Key knowledge:

The ability of judges and courts to make law

The operation of the doctrine of precedent
Reasons for interpretation of statutes by judges
Effects of statutory interpretation by judges
Strengths and weaknesses of law-making
through the courts
The relationship between courts and
parliaments in law-making














Unit 3
Area of Study 3

Key skills:
Define key legal terminology
Discuss, interpret and analyse legal information
Apply legal principles to relevant cases and issues
Describe the nature, importance and operation of
courts as law-makers
Analyse the impact of courts in law-making
Critically evaluate the law-making processes of
courts
Discuss the relationship between law-making
bodies
Key Terms
Binding precedent
Common law, case law, judge-made
law
Court hierarchy
Defendant
Distinguish, overrule, reverse,
disapprove
Doctrine of precedent
Ejusdem generis
Ex post facto
Extrinsic and intrinsic material

Historical Development of common law:

In 1154-1189- King Henry ii local customary laws applied.
Each area dealt with disputes in their own way and applied
their own customary laws. These naturally differed from area
to area.
King Henry ii, wanted a unified country and in order to
achieve this, he wanted to have uniform laws. He sent out
his judges on circuit (ie visiting different areas to resolve
their disputes)
To help them make consistent decisions when deciding the
different disputes they created a set of principles for dealing
with disputes.
These principles took over from the customary laws and this
is how the law developed.
In 1289- the principles were written down; and this created
the common law of England which Australia adopted.
Australia, as a colony of England, followed the principles of
common law developed in England.

One of these principles is that reasons for decisions, made by
Higher Courts, will be binding on lower courts in the same
hierarchy.
In other words, lower courts, in the same hierarchy, must
apply the same reasons for decisions, when dealing with
similar cases, as those applied by higher courts , in earlier
decisions.

This principle is called Stare Decisis . This means literally to
stand by what has been decided and it is at the heart of the
doctrine of precedent.

In order for the doctrine of precedent to work there needs to
be a court hierarchy (an order of importance) from the most
superior to inferior courts.
The Victorian Court Hierarchy
The High Court is a
Federal Court and
its the Highest Court
in Australia.

The decisions of the
High Court are
binding on each of
the state court
hierarchies.
The
Court of Appeal,
Supreme Court
County Court
Magistrates
Court
are all state courts
High Court

Court of Appeal
Supreme Court

County Court
Magistrates Courts
Superior Courts

The High Court, The Supreme Court and the Court
of Appeal are known as Superior Courts of record
because the reasons for the decisions in the court
cases that come before them are recorded for
future reference.
It is these courts which create common law .

What is common Law?

Common law is law developed through the courts.
It is also known as case law or judge-made law.
Restrictions on Judges ability to make
law; Judges and courts can only make
law if:

- a case is brought before them.

- If there is no previous binding
decision already established by a
higher court in the same hierarchy
(novel case)
Judges ability to make law
Judges can only make law when:
When they are deciding on a new issue (novel case)
brought before them or when a previous principle of law
requires expansion to apply to a new situation. eg the
first time a case of negligence was brought to court it
was a novel case and it created the common law of
negligence. Further cases over time have developed
that common law.

Statutory interpretation- interpreting the words in acts of
parliament. eg in the Brislan case the court had to
interpret the words other like services or in the
Franklin Dam case they had to interpret the words
external affairs. The interpretation given forms
precedent.

Doctrine of Precedent
Role of the Courts
in Law-making

Doctrine of Precedent
The judges look at past decisions to guide
them; they look at the reasons behind the
decision in past cases for guidance when
deciding new cases.
When a new situation arises and is decided
on a precedent is created.

What is a precedent?
A precedent is the reasoning behind a court
decision that establishes a principle or rule of
law that must be followed by other courts
lower in the same court hierarchy when
deciding future cases that are similar.
The main reasons for applying
precedent is to create consistency and
predictability within the legal system, as
like cases are decided in a like manner.

This in turn gives us confidence in our
legal system and we feel justice is
being done.

Precedent is the reason for the decision (the ratio
decidendi).
Precedents can only be made when a judge
alone is hearing a case. The Judge makes the
decision and gives the reasons for that decision;
the reason for the decision is then binding on
lower courts in the same hierarchy.
For this reason precedent is usually made by
courts which hear appeals (as there is no jury). ;
ie the High court, the Court of Appeal and the
Supreme Court.

