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CA Intermediate · Corporate and Other Laws · Interpretation of Statutes

A statute says: 'A trustee shall not sell trust property to himself.' An aggrieved beneficiary argues that the word 'himself' should be read to also bar a sale to the trustee's wife, saying the purpose is to prevent conflict of interest. The text of the statute is clear and unambiguous, and reading in the wife would require adding words. Which approach would a court following the settled rules of interpretation adopt?

The court would apply the literal rule. Because the words are clear and unambiguous and produce no absurdity, they are given their plain meaning and the court will not add words to cover the wife. Purposive reading or the golden rule is used only when the plain text is ambiguous or absurd.

  1. AExtend the word to cover the wife, since the purpose of every statute must always prevail over its words
  2. BApply the literal rule, give the words their plain meaning, and refuse to add words, because the language is clear and no absurdity resultsCorrect
  3. CHold the statute void because it does not cover the mischief
  4. DApply the golden rule to read in the wife, even though there is no absurdity or inconsistency in the plain words

Explanation

Where the words of a statute are clear and unambiguous, courts apply the literal rule and give them their natural meaning. Courts do not add words to a statute. The mischief or purposive approach and the golden rule are used only where the plain words produce ambiguity, absurdity or inconsistency. Here no such problem exists, so the wife is not covered.

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