Comerical Law - Lecutre 1

COMMLAW 1004 Lecture slides-Week 1 10/02/2015

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Lecture 1 The Legal System

Textbook chapters 1-4

What is law?

Sources of law Statutes - rules made by parliaments

Parliament Powers

Interpretation of statutes

rules of statutory interpretation

Judge made law (common law)

Validity and conflict of legislation with court rulings

Mabo (No 2) 1992 (common law)

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Tutorials

Start in Week 2 (next week- not this week)

Tutorial A is on applying the various rules

of statutory interpretation.

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What is Law?

Law is generally defined (p6) as:

A set of rules, developed over a very long

period of time regulating peoples interactions

with each other and which sets standards of

conduct between individuals and other

individuals, and individuals and the

government and that are enforceable through

sanction.

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What is Law?

Put another way law can be defined as:

The norms that regulate our behaviour in a

society where the breach of those laws attracts

a punishment or remedy.


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What is Law?

Justice and the law

A concept that is closely associated with law is

justice which means that which is right or

fair.

Justice is difficult to define but Lord Denning,

suggested: It is not a product of intellect but of spirit. The nearest we can

go to defining justice is to say that it is what right-minded

members of the community those who have the right spirit

within them believe to be fair.

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What is Law?

A sobering thought:

Laws do not change the heart but they

restrain the heartless.

Martin Luther King

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Characteristics of a legal system

Certainty (law must be as clear as possible

and so predictable so people can conduct

their affairs knowing what the law is);

Flexibility (law must be able to respond and

adapt to changing circumstances);

Fairness (law must be seen to be fair and

reasonable as if not people will not

comply); and

Accessibility (people are able to find out

what the law is). 8

Sources of law

Two main sources of law in Australia:

Common Law

Statute Law (legislation)

International law is not part of domestic law in Australia until implemented by Federal parliament.


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Common Law/Statute law

Law made by the Courts and that has been developed over time is known as the common law or case law or judge made law.

Law made by Parliament is known as statute law or legislation or Parliamentary law.

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Common Law

The term common law applies as after the Norman conquests of England in 1066 English kings/queens sent travelling judges around England to administer the royal justice.

The judges initially applied local customs, which varied from place to place.

Eventually, the judges began to follow earlier decisions (precedents) and the rules gradually became common throughout all of England and so came to be known as the common law.

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Law of Equity Common law became restricted due to procedural limitations

and its only possible remedy was compensation which could lead to unfair outcomes.

Where a citizen was aggrieved by a decision of the courts, or where no court action was possible, the citizen could petition the king/queen for relief.

The kings chancellor was empowered to settle these petitions according to good conscience and from these cases the law of equity was built up.

In time separate courts were established to hear equity cases.

In 1873 the laws of equity and the common law were fused into one system.

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The legislation relevant to this course

Commonwealth legislation (we will focus on in this course)

eg Commonwealth of Australia Constitution Act 1900 (UK)

Acts Interpretation Act 1901 (Cth)

Australian Consumer Protection Law (ACL) 2010

State legislation (relevant to this course)

eg Frustrated Contracts Act 1988 (SA)

Civil Liability Act 1936 (SA)


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Three Parliament systems have

influenced South Australian law UK (mainly pre 1856)

Queen

House of Lords

House of Commons

SA (from 1836) Governor

Legislative Council

House of Assembly

Cth (from 1901) Governor General

Senate

House of Representatives

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Why do we have such a messy

system?

Colonisation 1836

Federalisation 1900

Reconciliation 1992/2008

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Origins of Australian law The doctrine of reception (p23)

Colonies established by England were classified as

either:

i Territory acquired by treaty or military victory, in

which case the existing institutions were largely

retained; or

ii Territory that was terra nullius, i.e., the inhabitants

were not recognised and there was no existing legal

system and so all of the laws of England applied at

the time of conquest.

This second view is how Australia in 1788 was

viewed and so the English legal system of the time

applied in Australia by default.

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Origins of Australian law

Native title

In the case of Australia, this meant no recognition

was given to the rights of the Aboriginal people.

In 1992 in Mabo v. Queensland (No. 2) (1992)

(p24) the High Court acknowledged for the first

time that Australia had not been terra nullius and

that common law does recognise a form of native

title to land.

Therefore the High Court made it clear some

aboriginal legal rights did survive European

settlement.


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Customary law

The Mabo decision related specifically to

Aboriginal land rights. It is still the law today.

In Walker v. New South Wales (1994) (p25) the

court discussed the validity of Aboriginal

customary law relating to criminal cases. The High

Court decided that customary tribal criminal law

had been extinguished by the legislation enacted by

the States and Territories. So Aboriginal criminal

or tribal law is still not recognised in Australian

law today.

