not generally depend on the application of rules. It is an art. And I would therefore like to start by taking a look at the subject in a more general way. But I am not putting forward a theory of interpretation. The subject is too elusive to be encapsulated in a theory. But as a result of the work of legal philosophers, academic and practicing lawyers, and judges it is possible to take stock of some modest insights.

I propose to discuss the interpretation of contracts, statutes and constitutional measures. But before I turn to these particular legal texts, I would put forward four general propositions which (if correct) go to the heart of interpretation.

First, it is a universal truth that words can only be understood in relation to the circumstances in which they are used. Adapting one of Wittgenstein’s memorable examples, one can imagine parents telling a baby-sitter, who agreed to look after their five year old twins for some hours, that if the children become troublesome ‘teach them a game’[1]. The parents return to find the baby-sitter playing poker with the children. Poker is a game. Did the context give a more restrictive colour to the word ‘game’? Wittgenstein thought the answer was Yes. Judging by my own grandchildren I am not so sure.

The purpose of interpretation is sometimes mistakenly thought to be a search for the meaning of words. This in turn leads to the assumption that one must identify an ambiguity as a pre-condition to taking into account evidence of the setting of a legal text. Enormous energy and ingenuity is expended in finding ambiguities. This is the wrong starting point. Language can never be understood divorced from its context. In the words of Oliver Wendell Holmes, a word is not a transparent crystal. The true purpose is to find the contextual meaning of the language of the text, ie, what the words would convey to the reasonable person circumstanced as the parties were. In Codelfa Brennan J succinctly stated that ‘the symbols of language convey meaning according to the circumstances in which they were used’.[2] Earlier this year in the Royal Botanic Gardens case your High Court reaffirmed this observation[3]. In his classic judgment in Reardon Smith Lord Wilberforce illuminated this point.[4] Speaking of contracts, Lord Wilberforce said that there is invariably a setting in which the language has to be placed. He made clear that the court is always entitled to be informed of the contextual scene of a contract. The same must apply to the interpretation of all legal texts. The failure to understand this fundamental principle of linguistic jurisprudence and legal logic has caused great injustices. An example in the field of wills is instructive. Consider the decision in re Fish; Ingram v Rayner.[5] The testator gave his estate to ‘his niece Eliza Waterhouse’ during her life. The testator had no niece named Eliza Waterhouse. But his wife had a legitimate grand niece named Eliza Waterhouse and also an illegitimate grand niece of the same name. The illegitimate grand niece was living with the testator and he was in the habit of calling her his niece. This was powerful objective evidence that the words in the will referred to her. With wringing protestations about the painful nature of their task, the Court of Appeal refused to admit the evidence. They held that there was no ambiguity. The illegitimate grand niece lost what had been left to her. What a grotesque result. The will could not be understood without knowing the context.

In the interpretation of legal texts the most frequent source of judicial error is the failure to understand the contextual scene of a legal text. Often judges are not provided with all the contextually relevant raw materials. The essential setting of a text may include in a contract case how a market works, in a breach of statutory duty case competing policy arguments, the structure of a complex statute, the historical development of legislation, and so forth. There is scope for the development of something like a Brandeis brief but carefully and concisely targeted to the relevant context.

The second proposition is that the aim of interpretation of a legal text, whether it be a private instrument or a public statute, must be to derive a meaning from its nature and contents. The mandated point of departure must be the text itself. The primacy of the text is the first rule of interpretation for the judge considering a point of interpretation. Extrinsic materials are therefore subordinate to the text itself. Often lawyers argue cases on the reverse hypothesis. Justice Frankfurter recalled the lawyer who said to the United States Supreme Court ‘the legislative history is doubtful so I invite you to go to the statute’. Contextual materials must of course not be downgraded. On the contrary, the judge must consider all relevant contextual material in order to decide (a) what different meanings the text is capable of letting in and (b) what is the best interpretation among competing solutions. But the judge’s task is interpretation not interpolation. What falls beyond that range of possible contextual meanings of the text will not be a result attainable by interpretation. There is a Rubicon which judges may not cross: principles of institutional integrity forbid it.

