Australian Courts & Precedent

Foundations of Law
LAW100/LLM533
 Australian Courts & Precedent

Case law - recap

• Decisions in courts do two things:

Tip: note the relevant term is
• Resolve disputes precedent in this context, not
precedence
• Can lay down new legal principles

• Case law (AKA common law/judge-made law) is an important source of law in common law jurisdictions
• A case is said to lay down a principle which is referred to as precedent
 Australian Courts & Precedent

The doctrine of precedent

• Latin: stare decisis made law, and to cases interpreting statutes

• To stand on what has been decided • Rationale: Telstra Corporation v Treloar
• Follow decisions in previous cases • Certainty
• Equality
• Like cases treated alike • Efficiency
• Some rules and cases have greater authority than • Appearance of justice
others
.
• The doctrine of precedent determines the relative
weight to be accorded to the different cases
• Applies to both case laying down common law/judge
Australian Courts & Precedent

How does it work? What are the rules?

• Each court is bound by decisions higher in its hierarchy
• A decision of a court in another jurisdiction (including overseas courts), or
a lower court in the same hierarchy may be persuasive but are not
binding Tip: these rules
• Farah Constructions Pty Ltd v Say-Dee Pty Ltd – see next slide are important!
• A court is not bound by its own previous decisions but will depart from
them only reluctantly Nguyen v Nguyen (1990) 169 CLR 245
• Only the ratio decidendi (the reason for the decision) of a case is binding
• Obiter dicta (remarks made in passing) are not binding, but can be
persuasive
• Precedents do not lose their force by the passage of time
Australian Courts & Precedent

‘Farah Constructions Principle’

• Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 (‘Farah Constructions’)

Decisions in intermediate appellate courts in another jurisdiction, on the interpretation of

Commonwealth legislation or uniform national legislation, is not strictly binding, but
highly persuasive and should be followed if there is no binding decision unless the decision
is plainly wrong

• Also applies to non-statutory law as there is only one common law in Australia
Australian Courts & Precedent

Key Concepts
Hierarchies – see LDL Essential Legal Toolkit ‘A’
• Australia has 9 court hierarchies (1 federal, 6 states, 2 territories) (see next slide)
We will delve deeper
• High Court apex – binds all courts into these concepts
• Decisions of overseas courts are not binding but can be persuasive
Binding
• If binding, principle must be applied by a lower court in the hierarchy
• Note: there are ways to ‘avoid’ a precedent
Persuasive
• If persuasive – the principle may be applied by a court, but it has a discretion
• The persuasiveness of a decision varies according to, for example:
• Authoritativeness of court (HC obiter = super obiter and should be followed)
• Closeness of decision to facts under consideration
 Australian Courts & Precedent

Snapshot of Australia’s High Court of Australia = apex

with original jurisdiction (ss 75, 76 Constitution)
court hierarchy and appellate jurisdiction (s 73 Constitution)

State/Territory court hierarchy

Federal court hierarchy x 1 (6 states + 2 territories)
8 parallel systems

9 hierarchies in total
Source: Samantha Kontra, Essential Legal Skills: A Guide for First Year Law Students (Thomson, 2022) 77
Presentation title to go here

Ratio Decidendi – brief intro

• Ruling on a point of law, not just a statement of a rule of

law
• Legal issue that was in contention before the court
• That received full consideration
• Ratio is binding on subsequent courts (NB: think court
hierarchies)
• It is the reason for the decision the judge reached on the
issue(s) in dispute
Australian Courts & Precedent

Obiter Dictum – brief intro

• Remarks made in passing

• Obiter dictum (obiter dicta) is a statement or consideration of law in a case that

does not form part of the ratio

• Obiter is persuasive only (but note: ‘authoritative obiter’ – more later)

• Obiter can take a variety of forms:

• Hypothetical considerations
• Statements of law when the principle is not in dispute
• Alternative lines of reasoning
 Australian Courts & Precedent

Ratio decidendi: why hard to identify at times?

• It might be difficult to determine whether the principle of law was in
contention in the earlier case

• It might be possible to state a ratio at a higher or lower level of

generality

• There might no majority in favour of a particular ratio

• It might be difficult to distinguish the ratio from obiter dicta

Image: LDL 12th ed page 240

(11th ed page 199)
 Australian Courts & Precedent

Ratio decidendi: why hard to identify at times?

• In statutes, legal rules are stated in fixed form

• In case law, the legal rule laid down/ratio can often be stated in
different ways

• Legal rules can also be stated at different levels of generality

• E.g. Donoghue v Stevenson [1932] AC 562
• Most specific form (low level of generality) - exactly same
facts (ginger beer, rotten snail, opaque bottle)
• Higher level - Coca Cola, pre-packaged soft drink
• Higher level still = all manufactured products?
Australian Courts & Precedent

Authoritative Obiter

• Although obiter is only persuasive – its degree of persuasiveness varies depending on:

• Authority of Court – higher courts

• Consideration given to the dicta by the court

• Depends on how considered were the issues in the cases

• Nowicka v Superannuation Complaints Tribunal [2008] FCA 939, [21] (Sudberg J)

A mere passing remark or a statement or assumption on a matter that has not been argued is one thing,
considered judgment on a point fully argued is another, especially where, had the facts been otherwise, it
would have formed part of the ratio. Such judicial dicta, standing in authority somewhere between a ratio
decidendi and an obiter dictum, seem to have a weight nearer the former than the latter
 Australian Courts & Precedent

