Lecture 1 - Introduction to the Common Law System in Australia

The Law
The law is a social mechanism which constrains or restrains behaviour: it is both restrictive
and permissive. Jurisprudence is the science of defining the law.

Classification of Laws
Laws are generally divided up into two main categories: public law and private law.

Public Law
This is the area of law concerned with public interests. It includes administrative,
constitutional, criminal, industrial and taxation law. Public international law governs the
relations between states, and is generally found in UN resolutions or treaties.
Private Law
This is the law of things between individuals. It includes contract, torts, succession,
property, corporate and banking law. Private international law involves determining which
country has jurisdiction when there are multiple countries in which a claim could be made.

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The Common Law

As a System of Law
Australia, like a few other countries, is under the common law system. This comes from the
English system, which combines customary law, judge-made law and parliamentary law.
Other countries have different legal systems, such as civil law in most of Europe, Islamic law
and Roman law.
The common law system is adversarial and relies on legal precedent. Two parties advocate
before a judge. Precedent means that a court is bound to follow the latest ratio of a court
higher in the same hierarchy (Broome v Cassell). Judges are more important in common law
systems, as they make and adjudicate the law. However, a judges decision can be overruled
by Parliament.
On the other hand, the civil law system is more inquisitorial and relies on codes. The chief
feature of the common law system is that judges decisions in pending cases are informed
by the decisions of previously settled cases. Civil law is used in most of Western Europe and
their colonies. The law is derived from the civil code, so the role of judges is diminished.
As a Division of Law
Common law remedies and actions are separate from substantive law (rules of law such as
statutes) and procedural law (i.e. equity). Common law has its own rules, remedies and
procedures.
As a Source of Law
Common law is also called judge-made law, since it is derived from the decisions of judges.
This is different from other sources of law, such as statutes, legislation and international
law. Some areas combine a few sources - law of torts is mainly from common law, but the
Civil Liability Act 2003 also influences decisions.

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What a Court Case is About:

Under private law, a court case is essential a legal battle between two parties in order to
resolve the dispute. Conversely, public law court cases are about deciding whether a person
is guilty or not.
Some Definitions

Action / Matter - A legal case

Hearing - A case argued or dealt with before a court

Jurisdiction - The range of legal cases that the courts can hear

Plaintiff - The party that commences legal proceedings in a civil case

Defendant - the other party in a civil case

Summons / Writ / Statement of Claim - A document issued by the court on

request of the plaintiff

Accused / Defendant - The person being accused in a criminal trial

Appellant - The party appealing a previous decision

Respondent - The other party

Affidavit - A written statement from a witness

Doctrine of Precedent
General Rules
1. A court is bound by the decision of a court higher than it in the same hierarchy.
2. A court is generally not bound by its own previous decisions, but there should be
reluctance to depart from them (Nguyen v Nguyen).
3. The decision of an intermediate appellate court from a different hierarchy is not
strictly binding on a court in a different hierarchy, though the decision is very
persuasive (that is, presumptively binding).
4. English court decisions
a. No decision after 1986 is binding on Australian courts (Australia Act 1986).
b. No English decision, whenever made, is binding on the High Court of Australia
(Viro v The Queen)

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c. No decision of English Court of Appeal or lower courts in the English

hierarchy are binding on courts in Australia, irrespective of when they were
made (Cook v Cook).
d. There is no precent on point regarding whether lower courts are bound by
pre-1986 decisions of House of Lords or Privy Council, but there is a view that
they might be bound but that superior courts may not be (Cook v Cook).
5. A superior court in the same hierarchy is not strictly bound by the decision of a court
lower in the same hierarchy; however, a superior court may indeed follow the
decision.
6. Obiter dicta is never binding because it is not the ratio of the decision. However, if
obiter is used in the High Court of Australia it will be very persuasive to lower courts.
(Bone v Commissioner of Stamp Duties) It may even be considered to be ratio in the
absence of any other precedent (Hedley Byrne v Heller).
If a decision of a higher court is followed by a decision of a still higher court, the lower could
should follow the later decision, because the later decision will be taken to have overruled
the earlier decision impliedly (Ratcliffe v Watters). However, if the later decision of the
higher court contains only obiter on the issue, the court should follow the ratio of the
immediately superior court (Jacob v Utah).

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Waltons Stores v Maher (1988)

