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IMPLIED TERMS AFTER BELIZE TELECOM

Published online by Cambridge University Press:  17 July 2014

Richard Hooley*
Affiliation:
Professor of Law, King's College London.
*
Address for correspondence: The Dickson Poon School of Law, King's College London, Strand, London WC2R 2LS. Email: richard.hooley@kcl.ac.uk.
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Abstract

It is five years since Lord Hoffmann delivered the advice of the Privy Council in Attorney-General of Belize v Belize Telecom Ltd. In that landmark decision, Lord Hoffmann assimilated contractual interpretation and implication with the result that when implying a term in fact the court must ask a single question: “is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?” It might have been thought that five years was enough time for the English courts to come to terms with this approach. Belize is regularly cited in the courts, but the judges appear to struggle with its application. There remains uncertainty as to the roles (if any) to be afforded to the traditional “business efficacy” and “officious bystander” tests, and the requirement of “necessity”. This article seeks to re-evaluate Belize five years on. It concludes that Belize provides a doctrinally coherent and workable basis for identifying and giving effect to the intention of the parties through the implication of terms. However, the article questions whether it remains necessary, or even helpful, to continue to make reference to tests based on “business efficacy” or the “officious bystander”, as the tests distract from the central idea advanced by Lord Hoffmann and have led to uncertainty in its application.

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Articles
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Copyright © Cambridge Law Journal and Contributors 2014 

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References

1 [2009] UKPC 10, [2009] 1 W.L.R. 1988 at [16]–[27], hereafter referred to as Belize.

2 Ibid., at [19].

Ibid

3 This assumes that Belize is only concerned with terms implied in fact and not those implied by law or by custom and usage. The legitimacy of this assumption is considered later in this article.

4 Ibid., at [21].

Ibid

5 Mediterranean Salvage & Towage Ltd. v Seamar Trading & Commerce Inc., The Reborn [2009] EWCA Civ 531, [2009] 2 Lloyd's Rep. 639 at [8].

6 [1998] 1 W.L.R. 896, 912–3 (H.L.).

7 SNCB Holding v UBS AG [2012] EWHC 2044 (Comm) at [63] (Cooke J.).

8 Search conducted on 1 September 2013.

9 Vos J. has said that the cases after Belize “do not entirely speak with one voice”: Spencer v Secretary of State for Defence [2012] EWHC 120 (Ch), [2012] 2 All E.R. (Comm.) 480 at [52], affd. [2012] EWCA Civ 1368, [2013] 1 All E.R. (Comm.) 287.

10 [2011] EWCA Civ 543, [2011] Pens. L.R. 223 at [36].

11 Ibid., at [44] (emphasis added).

Ibid

12 Wuhan Ocean Economic & Technical Cooperation Co Ltd. v Schiffahrts-Gesellschaft “Hansa Murcia” MBH & Co KG [2012] EWHC 3104 (Comm), [2013] 1 Lloyd's Rep. 273 at [15].

13 Low, K. F. K. and Loi, K. C. F., “The Many ‘Tests’ for Terms Implied in Fact: Welcome Clarity” (2009) 125 L.Q.R. 561Google Scholar, 565. See also Peters, C., “The Implication of Terms in Fact” [2009] C.L.J. 513CrossRefGoogle Scholar.

14 Grabiner Q.C, Lord., “The Iterative Process of Contractual Interpretation” (2012) 128 L.Q.R. 41Google Scholar, 58–61.

15 McCaughran Q.C, John., “Implied Terms: The Journey of the Man on the Clapham Omnibus” [2011] C.L.J. 607, 614Google Scholar.

16 Davies, P. S., “Recent Developments in the Law of Implied Terms” [2010] L.M.C.L.Q. 140, 144Google Scholar; and also in “Construing Commercial Contracts: No Need for Violence”, in Freeman, M. and Smith, F. (eds.), Law and Language: Current Legal Issues 2011, vol. 15 (Oxford 2013), 434CrossRefGoogle Scholar, 439–42. See also Macdonald, E., “Casting Aside ‘Officious Bystanders’ and ‘Business Efficacy’?” (2009) 26 J.C.L. 97Google Scholar; Andrews, N., Contract Law (Cambridge 2011)CrossRefGoogle Scholar, [13.11].

17 See Carter, J. W., The Construction of Commercial Contracts (Oxford 2013)Google Scholar, [2–42], [3–15], pointing out that characterisation of a term as a condition, a warranty or an intermediate term is another means of giving effect to the intention of the parties and, therefore, turns on interpretation.

18 Smith, S. A., Contract Theory (Oxford 2004)Google Scholar, 8.1.2 and 8.3.4. This argument is probably at its strongest when used in the context of terms implied by law, which operate as default rules across defined types of contractual relationship. See also Goetz, C. J. and Scott, R. E., “The Limits of Expanded Choice: An Analysis of the Interactions Between Express and Implied Contract Terms” (1985) 73 California L.R. 261CrossRefGoogle Scholar; Ayes, I. and Gertner, R., “Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules” (1989) 99 Yale L.J. 729Google Scholar; Johnson, J. S., “Strategic Bargaining and the Economic Theory of Contract Default Rules” (1990) 100 Yale L.J. 615CrossRefGoogle Scholar.

19 Yam Seng Pte Ltd. v International Trade Corporation Ltd. [2013] EWHC 111 (QB), [2013] 1 Lloyd's Rep. 526 at [139] (Leggatt J.).

20 Low and Loi, note 13 above, 565–6.

note 13

21 Shirlaw v Southern Foundries (1926) Ltd. [1939] 2 K.B. 206, 227 (McKinnon L.J.).

22 Equitable Life Assurance Society v Hyman [2002] 1 A.C. 408, 459 (Lord Steyn).

23 Luxor (Eastbourne) Ltd. v Cooper [1941] A.C. 108 at 137 (Lord Wright); Charter Reinsurance Co Ltd. v Fagan [1997] A.C. 313, 388 (Lord Mustill).

24 Philips Electronique Grand Public SA v British Sky Broadcasting Ltd. [1995] E.M.L.R. 472, 482 (Sir Thomas Bingham M.R.).

25 Davies [2010] L.M.C.L.Q. 140, 145.

26 Reigate v Union Manufacturing Co [1918] 1 K.B. 592, 605 (Scrutton L.J.).

27 As recognised by Lord Hoffmann in Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988 at [17]. The Reborn [2009] EWCA Civ 531, [2009] 2 Lloyd's Rep. 639 provides a good example of this.

28 (1981–82) 149 C.L.R. 337, 346.