The third proposition relates to the generalisation that there has been a shift from literal interpretation to purposive interpretation. What is literalism? This is straightforward. The tyrant Temures promised the garrison of Sebastia that no blood would be shed if they surrendered to him. They surrendered to him. He shed no blood. He buried them all alive.[6] That is literalism. It has generally no place in modern law. On the other hand, it would be an over-simplification to say that there has been a homogenous shift towards a purposive interpretation of all legal texts. Much depends upon the particular text. A comparatively strict interpretation of a documentary credit issued in an international sale may be necessary because a third party (the bank) must be able to rely on a meaning gathered largely within the four corners of the text. In a network of contracts governing a construction project, parties ought generally to be able to rely on the obvious meaning of the interlocking texts. Similarly, fiscal legislation may sometimes require a stricter approach than social welfare legislation. By contrast, in a consumer transaction the purchaser of a fridge in a consumer sale may be entitled to a more generous interpretation of a right to reject a fridge which cannot make ice.

The fourth proposition I have already foreshadowed. Interpretation is not a science. It is an art. It is an exercise involving the making of choices between feasible interpretations. Structural arguments must be considered. Competing consequentialist arguments must be taken into account. Broader policy considerations may be relevant. Educated intuition may play a larger role than an examination of niceties of textual analysis. The judge’s general philosophy may play a role. Ultimately, however, a judge must be guided by external standards in making his choice of the best contextual interpretation. He must put aside his subjective views and consider the matter from the point of view of the reasonable person.

1. Commercial Contracts

Clarity is the aim in drafting commercial contracts but absolute clarity is unattainable. It is impossible for contracting parties to foresee all the vicissitudes of commercial fortune to which their contract will be exposed. Moreover, and quite understandably, business bargains have to be struck under great pressure of time and events. Often the phenomenon of studied ambiguity obtrudes: the parties cannot resolve a particular difference but leave it to the court to settle the issue. It is therefore tiresome for judges to expatiate on the quality of draftsmanship of commercial contracts. Judges must simply do the best they can with the raw materials produced in the real world.

The common law does not in principle differentiate between the interpretation of a rudimentary cobbled together contract and a sophisticated standard form contract; between the interpretation of a consumer contract and a commercial contract; or between the interpretation of a domestic and transnational contract. That is not, however, to say that in working out what is the best interpretation of a contract a court may not have to take into account, for example, a consumer as opposed to a commercial context, or the need for uniformity in international transactions.

In sharp contrast with civil law legal systems the common law adopts a largely objective theory to the interpretation of contracts. The purpose of the interpretation of a contract is not to discover how the parties understood the language of the text, which they adopted. The aim is to determine the meaning of the contract against its objective contextual scene. By and large the objective approach to the question of construction serves the needs of commerce. It is, however, less well suited to delivering practical justice in consumer transactions. There is much to be said for approaching commercial transactions and consumer agreements somewhat differently. This is already happening. One of the biggest modern developments in contract law has been the development of greater rights for consumers, notably in controls on exemption clauses and requirements of ‘fairness’ in consumer contracts. In England the principal impetus has been European directives for the protection of consumers. This has given rise to arguments that there should be two contract laws; one for consumer transactions, the other for commercial dealings.[7]

Two recent decisions in the House of Lords explored the extent to which the context may impress a meaning other than the obvious meaning on contractual language. In Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd[8] the issue was whether a contractual notice by a tenant to determine a lease was valid. The notice wrongly named the day upon which the tenant would do so as 12 January rather than 13 January. The majority held that the notice was valid. Essentially, they regarded it as wholly implausible that the tenant only wanted to terminate if he could do so on 12 rather than 13 January. Given this position the majority concluded that a reasonable recipient would have understood that the option was being exercised. In the context 12 meant 13. The minority held that the notice failed to conform to the requirements of the option reserved in the lease. As a member of the majority in Mannai I acknowledge that when judgments were delivered in the House of Lords Chancery, practitioners hoisted a black flag over Lincoln’s Inn.

The case of Investors Compensation Scheme Ltd v West Bromwich Building Society[9] is important. The particular dispute can be put to one side. It is sufficient to say that by a majority of four to one the House of Lords upheld the conclusion of the judge that something had probably gone wrong in the drafting and reversed a ruling of the Court of Appeal. Lord Hoffmann, speaking for the majority, rejected the contention that judges cannot, short of rectification, decide on an issue of interpretation that parties had made mistakes of meaning or syntax. Lord Hoffmann observed that ‘if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had.’ This was the ratio of the decision. However, in the course of his speech Lord Hoffmann also observed that the admissible background ‘includes absolutely anything which would have affected the way in which the language would have been understood by a reasonable man’. This proposition upset the horses in the commercial paddock. Commercial judges vented their angst. Subsequently, in BCCI v Ali Lord Hoffmann explained that his observation only referred to anything which the reasonable man would regard as relevant.[10] Relevance of the extrinsic evidence to the objective setting of the contract is the expressed criterion. It is, however, rare for a judge to decide that a text means something that it could not mean in ordinary or technical language. On the rare occasions when a judge does this, he does it because he thinks there is an obvious mistake which has been made by the author of the text and that he has a duty to correct it.

