Pensions

It was settled law that, where the construction of contracts and other instruments were concerned, the process was first, one of interpreting the words the parties had used. The court had to ascertain the meaning which a document would convey to a reasonable person having all the background knowledge, which would reasonably have been available to the parties in the situation in which they were at the time of the contract. The words used in the document should be given their ordinary and natural meaning and had to be read in the context of the background matrix of fact. Where there were two possible interpretations, the weight to be given to the commercial consequences must depend on the degree of ambiguity of the language concerned. It was settled law that a pension scheme should be construed so as to give a reasonable and practical effect to the scheme. It was necessary to test competing permissible constructions against the consequences they produce