29 This assumes that the courts will be reluctant to interpret clear and unambiguous terms in a broad contextual way: see Lord Clarke in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 W.L.R. 2900 at [23], and other cases discussed by Davies in “Construing Commercial Contracts”, note 16 above, 454. See also Kudos Catering (U.K.) Ltd. v Manchester Central Convention Complex Ltd. [2013] EWCA Civ 38, [2013] 2 Lloyd's Rep. 270 at [20] (Tomlinson L.J.).

note 16

30 Equitable Life Assurance Society v Hyman [2002] 1 A.C. 408, 459 (Lord Steyn).

31 Luxor (Eastbourne) Ltd. v Cooper [1941] A.C. 108 , 137 (Lord Wright).

32 See, e.g., Greaves & Co. (Contractors) Ltd. v Baynham Meikle & Partners [1975] 1 W.L.R. 1095, 1099 (Lord Denning M.R.).

33 See, e.g., Hawkins v Clayton (1988) 164 C.L.R. 539, 570 (Deane J. in High Court of Australia).

34 See, e.g., Luxor (Eastbourne) Ltd. v Cooper [1941] A.C. 108, 137 (Lord Wright).

35 See, e.g., The Moorcock (1889) 14 P.D. 64, 68 (Bowen L.J.); and, recently, Yam Seng Pte Ltd. v International Trade Corp Ltd. [2013] EWHC 111 (QB), [2013] 1 Lloyd's Rep. 526 at [131] (Leggatt J.).

36 By contrast, the classification of intention remains important in the context of common intention constructive trusts over the family home: see Stack v Dowden [2007] UKHL 17, [2007] 2 A.C. 432 at [60]–[61] (Lady Hale), and [18]ff (Lord Walker); cf. at [125] (Lord Neuberger); Jones v Kernott [2011] UKSC 53, [2012] 1 A.C. 776 at [34], [47] (Lady Hale and Lord Walker) and [64] (Lord Collins); cf. at [72] (Lord Kerr) and [89] (Lord Wilson).

37 Carter, note 17 above, [3–21]. But contrast, Collins, H., The Law of Contract, 4th ed. (Cambridge 2003), 223Google Scholar, 245–6 (arguing that the objective test for determining the content of contractual obligations severs any connection with the intention of the parties).

note 17

38 Phang, A., “Implied Terms Revisited” [1990] J.B.L. 394Google Scholar and “Implied Terms in English Law – Some Recent Developments” [1993] J.B.L. 242 argues that there should be no distinction between the two categories of implied term. But contrast Peden, E., “Policy Concerns Behind Implication of Terms in Law” (2001) 117 L.Q.R. 459Google Scholar, 463, adopted by Mance L.J. in Crossley v Faithful & Gould Holdings Ltd. [2004] EWCA Civ 293, [2004] 4 All E.R. 447; and see also Liverpool City Council v Irwin [1977] A.C. 239, 257–58 (Lord Cross); Geys v Société Générale [2012] UKSC 63, [2013] 1 A.C. 523 at [55] (Baroness Hale).

39 See, e.g., Liverpool City Council v Irwin [1977] A.C. 239.

40 See, e.g., Lister v Romford Ice and Cold Storage Co Ltd. [1957] A.C. 555; Scally v Southern Health and Social Services Board [1992] 1 A.C. 294; Malik v Bank of Credit and Commerce International SA [1998] A.C. 20.

41 Crossley v Faithful & Gould Holdings Ltd. [2004] EWCA Civ 293, [2004] 4 All E.R. 447 at [33]–[46]. See, generally, Peden, note 38 above, 467–75.

note 38

42 See, e.g., the Sale of Goods Act 1979, ss. 12–15.

43 Equitable Life Assurance Society v Hyman [2002] 1 A.C. 408, 458 (Lord Steyn); Malik v Bank of Credit and Commerce International SA [1998] A.C. 20, 45 (Lord Steyn). See also Rakoff, T., “The Implied Terms of Contracts: Of ‘Default Rules’ and ‘Situation-Sense’” in Beatson, J. & Friedmann, D. (eds.), Good Faith and Fault in Contract Law (Oxford 1995), 191Google Scholar; Riley, C. A., “Designing Default Rules in Contract: Consent, Conventionalism, and Efficiency” (2000) 20 O.J.L.S. 367CrossRefGoogle Scholar.

44 Exclusion is subject to statutory controls, e.g., the Unfair Contract Terms Act 1977, s. 6 (regarding terms implied by the Sale of Goods Act 1979, ss. 12–15).

45 Peel, E., Treitel's Law of Contract, 13th ed. (London 2011)Google Scholar, [6–046].

46 McMeel, G., The Construction of Contracts: Interpretation, Implication, and Rectification, 2nd ed. (Oxford 2011)Google Scholar, [11.39] identifies four tests traditionally employed for the implementation of terms in fact: it “goes without saying”; “business efficacy”; the “officious bystander” and a five-stage test advanced by Lord Simon in BP Refinery (Westernport) Pty Ltd. v Hastings Shire Council (1977) 180 C.L.R. 266 (P.C.), 282–3. But the precise number of tests depends on whether they are seen as alternative, cumulative or overlapping.

47 (1889) 14 P.D. 64.

48 The jetty owner did not own the riverbed and so could not have undertaken to make it safe.

49 Ibid., at 68.

50 Associated Japanese Bank (International) Ltd. v Credit Du Nord SA [1989] 1 W.L.R. 255, 263 (Steyn J.). See also, e.g., Concord Trust v The Law Debenture Trust Corp [2005] UKHL 27, [2005] 1 W.L.R. 1591 at [37] (Lord Scott).

51 [1939] 2 K.B. 206, at 227 (C.A.). The origins of the test can be traced back to the judgment of Scrutton L.J. in Reigate v Union Manufacturing Co (Ramsbottom) Ltd. [1918] 1 K.B. 592, 605 (C.A.): A. Phang, “Implied Terms, Business Efficacy and the Officious Bystander – A Modern History” [1998] J.B.L. 1 at 17ff.

52 Liverpool City Council v Irwin [1977] A.C. 239, 266 (Lord Edmund-Davies); Hughes v Greenwich LBC [1994] 1 A.C. 170, 179 (Lord Lowry).

53 [1956] 1 W.L.R. 585.

54 But see note 96 below for an explanation of this case which, arguably, fits better with Lord Hoffmann's approach in Belize.

note 96

55 Crossley v Faithful & Gould Holdings Ltd. [2004] EWCA Civ 293, [2004] 4 All E.R. 447, at [36]: Dyson L.J. (in context of implied terms by law) said necessity was an “elusive concept”.

