Laws Made By The Courts.

Precedent

         “A precedent is a judgement or decision of a court cited as authority for the legal principle embodied in the decision.”

Binding Precedent

         “A binding precedent is one that a court must follow. It must come from a court in the same hierarchy of courts that is higher in the hierarchy or from the same court if that court is obliged to follow its own previous decisions.”

Ratio Decidendi  

          “A court is obliged to follow only the ‘ratio decidendi’ of another case. ‘Ratio decidendi’ means ‘the reason for deciding a case’.” “It is a statement of law applied to the legal problems raised by the material facts of the case as identified by the court upon which the decision is based.”

Persuasive Precedent

           “Precedents which are not binding are called persuasive precedents. A court can decide whether to follow a persuasive precedent but it is not obliged to. A precedent will be regarded as persuasive if it is a decision of a court of different court hierarchy, or if the decision comes from a court lower in the same hierarchy. Another type of persuasive precedent is material that comes from the decision of a court of binding status, in the same hierarchy , where it is not the ratio but obiter dicta.”

Obiter Dicta

          “The term ‘obiter dicta’, which means ‘something said by the way’, are those observations which are not necessary to support the decision in questions but form part of the judge’s incidental discussion. Although the obiter dicta of a superior court is not, technically speaking, binding on an inferior court, it may exercise extremely strong persuasive influence.”

The Rules Of  Precedent

“There are some rules regarding the operation of the doctrine of precedent.

• A court is only bound to follow the ratio decidendi of a case and not comments made obiter dicta.
• Decisions of the High Court of Australia are binding precedents for every court in Australia.
• Lower courts are bound by the decisions of higher courts in the same judicial hierarchy. Conversely, a higher court can overrule a prior decision of a lower court in the same hierarchy.
• A judge is not bound by the decisions of other judges at the same level in the same judicial hierarchy, although such decisions will be highly persuasive in the interests of consistency.
• A judge is not bound by the decisions of higher courts in a different judicial hierarchy, although such decisions may be persuasive.
• The highest court in a judicial hierarchy can overrule its previous decisions, although it will not lightly to do so unless in the interests of justice or where the decision was clearly wrong.”   

The Australian Court Hierarchy

Courts are graded in order of importance. Courts dealing with the more serious matters are at the top of the hierarchy and vice versa.

Federal Court Hierarchy (refer to Appendix no.1)

            The High Court of Australia is the most senior court in both the federal and            state court hierarchy. It is then followed by the Family and Federal Court of Australia, each hearing different types of matters. The Federal Court can be further divided into General Division and Industrial Division.

State And Territory Court Hierarchy (refer to Appendix no.2)

                        Each state and territory has the Supreme Court at the top of the hierarchy,

            followed by a District Court, with Magistrate’s or Local Courts at the bottom.

Precedent In Australian Courts        

• “A single justice of the High Court of Australia is not bound to follow an earlier decision of a single justice but is obliged to follow a decision of the Full Court (two or more justices) of the High Court.
• The Full court of the High Court is not bound by its own previous decisions.
• When the High Court overrules itself, it takes into account four considerations.

• The earlier decisions did not rest upon a principle carefully worked out in a significant succession of case.
• A difference between the reasons of the justices constituting the majority in one of the earlier decisions.
• The earlier decisions had achieved no useful result but on the contrary had led to considerable inconvenience.
• The earlier decisions had not been independently acted on in a manner which militated against reconsideration.

• A single judge of the Federal Court is bound by decisions of the Full Court but not by decisions of other single judges.
• The Full Court of the Federal Court is not bound by its own previous decisions but is reluctant to overrule them when the case raises an issue of importance.
• The rules that apply to the Federal Courts are also used in the Family Courts.
• A single judge of a Supreme Court is bound by decisions of the appellate courts, both civil and criminal, of that state.
•   Judges of Supreme courts of the territories are bound by decisions of the Full court of the Federal Court.
• A single judge of Supreme Court is not bound by decisions of other single judges of the same court, but will be reluctant to depart from those decisions.
• Although Supreme Courts are not bound by decisions of Supreme Courts of other states or territories, it is generally recognized that consistency is desirable.
• The doctrine of stare decisis does not apply as between two inferior courts, District and Magistrate’s Courts”.

How To Avoid Precedent

“Some of the most common methods used to avoid precedent are told that

• The precedent was wrongly decided.
• The precedent cannot apply due to changed social conditions.
• The statement of law in the earlier case is too wide and should be confined to its facts.
• The statement in the earlier case is obiter dictum rather than ratio decidendi.
• The precedent is unsatisfactory.
• The precedent is distinguishable on its facts”.

Example

            In the case of Brogden v Metropolitan Railway Co (1877) 2 App Cas 666, the court held that the alteration made to the original offer may be assumed as accepted the moment the party made its first order. This was used as a precedent to the case of Carlill v Carbolic Smoke Ball Co (1893) 1 QB 256, where Lindley L.J. stated that Mrs.Carlill’s notification that she had used the smoke ball in accordance with the directions and had subsequently contracted influenza was also her acceptance of the company’s offer.

                 

         

        

Bibliography

1. Stephen Judge, Business Law (2nd edition), Macmillan Law Masters, London, 1999
2. Ian McLeod, Legal Me OD, 3rd edition, Palgrave, New York, 1999
3. D.P.Derham, F.K.H.Maher, P.L.Waller, An Introduction To Law, 3rd edition, Simmons Limited, Melbourne,1977
4. M.L.Barron, R.J.A.Fletcher, Fundamentals of Business Law, 3rd edition, McGraw-Hill Book Company Australia Pty Limited, Australia, 2000
5. R B Vermeesch, Business Law of Australia, 7th edition, Butterworths Pty Limited, Australia, 1992
6. JC Carvan, JV Gooley, EL McRae, Study Guide for A Guide to Business Law, 13th edition, LBC Information Services, Australia, 1999
7. Morris, G, Cook, et al Laying Down The Law, 4th edition, Butterworths, Sydney, 1996

Appendix no.1

Federal Court Hierarchy

Appendix no.2

State and Territory Court Hierarchy

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