The decision in the Investors Compensation Scheme case raised questions about two sacred cows of English law, namely that the court is not permitted to use evidence of (1) pre-contractual negotiations of the parties or (2) of their subsequent conduct in aid of the construction of written contracts even if the material throws light on the subjective intentions of the parties.[11] One view is that these rules follow from the principle that the task of the court is simply to ascertain the objectively ascertained contextual meaning of the language of the contract. The other view is that the restrictive rules are imposed as a matter of legal policy to achieve certainty. It is, however, important to note that the Vienna Convention on the Sale of Goods (1986),[12] the Unidroit Principles of International Commercial Contracts [1994],[13] and the Principles of European Contract Law (1999)[14] in principle permit such evidence to be taken into account. No doubt this liberality is due to the subjective approach of the civil law system. Possibly we are swimming against the tide. In England the rule about prior negotiations may for the moment be relatively safe. I am less confident about the life expectancy of the rule excluding subsequent conduct. Business people and, for that matter, ordinary people, simply do not understand a rule which excludes from consideration how the parties have in the course of performance interpreted their contract. The law must not be allowed to drift too far from the intuitive reactions of justice of men and women of good sense: the rule about subsequent conduct may have to be re-examined.

In any event, the strict application of these rules had to be qualified in practice. Pragmatically, it has been decided that if pre-contractual exchanges show that the parties attached an agreed meaning to ambiguous expressions, that may be admitted in aid of interpretation.[15] That is a substantial inroad on the restrictive rules. The courts have resorted to estoppel to temper the rigidity of the orthodox rule regarding the inadmissibility of subsequent conduct. Thus in Vistafjord the Court of Appeal held that a party may be precluded by an estoppel by convention from raising a contention contrary to a common assumption of fact or law (including the interpretation of a contract) on which the parties have acted.[16] In this way the reasonable expectations of parties are given some protection. A more radical approach to the two restrictive rules may become necessary. It may be that the differences between commercial and consumer transactions should be more clearly recognised: a hard-nosed attitude to admitting such evidence in commercial transactions may be right but in consumer transactions a more relaxed approach may be necessary.

That brings me to the implication of terms.[17] It is part of the interpretative process. In systems of law where there is a general duty of good faith in the performance of contracts the need to supplement the written contract by implied terms is less than in the common law system. The implication of terms fulfils an important function in promoting the reasonable expectations of parties. Two types of implication are relevant. First, there are terms implied in fact, ie, from the contextual scene of the particular contract. Such implied terms fulfil the role of ad hoc gap fillers. Often the expectations of the parties would be defeated if a term were not implied eg, sometimes a contract simply will not work unless a particular duty to co-operate is implied.

The law has evolved practical tests for such an implication, such as the test whether the term is necessary to give business efficacy to the contract or whether the conventional bystander, when faced with the problem, would immediately say ‘yes, it is obvious that there must be such a term’. The legal test for the implication of a term is the standard of strict necessity. And it is right that it should be so since courts ought not to supplement a contract by an implication unless it is perfectly obvious that it is necessary to give effect to the reasonable expectations of parties. It is, however, a myth to regard such an implied term as based on an inference of the actual intention of the parties. The reasonable expectations of the parties in an objective sense are controlling: they sometimes demand that such terms be imputed to the parties.

The second category are terms implied by law. This occurs when incidents are impliedly annexed to particular forms of contracts, for example, contracts for building work, contracts of sale, hire etc. Such implied terms operate as default rules. By and large such implied terms have crystallised in statute or case law. But there is scope for further development in a rapidly changing world. This function of the court is essential in providing a reasonable and fair framework for contracting. After all, there are many incidents of contracts which the parties cannot always be expected to reproduce in writing.

Ending my discussion of contracts, the black letter approach to interpretation of contracts has given way to a more commercial approach. It eschews niceties of language and concentrates on a contextual approach and the structure and purpose of the transaction. It is to be welcomed. On the other hand, the problem of the consumer perspective has not been completely solved.

