First Principles of Business Law

6.3. The 'golden' rule

If the literal approach gives a result that seems absurd, judges apply the 'golden' rule.

According to the golden rule, the words in an Act need not be given their ordinary meaning if doing so would result in an 'objective absurdity'.

The rule is of limited application. It is only used if the literal meaning seems absurd within the context of the Act itself, for example because it would create internal contradictions. The golden rule is not used to avoid policies or outcomes clearly intended by the legislators simply because the judge does not agree with those policies or outcomes.

The golden rule is used sparingly, to avoid the effect of obvious drafting errors in legislation. In such cases the court chooses a meaning that is consistent with the overall intent of the legislature.