Abstract

Article

Construction

Absurdity

The function of a Court of construction is to ascertain what the parties meant by the words which they have used. For this purpose, the grammatical and ordinary sense of the words is to be adhered to unless they lead to some absurdity or to some repugnance with the rest of the instrument, in which case the ordinary sense of the words may be modified so as to avoid that inconsistency, but no further: Watson v Phipps (1986) 60 ALJR 1; Commonwealth Steel Company Limited v BHP Billiton Marine & General Insurance Limited [2017] NSWSC 1445.

Mistake

In a construction exercise, an obvious mistake in the expression of the parties’ intention may be corrected: Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 426 – 7; Automobile Fire and General Insurance Co of Australia Ltd v Davey [1936] HCA 16; (1936) 54 CLR 534 at 542; Westpac Banking Corp v Tanzone Pty Ltd [2000] NSWCA 25; (2000) 9 BPR 17,521; St Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No. 2) [1973] 1 WLR 1572; Commonwealth Steel Company Limited v BHP Billiton Marine & General Insurance Limited [2017] NSWSC 1445.

Parenthetical Words

As a matter of ordinary grammar, parenthetical words qualify what immediately precedes them. Commonwealth Steel Company Limited v BHP Billiton Marine & General Insurance Limited [2017] NSWSC 1445.

Stability Clause

An employee’s claim for bodily injury  which is covered by Employer’s insurance can be made long after a particular risk period and as it is an employee claim, it might in most cases be expected to have a relationship with his earnings at the date damages must be assessed. To accommodate this,a policy may bear a stability clause which will adjust the amount of the limit of cover or that of the deductible accordingly, often in accordance with any proportionate increase in wages.  Commonwealth Steel Company Limited v BHP Billiton Marine & General Insurance Limited [2017] NSWSC 1445.

The ‘Primary’ Limit

Primary, in its ordinary meaning, means first. The Policy contains two limits. The first is a limit on what the insured must bear (i.e. the deductible). One does not proceed until this initial threshold is met. The second is the upper or ultimate limit of the insurer’s obligation to indemnify, a ceiling, which does not reflect the amount of any claim, let alone every claim for which the Insurer will be liable. Commonwealth Steel Company Limited v BHP Billiton Marine & General Insurance Limited [2017] NSWSC 1445.