2. Statute Law

In 1882 Pollock described the approach of English judges to statutes as follows: ‘Parliament generally changes law for the worse, and ... the business of the judges is to keep the mischief of its interference within the narrowest bounds.’[18] This was an accurate description of the judicial mindset in Victorian times. This approach led to restrictive interpretation by literalist methods which sometimes blocked social progress. It remained the approach of English judges until some time after the Second World War. But the legal world has changed. Like Australian judges, English judges now apply purposive methods of construction of statutes.

Except in the rare case where a statute reveals a contrary intention, it is now settled that every statute must be interpreted as an ‘always speaking statute’. There are at least two strands to this principle. The first is that courts must interpret and apply a statute of any vintage to the world as it exists today. That is the basis of the decision of the House of Lords in R v Ireland case where ‘bodily harm’ in a Victorian statute governing assaults was held to cover psychiatric injury.[19] Equally important is the second strand, namely that a statute must be interpreted in the light of the legal system as it exists today.[20] Thus the importance the law nowadays attaches to free speech is a relevant background to the interpretation of earlier statutes. The rationale of this principle is that a statute is usually intended to endure for a long time in a changing world. This principle does not apply to contracts. Arguably, however, there could be a similar development in respect of international standard form contracts with an intended long life.

It will be rare for a statute to have one obvious meaning which can be determined without taking into account the context of the legislation. One might say that a statutory provision that a notice must be lodged within 30 days requires no resort to contextual material. Even this proposition is not necessarily correct. The context may throw light on the relative plausibility of interpretations holding that days include every day of the week or only week days. While the text of the statute is of pre-eminent importance, it cannot be understood in a vacuum. This was lucidly explained by Lord Blackburn in River Wear Commissioners v Adamson as follows:

... I shall ... state, as precisely as I can, what I understand from the decided cases to be the principles on which the Courts of Law act in construing instruments in writing; and a statute is an instrument in writing. In all cases the object is to see what is the intention expressed by the words used. But, from the imperfection of language, it is impossible to know what that intention is without inquiring farther, and seeing what the circumstances were with reference to which the words were used, and what was the object, appearing from those circumstances, which the person using them had in view; for the meaning of words varies according to the circumstances with respect to which they were used.[21]

Legislative language can only be understood against the backcloth of the world to which it relates. Moreover, sometimes judgments do not fully take into account the different levels of reasoning at which the context is relevant. As in the case of commercial contracts, and other legal texts, the context is relevant to what possible different meanings the language of the text may let in. But the context is again relevant when the judge comes to select among the possible interpretations the best one. In any event, it is a fundamental misconception to say that the background to the statute may only be admitted in the event of an ambiguity. The interpretative process requires judges to make informed choices.

That brings me to the use of Hansard in aid of interpretation of statutes. As in Australia, English courts regularly use reports which led to or preceded legislation, in aid of interpretation. It is part of the setting of a statute. Australian and English lawyers would agree that there is no reason why Hansard materials should not be used to identify the mischief against which the statute is aimed. It helps to explain the background of the statute. Far more troublesome is the use in aid of interpretation of statements of a government minister in the promotion of a bill as reflecting the desired intent of the government. Section 15A–B of the Acts Interpretation Act 1901, as inserted in 1984, permits the use of such material where the legislation is ambiguous or obscure or where its literal meaning leads to an absurdity. In England Pepper v Hart[22] heralded a parallel development. Doubts about the reach of that decision have arisen in England. It may be of interest if I explained the reservations which are now emerging in England.

Pepper v Hart broke new ground by holding that in cases of ambiguity it is permissible to refer in aid of construction of statutes to statements of a promoter of the bill. The rationale of this principle was memorably stated by Lord Denning, ‘Why should judges grope about in the dark searching for the meaning of an Act, when they can so easily switch on the light?’ I have, however, come to the conclusion that while the actual decision in Pepper v Hart was correct, the broadly based observations in that case are contrary to constitutional principle.[23]

In the Westminster Parliament, exchanges sometimes take place late at night in nearly empty chambers whilst places of liquid refreshment are open. Sometimes there is a party political debate with whips on. The questions are often difficult but political warfare sometimes leaves little time for reflection. These are not ideal conditions for the making of authoritative statements about the meaning of a clause in a bill. Let me give you the flavour from an explanation by Lord Hayhoe, reported in Hansard of 27 March 1996. He said:

I remember only too well my first intervention as a new Minister at the Treasury on the Finance Bill in the very early hours of the morning on a subject about which I knew absolutely nothing but on which I had a marvellously thick book of briefing from the Inland Revenue. I appropriately read out the response to some detailed points that had been made by one of the Opposition spokesmen who stood up afterwards to say how well I had dealt with the point he had raised and welcomed my first intervention in Finance Bill Committees. However, I discovered from my private office afterwards that I had read out the wrong reply to the amendment. Clearly, it made not the slightest bit of difference.

