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Module 1: Introduction to the Australian legal systemThe great and chief end therefore, of men uniting into Commonwealths, and putting themselves under Governments, is the preservation of their Property [i.e., Lives, Liberties and Estates]. To which in the state of Nature there are many things wanting First, there wants an established known law received and allowed by common consent to be the common measure to decide all controversies between them Secondly, in the State of Nature, there wants a known and indifferent Judge, with Authority to determine all differences according to the established Law Thirdly, in the state of Nature there often wants Power to back and support the Sentence [i.e., judgment] when right, and to give it due Execution. (emphasis in the original)

(John Locke [1690], 2002, pp. 350351)

Introduction

While this course adheres to a rule-based black letter law approach to Australian business, commercial or mercantile law, in this first module we consider the two related foundational issues of (i) why societies need rules, and (ii) the structure or framework of Australias common law-based legal system, with reference to Professor Harts (1961) theoretical exposition of the nature of law and legal systems from an applied sociological viewpoint as set-out in The Concept of Law. His three-part framework of rules of recognition, change and adjudication is used to explain the overall structure of Australias legal system. Students will no doubt understand aspects of this module better as they progress through the course. And while you are not expected to remember all the detail of this first module, you will benefit considerably from grasping the analytical framework it sets out in relation to the nature of law and Australias overall legal system: a composite of the valid, enforceable primary and secondary laws of all the States, Territories and the Commonwealth combined, recognised and executable in courts Australia-wide.

Objectives

On completion of this module, you should be able to:

provide an account of, with reference to Harts (1961) The Concept of Law, why modern societies have a legal system to promote a stable yet dynamic social life

describe the historical sources of Australias common law based legal system within the context of Harts analytical framework

account for the federal structure of Australian government, the division of powers between the Commonwealth of Australia and the States as enunciated in the Commonwealth of Australia Constitution Act 1900 and the role of the High Court as arbitrator in constitutional and other legal disputes

outline the system of precedent with reference to its hierarchical (stare decisis) and case law aspectsthe material facts, ratio decidendi and obiter dictaas well as the leeways of choice that account for much of the common laws dynamics; and

articulate and apply the common law and statute based rules of statutory interpretation developed in order to discern the sense of a statute and give it maximum coherence.

Readings

Textbooks Turner & Trone 2013 Ch. 1

Davenport & Parker 2012 Ch. 1

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Why societies need rules and the components of a modern legal system

In The Concept of Law (1961), Professor HLA Hart of Oxford University expressed reasons similar to Hobbes and Locke as to why social rules are necessary even in primitive societies and a legal system in more sophisticated societies. In brief, society is not a suicide club and so social rules are devised for the maintenance of stable social life. Societies can exist without a legal systemindeed, primitive pre-law communities do so. There, the sole means of social control is the general attitude of the group towards its own standard modes of conduct. Hart calls such rules primary rules of obligation. The content of such rules include, as a minimum, if people are to live in close proximity as a community follow from conclusions about the physical and emotional characteristics of human being and the environment. They are as follows.

Human vulnerability

Approximate equality of physical and intellectual powers

Limited altruism

Limited resources

Limited understanding and strength of will.

There are two main conditions necessary if a society is to live by primary rules alone:

(a) Some restrictions (rules) are necessary on individual freedom to act; contributions to the common good are necessary; and, the majority must adopt and abide by these rules from the internal point of view and

(b) Such a system of unofficial rules is possible only in a small community closely knit by ties of kinship, common sentiment, and belief in a stable environment.

However, in such primitive societies (or in Lockes terms, in the state of nature) unofficial rules have three defectsuncertainty, they are static, and there is inefficiency as regards disputes. First as to uncertainty, the rules dont amount to a system. They are just a, set of separate standards without any identifying or commonmark. If doubts about them arise there is no specified procedure for settling the dispute. Secondly, the rules are static and so rule changes can only occur by slow growth or decay; no means of deliberately and quickly changing the rules exists. Thirdly, the diffuse social pressure by which such rules are maintained is highly inefficient, disputes about rule violation will be endemic and not capable of authoritative and final settlement. Furthermore, individuals may inflict punishment on others for rule violations and, the absence of a monopoly in society on sanctions can lead to endless tit-for-tat vendettas. The basic remedy for these three defects is to supplement the primary rules of obligation with secondary rules of a different kind, which when adopted convert the system of primary rules into a legal system.

