Slide 1
Licensed for use by Australian Law Courseware Copyright reserved
2011School of Business Law and TaxationTopic 2Case law as a source
of lawSources of law: Legislation and Case lawCRICOS Provider Code
00301 2013 Reed International Books Australia Pty Ltd trading as
LexisNexis
CRICOS Provider Code 00301JCRICOS Provider Code 00301JAttend a
seminar and/or listen to the iLecture recording;Read chapter 2 of
Understanding Business Law text book;Listen to the vodcast titled
Historical origins of Australian Law;Do the E-tutorial The Law Up
Close; and Read the case study notes for topic two.What to do this
week
CRICOS Provider Code 00301J2It is essential that you prepare for
class by completing the assigned text book reading and attempt the
case study questions.For additional assistance:Discussion Board -
staffedEmail your lecturerRemember
CRICOS Provider Code 00301J3CRICOS Provider Code 00301JAfter
completing this topic you should be able to:
Identify the different sources of law in Australia Understand
legislation as a source of law Outline the legislative process and
associated terminologyUnderstand case law as a source of lawExplain
the principles according to which case law is madeBe able to apply
case law by analogy. Learning outcomes
CRICOS Provider Code 00301J4The law evolves, rather than
remaining static. Moves in response to shifting societal
conditions, attitudes and values, but it still has its basic
principles, which do not change, as a foundation.
In this respect, the law has developed over the 200 plus years
since we were colonised by the British and adopted English law.
Despite growing this distinct body of law, Australian Law is
still quite similar to other legal systems that have their origins
in English law (e.g. Singapore, Canada).The nature of the law
CRICOS Provider Code 00301JLaw making bodies in Australia
Government ministers and officials with specified powers (the
executive);
Legislatures and local government councils (the legislature);
and
The courts (the judiciary).
CRICOS Provider Code 00301JLaw making bodies in Australia
Politicians, who are members of parliament, work with the
legislative branch of government to create legislation / statute
law (otherwise called enacted law).
Judges, who are members of the judicial branch of government
create the common law with their case judgments (otherwise called
unenacted law)
CRICOS Provider Code 00301JLegislation as a source of lawThe
role of the government in law-making
CRICOS Provider Code 00301JAustralian legislatures There are
many legislatures in Australia that exist at both the Commonwealth
and State level.
These legislatures can also be referred to as parliaments.
Legislatures at the Commonwealth and State level are bicameral
(meaning that they have an upper and lower house). Queensland is
the exception (it is unicameral, having only one house of
parliament).
CRICOS Provider Code 00301J
Source: Parliamentary Education
Officewww.peo.gov.au/students/desc/desc_cl.htmlAustralian
legislatures
CRICOS Provider Code 00301JAustralian legislatures The law made
by the legislature is called variously:LegislationStatutory law
(Statute for short)Acts of parliament (Act for short)Enacted
law
Each Act deals with a particular subject matter, which is
reflected in the name of the Act e.g. The Competition and Consumer
Act 2010 (Cth), Income Tax Assessment Act 1997 (Cth), Finance
Brokers Control Act 1975 (WA).
The date attached to the title of the legislation tells you when
it came into force. The abbreviation in brackets at the end of the
title tells you what legislature created the legislation and what
jurisdiction it operates in e.g. Cth Commonwealth; WA Western
Australia.
CRICOS Provider Code 00301JLaw making powers of Australian
legislatures State legislatures have the power to enact laws for
the peace, order and good governance of their territory.
This power does not extend to other states or territories.
These State legislatures obtain this power from their State
constitution.
Some legislative powers are shared between the Commonwealth and
State / Territory governments.
CRICOS Provider Code 00301JLaw making powers of Australian
legislatures The Commonwealth government has a more defined
legislative power than the State / Territory governments.
The Commonwealth governments power to legislate on specific
matters comes from the Commonwealth constitution.
Section 52 of the Commonwealth constitution details what the
Commonwealth parliament has the exclusive power to legislate on
(e.g. matters relating to any department of the public service that
the Commonwealth controls, places acquired by the Commonwealth for
public purposes.)
CRICOS Provider Code 00301JLaw making powers of Australian
legislatures Section 51 of the Commonwealth constitution details
what the Commonwealth parliament has the concurrent (shared) power
to legislate on legislative power is shared with the States (e.g.
fisheries in Australian waters beyond territorial limits,
bankruptcy and insolvency).
States can refer legislative powers to the Commonwealth i.e.
Corporations law
CRICOS Provider Code 00301JLaw making powers of Australian
legislatures As it concerns the Commonwealths power to concurrently
legislate on matters contained in section 51 of the Commonwealth
constitution, section 109 of the Commonwealth constitution provides
a resolution when the provisions of Commonwealth and State
legislation conflict.