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Origins of Australian law (p28)

1828 to 1850

The Australian Courts Act 1828 (UK) allowed

for the creation of Australian courts and marked

the beginning of the evolution of Australian law

as from this date English laws only applied in

Australia if there specific particular provisions for

them to do so.

The Australian Constitution Act 1850 (UK)

enabled the colonies to create local law making

bodies (i.e. parliaments), which was the next step

towards legal independence.

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1836

South Australia was proclaimed as a State on 28th

December 1836.

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All English laws

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1836


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What happened in 1836?

All the applicable statutes and common

law of England arrived in SA

and remained even if repealed later in UK.

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SA statutes

1836-1856 - Governors proclamations

1856 SA Parliament established

Has power to pass a statute about anything

(peace, order and good government)

but only applies in SA

SA introduced Australias first income tax in

1884.

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Colonial Laws Validity Act 1865

(Imp.) (p29) This Act established that the colonies had the right to

amend their own constitutions and that they could enact

legislation without necessarily applying English domestic

law to Australian law, provided that no English statute

directly applied to the colony.

Where an English law contained express provisions that it

was to apply to Australian colonies then it was said that it

had paramount force and so English law could still

override Australian laws.

This paramount force principle continued until the

Australia Act was passed in 1986!

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1901 Federation


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Federation- 1901 (p31)

The Commonwealth of Australia Constitution Act 1900 (UK) proclaimed the creation of the Commonwealth of Australia on 1 January 1901.

A new level of federal government was established

- a national parliament with jurisdiction set down in

the Commonwealth Constitution (with some

exclusive powers).

State parliaments had jurisdiction within their own

borders on any matters not specifically reserved for

the Commonwealth (residual powers).

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Commonwealth Parliament (p36)

Legislative Powers:

Exclusive powers which are exercisable only by

the Commonwealth: sections 52 (trade between the

States), 90 (customs and excise); marriage s51(xxi)

Concurrent powers which are exercisable by

either Commonwealth or State parliaments and are

granted specifically to the Commonwealth (under s

51-some of these powers are exclusive) but remain

within the law-making capacity of the States; and

Residual powers which are all non-exclusive and

non-concurrent powers (eg. education, transport).

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Commonwealths concurrent powers in

s51 Most of the Commonwealth powers are held

concurrently (shared) with the States eg s51:

Trade and commerce with other countries and among the States: (i).

Taxation that does not discriminate between the States: (ii).

Postal, telegraphic, telephonic, and other like services: (v).

Foreign corporations, and trading or financial corporations formed within the Commonwealth: (xx).

External affairs: (xxix) 28

Commonwealth does not have certain

powers

Commonwealth cannot legislate in respect of religion, section 116.

Section 116 states:

The Commonwealth shall not make any laws for establishing any religion, or for imposing religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth.

Does this allow for freedom of speech?


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To change the powers of the

Commonwealth (p40)

To change the Constitution requires a referendum

which is set out in section 128.

Approved by an absolute majority of both Houses of

Parliament,

Referendum (vote) approved by majority of the voters in a

majority of the States, and

The Governor-General gives Royal Assent.

To date there have been 43 proposals to change the

Commonwealth Constitution and only 8 have been

successful.

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State Constitution Constitution Act 1934 (SA)

Gives general (residual) legislative powers to State Parliament.

Limitations on State powers:

Powers reserved exclusively to Commonwealth Parliament: s90 (customs and excise) & s115 (currency) Commonwealth Constitution.

State cannot tax Commonwealth property: s114 Commonwealth Constitution.

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Relationship between Commonwealth &

State legislation

s109 Commonwealth Constitution.

If State legislation is inconsistent with

Commonwealth legislation, the latter

prevails.

State legislation is invalid to the extent

of the inconsistency.

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Expanding Commonwealth power

More and more national business

regulation is coming from the

Commonwealth as the States have

referred their powers to the

Commonwealth.

Example: Corporations; consumer

protection and income tax powers.


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Interpreting legislation

Approaches include:

Commonsense rules

Rules of statutory interpretation

1. Literal rule; or

2. Golden rule; or

3. Mischief rule.

Purposive interpretation required

Extrinsic materials discretion

Presumptions

Maxims

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Interpreting legislation Why do we need rules to interpret legislation?

Lord Evershed in 1961 described statutory interpretation as the intellectually exacting but spiritually sterilising duty of interpreting the enacted law.

Different words can mean different things and rarely, if ever, is legislation drafted with such precision that the need for interpretation would never arise.

Lord Denning (in a 1949 case) stated that the English language is not an instrument of mathematical precision and that drafters are not gifted with divine prescience.

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Interpreting legislation Justice Donaldson in Corocraft Ltd v Pan Am Airways

(1968) stated:

The duty of the courts is to ascertain and give effect to the will of Parliament as expressed in its enactments. In the performance of this duty the Judges do not act as computers into which are fed the statutes ...and from whom issue forth the mathematically correct answer...they are finishers, refiners and polishers of legislation which come to them in a state requiring varying degrees of polishing.