The state as defined by Barzel (2002, p. 22):

... consists of (1) a set of individuals who are subject to a single ultimate third party who uses violence for enforcement and (2) a territory where these individuals reside, demarcated by the reach of the enforcers power.

The value of peace, order and good government in societyas opposed to anarchyhas been recognised since time immemorial. Indeed, as Nobel Laureate Douglass North (1981, p. 24) notes, the historical record is that, individuals given a choice between a statehowever exploitative it might beand anarchy, have decided for the former. However, throughout history, enlightened government and efficient social arrangements have been the exception: in a world of non-market decision making, inefficient forms of political structure do persist for long periods of time (North 1981, p. 7).

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Professor Harts three-part legal system

(a) Rule of Recognition (ROR): to remedy uncertainty

Harts solution to the uncertainty of the regime of primary rules is to introduce the idea of the rule of recognition (ROR) which is a rule(s) about other rules. It specifies, some feature or features possession of which by a suggested rule is taken as a conclusive affirmative indication that it is a rule of the group to be supported by the social pressure it exerts (Hart 1961, p. 92). The ROR can take many forms and be simple or complex. More developed legal systems require more complex rules of recognition, not just the location of legal rules but, some general characteristic possessed by the rule. For example, that the rule be enacted by an identified group, or sourced in long customary practice, or the outcome of a judicial decision. Thus the rules are no longer just a discrete unconnected set, but are unified and so we have the notion of legal validitythat a rule is valid if part of an authoritative list of rules. For example, in Australia it is sourced in the common law, legislation and even Aboriginal customary land rightsrecognised sources of law.

(b) Rules of Change (ROC): remedying otherwise static primary rules

Here is required (in its simplest form) a rule that permits change in existing primary rules either to eliminate or modify old rules or introduce new rules governing the conduct of a society. Again, such rules of change (ROC) can be simple or complex. They can confer unrestricted or limited powers on the person(s) or body empowered to legislate, and can state procedural rules that the act of legislating must abide by. And as Hart points out, obviously there is a close connection between rules of recognition and rules of change. Where rules of recognition exist they will have to include legislation as an identifying feature of the rules. That is, the rules of recognition will say that valid rules include those enacted in accordance with the rules of change and by the body the rules of change empower to legislate.

(c) Rules of adjudication (ROA): remedying inefficiency of diffused social pressure

Here by secondary rules rules of adjudication (ROA)individuals and institutions are empowered to authoritatively determine whether primary rules have been broken. They may specify both (i) who is to adjudicate and (ii) the procedure. Note that these are not duty-imposing but power-conferring rules, conferring, judicial powers and a special status on judicial declarations about breaches of obligations. Rules of adjudication entail also have rules of recognition, because a courts statement that a rule has/has not been broken involves having the power to make,

... authoritative determinations of what the rules are. So the rule which confers jurisdiction will also be a rule of recognition, identifying the primary rules through the judgments of the court and these judgments will become a source of law.

(Hart 1961, pp. 9495)

Most legal systems with rules of adjudication, besides determining if primary rules have been broken, also prohibit private individuals taking the law into their own hands and give officials exclusive rights to ascertain and impose the appropriate penalties. There is a centralisation of adjudication and the imposition of penalties, especially in relation to anti-social acts of violence to individuals and willful criminal damage to property. However, alternative private law forms of dispute resolution are generally available for purely civil disputes, especially concerning commercial transactions.

Professor Hart concludes by stating that the union of primary and secondary rules is, at the centre of a legal system. Secondary rules include the second-level power-conferring rule of recognition and where such rule exists, both private persons and officials are provided with authoritative criteria for identifying primary rules of obligation, which criteria can take (as noted) a variety of forms.

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However, while a legal system comprises a complex union of primary and secondary rules, the existence of a legal system involves the relationships of law to people who constitute the legal system. In Harts view, there are two minimum conditions necessary and sufficient for the existence of a legal system:

(a) those rules of behaviours which are valid according to the rule of recognition must be generally obeyed. This doesnt require that private citizens have to (internally) accept the primary rules and the rule of recognition, just that theyfrom whatever motiveobey them, though in a healthy society the rules will be obeyed from the internal viewpoint; and

(b) that officials must accept and apply its rules of recognition, criteria of legal validity, as well as rules of change and adjudication. And that these must be:

effectively accepted as common public standards of official behaviour by its officials ... and [who] appraise critically their own and others deviations as lapses ... Evidence for the existence of a legal system must therefore be drawn from two different sectors of social life ... that the rules recognised as valid at the official level are generally obeyed.

