First Principles of Business Law

6.1. Establishing the meaning of legislation

However carefully legislation is drafted, cases will arise that test the meaning and scope of particular provisions. When such cases come before the courts, the judges must decide what the words in the relevant legislation really mean. This process is called 'statutory interpretation'.

When judges have to decide what legislation means, there are legal rules to help them. Some of these rules originate in common law (case law) while others have been provided by legislation. Properly applied, these rules ensure a degree of consistency and predictability in interpretation questions.

However, the process of interpretation may involve finely balanced issues and arguments. The available rules can often be used to support opposing arguments, and sometimes one principle of interpretation can be used to counter another. Judicial discretion may also affect what weight is attached to particular principles of interpretation.