56 Lewison, Sir Kim, The Interpretation of Contracts, 5th ed. (London 2011), 608Google Scholar.

57 Hoffmann, Lord, “Anthropomorphic Justice: The Reasonable Man and his Friends” (1995) 29 Law Teacher 127CrossRefGoogle Scholar, 138–40. See also Hoffmann, Lord, “The Intolerable Wrestle with Words and Meanings” (1997) 117 S.A.L.J. 656Google Scholar, 662.

58 See, e.g., Stubbes v Trower, Still and Keeling [1987] I.R.L.R. 321, 324 (Mustill L.J.).

59 See, e.g., Luxor (Eastbourne) Ltd. v Cooper [1941] A.C. 108, 125 (Lord Russell); Hughes v Greenwich LBC [1994] 1 A.C. 170, 179 (Lord Lowry).

60 Furmston, M. et al. (eds.), Butterworths Common Law Series: The Law of Contract, 4th ed. (London 2010)Google Scholar, [3.20].

61 See, e.g., Mosvolds Rederi A/S v Food Corporation of India, The Demoder General TJ Parke and King Theras [1986] 2 Lloyd's Rep. 68, 70 (Steyn L.J.); Marcan Shipping (London) Ltd v Polish Steamship Co, The Manifest Lipkowy [1989] 2 Lloyd's Rep. 138, 143 (Bingham L.J.).

62 Peel, E., Treitel's Law of Contract, 12th ed. (London 2007)Google Scholar, [6-031]: the submission is not made in the 13th ed., 2011, where it is said (at [6-036]) that, after Belize, “the precise relationship between [the two tests] may be regarded as a somewhat sterile debate”.

63 Morgan, J., Great Debates in Contract Law (Basingstoke 2012), 107Google Scholar. Cf. Phang, A., “Implied Terms Revisited” [1990] J.B.L. 394Google Scholar at 397 (officious bystander test is a practical application of the business efficacy test), although he later revised this view in “Implied Terms, Business Efficacy and the Officious Bystander – A Modern History” [1998] J.B.L. 1 at 17ff (the tests are complementary).

64 BP Refinery (Westernport) Ltd. v Shire of Hastings (1977) 180 C.L.R. 266 (P.C.), 283, per Lord Simon, although he appears to present them as cumulative requirements.

65 Beatson, J., Burrows, A. and Cartwright, J., Anson's Law of Contract, 29th ed. (Oxford 2010), 151Google Scholar.

66 Liverpool City Council v Irwin [1977] A.C. 239, 258 (Lord Cross), 266 (Lord Edmund-Davies); Philips Electronique Grand Public SA v British Sky Broadcasting Ltd. [1995] E.M.L.R. 472, 482 (Sir Thomas Bingham M.R.).

67 [2009] UKPC 10, [2009] 1 W.L.R. 1988.

68 Article 90(E) provided that directors were to hold office “subject only to Article 112” (which dealt generally with the circumstances in which the office of director was vacated, e.g., on bankruptcy or conflict of interest), but there was nothing in Art. 112 providing for what was to happen if the holding of the special shareholder fell below the stated percentage. Lord Hoffmann (ibid., at [31]) dealt with an argument that Art. 112 prevented the implication of a term, because this would be inconsistent with the express term, by interpreting the express term narrowly.

ibid

69 Ibid., at [32].

Ibid

70 In Belize, [2009] UKPC 10, [2009] 1 W.L.R. 1988 , at [36], Lord Hoffmann acknowledged that because articles of association of a company are registered, and available to anyone who wishes to inspect them, the admissible background for the purposes of construction had to be limited to what any reader would be supposed to know, and did not include extrinsic facts known only to some of the people involved in the formation of the company (applying Bratton Seymour Co Ltd. v Oxborough [1992] B.C.L.C. 693).

71 [2009] UKPC 10, [2009] 1 W.L.R. 1988 , at [16]–[21]. See also the summary of Lord Hoffmann's approach provided by Aikens L.J. in Crema v Cenkos Securities plc [2010] EWCA Civ 1444, [2011] 1 W.L.R. 2066 at [38]–[39]. Lord Clarke has said that Lord Hoffmann's analysis in Belize “repays detailed study” (The Reborn [2009] EWCA Civ 531, [2009] 2 Lloyd's Rep. 639, at [9]) and Arden L.J. has said that the whole speech “needs careful study” (Eastleigh BC v Town Quay Developments Ltd. [2009] EWCA Civ 1391, [2010] P. & C.R. 2 at [32]).

72 [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [21]–[27].

73 Ibid., at [16] “whether it be a contract, a statute or articles of association”. In Crema v Cenkos Securities plc [2010] EWCA Civ 1444, [2011] 1 W.L.R. 2066, at [37], Aikens L.J. said that Lord Hoffmann's principles were also relevant to contracts which were partly oral and partly in writing, as well as those wholly oral, with any necessary modifications; Sir Andrew Morritt C. at [71] doubted that the same principles could be easily adapted to contracts implied from conduct, citing his own judgment in Grisbrook v MGN Ltd. [2010] EWCA Civ 1399, [2011] Bus. L.R. 599 at [31] (but contrast Hamsard 3147 Ltd. (t/a “Mini Mode Childrenswear”) v Boots UK Ltd. [2013] EWHC 3251 (Pat) at [65], Norris J.).

Ibid

74 The context and Lord Hoffmann's reference to the “business efficacy” and “officious bystander” tests support this view (and see Treitel's Law of Contract, note 45 above, 223, n. 174); cf. Anson's Law of Contract, note 65 above, 153, n. 139, whose authors ask whether Lord Hoffmann's approach should also apply to the implication of terms by law without giving any reason why it should.

note 45
note 65

75 Carter, Construction of Commercial Contracts, note 17 above, [3–20].

note 17

76 [2012] UKSC 63, [2013] 1 A.C. 523, at [55].

77 Lord Hoffmann, “Anthropomorphic Justice: The Reasonable Man and his Friends”, note 57 above, 139 (the 24th Lord Upjohn Lecture at the Inns of Court School of Law, delivered on 12 May 1995). See also Lord Hoffmann, “The Intolerable Wrestle with Words and Meanings”, note 57 above, 662.

note 57
note 57

78 [1997] A.C. 191, 212.

79 [1998] 1 W.L.R. 896 (H.L.).

