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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).

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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

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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.

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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?

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