Without meaning to be disparaging to Justice Kelly,s judgment on the matter, I would like to bring this further point of contention to the Millar's attention and indeed their legal team.
Judge Hogan in his High Court Judgment sets out the reason he believes the term "market conditions" means market conditions generally:
The construction of clause 3
21. Turning now to that question, it will be seen that the key words are those contained in clause 3 (“…in response to market conditions…”) of the applicable terms and condition. The Millars, while not contending for a form of tracker mortgage, argued nonetheless that the clause meant that the interest rates should generally follow general market conditions,
i.e., that the rate should decrease when rates were lowered generally, while accepting that the rate could increase when rates were generally increased. For its part, Danske contended that clause 3 did not refer to market conditions generally, but rather to its own cost of funding. It averred that as it did not avail of any ECB funding, the interest rates set by the ECB were not relevant to its own funding costs.
22. The Ombudsman concluded that clause 3 was “clear in its wording” and for this precise reason found against the Millars. I fear that I cannot agree. The term “market conditions” is not a specialist term of art which has a defined meaning in legal or financial circles. Given that these words are not terms of art, they must therefore be construed in the first instance by reference to the ordinary usage of these terms and how, objectively, these words would be understood by a reasonable person in the context in which they appear.
23. In its more common usage the term “market conditions” may be taken to refer to “market conditions generally.” While I agree that the term might also in some contexts refer to particular market conditions experienced, for example, by one undertaking in the relevant market, I should have thought that this was a less frequent usage. If, moreover, the construction urged by Danske were correct, it would mean that its interest rate could be varied by reference to special factors which were peculiarly within its own knowledge, the details of which it would not be obliged to disclose and which, as the Ombudsman himself acknowledged, the customer would have been obliged to accept more or less at face value. If this was, indeed, what was intended by the term “in response to market conditions”, one might have supposed that more explicit language along these lines might also with advantage have been used.
24. The clause is, in any event, an ambiguous one, the meaning of which falls to be determined by reference to the general factual background against which the contract was entered into: see generally
Analog Devices v. Zurich Insurance Co. [2005] IESC 12, [2006] 1 I.R. 274, 280, per Geoghegan J. and the judgments of Fennelly and O’Donnell JJ. in
ICDL GCC Foundation v. European Computer Driving Licence Foundation Ltd. [2012] IESC 12. In
Analog Devices Geoghegan J. referred with approval to the judgment of Lord Hoffmann in
Investor Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 W.L.R. 866, 912-913, in which the following principles of interpretation were set out:
“(1) Interpretation is the ascertainment of the meaning which the 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.
(2) The background was famously referred to by Lord Wilberforce as the ‘matrix of fact’ but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammar; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meaning of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must for whatever reason, have used the wrong words or syntax.....
(5) The ‘rule’ that words should be given their ‘natural and ordinary meaning’ reflects the commonsense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had.”
25. These principles were also expressly approved by the Supreme Court in
ICDL. It follows, therefore, that having regard to the Lord Hoffmann’s second principle, the Ombudsman could and should have had regard to the available background evidence in order to determine the precise meaning of this phrase in this particular context. That background evidence may - or may not - show that the words in question should have a more particular or a more general meaning. It is only where this background material cannot assist in resolving the ambiguity that, in line with the comments of O’Donnell J. (in his admittedly dissenting) judgment in
ICDL, recourse should be had as a last resort to the principle of
contra preferentem.
Now let us look at what Justice Kelly says in total on the matter:
42. I am of the view that the Ombudsman was correct in concluding that clause 3 is clear in its wording. The trial judge in his analysis came to a different conclusion, holding that the term “
market conditions” may be taken to refer to “
market conditions generally”. I do not share that view nor do I agree that the clause in question is ambiguous.
Notice anything unusual!
Justice Kelly's Judgment was a reserved Judgment in the fact that it was heard mid February 2015. The Judges took over 4 months to deliver their respective judgments. A reserved judgment can be defined as follows:
"Reserved judgment" or "reserve judgment" most basically refers to a judgment that is withheld in order to gather more information before arriving at a conclusion. It refers to the need for more data or opinions in order to make an informed decision. It is most often used as a legal term to refer to a judge withholding a sentence or declaration in order to consult more evidence and develop a more informed judgment.
More importantly, Judgments should quantify and qualify the reasons a particular Judges arrives at the said conclusions. Judgments should contain the summary of arguments of both the parties, the law of the land, previous judgments on the issue, conclusion and the reasons for arriving at that conclusion. The lack of stated reasons for Judge Kelly's conclusion in relation to his finding of what the term "market conditions" means, is very pronounced. This may form another pillar of a valid argument, if the Millar's wish to make an application to the Supreme Court for a Supreme Court appeal.