Authoritative Obiter
• Sometimes obiter can be more important than the ratio

• Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130

• Hedley Byrne & Co v Heller & Partners Ltd [1964] AC 465

• Courts reactive – superior courts sometimes use cases as a launching pad

• For reasons of certainty, it can be advisable for lower courts to follow dicta of superior courts
• Farah Constructions v Say- Dee Pty Ltd (2001) 230 CLR 88
• High Court was scathing of the NSWCA – caused uncertainty as it had been made in the face of long
established authority and seriously considered dicta of a majority of this court

Think of High Court obiter a bit like SUPER OBITER – should follow in the absence of
binding authority
 Australian Courts & Precedent

Judicial Precedent
Old Precedents Limitations of the doctrine

• Precedents do not lose their force • Retrospective – always looking to the past. Slow and piecemeal –
by lapse of time must wait for dispute

• Very old or out-of-step precedents • ‘Judicial dilemma’ – lower courts bound by an out-of-date precedent
are unlikely to be applied
• Failing to change leaves the court open to criticism for being out of
• Whether by overruling previous step with community
decision (if possible) or avoiding
the precedent • Departing from a precedent = charges of usurping legislature;
undermines certainty

• Can lead to ‘legal fictions’

 Australian Courts & Precedent

Note: The Federal Why are state courts

Circuit Court and the included in this diagram?
Family Court merged in
2021. The Court is now State courts can exercise
called the ‘Federal federal jurisdiction:
Circuit and Family
Court of Australia’ – - Judiciary Act 1903 (Cth) s
make a note if you are 39
using the 11th edition of
your textbook on page - Re Wakim; Ex Parte
610. McNally (1999) 198 CLR
511
Page 640 in LDL 12th
ed and this diagram - Conferral of state
has been updated to jurisdiction on federal
reflect this change in courts is however not
the 12th ed. permitted

Source: LDL 12th ed pg 640

Australian Courts & Precedent

Simplified state hierarchy: NSW

Note: The NSWCA and NSWCCA

sit at the same level here =
intermediate appellate courts
Australian Courts & Precedent

When will the High Court overrule itself?

No set principles, although the court will often apply the considerations in the following cases:

John v Federal Commissioner of Taxation (1989) 166 CLR 417:

1. The earlier decision ‘did not rest upon a principle carefully worked out in a significant succession of
cases’
2. Difference between the reasons of the justices constituting the majority
3. Earlier decision achieved no useful result BUT led to ‘considerable inconvenience’
4. Earlier decision had not been independently acted on in a manner which militated against
reconsideration

Imbree v McNeilly (2008) 236 CLR 510:

5. Whether the change is necessary to maintain a better connection with more fundamental doctrines
and principles.
 Australian Courts & Precedent

Case examples:
• Not self bound, but overruling itself is a serious step not taken lightly
• See e.g.

• Imbree v McNeilly (2008) 236 CLR 510 – standard of care –

learner driver

• Brodie v Singleton Shire Council (2001) 206 CLR 512 – High

Court abolished the common law ‘Highway Rule’ overruling
earlier decision

• Esso Australia Resources Ltd v Federal Commissioner of

Taxation (1999) 201 CLR 49 – dominant purpose test

Source: LDL 12th ed page 266 (page 244, LDL 11th ed)
 Australian Courts & Precedent

Constitutional Cases
• Ha v New South Wales (1997) 189 CLR 465 (‘Ha’)
• NZYQ v Minister for Immigration [2023] HCA 37

• Re Wakim: Ex Parte McNally (1999) 198 CLR 511 (‘Wakim’)

‘The function of the judiciary…is to give effect to the intention of the makers of the
Constitution as evinced by the terms in which they expressed that intention’ (McHugh J)

• Wurridjal v Commonwealth (2009) 237 CLR 309 (Wurridjal)

The question of whether the High Court will overrule itself in Constitutional cases is ‘not to
be answered by the application of a well-defined rule…rather it requires an evaluation of
factors…informed by a strongly conservative cautionary principle…’ (French CJ)
 Australian Courts & Precedent

Precedent across different appeal hierarchies

• Farah Constructions Principle

• CAL No 14 Pty Ltd v Motor Accidents Insurance Board (2009) 239 CLR 390 (‘CAL v MAIB’) –
duty to follow such decisions, unless convinced that the earlier decision was wrong

• Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
(‘Marlborough Gold Mines’) – ‘all the more so a single judge’ should not depart
from…intermediate appellate court decision unless considered plainly wrong
Australian Courts & Precedent

‘Plainly wrong’?
• Not able to be exhaustively defined

• Strong wording

• BHP Billiton Iron Ore Pty Ltd v National Competition Council (2000) 162 FCR 234 –
approach with ‘real and deliberative’ caution. Examples:

o Taking into incorrect statutory provisions

o Failing to take into account statutory provisions
o Failing to follow binding authority
o Other issue which has caused the decision of the court to fall into error

• Remember, it is not open to a court which is bound by a decision of a higher court to

depart from that decision on the basis that it is plainly wrong
 Australian Courts & Precedent

Summary of key principles

• Each court is bound by decisions of courts higher in its hierarchy
• Decision of a court in another jurisdiction (including overseas) may be persuasive but not binding
• A court is not bound by its own decisions but will depart from them only reluctantly
• It is not open to a court bound by a decision of a higher court, to depart from it on the basis plainly wrong
• Only the ratio decidendi of a case is binding
• Obiter dicta (remarks in passing) persuasive
• High Court is not self bound, but will depart from earlier decisions reluctantly – not taken lightly
• No set principles but see John v Federal Commissioner of Taxation and Imbree v McNeilly
• Desire for uniformity – one common law, Cth legislation, uniform national legislation (Farah)
• Trial judges and appellate courts should follow the decisions of courts of coordinate jurisdiction unless
they consider such a decision plainly wrong (Farah Constructions)
• High Court obiter should be followed – accorded great respect