80 Transfield Shipping Inc. v Mercator Shipping Inc., The Achilleas [2008] UKHL 48, [2009] 1 A.C. 61 at [11] and [26]. See also Hoffmann, Lord, “The Achilleas: Custom and Practice or Foreseeability?” (2010) 14 Edinburgh L.R. 47CrossRefGoogle Scholar, 59–61. In John Grimes Partnership Ltd. v Gubbins [2013] EWCA Civ 37, [2013] B.L.R. 126 at [24], the Court of Appeal used objectively assessed intention of the parties, and the implication of contract terms, to explain remoteness in contract following The Achilleas (see main text to note 222 below).

note 222

81 Collins, H., “Lord Hoffmann and the Common Law of Contract” (2009) 5 E.R.C.L. 474Google Scholar.

82 Almost a year after delivering his speech in Belize, and after he had retired as a Law Lord, Lord Hoffmann said, in a conversation with Kate Gibbons of Clifford Chance, published at [2010] L.F.M.R. 242, 245, that he felt he was “tidying things up” in Belize because, despite the four or five tests for the implication of terms found in the textbooks, “there is no basic principle as to why one should imply a term”. He added (at 247) “I see myself as a conservative, but whose job it is to try and explain the law as clearly as possible and what its implications are. Belize is a good example of that …”.

83 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [16].

84 Ibid., at [17].

Ibid

85 Kramer, A., “Implication in Fact as an Instance of Contractual Interpretation” [2004] C.L.J. 384CrossRefGoogle Scholar.

86 Kramer, A., “Common Sense Principles of Contract Interpretation (and how we have been using them all along)” (2003) 23 O.J.L.S. 173CrossRefGoogle Scholar. Cf. Lord Hoffmann, “The Intolerable Wrestle with Words and Meanings”, note 57 above.

note 57

87 Kramer submits ([2004] C.L.J. at 399) that once this is recognised then the distinction identified by Williams, Glanville in “Language and the Law – IV” (1945) 61 L.Q.R. 384Google Scholar, 401, between an intention that was presumed to be actually held and a hypothetical intention that the parties would have held if they had foreseen and considered the matter, “fades away”.

88 A. Kramer, “Common Sense Principles”, note 86 above, 192.

note 86

89 Wittgenstein, L., Philosophical Investigations, 3rd ed., trans. Anscombe, G.E.M. (Oxford 1972), 33Google Scholar.

90 [2004] C.L.J. at 401–2.

91 But because terms implied in law are implied in a different way, Kramer says that they should be labelled “imposed”, “constructed” or “constructive” terms: ibid., 402, n. 58.

ibid

92 Ibid., 385.

93 Davies, “Recent Developments”, note 16 above; and also in “Construing Commercial Contracts”, note 16 above, 439–42.

note 16
note 16

94 [2010] L.M.C.L.Q. at 144.

95 [1956] 1 W.L.R. 585.

96 [2010] L.M.C.L.Q. at 144. In response to Davies, it is submitted that, following Belize, the proposed term would not be implied in Spring because the term was not necessary to give effect to the reasonable expectations of the parties. The claimant union member had done nothing to lead a reasonable person in the position of the defendant union to believe that he agreed to be bound by the Bridlington Agreement, when the union knew, or ought to have known, that he had not even heard of it. The presumption against implication would have applied. Moreover, Belize does not remove subjective intention from the process of implication. Uncommunicated actual (or subjective) intention cannot “trump” an objective approach, but communicated intention affects the other party's knowledge and that knowledge is relevant to the reasonable expectations of someone in the position of that other party (see McLauchlan, D., “The Contract That Neither Party Intends” (2012) 29 J.C.L. 26Google Scholar, 28, 30–34). This must not be confused with the separate question relating to what evidence is admissible when applying the objective approach (see Burrows, A., “Construction and Rectification” in Burrows, A. and Peel, E. (eds.), Contract Terms (Oxford 2007), 77Google Scholar, 82–3).

97 [2010] L.M.C.L.Q., at 144.

98 Ibid., at 145.

Ibid

99 Ibid., at 145.

Ibid

100 Ibid., at 145.

Ibid

101 Ibid., at 145.

Ibid

102 Ibid., at 145.

Ibid

103 Ibid., at 149.

Ibid

104 [2012] S.G.C.A. 55, [2012] 4 S.L.R. 1267 (Andrew Phang Boon Leong J.A., V.K. Rajah J.A. and Woo Bih Li J.). See also Yihan, G., “Terms Implied in Fact Clarified in Singapore” [2013] J.B.L. 237Google Scholar.

105 [2012] S.G.C.A. 55, [2012] 4 S.L.R. 1267, at [31].

106 Ibid., at [36] (emphasis as in original judgment).

Ibid

107 Ibid., at [33] (emphasis as in original judgment).

Ibid

108 Ibid., at [33].

Ibid

109 Ibid., at [36] (emphasis as in original judgment).

Ibid

110 Ibid., at [27].

Ibid

111 Phang J.A. simply said (at [28]) that the two tests were “complementary, rather than alternative or cumulative: the official bystander test is the practical mode by which the business efficacy test is implemented”. For criticism of the two tests, see main text to note 55 above.

note 55

112 See main text to note 60 above.

note 60

113 [2013] S.G.C.A. 43 (Sundaresh Menon C.J., Chao Hick Tin J.A. and Judith Prakash J.).

114 Ibid., at [31], relying on a generalised dictum of Lord Steyn in Equitable Life Assurance Society v Hyman [2002] 1 A.C. 408, 459E (“The inquiry is entirely constructional in nature…”).

Ibid

115 Calnan, R., Principles of Contractual Interpretation (Oxford 2013), 2Google Scholar, n. 5. Cf. Patterson, E.W., “The Interpretation and Construction of Contracts” (1964) 64 Col. L.R. 833CrossRefGoogle Scholar, 835.

116 [2013] S.G.C.A. 43, at [79].

117 Lord Hoffmann was never consistent in his terminology. In Investors Compensation Scheme [1998] 1 W.L.R. 896, he made reference to both construction (at 912F) and interpretation (at 912G) without distinguishing between them. Admittedly, he used the term “construction”, and not “interpretation”, in Belize ([2009] UKPC 10, [2009] 1 W.L.R. 1988 at [16], [19], [25]), but given his extra-judicial statement that “the implication of a term into a contract is an exercise in interpretation like any other” (Lord Hoffmann, “The Intolerable Wrestle with Words and Meanings”, note 57 above, 662), it is highly unlikely that he was seeking to redefine what he meant by construction for these purposes without at least drawing attention to what he was doing.

note 57

118 McMeel, note 46 above, [1.16], [10.03].

note 46

119 [1995] E.M.L.R. 472, 481.

120 Trollope & Colls Ltd. v North West Metropolitan Regional Hospital Board [1973] 1 W.L.R. 601, 606 (Lord Pearson left the question open).