Section 109 provides that the federal legislation prevails over
the state legislation to the extent of the inconsistency.
Where however, the Commonwealth and State laws do not conflict,
they continue to operate in their respective spheres.
CRICOS Provider Code 00301JLaw making powers of local
governmentsLocal governments have the power to make laws called
by-laws.
As local governments are established by the government of the
state / territory in which they function, they cannot make laws
that are inconsistent with that States laws.
They also cannot make laws that are inconsistent with federal
laws, or that exceed the powers that the State has given to the
local government.
CRICOS Provider Code 00301JState GovernmentFederal
GovernmentLocalGovernmentIntersecting spheres of government in
Australia
CRICOS Provider Code 00301JThe legislative processThe relevant
minister receives approval from cabinetA bill is drafted for
presentation to parliamentBoth houses of parliament (except
Queensland) must pass the bill before receiving royal assent from
the Governor-GeneralOn royal assent the Act commences as law
CRICOS Provider Code 00301J18 Finding a particular ActIf you
have to find a copy of particular legislation, for example the
Occupational Safety and Health Act 1984 (WA), these can be
found:
In law libraries On the internet e.g. austlii, ComLawState law
publisher
Good information on the most important provisions of a piece of
legislation can be found in pamphlets / brochures / guides produced
by the government agency that is responsible for ensuring
compliance with that legislation e.g. Worksafe and bullying.
CRICOS Provider Code 00301J19An approach to reading legislation
Skim through the table of provisions, looking for the provision/s
that cover what you are looking to clarify.
Read the provision/s through a few times so that you can better
understand what it is stating.
Refer to the definitions section if there are terms in the
provision/s that might need to be defined.
Note a cross referencing of provisions (where one provision
directs you to another provision that works with it)
If there is an objects clause that helps clarify what the
legislation wants to achieve, read that to better understand how
its provisions might be applied to your particular issue.
CRICOS Provider Code 00301J20 Definition sections
ImportantHIRE-PURCHASE ACT 1959 - SECT 2
2 . Terms used (1) In this Act, unless inconsistent with the
context or subject-matter
cash includes a cheque drawn on a financial institution;
Commissioner means the person for the time being designated as
the Commissioner under section23A;
credit provider means a hire-purchase credit provider;
dealer means a person, not being the hirer or the owner or a
servant of the owner, by whom or on whose behalf negotiations
leading to the making of a hire-purchase agreement with the owner
were carried out or by whom or on whose behalf the transaction
leading to a hire-purchase agreement with the owner was
arranged;
default charge in relation to an agreement means such amount as,
subject to any relief granted under section36A, is payable under
the agreement by the hirer where he fails to fulfil his obligations
under the agreement;
Department means the department of the Public Service
principally assisting in the administration of this Act;
CRICOS Provider Code 00301J21 Interpreting legislationBe aware
that sometimes the meaning of a legislative provision, or word
contained therein, is uncertain, and it could be argued that it
means one thing rather than something else.
These issues of ambiguity are what lawyers deal with on a daily
basis so dont concern yourself with resolving these
ambiguities.
Just be aware that these ambiguities do occur which may impact
your legal standing or the legal standing of the organisation that
you work for.
CRICOS Provider Code 00301J22Case law as a source of lawThe role
of the courts in law-making
CRICOS Provider Code 00301JCRICOS Provider Code 00301JA judges
power to make lawJudges indirectly create law with the decisions
that they make to resolve legal cases.
Judges do not have any direct authority (e.g. from a
constitution) to make law. It is just a by-product of their role,
with their normal function to apply existing law to cases that come
before their court.
Judge made law is also referred to as common law or unenacted
law, being law that has not been enacted by parliament.
CRICOS Provider Code 00301J24CRICOS Provider Code 00301JLaw made
by judgesJudges hold office till 70 years of ageJudges are
accountable and their judgements are public and scrutinised.Courts
provide written reasons for their decisions called the court
judgment.The reasoning of the court is the most important part of
the judgment Ratio decidendi.The level of the court will determine
the importance of the decision.
CRICOS Provider Code 00301J25CRICOS Provider Code 00301JLaw made
by judgesCase judgments are published in Law Reports, e.g. the
Commonwealth Law Reports (CLR) which are most commonly found in law
libraries.Case judgments can also be found on the internet at
Austlii and on Court websites.
CRICOS Provider Code 00301J26Case CitationProvides important
details about the parties to a case, the court in which the case
was heard etc.
