Litigator Arnie Herschorn's article "Current Approaches to Contractual Interpretation: Ambiguity and Palpable and Overriding Error" was published in the July 2019 edition of the Canadian Business Law Journal (subscription).
Summary of "Current Approaches to Contractual Interpretation: Ambiguity and Palpable and Overriding Error" from the Canadian Business Law Journal:
The principle of contractual interpretation that an appellate court should not reverse the findings of a lower court except in the case of palpable and overriding error, apart from errors of law, gives rise to an unpalatable consequence. The appellate court is bound to show deference to the findings of the lower court even if it considers those findings to be wrong, so long as they are not plainly wrong. But, if the appellate court is divided on whether the findings of the lower court are wrong, then it is unlikely that the findings can be plainly wrong. Automatic deference should not be required. The standard should be correctness. The principle of contractual interpretation that the court should give effect to the clear and unambiguous language of a contract does not fare so well either when an appellate court is divided on whether the contract is clear and unambiguous. There would seem then to be an impasse as to whether the contract is clear or not. The answer recommended here is that the court should ask whether the language of the contract is sufficiently clear to achieve the contested result advanced by either of the conflicting interpretations of the contract. It is then possible to evaluate the conflicting interpretations by evaluating the competing justifications offered for them. Something beyond a dispute as to whether the language of the contract is clear drives the defences of the conflicting interpretations.