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Rule in Codelfa affirmed again...and again


In Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 the High Court held (per Mason J with whom Stephen J and Wilson J agreed) that extrinsic evidence is not admissible to contradict the language of a contract when it has a plain meaning. The court reaffirmed this rule in Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5 at [39], and again In October 2011 in Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45. The "True rule" as stated by Mason J in Codelfa is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. The rule is important as it re-asserts the primacy of the language used and often limits the evidence that can be lead at trial, and thereby the cost of the trial.

See attached article by Heydon J in relation to the true rule

feb 18 - implications of chartbrook ltd v persimmon homes ltd for the law of trusts - justice heydon.pdf

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