(Hart 1961, p. 113)

So, the concept of the legal validity of a rule differs from the notion of its efficacy. A primary rule is valid if it passes all the tests provided by a rule of recognition and is thus a rule of the system , whereas efficacy means,

... the fact that a rule of law which requires certain behaviour is obeyed more often than not, it is plain that there is no necessary connection between any particular rule and its efficacy.

(Hart 1961, p. 100)

(d) Application of Harts analysis to the Australian legal system

An examination of the Australian legal systemin effect a composite of state and commonwealth legal systemsillustrates those agencies that perform all of the above functions. Perhaps it is best approached initially by an examination of the following diagram.

Legislature Executive Judiciary

Parliament Executive Council Courts of Law

(CWealth/States) Ministers Police

Members of Parl Heads of Dept Public Service

Administrative Tribunals

Legal profession

Note that Commonwealth countries (e.g., Australia, New Zealand, the UK as well as the USA) are common law countries. That is, countries in which the law, the structure of the legal system as well as legal principles and processes, i.e., legal rules have their base in that body of rules and institutions developed historically by the English Crown and its law courts, as opposed to European code-based legal systems in which comprehensive legal codes have been enacted covering all aspects of societal life.

Because Australia is a federation, there is a division of legislative power between the Commonwealth and State Parliaments or legistatures. Sections 5160 and 109 of the Constitution sets out the division of legislative powers between them and a tie-breaker rule for inconsistent but otherwise valid laws. To be valid, the Act must comply with or be authorised by that Parliaments constitution. Parliament may also initiate change in the law by simply passing an amendment to an Act or introducing a new Act (provided that the Act complies with its constitution).

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Section 1 of the Commonwealth of Australia Constitution Act 1900 states that: the legislative power of the Commonwealth shall be vested in a Federal Parliament, which shall consist of the Queen [the ruling British Monarch and Queen of Australia], a Senate, and a House of Representatives The constitutions of all Australian states have equivalent provisions.

Section 61 vests the executive power of the Commonwealth in the Queen, exercisable by the Governor-General as the Queens representative. The following sections 6264 establish the Federal Executive Council, its members being the Governor-General and Ministers of State, and authorise officers to be appointed to administer departments of State as established.

Following which, s. 71 provides that the judicial power of the Commonwealth shall be vested in a Federal Supreme Court to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. While s81 ensures that all States must give full faith and credit to each others public Acts and records (including court judgments and decisions).

This analysis however somewhat marginalises the contribution of the Common Law (which includes Equity Lawthe two being fused in the late 19th Century) that forms the basis of Australian legal system and the body of laws in effect. In the textbook, Turner and Trone (2013, pp. 1921) outlines the development of the common law. That body of common principles developed and applied by the judges of the English Crowns common law courts, on circuit, hearing civil disputes and enforcing the Kings peace, i.e., applying the developing criminal law and a slowly increasing body of general legislation including taxation laws. Applying Harts analysis, in a common law system the regime of primary lawsvalid according to secondary rules of recognitionhave two main sources, the common law courts (case law) and the legislature, and laws from both sources hopefully harmonise into one coherent body of law. Because, there is ultimately just one body of (supposedly) internally consistent law. It cannot be that the case law mandates law X and legislation law Y, where X and Y are mutually exclusive and incapable of being simultaneously conformed with, by a person subject, for instance, to Australian law. This potential collision is solved by a conflict of laws rulesimilar to s109 of the Australian Constitution which governs the clash of State and Commonwealth lawto the effect that statute law prevails over inconsistent common law, then invalidated to the extent of that inconsistency.

The Executive of the Commonwealth and each State is responsible for the administration of the laws made by their respective Parliaments. Although the Executive Council makes high-level decisions on how the Acts are to be carried out, it is the public service that executes or administers those Acts on a day-to-day basis. Because decisions made pursuant to Acts of Parliament must be authorised by that Act to be valid, it is useful to have a review mechanism to allow the public to seek review of poor government decisions, apart from any rights of review they might have under their common law-based property, contract and tort law rights. The Administrative Appeals Tribunal carries out this function in the Commonwealth arena and similar bodies in the Australian states and territories.

