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ARTICLE · 01 MARCH 2016

Contract construction - Uncertainty remains

Until the High Court decides the matter, courts should approach the question by applying Codelfa, which remains binding.

AustraliaCorporate/Commercial Law

The High Court has refused to answer the contractual construction question of whether ambiguity must be shown (the "ambiguity gateway") before a court can consider evidence of the surrounding circumstances when interpreting a written contract.

As discussed in our recent publication Surrounding circumstances and contract construction: Is there still an ambiguity gateway?, there is a great deal of uncertainty as to whether the ambiguity gateway applies.

It had been hoped that the High Court decision involving contractual construction in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited & Anor (Mount Bruce Mining) would settle this matter. However, as the case did not directly raise the issue, the High Court expressly refused to determine it.

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