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Judges continue to play an important role in interpreting legislation because often the meaning of words and phrases in legislation will be undefined or hard to determine. This may be the result of simple oversight, a deliberate attempt to fudge the meaning to achieve a political compromise or a genuine recognition that all the circumstances in which the legislation may apply cannot be foreseen. The use of the word ‘reasonable’ in legislation is often a convenient route of escape for legislators in such situations.

Because the interpretation of legislation by the courts can have such an important effect on how the legislation is implemented, both Commonwealth and State parliaments enacted legislation to guide this process - these are the Acts Interpretation Acts. Explanatory memoranda state the intended effect of legislation. Second reading speeches, made by the politician who moves the Bill, and debates in parliament are also important. The Acts Interpretation Acts, both Commonwealth and State, provide that the courts must be guided by these statements, and other relevant extrinsic material (s15AB and s8B). The Commonwealth Acts Interpretation Act applies to Commonwealth legislation, and the State Act to State legislation.

Judges have developed special rules of statutory interpretation that are also used in understanding the meaning of a statute. The literal rule provides that words in legislation should be given their “plain, literal, natural, ordinary or grammatical meaning” unless they clearly have an established legal meaning as defined in previous case law. The ‘golden rule’ is an extension of the literal rule. It provides that words in a statute are to be given their ordinary meaning unless that interpretation should lead to some absurd result. In that case, the ordinary meaning should be modified in some way that the court thinks appropriate in the context of the legislation. The mischief rule provides that the court should look at the state of the law before an Act was passed to see what remedy the new legislation hoped to provide to cure the ‘mischief', that is, problem which existed under the law as it was.

The fourth approach is the purpose rule. This is provided in the Acts Interpretation Acts at the Commonwealth and State levels (s15AA and s8A).

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