A jury decision cannot create a precedent as
juries do not give reasons for their decisions.

Lesson 2 Quick Revision of last lesson:

1. How did common law originate in England?
2. What does stare decisis mean?
3. What is precedent?
4. Why do we need a hierarchy for precedent to exist?
5. What are the advantages of precedent?
6. What are the two ways that judges make law?
7. What restrictions are there to a judges ability to make
laws?
8. Which Courts can make common law and why?
9. What is the ratio decidendi?
10. What is NOT part of the ratio decidendi.

1. How did common law originate in
England?
Circuit judges began to record the reasons
for their decisions, when resolving disputes,
over time. These records of decisions were
referred to again and again by the judges as
they resolve disputes across the country and
they formed the first common law.
As a colony of Britain Australia adopted the
same common law
2. What does stare decisis mean?

Stare Decisis - literally means to stand
by what has been decided; the process
of lower courts following the decision of
higher courts

3. What is precedent?

Precedent is the reasoning behind a
judges decision that establishes a
principle or rule of law that must be
followed by other courts lower in the
same court hierarchy when deciding
future cases that are similar
4. Why do we need a hierarchy for
precedent to exist?

So decisions of the Higher (superior)
courts in the hierarchy, can be followed
by lower (inferior) courts.

5. What are the advantages of
precedent?

Precedent creates consistency and
predictability within the legal system,
as like cases are decided in a like
manner.
This in turn gives us confidence in our
legal system and we feel justice is
being done.

6. What are the two ways that judges make
law?
When they are deciding on a new issue
(novel case) brought before them or when a
previous principle of law requires expansion
to apply to a new situation.

Statutory interpretation- interpreting the
words in acts of parliament.
7. What restrictions are there to a judges ability
to make laws
Courts are reactive; they can only make
common law when a case (a dispute to resolve)
is brought before them.

Also they can only make common law if there is
no previous binding decision already
established by a higher court in the same
hierarchy (novel case)

8. Which Courts can make common law
and why?
The High Court, Supreme Court and
Court of Appeal only can make law.
These courts record the judgments of
courts at the end of a case, and it is in
the judgment that the ratio decidendi is
stated.

9. What is the ratio decidendi?

Ratio Decidendi (ratio for short) - is the
reason for the decision which is given in
the judgment The ratio is the binding part
of the decision. (a judgement is the
statement read out by the judge at the end
of the appeal hearing.



10. What is NOT part of the ratio decidendi?

It is NOT the decision, or the sanction or the
remedy, but the reason for the decision,
which is then regarded as a statement of
law to be applied in the future.



1. Define: p 195
Binding Precedent
Persuasive Precedent
obiter dictum
2. What are material facts p 194
3. Which parts of a decision are not part of
the reason for the ratio?
4. How can the ratio decidendi of a case be
found when there is more than one judge? P
194
Binding Precedent:
A binding precedent is a legal principle established in a
higher court that must be followed by lower courts in the same
hierarchy when deciding similar or like cases.
eg in Victoria a judge of the County Court must follow the
decisions of judges in the Supreme Court.

For a precedent to be binding on a particular case, the
precedent must be:
From the same hierarchy of courts
From a superior court-one that is higher in the hierarchy

The decisions of the High Court (the highest court in Australia)
are binding on all other Australian courts. However, the High
Court is not bound by its own previous decisions.











A Persuasive Precedent
Are not binding on courts. They are seen more as convincing
argument, but one
that does not have to be followed because it is not binding.
Precedents considered to be persuasive but not binding are:

The decision of a court in another hierarchy-such as another state
or country.
Ratio decidendi of courts at the same level; for example, a County
Court judge would not be bound by a decision of another County
Court judge
Ratio decidiendi of inferior (lower) courts in the same hierarchy;
for example a County Court judge would not be bound the
decision of a magistrate in a previous case
Obiter dicta statements of a court in the same hierarchy or in
another hierarchy.