121 National Commercial Bank of Jamaica Ltd. v Guyana Refrigerators Ltd. (1998) 53 W.I.R. 229, 232; Equitable Life Assurance Society v Hyman [2002] 1 A.C. 408, 459; and, writing extra-judicially, see Steyn, J., “The Intractable Problem of the Interpretation of Legal Texts” (2003) 25 Sydney L. Rev. 5Google Scholar, 11; Steyn, J., “Interpretation: Legal Texts and their Landscape” in Markesinis, B. (ed.), The Coming Together of the Common Law and the Civil Law: The Clifford Chance Millennium Lectures (Oxford 2000), 79Google Scholar, 84–85.

122 C Itoh & Co Ltd. v Companhia De Navegaçao Lloyd Brasileiro and Steamship Mutual Underwriting Association (Bermuda) Ltd., The Rio Assu [1999] 1 Lloyd's Rep. 115, 120, affd. at 122. See also Aberdeen City Council v Stewart Milne Group Ltd. [2011] UKSC 56, [2012] S.L.T. 205 at [32]–[33], where, despite distinguishing between interpretation and implication, Lord Clarke took a similar approach to the two processes when it came to business common sense. Cf. McLauchlin, D. and Lees, M., “More Construction Controversy” (2012) 29 J.C.L. 97Google Scholar, 118–119.

123 Carter, Construction of Commercial Contracts, note 17 above, [3–27].

note 17

124 [1977] A.C. 239, 254. See also Glanville Williams, “Language and the Law – IV”, note 87 above, 401, who said that the various types of implied term “merge imperceptibly into each other”.

note 87

125 See main text to note 89 above.

note 89

126 See, e.g., Bratton Seymour Service Co Ltd. v Oxborough [1992] B.C.L.C. 693, 698 (Steyn L.J.); Sirius International Insurance Co (Publ) v FAI General Insurance Ltd. [2004] UKHL 54, [2004] 1 W.L.R. 3251 at [25] (Lord Steyn).

127 Lewison, Interpretation of Contracts, note 56 above, 274.

note 56

128 Ibid., at 275.

Ibid

129 Kain, B., “The Implication of Contractual Terms in the New Millennium” (2011) 51 C.B.L.J. 170Google Scholar, 181–2.

130 Grammond, S., “Implied Obligations from a Comparative Perspective” (2012) 52 C.B.L.J. 113Google Scholar, 119.

131 See also WX Investments Ltd. v Begg [2002] EWHC 925 (Ch), [2002] 1 W.L.R. 2849 at [28] (Patten J.: “The implication of a term is essentially a process of construction of the contract.”); Meridian International Services Ltd. v Richardson [2007] EWHC 2539 (Ch) at [62] (Ham Q.C., deputy H.C. Judge: “The implication of a term is part of the process of interpretation of contracts…”), and on appeal see [2008] EWCA Civ 609 at [16], [34].

132 F & C Alternative Investments (Holdings) Ltd. v Barthlemy (No. 2) [2011] EWHC 1731 (Ch), [2012] Ch. 613 at [272] (Sales J.).

133 Golden Fleece Maritime Inc. v ST Shipping and Transport Inc., The Eli [2007] EWHC 1890 (Comm), [2008] 1 Lloyd's Rep. 262 at [24] (Cooke J.); SNCB Holding v UBS AG [2012] EWHC 2044 (Comm), at [67] (Cooke J.). See also Steyn, “Interpretation: Legal Texts and their Landscape”, note 121 above, 85.

note 121

134 [2011] EWCA Civ 543, [2011] Pens. L.R. 223, at [36].

135 That there remain two separate, but linked, processes seems to be implicit in Akenhead J.'s statement that Lord Hoffmann has “dovetailed” considerations relating to implied terms into the context of contractual interpretation: TSG Building Services plc v South Anglia Housing Ltd. [2013] EWHC 1151 (TCC) at [44]; Aspects Contracts (Asbestos) Ltd. v Higgins Construction plc [2013] EWHC 1322 (TCC) at [16].

136 [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [34]. See also Codelfa Construction Prop Ltd. v State Rail Authority of New South Wales (1981–82) 149 C.L.R. 337, 345 (Mason J.)

137 Lord Hoffmann, “The Intolerable Wrestle with Words and Meanings”, note 57 above, 662.

note 57

138 Lord Hoffmann, speaking in a conversation with Kate Gibbons of Clifford Chance, note 82 above, 245.

note 82

139 The point is well made by McMeel, note 46 above, at [11.03] and [11.28].

note 46

140 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [23].

141 [2009] EWCA Civ 531, [2009] 2 Lloyd's Rep. 639.

142 Ibid., at [11].

Ibid

143 Ibid., at [9].

Ibid

144 Ibid., at [15], and see also [18]; applied in Fitzhugh v Fitzhugh [2012] EWCA Civ 694, [2012] 2 P. & C. R. 14 at [15].

Ibid

145 [1995] E.M.L.R. 472, 481.

146 Ibid., at [18].

Ibid

147 [2010] L.M.C.L.Q. 140, 146. Davies also regards Rix L.J. (at [48]) as being “little more than lukewarm” regarding Belize, and points out that Carnwath L.J. (at [63]) emphasised that an implied term must be necessary.

148 [2010] EWCA Civ 538 at [45].

149 See also Consolidated Finance Ltd. v McCluskey [2012] EWCA Civ 1325, [2012] C.T.L.C. 133 at [43], where Arden L.J. (obiter) accepted Counsel's submission that the test of necessity “is still part of the law and unaffected by Belize.”

150 See Lord Hoffmann in Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [25] and Lord Clarke in The Reborn [2009] EWCA Civ 531, [2009] 2 Lloyd's Rep. 639, at [18], by reference to the authorities cited therein, as identified by Cooke J. in SNCB Holding v USB AG [2012] EWHC 2044 (Comm), at [68]. See also McCaughran, “Implied Terms: The Journey of the Man on the Clapham Omnibus”, note 15 above.

note 15

151 Lord Clarke made the same error both before (The Rio Assu [1999] 1 Lloyd's Rep. 115, 120) and since (Aberdeen City Council v Stewart Milne Group Ltd. [2011] UKSC 56, [2012] S.L.T. 205, at [33]).

152 [2012] EWHC 2044 (Comm).

153 Ibid., at [58].

Ibid

154 Ibid., at [63].

Ibid

155 Ibid., at [65].

Ibid

156 Ibid., at [65].

Ibid

157 [2012] EWHC 2060 (Ch).

158 Or Arden L.J. in Groveholt Ltd. v Hughes [2010] EWCA Civ 538, at [45].

159 [2012] EWHC 2060 (Ch), at [42].

160 Ibid., at [40]

Ibid

161 [2013] EWCA Civ 89.

