EXAM FRAMEWORK

Question 1

PQ: Contractual Interpretation

Answer 1

1. Summarise the Law
   a. 2-step framework in Zurich Insurance
2. Is there any subsequent conduct (e.g. negotiations)?
3. Former correspondence before agreement was signed (i.e. prior negotiations)?
4. Even if commercial results were absurd, must still give effect to parties - if it is what the parties intended.
5. Can you imply a term (i.e. Sembcorp Marine framework)?

Question 2

PQ: Contractual Interpretation -

Zurich Insurance 2-step framework?

Answer 2

1. What is the extrinsic evidence admissible?
   a. 4 req of civil procedure set down in para 35A in PD (from Sembcorp Marine)

b. Add considerations:
i. Zurich Insurance tripartite req: Extrinsic evidence admissible so long as it is relevant; reasonably available to all contracting parties; and relates to clear/obvious context.
ii. Attributes of docs: Courts are less likely to allow extrinsic evidence in std form contracts and commercial docs.

2. With the admissible evidence, what interpretation do we then place on the words of the contract?
   a. No Ambiguity: Contract is extremely clear and it to be given effect as it stands. The plain meaning of the contractual words governs.

b. Patent ambiguity: Patently ambiguous words govern. Contract is nonsensical; even if the results are commercially nonsensical or absurd, the Court has to give effect to it because this represents the parties’ objective intentions [Soup Restaurant].
- Court cannot rewrite parties’ intentions. CA in Soup Restaurant accepted that where there are 2 possible interpretations of a clause, Court should adopt the interpretation that was most consistent with business common sense.
- CA also held that although relevant context is also important, the text ought always to be the first port of call.

c. Latent ambiguity: Contract is clear on its face but is ambiguous once the Court considers extrinsic evidence, which may lead to alternative meaning. Court may give effect to alternative interpretations. Also allows the court to admit further extrinsic evidence.

Question 3

PQ: Tort - Duty of Care

Answer 3

1. Universal 2-Stage Test regardless of type of loss preceded by threshold requirement.
2. Different types of losses require different specific “proximity” and “policy considerations”
3. Steps:
   (1) Threshold requirement of “factual foreseeability”. Unclear what must be foreseen; on balance, appears to be any kind of loss or damage
   Spandeck, [75]: “D ought to have known that C would suffer damage from his (D’s) carelessness”.

(2) 1st Stage: Proximity -
Different types of losses require different factors satisfying “proximity”
:
A. Pure economic loss: assumption of responsibility, reasonable reliance

B. Psychiatric loss: three proximities in McLouglin: (a) the class of persons whose claims should be recognised; (b) the proximity of Ps to the accident; and (c) the means by which the shock was caused.
C. Overlap between proximity and policy consideration


(3) 2nd Stage: policy considerations that may negate finding of DoC.
Only negative function; cannot be used to establish a duty of care, but only to negate a finding of duty of care.
BUT, positive policy considerations can be taken into acc to counter-balance negative policy considerations.