It is sometimes meaningful and appropriate for a judge to refer to the intention of parliament in recognition of its supreme law-making power. It is also perfectly sensible to say that legislation as duly promulgated reflects the will of parliament. But it is quite a different matter to ascribe to a composite and artificial body such as a legislature a state of mind deduced from exchanges in debates. The law can ascribe to legal persons, such as companies and state agencies, an intention to commit particular acts. Rules of attribution have been developed to suit the demands of particular contexts. But the argument that a legislature, operating through two chambers, may have an intention revealed by statements in debates is altogether more ambitious. Until Pepper v Hart, under the common law, there was in England no rule of attribution, or rule of recognition, which treated statements of ministers as acts of parliament.

The intention under consideration is one targeted on the meaning of language contained in a clause in a bill and employed in a ministerial statement. A bill is a unique document. It speaks in compressed language. Parliament legislates by the use of general words. It is difficult to ascribe to members of parliament an intention in respect of the meaning of a clause in a complex bill and how it interacts with a ministerial explanation. The ministerial explanation in Pepper v Hart was made in the House of Commons only. What is said in one House in debates is not formally or in reality known to the members of the other House. How can it then be said that the minister’s statement represents the intention of parliament, ie, both Houses? The Appellate Committee took the view that opposing views expressed by a person other than the promoter can safely be disregarded whenever a statement by a promoter is admitted. This is also an assumption which seems inherently implausible in respect of the ebb and flow of parliamentary debates. In truth, a minister speaks for the government and not for parliament. The statements of a minister are no more than indications of what the government would like the law to be. In any event, it is not discoverable from the printed record whether individual members of the legislature, let alone a plurality in each chamber, understood and accepted a ministerial explanation of the suggested meaning of the words. For many the spectre of the ever-watchful whips will be enough. They may agree on only one thing, namely to vote yes. And they have no means of voting yes and registering at the same time disagreement with the explanation of the minister. Their silence is therefore equivocal. When one considers such realities of parliamentary life the idea of determining from Hansard the true intention of parliament on the meaning of a clause in a bill, and an associated ministerial statement, looks more and more farfetched. In Black-Clawson[24] Lord Reid, speaking with enormous parliamentary experience, said: ‘We often say that we are looking for the intention of parliament but that is not quite accurate. We are seeking the meaning of the words which parliament uses.’ It would have been a fiction for the House to say in Pepper v Hart that as a matter of historical fact the explanation of the Financial Secretary reflected the intention of parliament. Arguably the House may have had in mind in Pepper v Hart that an intention derivable from the Financial Secretary’s statement ought to be imputed to parliament. If that were the case, the reasoning would rest on a complete fiction. The only relevant intention of parliament can be the intention of the composite and artificial body to enact the statute as printed.

There is a strong case for allowing a statute to be interpreted in favour of the citizen in accordance with a considered explanation given by a minister promoting the bill. It is the argument that the executive ought not to get away with saying in a parliamentary debate that the proposed legislation means one thing in order to ensure the passing of the legislation and then to argue in court that the legislation bears the opposite meaning. That is what happened in Pepper v Hart. Lord Bridge of Harwich said that the Financial Secretary ‘assured’ the House that it was not intended to impose the relevant tax. He must have taken the view, as did other members of the majority, that the Revenue in imposing the tax was going back on an assurance to the House of Commons. That would have been an unfair and unacceptable result. If such a consequence prevailed it would tend to undermine confidence in the legal system.

Whether one calls it an estoppel, a legitimate expectation, a principle of fairness, or whatever else, Pepper v Hart as decided on its facts can simply be viewed as a tempering of the traditional exclusionary rule in the interests of justice. On this basis the impact of the decision can be confined to the admission against the executive of categorical assurances given by ministers to parliament. This may be a principled justification of Pepper v Hart. And it does not involve a search for the phantom of a parliamentary intention.

Unfortunately, that is not how the reasoning of the House in Pepper v Hart was expressed. The House had before it a ministerial statement which it regarded as favouring the taxpayer. This framework dictated the shape of the arguments and the judgments. The converse case was not considered. What would the position have been if the statutory position had been truly ambiguous and the ministerial statement favoured the Revenue? Ex hypothesi the statement would have come from a minister promoting the bill and would have been clear on the very question in issue. It would therefore have been a trump card. A judge who declined to give effect to it would, on the reasoning in Pepper v Hart, be thwarting the intention of parliament. What then happens to the principle that if a taxation provision is reasonably capable of two alternative meanings, the courts will prefer the meaning more favourable to the subject? Pepper v Hart does not address this question.