Although not binding, persuasive precedents may be seen as a point
of reference. They give an indication of how other judges think the
law should be.
Obiter dictum:

Literally means things said by the way

A judges statement or comment, made in his/her
judgment, that is not part of the ratio decidendi
(precedent) but may be used as a persuasive
argument in later cases.
Eg Hedley Burne v Heller (1964) p 198, the obiter
comments were used as persuasive precedent in
the Shaddock case (1981) p 193
Read
Donoghue v Stevenson (1932) p196
and
Grant v Australian Knitting Mills (1936) p 197

The British case Donoghue v Stevenson was used as
persuasive precedent for the Australian case Grant v
Australian Knitting Mills , which established the law of
negligence in Australia.
Why was it persuasive precedent and not binding
precedent?
2. Material facts: p 194
Are the facts which affect the outcome of the case
and are vital to the reason for the decision.

3. The Obiter dictum comments are not part of the
reason for he decision.

4. Where there are more than one judges involved in
the decision eg The High Court, where there can be
5-7 justces, then if a unanimous decision is not
made then the precedent created is that of the
majority.
Examples of cases:
1. Ratio Decidendi- Pinkstone v R (2004) p194

2. Development of the common law of negligence:
a. Read the two cases: Donoghue v Stevenson
(1932) and Grant v the Australian Knitting Mills
(1936).
b. Explain why the Donoghue case was used as a
persuasive precedent.
c. Read the two cases Hedley Byrne v Heller (UK)
(p 198) and Shaddock (Aust)(p 193).
d. How did these two cases develop the law of
negligence?
e. Which obiter dictum comments did the Hedley
Byrne case follow?
Ways judges can develop precedent or avoid following
an earlier decision (precedent).

Distinguishing a previous precedent
Where there is a binding precedent, a lower court may
avoid using the precedent established by a higher court if it
finds a significant difference in the material facts of the
original case and the case currently being considered.
The precedent is not followed because the judge can
distinguish the new case from the previous one.
In this way the lower court can avoid using the set
precedent.

Reversing:
Involves one case.
When a case is heard on appeal, a higher
court may disagree with the legal principle
applied by the lower which first heard the case.
The original decision is reversed and a new
precedent is created by the superior court to
apply to these material facts in future cases.


Overruling a precedent

When a superior court decides not to follow an earlier
precedent established by a lower court in a different
case, but with similar material facts.
The superior court will overrule the previous
precedent.
It can do this because it is not bound by precedents
created in lower courts. When a precedent is
overruled, the new ratio decidendi from the latest
case becomes the precedent to follow in the
future. New precedent is set.

NO
Disapproving:
Two different cases.
When a court disapproves a precedent established by
another court at the same level, then a new precedent is
established. Both precedents remain in force until another
case on the issue is taken to a higher court can overrule the
previous decision and create a new precedent.
In the case of a lower court disapproving of a precedent
established by a higher court in the same hierarchy, then the
original precedent is followed, but reluctantly. All the judge
can do is apply the old precedent, but in their obiter
comments explain their disapproval of the precedent.

Gillard v Wenbon
Intoxicated driver
fell asleep in the back seat of his car
In the morning turned on the engine to start heater
to warm himself up
But fell asleep in the front seat with the engine
running
Accused found not guilty of being in charge of a
motor vehicle




Distinguishing a previous precedent
Davies v Waldron (1989)
Intoxicated driver
Sitting in the front seat of a car and had
attempted to start the engine o his car.
The accuseds lawyer argued that he started the
engine for a friend to drive, as the engine was
difficult to start
there was no other person in or near the car
when the police found him
Found to be guilty of being in charge of a motor
vehicle
The judge in the Davies v. Waldron (1989) case
was able to distinguish between the facts of the
case from Gillard v. Wenborn
In Davies v. Waldron distinguished the case
saying, in Davies v Waldron the driver found
attempting to start the car (and was at risk of
driving), whereas the accused in Gillard v.
Wenborn was found asleep in the drivers seat
with the car running, and was not at risk of
driving.
In Davies v. Waldron, the judge found the
accused did start to drive motor vehicle within
the meaning of the Road Safety Act.