The Judiciary is responsible for the authoritative determination of disputes either between individuals, individuals and State/Commonwealth instrumentalities, or between States or the Commonwealth and a State. This role is carried out by the various Federal and State courts that make up our hierarchy of courts. The judges are the persons who make the final decision, although in some criminal cases, it is the jury that makes the decision. In order to enforce the decisions of the judges, we must have a police force to compel obedience to the law. The legal profession also assists in the task of enforcement by acting as a go-between between the police and the courts (in criminal cases) or individuals and the courts (in civil cases).

The relationship between the Parliament and the Courts

Although Parliament has supreme law-making power in the sense that it may override any existing law (whether that law be one of an Act of Parliament or a decision of a judgecase law), it may only do so where that Act is within its constitutional power. It is the High Court that is the final arbiter of questions of constitutional validity. It interprets the relevant section of the Commonwealth of Australia Constitution Act 1900 (as amended) and determines whether the particular Act or statute falls within its meaning. If it does not, the Act is invalid.

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It is also the role of the judge to interpret ordinary Acts of Parliament where the meaning of parts of that Act are the subject of dispute. However, when doing so, judges are careful not be seen to be making the law, but simply interpreting and applying the law. Historically, the judiciary developed and applied a series of self-regulating rules about the common law, the relationship between the common law and statute law, as well as how to interpret and apply Acts of Parliament, to avoid any claim or appearance that the judiciary was a rival to the sovereign Parliament in lawmaking.

The so-called rules of statutory interpretation, as judicially developed, were essentially just a series of principles developed to assist courts in ascertaining the true meaning of the words used by Parliament in a statute. Though the three main (rival) principles of interpretation (the literal, golden and mischief rules) that emerged, were not strictly rules of law but were rather, flexible and not strictly binding, supplying a presumption in favour of a particular meaning in the event of textual ambiguity etc. and indicating the meaning which a court ought to give the phrase or section in question when a contrary express or implied intention is absent.

Note however that as authoritatively expressed by the full Australian High Court in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1980) 147 CLR 297, the current Australian non-statutory or common law position as to the interpretation of statutes is a two-part Literal Rule equivalent to the Mischief or Purposive Rule.

While judicially developed rules of interpretation do not strictly bind, statutory rules of interpretation such as (i) ss 15AA-AB of the Acts Interpretation Act 1901 (Commonwealth), and (ii) s14A Acts Interpretation Act 1954 (Queensland), are binding on judges. Sections 15AA-AB and s14A are essentially a codification of the Mischief or Purposive Rule, e.g., as outlined by the High Court in Cooper Brookes. For example, section 14A Acts Interpretation Act 1954 (Qld) states that,

In the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.

However, if Parliament does not like the interpretation offered by the judges, it can pass an amendment to the Act to override the decision, though retrospective overriding by Parliament of a judicial decision affecting private rights is considered an extreme measure and tantamount to a breach of the so-called Rule of Law, which requires equality before the law and that the State not use its statutory powers to modify pre-existing legal rights and transactions, without at least compensation being paid.

The separation of powers doctrine and the rule of law

While Locke (1690) in his Two Treatises of Government, wrote on the separation of the legislative and executive powers of a commonwealth, he adhered to existing views regarding the balancing of power. It was the French philosopher and jurist Montesquieu drawing on Locke amongst others and his familiarity with and admiration of the Constitution of England, who in his 1748 The Spirit of the Laws, developed a genuine doctrine of separation of powers (Neumann 1949, p. lx). This advocated a clear separation of the (third) judicial power in the machinery of the state or government from legislative and executive powers in order to best secure the life and liberty of the subject:

In every government there are three sorts of power: the legislative; the executive in respect of things dependent on the law of nations; and the executive in regard to matters that depend on the civil law When the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner. Again, there is no liberty, if the judicial power be not separated from the legislative and executive. Were it joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control; for the judge would then be the legislator. Were it joined to the executive power, the judge might behave with violence and oppression.

(Montesquieu [1748] 1949, pp. 151152)

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Since Montesquieu, variant models that imperfectly separate the legislative (law enacting) and executive (law enforcing) powers of government but better quarantine its judicial (adjudicative) powers have formed the basis of workable constitutional settlements and enactments including Australias 1900 Constitution. While as Allars (1990, p. 35) notes the pure version of Montesquieus doctrine involves three propositions, it is the third proposition, the personnel of one branch of government should not be members of any other branch exercising any of the functions of that other branch [that] is probably the most fundamental and is designed to protect individual liberty by the dispersion of power. However Allars (1990, p. 35) adds the important rider that, the third principle must be supplemented by a positive doctrine of checks and balances in order to provide a theory about control by one branch over another in the form of checking, of securing accountability.