The basis on which the exclusionary rule was relaxed ignores constitutional arguments of substance. Lord Bridge described the rule as ‘a technical rule of construction’. And implicitly that is how the majority approached the matter. Surely, it was much more. It was a rule of constitutional importance which guaranteed that only parliament, and not the executive, ultimately legislates; and that the courts are obliged to interpret and apply what parliament has enacted, and nothing more or less. To give the executive, which promotes a bill, the right to put its own gloss on the bill is a substantial inroad on a constitutional principle, shifting legislative power from parliament to the executive. Given that the ministerial explanation is ex hypothesi clear on the very point of construction, Pepper v Hart treats qualifying ministerial policy statements as canonical. It treats them as a source of law. It is in constitutional terms a retrograde step: it enables the executive to make law. It is of fundamental importance to understand that the objection is not to the idea of a judge looking at Hansard. It is entirely acceptable for a judge to identify the mischief of a statute from Hansard. What is constitutionally wrong in the English system is to treat the intentions of the government as revealed in debates as reflecting the will of parliament.

A matter not considered in Pepper v Hart is the likely impact of the relaxation of the exclusionary rule on executive practice. It was always predictable that the behaviour of ministers would alter in response to the change announced in Pepper v Hart. After all, why should ministers not take advantage of Pepper v Hart to explain the effect of the legislation in the way in which the government would like it to be understood? If this happens it must mark a constitutional shift of power from parliament to ministers. The parliamentary debates leading to the enactment of the Human Rights Act 1998 are revealing. When questioned about the effect of the omission to incorporate Article 13 of the European Convention on Human Rights the Lord Chancellor said: ‘One always has in mind Pepper v Hart when one is asked questions of that kind. I shall reply as candidly as I may’.[25] This makes my point: executive practice is bound to be influenced by Pepper v Hart. There is a real incentive for government to use this strategy to get Pepper v Hart statements on the record when it is reluctant to spell out its precise intentions on the face of the bill.

In Pepper v Hart the House of Lords failed to consider important constitutional questions. There are, however, those who believe that the relaxation of the exclusionary rule was the ultimate vindication of purposive construction. And purposive construction is like mother’s milk and apple pie: who can argue against it? The reasoning in Pepper v Hart sought to build on the fact that official reports and white papers are admissible for the purpose of identifying the mischief to be corrected. Such reports are always admissible for what logical value they have. But the constitutional objections do not apply to such reports. They are part of the contextual scene against which parliament legislates. In any event, to present the Pepper v Hart issue as depending on whether one adopts a literal or purposive approach to construction is wide off the mark. By the time Pepper v Hart was decided, nobody supported literal methods of construction. The suggested antithesis misses the point of the fundamental and constitutional nature of the objections. The objections are not simply that a minister’s view of a clause is irrelevant but that it is in principle wrong to treat it as a trump card or even relevant in the interpretative process.

What are the chances of Pepper v Hart being reversed? Being a decision that marks a shift of power from parliament to the executive, the prospect of any government initiating legislation to reverse it must be slight. It is, however, possible that Pepper v Hart may be confined by judicial decision to the use of Hansard against the executive when it goes back on an assurance given to parliament. This would not require the overruling of Pepper v Hart. It would simply confine its legal force to the material circumstances of that case. In England this question will not go away. In two recent decisions in the House of Lords there have been dicta raising these questions.[26] The debate continues.

3. Constitutional Measures: Fundamental Rights

Constitutional adjudication affecting fundamental rights contained in a bill of rights requires a broader approach than is applicable to commercial contracts and statutes. It requires what Lord Wilberforce in Foster described as a generous interpretation avoiding what has been called ‘...the austerity of tabulated legalism, suitable to give to individuals the full measure of fundamental rights and freedoms’.[27]

