Abstract

Article

Contract not necessarily to be read as a whole

Contracts are usually to be read as a whole, but for various reasons this may not be followed. Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]. The is parties may limit the evidence to which they wish the Court to have regard Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 at [32].Or the absence of contextual evidence may be due to having a separate question determined, or the unhelpfulness of the evidence, or the unavailability or unwillingness of witnesses, or irrelevance. Where the parties are sophisticated and well-represented, thecourt need not inquire into the reasons but to resolve the issues presented on the materials made available. MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56.

When Semantics are t be Avoided

Legal meaning should not turn on arguments based on semantic exactitude where it is plain that the parties have recorded their bargain in loose, ungrammatical language: Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 at [98]; MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56.

Location of a Clause

Location of a clause may have an influenceon its construction. MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56.

Business commonsense

Business commonsense is a topic upon which minds may differ, and may be a function of contested evidence: Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2010] HCA 70 at [43]; Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 at [20]; MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56.

Post-contractual Conduct

Post-contractual conduct cannot undermine the fundamental principle that a document must be construed in the light of the surrounding circumstances that were known to the parties at the time the contract was entered unless it may cast light on the surrounding circumstances known to the parties at the time the contract was entered. MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56.

Comparing Competing Constructions against Text, Context and Purpose

It is necessary, to test competing constructions of a provision against its text, context and purpose, and preference will be shown to commercial consequences and a congruent operation to the various components of the whole. . Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; Re Sigma Finance Corp (in administrative receivership) [2009] UKSC 2; [2010] 1 All ER 571 at [12]; Rainy Sky SA v Kookmin Bank [2011] UKSC 50; [2011] 1 WLR 2900 at [28]; MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56.

Presumption as to Back-to-Back Operation of Reinsurance

As an ordinary aspect of facultative reinsurance of a portion of the same risk as the primary insurer on a proportional basis, there is a presumption that reinsurance is back to back with the underlying policy, and it requires clear language within the contract to rebut it.it is strong because because it is  the essence of the bargain that the reinsurer takes a proportion of the premium in return for a share of the risk. Forsikringsaktieselskapet Vesta v Butcher [1989] UKHL 5; [1989] AC 852; Wasa International Insurance Co Ltd v Lexington Insurance Co [2010] 1 AC 180. See The Law of Reinsurance C Edelman QC and A Burns, (2nd ed 2013) at p 55. There is some controversy as to its nature and extent: The Law of Reinsurance in England and Bermuda P O’Neill and J Woloniecki (4th ed 2015 p 216. However, it is no more than a presumption, which may be displaced. Its need is highest if the documentation is weak, and when it is constituted by when reinsurance is effected in short form documents such as a slip. MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56. It is particularly justified if the warranties in the insurance and reinsurance are in effectively identical terms. But if they contain different warranties they could not to that extent be treated as back-to-back, though if a particular reinsurance warranty has no counterpart in the insurance, the failure to align the terms in one respect does not mean that the two contracts were not aligned in a different respect.

 

Authority of Other Cases

Cases are only authority for what they decide. MetLife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2017] NSWCA 56.