For example: Buckenara v Hawthorn Football Club Ltd [1998] VR
39Newington v Windeyer (1985) 3 NSWLR 555
CRICOS Provider Code 00301J27CRICOS Provider Code
00301JHistorical origins of the common lawIn England, prior to the
14th century, each county had their own laws and customs that would
apply to the citizens of their county.
The King, unhappy with this system, then implemented a uniform
(common) body of law throughout England. This common law replaced
the local county laws and was administered by the judges in the
Kings courts.
Typically, the common law was applied in a strict and
uncompromising way.
CRICOS Provider Code 00301J28CRICOS Provider Code 00301JThe
development of equityBecause the strict application of the common
law produced harsh and unjust results, many people appealed against
these decisions, initially to the Kings chancellor and then to the
Court of Chancery.
These appeals were determined on the basis of what was just and
fair in the circumstances.
The body of rules established by the Court of Chancery came to
be known as the law of equity.
CRICOS Provider Code 00301J29CRICOS Provider Code 00301JCommon
Law and EquityThe rules of the common law and equity are no longer
administered through separate courts.In every Australian
jurisdiction the courts may exercise both common law and equitable
jurisdiction.Should the principles of the common law and equity
conflict, the rules of equity prevail see Taylor v Johnson
below.
CRICOS Provider Code 00301JCRICOS Provider Code 00301JBasic
procedure in a civil casePlaintiff launches action via writ issued
out of appropriate courtPlaintiff makes allegations against a
person defendantDefendant answers allegations and thus defines
issues in caseParties engage in collecting evidence via
interrogatories, discovery
CRICOS Provider Code 00301J31CRICOS Provider Code 00301JBasic
procedure in a civil caseWitnesses ordered to appear by
subpoenaLawyers examine witnessesThen cross-examination by opposite
sides lawyersClosing addresses by both sidesAdjudicator magistrate
or judge applies law to facts proved by evidence or established for
juryAdjudicator makes order
CRICOS Provider Code 00301J32CRICOS Provider Code 00301JThe
doctrine of precedentCommon law is underpinned by the doctrine of
precedentPrecedent set by a higher court is binding on all lower
courts in the same hierarchyA state Supreme Court must follow any
precedent set by the High Court of AustraliaA court is not bound to
follow its own precedent
CRICOS Provider Code 00301JCRICOS Provider Code 00301JThe
doctrine of precedentPrecedent is applied to future similar
casesPrecedent represents settled principle (stare decisis) and
gives certainty to future decision-makingStare decisis means let
the decision stand or let a judges decision be the basis for how
similar matters are decided in the future. Courts may change
decisions as new situations arise allowing for flexibility
CRICOS Provider Code 00301J
CRICOS Provider Code 00301J35CRICOS Provider Code 00301JThe
doctrine of precedentThe material facts of a case are important in
determining whether a precedent case must be applied to it.Material
facts are the important facts of a case that are relevant in
determining whether or not the law has been broken. These material
facts must be established through the presentation of evidence.E.g.
With the offence of driving under the influence of alcohol, the
following are material facts:The accused was driving;They had
consumed a number of alcoholic beverages before driving;They
recorded a blood alcohol level that was above the legal limit.
CRICOS Provider Code 00301JCRICOS Provider Code 00301JThe
doctrine of precedentImportant to note: If the facts of the case
before the lower court are materially different from the facts of
the higher court case, the lower court is not bound to follow the
decision of the higher court. Here, it can be said that the facts
of the lower court case can be distinguished from the facts of the
higher court case.
CRICOS Provider Code 00301JCRICOS Provider Code 00301JThe
doctrine of precedentIf a lower court has to follow the precedent
decision of a higher court, what the lower court must apply to its
case is the ratio decidendi of the higher court case.
The ratio decidendi is the reason or rationale for the
decision.
CRICOS Provider Code 00301JCRICOS Provider Code 00301JRatio
decidendiThe ratio decidendi is the essential part of the higher
courts judgment.The ratio decidendi is a combination of:Material
facts of the case and The legal rule/s applied to them.
CRICOS Provider Code 00301J39An example of case law:Taylor v
Johnson (1983) 151 CLR 422
10 acres of land for $15,000.I will sell my 10 acres of land to
Taylor for $15,000 per acre.
CRICOS Provider Code 00301J40An example of case law:Taylor v
Johnson (1983) 151 CLR 422
10 acres of land for $15,000.
CRICOS Provider Code 00301J41
An example of case law:Taylor v Johnson (1983) 151 CLR 422
A contract will be enforced accordingly to its agreed terms.What
has been agreed is judged objectively.
CRICOS Provider Code 00301J42In Taylors case, it appeared
(objectively) that the parties had agreed to sell the ten acres for
$15,000. A mistake by one party as to the agreed terms of a
contract does not affect objective agreement. This is outrageous! I
appeal!The court decided to enforce the contract on its stated
terms, despite Johnsons mistake. Johnson appealed against this
decision.