162 The Court of Appeal (ibid., at [18]) said that Briggs J.'s summary was “sufficient and helpful”, and was applied in Grainmarket Asset Management LLP v PGF II SA [2013] EWHC 1879 (Ch) at [40].

ibid

163 [2013] EWCA Civ 89, at [16].

164 Ibid., at [18].

Ibid

165 Ibid., at [22].

Ibid

166 Ibid.

Ibid

167 Ibid., at [23].

Ibid

168 Ibid.

Ibid

169 Ibid., at [26] (emphasis added).

Ibid

170 Ibid., at [30]. See also Eastleigh BC v Town Quay Developments Ltd. [2009] EWCA Civ 1391, [2010] P. & C.R. 2, at [33] (Arden L.J.); Fitzhugh v Fitzhugh [2012] EWCA Civ 694, [2012] 2 P. & C.R. 14, at [20] (Rimer L.J.)

Ibid

171 Laws and Lewison L.JJ. agreed with McCombe L.J. Lewison L.J. added (at [43]) that it is “more difficult to sustain an argument that terms are to be implied into an agreement made by the contracting parties in one capacity [as shareholders] which result in fetters on his powers to act in another capacity [as director]”.

172 See Thomas Crema v Cenkos Securities plc [2010] EWCA Civ 1444, [2011] 1 W.L.R. 2066, at [37], per Aikens L.J.: “the oft-expressed requirement that an implied term must not just be reasonable but be ‘necessary’ simply reflects the requirement that the court has to be satisfied that the term must be implied because that is what the contract must mean”.

173 [2009] EWCA Civ 1391, [2010] P. & C.R. 2, at [31].

174 [2012] UKSC 63, [2013] 1 A.C. 523, at [55].

175 See Lord Hoffman's statement in Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [27] that the business efficacy and officious bystander tests are simply different ways of expressing the central concept.

176 See, e.g. Eastleigh BC v Town Quay Developments Ltd. [2009] EWCA Civ 1391, [2010] P. & C.R. 2, at [37], [39] (Arden L.J.); Wuhan Ocean Economic & Technical Cooperation Co Ltd v Schiffahrts-Gesellschaft “Hansa Murcia” MBH & Co KG [2012] EWHC 3104 (Comm), [2013] 1 Lloyd's Rep. 273, at [25] (Cooke J.).

177 Lewison, Interpretation of Contracts, note 56 above, at 296, n. 136, says that this approach is more consonant with the source of the principle: “such business efficacy as must have been intended … by both parties” (The Moorcock (1889) 14 P.D. 64, 68).

note 56

178 Jackson v Dear [2013] EWCA Civ 89, at [30] (McCombe L.J.); SNCB Holding v UBS AG [2012] EWHC 2044 (Comm), at [8] (Cooke J.); Torre Asset Funding Ltd. v Royal Bank of Scotland plc [2013] EWHC 2670 (Ch) at [151] (Sales J.).

179 BP Refinery (Westernport) Pty Ltd. v Shire of Hastings (1977) 180 C.L.R. 266, 282–3 (P.C.) (Lord Simon).

180 TSG Building Services plc v South Anglia Housing Ltd. [2013] EWHC 1151 (TCC), at [51] (Akenhead J.); Mid Essex Hospital Services N.H.S. Trust v Compass Group UK and Ireland Ltd. (trading as Medirest) [2013] EWCA Civ 200 at [154] (Beatson L.J.), and also at [92], [95] (Jackson L.J.) and at [140] (Lewison L.J.).

181 Consolidated Finance Ltd. v McCluskey [2012] EWCA Civ 1325, [2012] C.T.L.C. 133, at [36]: loan agreement had an ineffective purpose clause but this was held to prevent implication of different purpose.

182 Ibid., at [38].

Ibid

183 Ibid., at [40]. See also the Philips Electronique case [1995] E.M.L.R. 472, at 482 (Sir Thomas Bingham M.R.); Trollope & Colls Ltd. v North West Metropolitan Regional Hospital Board [1973] 1 W.L.R. 601, 609–10 (Lord Pearson), 612–614 (Lord Cross).

Ibid

184 Davies, “Recent Developments”, note 16 above; Davies, “Construing Commercial Contracts”, note 16 above, 441.

note 16
note 16

185 [1939] 2 K.B. 206.

186 Steyn J. in Mosvolds Rederi A/S v Food Corp of India [1986] 2 Lloyd's Rep. 68, 70 and also in Associated Japanese Bank (International) Ltd. v Credit du Nord SA [1989] 1 W.L.R. 255, 263–64; Clarke J. in The Rio Assu [1999] 1 Lloyd's Rep. 115, 121 and (based on the citation of Irwin and Trollope & Colls) in The Reborn [2009] EWCA Civ 531, [2009] 2 Lloyd's Rep. 639, at [18].

187 Note 15 above, 614

Note 15

188 [2010] L.M.C.L.Q. 140, 145.

189 Mitchell, C., “Obligations in Commercial Contracts: A Matter of Law or Interpretation?” (2012) 65 C.L.P. 455Google Scholar, 474.

190 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [16].

191 Ibid., at [23]. It is suggested in Treitel that the requirement of necessity “is perhaps best confined to a role in contradistinction to reasonableness”: Treitel's Law of Contract, note 45 above, 225, n 298.

Ibid
note 45

192 Hamlyn & Co v Wood & Co [1891] 2 Q.B. 488, 491 (Lord Esher M.R.); Liverpool City Council v Irwin [1977] A.C. 239, 266 (Lord Edmund-Davies).

193 Jackson v Dear [2012] EWHC 2060 (Ch), at [40] (proposition (vii) of Briggs J., which was agreed by the parties and approved by the court on appeal: [2013] EWCA Civ 89, at [18]); BMA Special Opportunity Hub Fund Ltd. v African Minerals Finance Ltd. [2013] EWCA Civ 416 at [24] (Aikens L.J.); Fons HF (In Liquidation) v Corporal Ltd. [2013] EWHC 1801 (Ch) at [49], and on appeal [2014] EWCA Civ 304 at [16] (Patten L.J.).

194 Beazer Homes Ltd. v County Council of Durham [2010] EWCA Civ 1175 at [24] (Lloyd L.J.). See also, e.g., Young and Marten Ltd. v McManus Childs Ltd. [1969] 1 A.C. 454, 465 (Lord Reid); Liverpool City Council v Irwin [1977] A.C. 239, 262 (Lord Salmon).

195 Marks & Spencer plc v BNP Paribas Securities Trust Co (Jersey) Ltd. [2013] EWHC 1279 (Ch) at [36] (Morgan J.): “It is a necessary (but not a sufficient) condition for the implication of any term that the suggested term be a reasonable term”.