Overrule
The ANU (Australian national University) sued AON
(insurance company)after ANU suffered damages to its
buildings in Canberra after a bushfire in 2003, In 2004 the
parties settled out of court.
New information came to light and ANU wanted to settle
change its Statement of Claim against AON, to introduce
new claims. The judge granted ANU permission to amend
the Statement of Claim.
AON appealed to the Court of Appeal against the
decision to allow them to amend the Statement of Claim.
The Court of Appeal dismissed the appeal.
AON appealed to the High Court , which then allowed the
appeal, against the ANU to amend the original Statement
of Claim to be heard.
.
Overrule
In a 1997 case Queensland v. JL Holdings, a precedent
was set, allowing a party in a civil case to adjourn (delay)
a trial, even after it had commenced, in order to make a
substantial amendment to its case,
The trial judge allowed this to occur in order to attain
justice, as long as it paid some of the other partys
costs.

The High Court overruled its previous precedent
set in 1997, (allowing a party to adjourn (delay) a
trial in order to make a substantial amendment
to its case, as long as it paid some of the other
partys costs).
The High Court in the AON case overruled
this decision and placed limits on a parties
right to make changes to their claims,
particularly once litigation had begun
Reverse
In the Studded Belt Case
(Deing v Tarola 1992) a 20yr
old man was apprehended by
police at McDonalds. He was
wearing a black leather belt.
The belt had raised studs.
He was charged with an
offence under S6 of the
Control of Weapons Act 1990
(Vic)
His case was heard in the
Magistrates Court and he
was found guilt , as it fitted
the description of one of the
weapons listed in the Control
of Weapons Regulations
1990.

An appeal was lodged in the
Supreme Court and the
Supreme Court decided
differently to the Magistrates
Court.
The judge concluded that the
studded belt was not a
regulated weapon.
The Judge upheld the appeal
against the conviction and
ordered that Tarola be
acquitted.
This therefore reversed the
original decision of the
Magistrates Court.


Disapproving a case
An old British common law principle allowed animals to
roam free, without requiring them to be restrained by a
fence and the landowner did not owe a duty of care for
their straying stock.
Mr and Mrs Trigwell (1978) were injured in a car crash
when a vehicle collided with their car after hitting two
sheep. They sued the driver of the other car and the
owner of the sheep for damages.
The High Court decided to follow the old common law
that the landowner did not owe a duty of care for their
stock straying from their land onto the highway
In Obiter statements the judge stated his
disapproval of the old common law, but even so,
was reluctant to change the law as he felt law-
making should be left to Parliament.
the Victorian Parliament decided to follow the
suggestion made by the judge in the Trigwell case
and it passed the Wrongs Animals Straying on
Highways) Act 1984 (Vic)
This Act abolished the common-law immunity and
made owners of land liable for damage negligently
caused by their animals straying on highways.
Common law the area of law developed by the
courts, judge-made law

Statute law laws made by parliament

Different areas of law often develop through a
combination of common law and statute law. If
parliament have yet to legislate in a particular area of
law, the courts are left to decide such legal issues on a
case by case basis (example: the rights of transgender
people). In resolving such disputes in court, judges will
make decisions (precedents) that will then be used to
guide decisions in future cases. Also these precedents
and obiter statements can guide parliament about
future statute law.

Statute Law and Common Law
Homework: Answer the following exam question:
Outline the operation of the Doctrine of Precedent 6 marks
Paragraph your work, include the following words in your
response and underline them. Dont use dot points.
Court hierarchy
Stare decisis
High court, supreme court, Court of Appeal
A case has to come to a court
Ratio decidendi
Similar material facts
On appeal
Novel case
Obiter dictum
Binding and persuasive precedent
R.O.D.D.

Development of law of negligent advice
Wrong advice given
Not successful because bank had
disclaimed responsibility
Obiter there ought to be a duty of care
owed for negligent advice
Hedley Byrne v
Heller (UK)
Wrong advice given
Followed obiter from above as persuasive
Shaddock successful because a duty of
care is owed when advice is given in the
course of business
Shaddock v
Parramatta City
Council
Wrong advice given
Sibberas successful in original trial
Trial judge followed precedent set in Shaddock v
Parramatta City Council
Decision reversed on appeal and Norris successful
Appeal judge distinguished Shaddock case saying
that Norris was NOT an expert in financial matters
and therefore did not owe a duty of care
Norris v
Sibberas
Ex post facto
Courts can make laws ex post facto after
the action or omission has taken place
They decide on a situation that has already
taken place
In the case of Grant v Australian Knitting
Mills the law of negligence was made after
the act the knitting mills where acting within
the law at the time and were later found to
have broken the law