Bills of rights have proved themselves in the common law world, influencing the common law and being influenced by it. The interpretative techniques adopted in common law countries vary. The Canadian Charter of Rights and Freedoms requires judges to interpret an impugned law in a way that conforms to the Charter. If it cannot be reconciled the court declares the inconsistency and the law is pro tanto void. The New Zealand Bill of Rights 1990 is a weaker model. While the court must strive to reach an interpretation compatible with the Bill of Rights, there is no express power for the court to go further. On the other hand, the New Zealand Court of Appeal has strengthened the regime by holding that there is an implied power to make a declaration of inconsistency.[28] With the advantage of these earlier models the South African Constitution, and its Bills of Rights, was carefully crafted to entrench human rights strongly. Unlike Canada and New Zealand there is a Constitutional Court to adjudicate on constitutional issues. It has the power to declare legislation unconstitutional. The United Kingdom Bill of Rights is a relative newcomer in the field. The Human Rights Act 1998, which incorporates the European Convention on Human Rights into our law, came into force in October 2000. There is a strong interpretative obligation on the court to interpret legislation so as to be compatible with the Convention. If it is impossible to do so, the court must make a declaration of incompatibility. Parliamentary supremacy is respected. The expectation is, however, that parliament will consider the law on an early occasion and amend it.

It is undoubtedly the case that human rights are protected at many levels in the Australian system.[29] But unlike Western European countries and major Commonwealth countries, Australia has no express bill of rights. For Australian courts, fulfilling their constitutional duties of standing between the people and the executive, and protecting fundamental rights, this is a disadvantage.

In advance of the Human Rights Act 1998 coming into operation there was much hysteria. Newspapers described the Act as a recipe for chaos. They feared that traffic would be brought to a halt; that serious crime would go unpunished; and that the prison gates would be left permanently open. The forecast was that it would rain sulphur and brimstone. The premise of this hysteria was that the courts would accede to every impractical and implausible claim, ignoring the balance inherent in the Convention between individual rights and conditions of stability and order required in a liberal democracy. This ignored the fact that the direct application of the Convention has caused no such chaos in other European democracies. Nevertheless, Lord McCluskey, a Scottish judge, joined in by saying that the Human Rights Act ‘would provide a field-day for crackpots, a pain in the neck for judges and legislators, and a goldmine for lawyers’. Unsurprisingly, the judge was held to be disqualified from sitting in a human rights case.[30] The predicted legal revolution has not taken place. Instead there has been a subtle process of weaving human rights law into United Kingdom law. The Act has bedded down in a sensible and satisfactory way. Only a small percentage of challenges have succeeded. But it has afforded an opportunity for the courts to examine critically but constructively a few murkier areas of English law. It has strengthened our democracy.

Much can, however, be done through the common law. In England, the courts have recognised certain fundamental rights as constitutional. The courts protect as constitutional the right of participation in the democratic process, equality of treatment, freedom of expression, religious freedom and the right of unimpeded access to the courts. Even before the incorporation of the European Convention on Human Rights into English law the courts held that everybody has an absolute constitutional right to a fair trial which if breached must lead to the setting aside of the conviction.[31] What is the significance of classifying a right as constitutional? It is meaningful. It is a powerful indication that added value is attached to the protection of the right. It strengthens the normative force of such rights.[32] It virtually rules out arguments that such rights can be impliedly repealed by subsequent legislation.[33] Generally, only an express repeal will suffice. The constitutionality of a right is also important in regard to remedies. The duty of the court is to vindicate the breach of a constitutional right, depending on its nature, by an appropriate remedy.

There is another important common law development. Parliament does not legislate on a blank sheet. In the case of Britain it legislates for a European liberal democracy. This gives rise to what Sir Rupert Cross described as a presumption of general application which operates as a constitutional principle.[34] General words in a statute should not be allowed to abrogate fundamental rights. This principle has a considerable common law pedigree but in practice judges often failed to observe it. In 1998 in Pierson[35] in separate judgments Lord Browne-Wilkinson and I tried to bring together the rich strands of authority in support of this principle. At that time our views did not attract the support of a majority. Two years later in Simms[36] the House of Lords unambiguously reaffirmed the principle. Lord Hoffmann explained the rationale of the principle:

Parliamentary sovereignty means that Parliament can, if it chooses, legislate contrary to fundamental principles of human rights.... The constraints upon its exercise by Parliament are ultimately political, not legal. But the principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual.

This principle is now firmly entrenched in English law.[37] If it is applied by your courts, it will strongly reinforce the protection of fundamental rights in Australia.

4. Conclusion

I end by saying that in the interpretative process the judiciary owes allegiance to nothing except the constitutional duty of reaching through reasoned debate the best attainable judgments in accordance with justice and law. This is their role in the democratic governance of our countries.[38]

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[*] The University of Sydney: The John Lehane Memorial Lecture 2002, Wednesday, 25 September 2002.