The related fundamental politico-legal doctrine/principle of the Rule of Lawin its variant versionsto the effect the government must be by law and not arbitrary decree, articulates elements of the construct of the separation of government powers as well as the importance of internal checks and balances. A modest version of the rule of law includes the proposition that:

. individuals [and institutions] having legal authority to apply or enforce norms should do so correctly and consistently and should be accountable for their compliance with legal standards applicable to their decision.

(Allars 1990, p. 15)

This should bring to mind Harts (1961) above second minimum condition for a legal system: that officials must accept and apply its rules of recognition, criteria of legal validity, as well as rules of change and adjudication. In political economy terms, judiciaries are designed as, independent, autonomous and balanced centres of power that can and do check other centres of power, including legislatures (Breton 1996, p. 321). Even though, since other branches or centres of government are generally better resourced, the legal system/judicial centre(s) of autonomous power is generally regarded as the weakest organ of governmentthough this point is debatable. As Justice McHugh (2004, p. 1) notes writing extra-judicially, this weakest organ view originates with the revolutionary American, Alexander Hamilton writing in 178788. Hamilton asserted that the judiciary is beyond comparison the weakest of the three departments of power since it had, no influence over either the sword or the purse and could take no active resolution whatsoever, so that it had to, depend upon the aid of the executive arm even for the efficacy of its judgments (cited in McHugh 2004, p. 1). However, McHugh (2004, p. 2) contests Hamiltons view, correctly asserting that it overlooked three developing aspects of the judiciarys strengths:

The first is the frequency with which the judiciary has been called on to exercise the power of judicial review and declare legislative and executive acts void and of no effect. The second is the importance of the social, economics and political issues that courtsespecially federal courtsmust decide. The third is the underpinning of the judiciarys strength by public confidence in its integrity, impartiality and capacity.

In any event, Montesquieu considered that the political system is only truly democratic where there is a proper separation of power between the three branches of government, i.e., the legislature, the executive, the judiciary. A close examination of the Australian legal system does not fully support this theory, while the legal system of the United States of America with its separate executive does. In these two countries there is however a fairly strict separation between the judiciary and other branches of government.

In terms of personnel, the more influential members of Parliamentthe Ministers of the Crownare members of both Parliament and the Executive. In a Westminster system of government, this cannot be avoided since it is required under the Constitution that Ministers must be members of Parliament and members of the Executive Council. The High Court in the case of Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 referred to the British tradition of cabinet and responsible government and accepted that the interrelationship between the two was unavoidable. However, the High Court argued that democracy was still preserved by the fact of the overall supremacy of the Legislature. The judges however, are separate from the other two branches, in that they cannot be a judge as well as a member of Parliament or the Executive.

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This does not mean however, that they cannot be appointed from Parliament or the Executive. In fact, many are appointed this way, e.g., Chief Justice Sir Garfield Barwick was a former Liberal member of the House of Representatives, Attorney-General and Minister for Foreign Affairs in the Menzies Government. Similarly, Senator Lionel Murphy, Attorney-General in the early 1970s Whitlam Labor Government, later became a High Court Judge. Former High Court Judges are not infrequently appointed to head up the Executive as Governor-General, for example, Sir Ninian Stephen and Sir William Deane. While during World War II, Justice (later Chief Justice) Owen Dixon of the High Court, temporarily abandoned his judicial duties to become Minister/Ambassador to Washington, USA and later on in 1950, was appointed by the United Nations to mediate between India and Pakistan in relation to their Kashmir conflict. However, Dr Herbert V. Evatt eclipsed them all, being successively a High Court Judge at 36, before switching to politics in 1940, becoming Attorney-General, Minister for External Affairs, then President of the United Nations General Assembly in 1948, Opposition leader of the Australian Labor Party during the 1950s, and finally a Justice of the NSW Supreme Court (196062).

In terms of influence, the Ministers (and in particular Cabinet which consists of the senior Ministers) exert a great degree of influence and control over both Parliament and the Executive Council. Because Parliament in the main votes on party lines, and the Ministers are appointed from the government, i.e., the party with the largest numbers in the House of Representatives, the Ministers vote are usually successful. In fact, by convention, if the government does not win the vote in the lower house on an important issue, it must resign.

