In this case the Supreme Court confirmed that business efficacy must be a necessity for a term to be implied into a contract. The court commented that the decision in Attorney General of Belize and others v Belize Telecom Ltd  UKPC 10 had been widely misinterpreted as diluting the requirement (by suggesting such a term may be implied if it would be reasonable so to do) and should no longer be used as guidance on the law of implied terms. It clarified that the proper approach was to construe the express terms of the contract first, and only then should implication of terms be considered. Lord Neuberger made six comments on the test to be used, noting in particular that the business efficacy and officious bystander tests are not cumulative i.e. only one needs to be satisfied, although in practice if one is satisfied, it is likely that the other is also. He also suggested that a more helpful way of putting the 'business efficacy' test may be, as Lord Sumption suggested, that the contract lacks commercial or practical coherence without the proposed implied term.
To read more, please click here.