[♦] The Rt Hon Lord Steyn is a Lord of Appeal in Ordinary.

[1] Ludwig Wittgenstein, ‘Philosophical Investigations’ (2^nd ed, 1958) note to para 70.

[2] Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 401.

[3] Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 at 293.

[4] Reardon Smith Line Ltd v Hansen-Tangen [1976] 2 Lloyd’s Rep 621.

[5] In re Fish; Ingham v Raynor [1894] UKLawRpCh 38; [1894] 2 Ch 83.

[6] This example is given in William Paley, The Works of William Paley (1838) Vol 111 at 60.

[7] George Appleby, Contract Law (2001) Chapters 15 and 17.

[8] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749 (hereinafter Mannai).

[9] Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28; [1998] 1 WLR 896 (hereinafter Investors Compensation Scheme).

[10] Bank of Credit and Commerce International SA v Ali [2001] UKHL 8; [2001] 2 WLR 735 at 749 (Lord Hoffman).

[11] Prenn v Simmonds [1971] 1 WLR 1381; James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583.

[12] Sale of Goods (Vienna Convention) Act 1986 Article 8(3).

[13] Article 4(3).

[14] Article 5:102.

[15] Karen Oltmann v Scarsdale Shipping Co Ltd (the Karen Oltmann) [1976] 2 Lloyd’s Rep 708. See D W McLauchlan, ‘Common Assumptions and Contract Interpretation’ (1997) 113 LQR 237.

[16] Norwegian American Cruises v Paul Mundy Ltd (the Vistafjord) [1988] 2 Lloyd’s Rep 343.

[17] Andrew Phang, ‘Implied Terms, Business Efficacy and the Officious Bystander’ (1988) JBL at 1.

[18] Sir Frederick Pollock, Essays on Jurisprudence and Ethics (1882) 85.

[19] R v Ireland; R v Burstow [1997] UKHL 34; [1998] AC 147 at 158D–G.

[20] Sir Rupert Cross, Statutory Interpretation (3rd ed, 1995) 51–52; McCartan Turkington Breen (a firm) v Times Newspapers Ltd [2000] UKHL 57; [2001] 2 AC 277 at 296A–F.

[21] River Wear Commissioners v Adamson (1877) 2 AC 743 at 763.

[22] Pepper v Hart [1992] UKHL 3; [1993] AC 593.

[23] I have drawn on my paper: Johan Steyn, ‘Pepper v Hart: A Re-examination’ (2001) 21 Oxford Journal of Legal Studies at 59.

[24] Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] UKHL 2; [1975] AC 591.

[25] United Kingdom, House of Lords, Parliamentary Debates (Hansard), 18 November 1997 at Col 475.

[26] Regina v Secretary of State for the Environment, Transport and Regions, Ex p Spath Holme [2000] UKHL 61; [2001] 2 WLR 15 at 48 (Lord Hope of Craighead); Robinson v Secretary of State for Northern Ireland and Others [2002] UKHL 32 (Lord Hoffmann and Lord Millett).

[27] Ministry of Home Affairs v Fisher [1979] UKPC 21; [1980] AC 319 at 328.

[28] Moohen v Film & Literature Board of Review [2000] 2 NZLR9; Poumaka [2000] 2NZLR 37.

[29] George Williams, Human Rights Under the Australian Constitution (1999) passim.

[30] Hoekstra and Others v HM Advocate [2001] 1 AC 216.

[31] R v Brown (Winston) [1994] 1 WLR 1599; R v Bentley (2001) 1 Cr App Rep 307. Now the absolute guarantee of a fair trial is governed by article 6.1 of the European Convention: the relevant case law is reviewed in Mills v Lord Advocate (Scotland Act), July 2002, PC.

[32] Mohammed v The State [1998] UKPC 49; [1999] 2 AC 111.

[33] Thoburn and Others v Sunderford City Council and Others (18 February 2002, DC).

[34] Statutory Interpretation (3rd ed) at 166.

[35] R v Secretary of State for the Home Department, Ex parte Pierson [1997] UKHL 37; [1998] AC 539 at 575D.

[36] R v Secretary for the Home Department Ex p Simms [2000] 2 AC 131.

[37] R v Special Commissioner and Another, Ex p Morgan Grenfell & Co Ltd [2002] UK HL 21.

[38] I am indebted to Lydia Clapinska, a Judicial Assistant in the House of Lords, now based in Sydney, and to Karen Steyn, for suggestions about my lecture.