Interpretation and Rectification: Lord Hoffmann's Last Stand
In this article, the author analyses the recent decision of the House of Lords in Chartbrook Ltd v Persimmon Homes Ltd concerning the law of contract interpretation and rectification. After explaining the difficult facts of the case and the reasons given by their Lordships for
reversing the judgments of the lower courts on the interpretation issue, which were based on the plain meaning of the clause in dispute, the author discusses the further, albeit obiter, ruling that evidence of prior negotiations is inadmissible as an aid to interpretation. He argues that the
reasons for this conclusion given in the main judgment of Lord Hoffmann are unconvincing and suggests that, in this respect, Chartbrook is unlikely to be followed by the New Zealand Supreme Court in view of that Court's decision in Gibbons Holdings Ltd v Wholesale Distributors Ltd
that evidence of subsequent conduct is admissible as an aid to interpretation. The author also discusses Lord Hoffmann's ruling on the alternative claim in Chartbrook for the equitable remedy of rectification and suggests that, while his Lordship's conclusion is correct, the reasoning
is difficult and likely to generate further debate as to the requirements for granting that remedy.
Document Type: Research Article
Publication date: 01 September 2009
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