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Commonsense rules to help

interpret legislation An Act is to be read as a whole and a word interpreted in

its context.

General words that are not defined are to be given their ordinary (dictionary) meaning.

Technical words that are not defined are to be given their technical meanings.

A word used more than once in an Act is assumed to be used with a consistent meaning throughout the Act.

If a different word is used where the same word could have been used, it can be assumed a change of meaning is intended.


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Rules of statutory interpretation (p107)

1 Literal rule

The courts assume that the meaning and intent of the legislation is clear and so the courts do not have to do anything more than give effect to those words.

The intention of the legislation is derived from the words in the Act.

Those words are to be given their ordinary meaning (unless the intention shows otherwise, eg a word is expressly defined).

The Court is not concerned with the consequences of the interpretation. 38

Rules of statutory interpretation

Literal rule

This approach is defended on the grounds that it is the responsibility of the author to draft the text carefully and so if a literal reading reveals gaps in the law or results in an outcome contrary to the authors intention, then it is the authors fault, not that of the interpreter.

Higgins J in Amalgamated Society of Engineers v Adelaide Steamship Company Ltd (1920) 28 CLR 129 stated:

...a statute is to be expounded according to the intent of the parliament that made it; and that intention has to be found by an examination of the language used in the statute as a whole. The question is, what does the language mean; and when we find what the language means in its ordinary and natural sense, it is our duty to obey that meaning, even if we think the result to be inconvenient or impolitic or improbable.

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2 Golden rule (p108-9) The court uses the plain meaning of the words

used in the statute.

However, the Court takes into account the consequences of a particular interpretation.

If absurdity or inconsistency results, the Court will modify the ordinary meaning of the words to overcome that result, Lord Wensleydale in Gray v Pearson (1857).

However, the rule requires a mistake in the wording of the Act before it is applied.

The Court can modify by reading words into the Act or correcting typographical errors.

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Lee v Knapp [1967] 2 QB 442 (p109)

Section 77 of the Road Traffic Act (1960) (UK) provides that it is an offence not to stop after an accident.

Lee was involved in a motor vehicle accident with Knapp and he argued he did stop after the accident (momentarily) and then drove off.

The court rejected such a literal approach as it was absurd (as to stop means to stop long enough to exchange details and other necessary information) and so Lee was found guilty of the offence.


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3 Mischief rule (p109)

The Court is to determine the purpose for the

passing of an Act.

The preferred interpretation will be the one that

advances the purpose of the Act.

Need to look at the overall intention of the

legislation and try to find out what mischief the

Act was trying to remedy.

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Smith v Hughes 1960 (p109)

Offence for a prostitute to solicit in a street.

To try and get around the wording of this law, some prostitutes were not in the street but began to try and attract business by standing at their windows or on their balconies and calling out to passers-by.

Purpose of the statute was to clean up the streets so people could use them without being solicited by prostitutes.

Has an offence been committed?

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Smith v Hughes 1960 (p109)


Not if apply literal rule- as not standing on street when trying to attract a customer.

Yes- if apply mischief rule- as the law was aimed to prohibit this type of conduct.

Judge used the mischief rule in this case to give effect to the legislations purpose, which was to clean up the streets and make them safer for families to walk down.

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Fisher v Bell 1961 (p108)

Offence for flick knives to be offered for sale.

Flick knives were displayed in a shop window with prices attached.

Offer for sale is an indication of an intention to make a contract of sale on the terms stated and is distinguished from an invitation to make an offer.

Purpose of the statute was to restrict the sale of offensive weapons.



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Fisher v Bell 1961 (p108)

Court said NO- display in window is just an invitation to treat

Court used literal rule to achieve result it wanted

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Acts Interpretation Act 1901 (Cth) (p110)

Section 15AA(1)

In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.

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Acts Interpretation Act 1901 (Cth)

Section 15AB(1)

Court may consider extrinsic materials

(a) to confirm that the meaning of the provision is the ordinary meaning

(b) to determine the meaning of the provision when:

(i) the provision is ambiguous or obscure; or

(ii) the ordinary meaning leads to a result that is manifestly absurd or is unreasonable.

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Statutory interpretation

Courts are cautious in using s15AB.

Often ends up shifting the problem of interpreting words in a statute to interpreting words in the extrinsic material.


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Presumptions

Presumptions are staring points in the law (a default position) but they can be rebutted by clear evidence to the contrary.

There are a number of presumptions that apply to contract law and we will look at these soon.

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Maxims (p111-12) There are a number of these aim is to help make

interpreting words easier.

Example

General words at the end of a list of specific words will be read down to the same meaning as apply to the specific words- ejusdem generis (of the same kind or class).

e.g. If a law stated, no person was to have in their possession heroin, cannabis, cocaine or any other drug.