196 National Commercial Bank of Jamaica Ltd. v Guyana Refrigerators Ltd. (1998) 53 W.I.R. 229, 233 (Lord Steyn). See also, e.g., The Reborn [2009] EWCA Civ 531, [2009] 2 Lloyd's Rep. 639, at [15]; Stena Line Ltd. v MNRPFT [2011] EWCA Civ 543, [2011] Pens. L.R. 223, at [41] (Arden L.J.).

197 Equitable Life v Hyman [2002] 1 A.C. 408, 459 (Lord Steyn), cited with approval by Lord Hoffmann in Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [23].

198 See, e.g., Holding and Management (Solitaire) Ltd. v Ideal Homes North West Ltd. [2005] EWCA Civ 59.

199 Note Farnsworth, E., Contracts, 2nd ed. (Boston 1990)Google Scholar, para 7.7: “It is therefore to these expectations, rather than to the concern of the philosopher or semanticist, that we must turn in the search for the meaning of contract language”.

200 C. Mitchell, “Obligations in Commercial Contracts”, note 189 above, 471. But Mitchell (at 478) is concerned that “reasonable expectation” is a “substantively empty” category of analysis because so much can be justified as falling within its scope: see further Mitchell, C., “Leading a Life of its Own? The Roles of Reasonable Expectation in Contract Law” (2003) 23 O.J.L.S. 639CrossRefGoogle Scholar.

note 189

201 In Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [23], Lord Hoffmann referred, with evident approval, to Lord Steyn's statement in Equitable Life v Hyman [2002] 1 A.C. 408, at 459, that an implication was necessary “to give effect to the reasonable expectations of the parties”. See also Paragon Finance plc v Nash [2001] EWCA Civ 1466, [2002] 1 W.L.R. 685 at [36] and [42] (Dyson L.J.); McKillen v Misland (Cyprus) Investments Ltd. [2013] EWCA Civ 781 at [84] (Arden L.J.). But the reference to “reasonable expectations” in the context of implied terms in fact is criticised by Andrews, note 16 above, at [13.11], on the grounds that it might conflate the settled distinction between terms implied in fact and terms implied in law and “become an empty formula apt to mask a more interventionist and prescriptive approach to the implication of terms in fact”. See also note 200 above.

note 16
note 200

202 See Lewison, Interpretation of Contracts, note 56 above, 292.

note 56

203 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [16] and [18].

204 This is exemplified by Consolidated Finance Ltd. v McCluskey [2012] EWCA Civ 1325, [2012] C.T.L.C. 133, at [35], where Arden L.J. stressed that “the court looks very critically at arguments that terms have to be implied into agreements. Such terms may … impose additional obligations on the parties and so that is something about which the court exercises caution”.

205 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [17]; and see also main text to notes 178 above and 235 below.

notes 178

206 Ibid., at [27].

Ibid

207 Ibid., at [25].

Ibid

208 In the pre-Belize case of Equitable Life Assurance Society v Hyman [2002] 1 A.C. 408, the House of Lords implied a term, which restricted the directors' apparently unlimited discretion as to bonuses, on the ground that it reflected the reasonable expectation of the parties. The term would not have passed the officious bystander test but, as Lord Hoffmann later noted in Belize at [22]–[23], the House took account of the business purposes of the parties which would have been frustrated if the term had not been implied. This entailed a broader understanding of what was meant by “necessity” than had previously been thought to emerge from The Moorcock (see Grabiner (2012) 128 L.Q.R. 41, 55–58).

209 [2013] EWHC 111 (QB), [2013] 1 Lloyd's Rep. 526.

210 Ibid., at [134].

Ibid

211 Ibid., at [131] (emphasis added).

Ibid

212 As Leggatt J. stated at ibid. [137].

ibid

213 Leggatt J. did not claim it would, merely stating at ibid. [138] that “[i]n addition to honesty, there are other standards of commercial dealing which are so generally accepted that the contracting parties would reasonably be understood to take them as read without explicitly stating them in their contractual document”.

ibid

214 Ibid., at [148].

Ibid

215 See Whittaker, S., “Good faith, implied terms and commercial contracts” (2013) 129 L.Q.R. 463Google Scholar; Granger, E., “Sweating over an implied duty of good faith” [2013] L.M.C.L.Q. 418Google Scholar. The courts have also been lukewarm towards the decision and have refused to see it as providing a principle of general application to all commercial contracts: Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd. (t/a Medirest) [2013] EWCA Civ 200, at [105], [150]; TSG Building Services plc v South Anglia Housing Ltd. [2013] EWHC 1151 (TCC), at [45]–[46]; Hamsard 3147 Ltd. (t/a “Mini Mode Childrenswear”) v J.S. Childrenswear Ltd. [2013] EWHC 3251 (Pat), at [86].

216 Yam Seng [2013] EWHC 111 (QB), [2013] 1 Lloyd's Rep. 526, at [156]. The claimant submitted that this specific duty formed part of “the relevant content” of the duty of good faith performance in this case and Leggatt J., after emphasising (at [144] and [154]) that the content of the duty to perform a contract in good faith was dependent on context, stated (at [155]) that this specific term was “clearly implied” into the distributorship contract and concluded (at [173]–[174]) that its breach justified the claimant's termination of the contract.

217 Whittaker, note 215 above, 469.

note 215

218 Yam Seng [2013] EWHC 111 (QB), [2013] 1 Lloyd's Rep. 526, at [133].

219 Beatson L.J. seems to have interpreted Leggatt J.'s words in this narrower way in the Mid Essex case, [2013] EWCA Civ 200, at [150].

220 [2013] EWCA Civ 37, [2013] B.L.R. 126.

221 [2008] UKHL 48, [2009] 1 A.C. 61.

222 Ibid., at [24]. Sir David Keene said he agreed with the summary of the law provided by Toulson L.J. in Supershield Ltd. v Siemens Building Technologies FE Ltd. [2010] EWCA Civ 7, [2010] 2 All E.R. 1185 at [43], adding “although I would put it in slightly different language”.

223 Sabapathy, S., “Falling Markets and Remoteness” [2013] L.M.C.L.Q. 284, 287Google Scholar.

224 [2013] EWCA Civ 37, [2013] B.L.R. 126, at [19].

225 Although note Lord Hoffmann's reference to Liverpool City Council v Irwin [1977] A.C. 239, in The Achilleas [2008] UKHL 48, [2009] 1 A.C. 61, at [11], and also his later statement, that appeared in an article written after his retirement as a Law Lord, that The Achilleas was concerned with “a default term implied in a contract of a certain type, in this case a time charter” (Hoffmann, Lord, “The Achilleas: Custom and Practice or Foreseeability?” (2010) 14 Edinburgh L.R. 47CrossRefGoogle Scholar, 61).