Facts
Waltons had negotiated with Maher to lease a piece of land that he owned. Maher was to
demolish a building on the land and then build a new one. A draft lease was sent to
Mahers lawyer, who suggested some alterations. Mahers lawyer then informed Waltons
that the lease had to be agreed upon quickly, as Christmas was approaching and Maher
had to organise building materials before the holiday period. It was made clear that
Maher did not want to start the demolition until the lease was finalised.
The Waltons Stores solicitor sent new documents with the message: You should note
that we have not yet obtained our clients specific instructions to each amendment
requested, but we believe that the approval will be forthcoming. We shall let you know
tomorrow if any amendments are not agreed to. Maher executed the documents and
heard no more from Waltons, so he went ahead with the demolition.
Waltons decided not to go ahead with the lease, and learnt of the demolition. However,
they did not respond to Mahers letters until a week later, by which time Maher had
commenced construction of the new building.
Legal Issues
Was Waltons Stores bound to proceed, even though the documents had not been
executed properly under s 54A(1) of the Conveyancing Act 1919 (NSW)?
Ruling
The case illustrates the relationship between common law, equity and statute law. Before
the High Court, it was held that, even though there was no binding contract (as Waltons
had not signed the documents), Waltons still had an obligation to Maher. Brennan J came
to this conclusion using the principle of equitable estoppel.
In this case, the issue of contract was determined using the principles of the common law.
Statute law was used to interpret the Conveyancing Act 1919 (NSW). Finally, equity was
used to provide equitable estoppel. Note that any rules in the statute law will override
the common law and equity.
Brennan J: In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff
to prove that (1) the plaintiff assumed that a particular legal relationship then existed
between the plaintiff and the defendant or expected that a particular legal relationship
would exists between them (2) the defendant has induced the plaintiff to adopt that
assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the
assumption or expectation; (4) the defendant knew or intended him to do so; (5) the
plaintiffs action or inaction will occasion detriment if the assumption or expectation is
not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by
fulfilling the assumption or expectation or otherwise.

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Broome v Cassell (1972)

Facts
The case itself concerned two consolidated actions for libel on the publication of a book.
The plaintiff was a Navy Captain who was a Commander at the time of the events in the
book. The book describes a naval disaster involving the PQ17, which was under the
plaintiffs command. Questions of exemplary damages had arisen.
The relevant point for this topic is that the Court of Appeal dismissed the appeal, but in
doing so, gave the opinion that the House of Lords decision of Rookes v Barnard was
wrongly decided and was not binding upon them. It was, so they said, arrived at per
incuriam, and without argument from counsel. The Court of Appeal directed the judges of
first instance to disregard the decision.
Legal Issues
Was the Court of Appeal allowed to ignore the decision of a higher court, the House of
Lords?
Ruling
The case upholds the concept of precedent, insofar as lower courts must follow the ratio
of courts above them in the judicial hierarchy.
The Court of Appeal was at liberty to say that they felt a case needed to be re-examined
by the House of Lords
Lord Hailsham: It is not open to the Court of Appel to give gratuitous advice to judges of
first instance to ignore decisions of the House of Lords in this way The course taken
would have put judges of first instance in an embarrassing position Much worse,
litigants would not know where they stood Whatever the merits, chaos would have
reigned until the dispute was settled, and, in legal matters, some degree of certainty is at
least as valuable a part of justice as perfection.
The fact is, and I hope it will never be necessary to say so again, that, in the hierarchical
system of courts which exists in this country, it is necessary for each lower tier, including
the Court of Appeal, to accept loyally the decisions of the higher tiers. Where decisions
manifestly conflict, the decision in Young v Bristol Aeroplane (1944) offers guidance to
each tier in matters affecting its own decisions. It does not entitle it to question
considered decisions in the upper tiers with the same freedom. Even this House, since it
has taken freedom to review its own decisions, will do so cautiously.

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Miliangos v George Frank (1976)

Facts
George Frank was a Swiss textile producer that sold textiles to Miliangos, a textiles trade
company located in England. However, MIliangos refused to pay. George Frank sued
Miliangos in Swiss francs for the amount owed. During the process of the litigation, the
exchange rate of England dropped around 40%. As of such, George Frank would lose
money if he should win the case. The issue for the case was whether damages could be
awarded in a currency other than the pound sterling. In a preceding case, Havana Railway
or United Railways (1961), the law was made such that damages can only be awarded in
sterling.
The Court of Appeal had reversed the decision of a lower court, who had followed the
decision of the House of Lords in favour of a later and inconsistent decision of the Court
of Appeal.
Legal Issues
Was the Court of Appeal obliged to follow the Lords or their own decision?
Ruling
The case upholds the doctrine of precedent.
The Court of Appeal should have followed the House of Lords decision in preference to its
own decision. A decision is per incuriam (without care, given without reference to an
earlier judgment relevant to the case) where:
-

The judgment was given in inadvertence to some authority apparently binding in the
court in question

The judgment would have been decided differently if the authority was applied

The only judicial means by which decisions of House of Lords could be reviewed was by
House of Lords itself under its 1966 declaration as to judicial precedent.
Lord Simon: It is the duty of a subordinate court to give credence and effect to the
decision of the immediately higher court, notwithstanding that it may appear to conflict
with the decision of a still higher court. The decision of the still higher court must be
assumed to have been correctly distinguished in the decision of the immediately higher
court.
The Lords overruled their previous judgment. Firstly, the economic climate of the world
had changed and sterling was no longer a stable currency. Secondly, justice could only be
done by awarding damages in another currency, as it was obvious that the loss George
Frank would suffer from this case would be injustice.
However, the claimant applying for damages in a foreign currency must show reason for
the law to permit so based on the losses suffered outside the domestic jurisdiction.

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