Would a person be guilty of this offence if they were in

possession of a tablet of aspirin or cold tablet?

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Maxims In applying this ejusdem generis maxim, the term any

other drug would be interpreted to mean a drug falling within a class of drugs like the drugs listed before it (heroin, cannabis, cocaine) and so aspirin or cold tablets would clearly not fall within such a class.

The other drugs- heroin, cannabis and cocaine are all illegal and/or addictive whereas aspirin and cold tablets are not illegal nor addictive.

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Judge made law-common law

Topics:

Historical background

Court hierarchy

The doctrine of precedent (also called stare decisis)

Court cases used as authority to decide later cases involving similar facts.

All cases in textbook are to be treated as binding precedents.

Parties to a Court case


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Common law-English tradition

(see discussion on pages 14-15) Although parliament is supreme in our liberal

democracy system it has chosen to not be the

only source of all law.

It has left intact much of what is called the

common law.

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Civil law-European tradition (p12)

Most European countries, such as Germany,

Spain, France and Italy operate under a civil

law system.

Rules under a civil law system appear in the

form of a Code, such as the Napoleonic Code.

Judges in a civil law system merely interpret

and apply the statutes and codes. They do not

create law.

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Judge Made Law-Case Law

Background to Australian tradition Common Law

Originally Courts heard only contract, tort and recovery of property disputes (needed a cause of action).

Courts offered only limited remedies, such as damages and recovery of property.

Law of Equity

Overcame deficiencies of the Common Law by supplementing it with a body of rules that provided justice according to equity and good conscience.

More appropriate remedies were given.

Fusion of Common Law and Equity in 1873 (so now one system)

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Hierarchy- State courts

High Court

Supreme Court

District Court

Magistrates Court

Specialist Courts include:

Environment Resources & Development Court

Licensing Court

Industrial Relations Court

In SA the Magistrates Court has jurisdiction to hear matters involving personal injury claims arising from a motor vehicle accident up to $80,000. There is also a small claims division that hears claims up to $6,000.


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Hierarchy-Federal Courts (p50)

High Court

Federal Court

Family Court specialist Court

Federal Magistrates Court

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Doctrine of Precedent (p94-101) Rules of precedent include:

Court must give reasons for its decision (ratio decidendi)

Court must follow and apply a decision of higher Courts in the same jurisdiction in cases involving similar facts.

Courts at the same level are not bound to follow and apply their own previous decisions, although they often do. The Magistrates Court is not a court of record and so its decisions do not get published.

Decisions of the highest court in a jurisdiction are final.

Decisions of Courts in another jurisdiction are not binding authority, but may be persuasive authority. (But all cases in textbook and for this course are to be treated as equally binding).

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Other aspects of the doctrine-p101

Ratio decidendi reasons for a decision- binding.

Obiter dictum observations not necessary to the decision (things said by the way)- persuasive only.

Reversed higher Court changes the decision of a lower court and upholds the appeal.

Overruled higher Court changes the law by setting a new precedent.

Distinguished not applying a precedent because the facts of a case are sufficiently different to the precedent.

Adopted- a court follows an earlier decision of the same or higher court.

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Parties to a Court case (chapter 3-p76)

Parties are referred to differently depending on whether case is a first hearing or an appeal.

Plaintiff - the person starting a civil action.

Defendant - the person defending a civil action.

The plaintiff has the burden of proof (onus) to

prove the case on the balance of probabilities.

Case name lists first the party bringing the action.


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Parties to a Court case-p77

For appeals:

Appellant - a person appealing against a previous

decision and who can be either the plaintiff or

defendant from the first case.

Respondent - the party who was successful in the

first action.

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Parties to a court case

A v B

natural persons

corporations

governments (Crown)

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Adversarial system (p77-79)

Features of the adversarial system

Two opposing sides who argue their case in a court

presided over by a neutral third party (e.g. Judge).

One side will win; one side will lose

In a civil case parties prove their case. on the balance

of probabilities.

In a criminal case the Crown proves the case beyond

reasonable doubt.

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Criminal cases

For criminal matters:

Crown - represents the state in a criminal action

against an accused.

Accused - the person against whom a criminal

action is brought by the State.

The Crown has the burden of proof (onus) to

prove the case beyond reasonable doubt.


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Are criminal and civil trials different?

Criminal Civil Initiator Government Citizen

Outcomes Fine/Jail Money

Burden Prosecution Plaintiff of proof

Standard Beyond Balance of proof reasonable of

doubt probabilities

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Approach to answering a legal

problem

IRAC APPROACH

Basic steps:

Read the facts and Determine the

Relevant Issue.

Identify the Relevant Law that might

apply and Identify the laws required

elements.

Apply the law to the relevant facts.

Reach a Conclusion

Comerical Law - Lecutre 1

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