CRICOS Provider Code 00301JOn appeal, the High Court took note
of additional facts. The court found that, when he accepted the
offer, Taylor must have known the price was too good to be true,
and deliberately made sure that Johnson did not discover the
mistake until after the agreement was completed.
In the light of these additional facts, the court decided that
it would be against good conscience (i.e. contrary to equity) to
allow Taylor to enforce the contract. It was the first time this
equitable principle had been applied to this type of case.
CRICOS Provider Code 00301JThis decision now stands as a
precedent for future cases that have similar material facts. The
ratio decidendi of Taylors case can be stated as:
In equity, it is contrary to good conscience to enforce a
contract if:one of the parties is seriously mistaken, andthe second
party was aware of circumstances that indicate the first party is
mistaken, and the second party deliberately acts to ensure the
error is not discovered until it is too late.
CRICOS Provider Code 00301JCRICOS Provider Code 00301JRatio
Decidendi Donoghue v Stevenson [1932] AC 562A product manufacturer
owes a duty of care to consumers of their products and they will be
held liable for negligent actions that cause injury / harm to this
class of persons.Material facts: A manufacturer of ginger beer
supplied a product which caused injury / harm to a consumer.The
legal rule applied to them: A party must not breach a duty of care
owed to others in their proximity by engaging in negligent conduct
that is likely to cause them harm.
CRICOS Provider Code 00301J46CRICOS Provider Code 00301JA case
can be either a binding or persuasive precedent.
Whether a case is binding on a court or merely persuasive will
depend on:What court the case was heard in and its place in the
judicial hierarchy;What country the case was heard in; andHow
similar the facts of the precedent case are to the facts of the
case before the court.
Binding or persuasive precedent
CRICOS Provider Code 00301JCRICOS Provider Code 00301JBinding
precedentA lower court must follow a previous decision if the
decision is:Made by a higher court;In the same judicial
hierarchy;And has the same material facts as the case before the
lower court.If these criteria are met, the judges in the lower
court have no choice but to apply the ratio of the higher court
case to the case before them.
CRICOS Provider Code 00301J48CRICOS Provider Code
00301JPersuasive precedentA lower court may follow a previous
decision if the decision:Has the same material facts as the case
before the lower court; andIs from a lower court in the same
hierarchy; orIs made by a court in another jurisdiction (within
Australia or a foreign country)In these circumstances, the judges
in the lower court have a choice whether to apply the ratio of the
other case to the case before them, and will only do so if it
assists them in resolving the current matter.
CRICOS Provider Code 00301J49CRICOS Provider Code 00301JIn this
unit, we do not require you to read through full case judgments and
instead we will direct you to case summaries (in the text book and
on blackboard) which support your understanding of the legal
principles that we teach you.
Legal cases level of detail
CRICOS Provider Code 00301JCase studySources of law: Legislation
and Case law
CRICOS Provider Code 00301JThe National Oyster Federation of
Australia Ltd (NOFA) has awarded you an internship over the long
vacation for being the student with the best marks in business law.
You will be required to assist the CEO, Jim Trevalla. In his
briefing to you, Mr Trevalla explains that NOFA was set up to
protect the industry. There has been some unfortunate chapters in
the industry's life. For example, there is the recurring problem of
food poisoning due to bad practices of growers. At one stage there
was a celebrated case of price fixing, and the industry has a bad
reputation with governments all over the country. Mr Trevallas
major challenge is to keep the board happy, but he is between a
rock and a hard place because there is a high level of cowboys in
the business and they are a law unto themselves. He tells you that
he really wants your effort to go into helping him keep these
people in check and he asks you to prepare a draft compliance
manual that will eventually be disseminated to all Federation
members.
CRICOS Provider Code 00301JWould statute law or common law be
more important to the proposed compliance manual of the National
Oyster Federation of Australia Ltd (NOFA)? Give reasons for your
answer.
CRICOS Provider Code 00301J2. Given the types of problems that
Mr Trevalla has identified as plaguing the industry, what pieces of
legislation are likely to form the basis of the compliance manual?
Why have you identified these pieces of legislation as being
relevant? Are there any other pieces of legislation that you
foresee might be relevant to the regulation of the industry?
CRICOS Provider Code 00301J3. What was the ratio decidendi of
Commonwealth Bank of Australia v Amadio (1983)151 CLR 447? (page 47
of textbook) What court was this important case heard in? Would the
District Court of Western Australia have to follow the precedent
set in the Amadio case if a case with similar facts came before
it?
CRICOS Provider Code 00301J