226 Goodwin, J., “A Remotely Interesting Case” (2013) 129 L.Q.R. 485Google Scholar, 487.

227 As argued, e.g., by E. Peel in “Remoteness Revisited” (2006) 125 L.Q.R. 6. As a matter of authority, it is worth noting that the argument that a defendant cannot be held liable for an “extraordinary” or “unusual” loss, unless there is an implied term in the contract to that effect, was rejected by the House of Lords in The Heron II [1969] A.C. 350, 422 (Lord Upjohn).

228 See Lord Hoffmann in Investors Compensation Scheme [1998] 1 W.L.R. 896, 912–3 (H.L.), 912–13, as further explained in Bank of Credit and Commerce International SA (in liquidation) v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [39].

229 See Carter, note 17 above, [3–27] (construction determines what terms are implied but “because the content of the implied term is worked out simply by construing the contract, any term which is implied must be largely formal or even redundant”); Calnan, note 115 above, [8.09] (Lord Hoffmann's formulation sets out what needs to be achieved but “it does not give any assistance in deciding how to do it”).

note 17
note 115

230 The uncertainty inherent in the process of interpretation was recognised by Leggatt J. in the Yam Seng case [2013] EWHC 111 (QB), [2013] 1 Lloyd's Rep. 526, at [152].

231 McCaughran, note 15 above, 617.

note 15

232 Davies [2010] L.M.C.L.Q. 140, 145.

233 Morgan, J., Contract Law Minimalism: A Formalist Restatement of Commercial Contract Law (Cambridge 2013), 238CrossRefGoogle Scholar.

234 See, e.g., comments by Whittaker, note 215 above, and Granger, note 215 above, on Yam Seng, and those by Sabapathy, note 223 above, and Godwin, note 226 above, on John Grimes Partnership v Gubbins.

note 215
note 215
note 223
note 226

235 Luxor (Eastbourne) Ltd. v Cooper [1941] A.C. 108, 137 (Lord Wright).

236 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [17].

237 Crema v Cenkos Securities plc [2010] EWCA Civ 1444, [2011] 1 W.L.R. 2066, at [38].

238 Phillips Electronique v British Sky Broadcasting [1995] E.M.L.R. 472, at 481–82 (Sir Thomas Bingham M.R.); Codelfa Construction v State Rail Authority of NSW (1981–82) 149 C.L.R. 337, 346 (Mason J.).

239 See, e.g., Shell UK Ltd. v Lostock Garages Ltd. [1976] 1 W.L.R. 1187 (C.A.); Daniel Stewart & Co plc v Environmental Waste Controls plc [2013] EWHC 1763 (QB) at [58] (Picken Q.C., deputy H.C. judge).

240 For the different effect of communicated and uncommunicated subjective intention, see note 96 above.

note 96

241 Equitable Life Assurance Society v Hyman [2002] 1 A.C. 408, at 459 (Lord Steyn). Cf. Spring v NASDS [1956] 1 W.L.R. 585, note 53 and the main text thereto above, and see also note 96 above.

note 53
note 96

242 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [18].

243 Consolidated Finance Ltd. v McCluskey [2012] EWCA Civ 1325, [2012] C.T.L.C. 133, at [36]. Cf. McCaughran [2011] C.L.J. 607, 618.

244 See, e.g., Jackson v Dear [2013] EWCA Civ 89, at [27] (McCombe L.J.); Aspects Contracts (Asbestos) Ltd. v Higgins Construction plc [2013] EWHC 1322 (TCC), at [24] (Akenhead J.); Torre Asset Funding Ltd. v Royal Bank of Scotland plc [2013] EWHC 2670 (Ch), at [152(vi)] (Sales J.). But with increasing caution: see, e.g., SNCB Holding v USB AG [2012] EWHC 2044 (Comm), at 62 (Cooke J. warned of the “dangers in taking them as the litmus test”); Unique Pub Properties Ltd. v Broad Green Tavern Ltd. [2012] EWHC 2154 (Ch) at [34] and Straw v Jennings [2013] EWHC 3290 (Ch) at [100] (Warren J., in both cases, said that “[t]hese formulations are not legislation and are not to be allowed to take on a life of their own”.)

245 Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, at [21].

246 Foo Jong Peng v Phua Kiah Mai [2012] S.G.C.A. 55, [2012] 4 S.L.R. 1267, at [33] (Sing. C.A.); Sembcorp Marine Ltd v PPL Holdings Pte Ltd. [2013] S.G.C.A. 43, at [100] (Sing. C.A.).

247 See, e.g., Beale, H. et al. (eds.), Chitty on Contracts, 31st ed. (London 2012), vol. 1Google Scholar, [13–005] “guidance”; Lewison, Interpretation of Contracts, note 56 above, at 290 “useful guidance”; McMeel, Construction of Contracts, note 46 above, at [11.51] “practical guidance”.

note 56
note 46

248 As did, e.g., Andrew Smith J. in ENE Kos v Petroleo Brasileiro SA, The Kos [2010] 1 Lloyd's Rep. 87 at [41–42], revsd. on other grounds [2010] 2 Lloyd's Rep. 409; Cooke J. in Wuhan Ocean Economic & Technical Cooperation Co Ltd v Schiffahrts-Gesellschaft “Hansa Murcia” MBH & Co KG [2012] EWHC 3104 (Comm), [2013] 1 Lloyd's Rep. 273, at [15]; Akenhead J. in TGS Building Services plc v South Anglia Housing Ltd. [2013] EWHC 1151 (TCC), at [44]; Norris J. in Hamsard 3147 Ltd. (t/a “Mini Mode Childrenswear”) v Boots UK Ltd. [2013] EWHC 3251 (Pat), at [82–85]. In Marks & Spencer plc v BNP Paribas Securities Trust Co (Jersey) Ltd. [2013] EWHC 1279 (Ch), Morgan J. applied the Belize approach at [35], and then considered the business efficacy and officious bystander tests at [37], but it is clear that he based his decision on the Belize approach at [39].

249 As, e.g., in the speech of Lord Atkin in Shirlaw's case, [1939] 2 K.B. 206, 717.

250 F & C Alternative Investments (Holdings) Ltd. v Barthelemy (No. 2) [2011] EWHC 1731 (Ch), [2012] Ch. 613, at [272] (Sales J.).

251 In Belize [2009] UKPC 10, [2009] 1 W.L.R. 1988, Lord Hoffmann (at [25]) said that the requirement that the implied term must “‘go without saying’ … runs the risk of diverting attention from the objectivity that informs the whole process of construction”.

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