However, again it is true that little influence is exerted by the legislature or the executive over the judiciary. Although the executive appoints the judge, once appointed, he/she has security of office and cannot be removed except by proven misbehaviour or incapacity, as determined by the Parliament. There are several recent examplesin NSW and Queenslandof a judge being examined by the Parliament regarding his conduct. On both occasions, the judge subsequently left the bench. The executive cannot remove the judge because it does not like his/her decisions. The High Court judges tenure is protected by the Constitution. Although the tenure of the state judge is only protected by an ordinary Act of Parliament, should a government repeal the Act in order to remove a judge from office, it would not survive the public outcry that would occur as a result.

There is also a degree of overlapping between the three branches in the functions that each carries out. Although the main function of the legislature is to make the laws, the executive is also seen as a prolific maker of laws, generating the huge number of delegated laws that assist in the day-to-day operations of the government.

Even though it can be said with assurance, that we have no true separation between the legislature and the executive, it can be said with some degree of confidence, that the judiciary is independent from the other two both with respect to its personnel and its functions: only the courts may exercise judicial power. The High Court affirmed the notion of separation of judicial power in the Boilermakers case (R v Kirby; ex parte Boilermakers Society of Australia (1956) 94 CLR 254 holding that judicial power may only be exercised by a properly constituted court and not by an administrative tribunal exercising executive power (p. 315):

In a federal system the absolute independence of the judiciary is the bulwark of the constitution against encroachment whether by the legislature or by the executive. To vest in the same body executive and judicial power is to remove a vital constitutional safeguard.

What then is judicial power? The nature of judicial power and decision-makingwhich ought not to be exercised by the legislature or executivecan be defined as follows (Allars 1990, pp. 3637):

. a process of inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined [so that] the end to be reached in the process of judicial decision-making must be an act which entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist

The legislative branch

As mentioned earlier, Australia is a federation. The instrument which created the Commonwealth of Australia was an Act of the British Parliamentthe Commonwealth of Australia Constitution Act 1900 (UK). It provided for the creation of a federal government and a unified Commonwealth of States as from 1st January, 1901. Until that date, the Australian continent was divided up amongst a disharmonious, non-cooperative group of British colonies acting independently of and in competition with each other.

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The Commonwealth Constitution therefore created the Commonwealth Parliament, that on its first official meeting adopted the Constitution Act as its first legislative enactment. It is the document that sets out its legislative powers. The drafters of the Constitution followed the model adopted by the United States in giving specific powers to the newly created federal government and leaving the residual (or unstated remaining) powers to the States. The states were given the legislative power to make laws on any topic (with the exception of a few exclusive powers given to the Commonwealth, see below). The Commonwealth was only given the legislative power to make laws on specific areas listed in the Constitution. If a Commonwealth Act is not authorised by one of those specific areas, it is not valid.

The division of legislative power

In order to ascertain the correct division of legislative power in Australia, we must examine the provisions of the Commonwealth Constitution. It provides for three main groups of legislative power:

(i) Exclusive powers

Only the Commonwealth has the legislative power to make laws over those areas listed in the Constitution as exclusive. If a State Parliament attempts to pass a law over one of those areas, it is invalid. The most important example of exclusive power is s90 which provides that the Commonwealth has exclusive power to levy customs and excise duties. Other exclusive powers relate to the seat of government.

(ii) Concurrent powers

Both the Commonwealth and the States have the legislative power to make laws over those areas listed as concurrent. Concurrent powers are specifically given to the Commonwealth in the Constitution but are not exclusive to it, with the result that the State retains a similar power. Where there exists both a Commonwealth and a State law on the same topic, s109 resolves the conflict by providing that the Commonwealth law prevails and that the State law is invalid to the extent of any inconsistency.

The most important section conferring concurrent power is s51. Some of the more important shared powers include trade and commerce, taxation, marriage, divorce and matrimonial causes, external affairs.

(iii) Residual powers

Section 107 of the Constitution expressly saves the legislative power of the States, except where the Constitution withdraws such power eg. the Commonwealths exclusive powers, Constitutional restrictions upon the States, e.g., s114 prevents a State from raising a naval or military force without consent of the Commonwealth; and s115 prevents a State from coining money. Because the Commonwealth can only make laws over its specific powers, it follows that only the States can make laws over its residual powers. If the Commonwealth attempts to pass an Act of Parliament over an area of residual power, that law is invalid.

The High Court and constitutional disputes

Laws, whether made by parliament or by delegated legislation are not necessarily valid just because they have been passed by the relevant parliament, or by the appropriate body or person acting under its authority. It is possible for individuals or governments to challenge the validity of such laws in the High Court, claiming that the law enacted is invalid because it exceeds the law-making powers of the parliament (ultra viresbeyond the powers). Accordingly, if the challenge is successful, then the law is invalid and of no force or effect.

The High Court is the only court that has the power to decide on major issues involving the constitutionality of Commonwealth legislation. Section 75 gives the High Court original jurisdiction (i.e. the exclusive right to hear the case for the first time) over any matter arising under the Constitution or involving its interpretation.

It is important to remember that the power of the High Court in such a case is a power to declare the particular action of the Commonwealth to be either valid or invalid but it cannot rewrite the legislation.

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Amending the Constitution

Section 128 of the Constitution provides that the Constitution may only be altered by way of referendum. In order to be successful, the referendum requires the affirmative vote of:

(a) a majority of both Houses of the Commonwealth parliament to pass by absolute majority the proposed law

(b) a majority of

the voters in a majority of states; and

the voters in the Commonwealth as a whole.

There have been very few successful amendments. One exception was the 1967 amendment to s51(xxvi) that in effect gave Commonwealth Parliament the legislative power to pass laws in relation to Aboriginal Australians, and who then finally obtained full legal status and rights as Australian citizensrights of which they had most extraordinarily previously been deprived.

The common law system of precedent

Legislation is now the predominant of two major sources of valid law (the other, case law) operating within Australias legal system which is, to cite Professor Hart, a combination of primary and secondary rules. The legislative creativity of Parliaments now far exceed that of the law courts. We live, as Sir John Seeley observed in 1885, in a Legislation-State: a form of state devoted to the business of making continual improvements in the life of the community by means of explicit legal innovations, i.e., by parliamentary legislation (Waldron 1999, p. 7). The Australian legal systemthough now dominated by legislation as a primary source of lawis however a common law system. The phrase common law is used in three ways to mean: (i) the legal rules formed by judges in the English common law courts as distinct from the equity courts; (ii) case law sourced legal rules as formed by judges as opposed to legislation-based legal rules; and (iii) the body of legal rules to be found in those countries based on the English system of law in which much of the law is made by judges, as distinct from the law of those counties where the legal system is dominated by codes of law, the civil law systems (Vermeesch & Lindgren 2005, p. 19).

The common law system, is accordingly a complex mechanism devised for producing, identifying, disseminating and applying valid primary rules that have been derived, historically, by judges in the process of formal dispute resolution. While common law judges adhered to the legal fiction that they didnt invent new legal rules (but rather declared themlike a scientific discovery) to cover situations not provided for by the widespread customary rules that they began with from the late 12th century. Over time, vast areas of new law were gradually developed, mostly by extension of existing principles to new fact situations, as for example, commerce expanded, and by analogical reasoning.

In fact, a lot of mercantile practicethe private law rules that merchants all over Europe since the Middle Ages collectively applied to their transactions or lex mercatori was simply borrowed and incorporated into English law by leading judges like Chief Justice Mansfield in the 1700s. Various early contract law innovations e.g. rules about the remoteness of damages as established in the leading case Hadley v Baxendale (1854) were also borrowed wholesale from leading European legal scholars like Robert Pothier (16991772) the French Civil Code, other codes, ordinances and instruments. In turn mediaeval lawyers on the continent had developed a rule of recovery for breach of contract that Pothier refined (Perillo 2004, p. 4).

In this way, and from various sources, whole areas of the law such as contract and the law of torts (damages) were discovered by common law judges. Judicially creativity though more constricted in the 20th century by the vast outpourings of the legislature, continued apace with the wholesale development of administrative law as a constraint on the ever-expanding sphere of state activities.

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The application of the set of common law rules in force, obviously depends upon adequate documentation of the leading cases (case law)the pleadings and arguments submitted by lawyers and the Judges decision with supporting reasonsbeing available to the legal profession, judges and lawyers, as well as the Crown which is responsible for overseeing the whole legal system. And so a system of increasingly reliable and systematic court reporting developed, or Law Reports (see Turner and Trone 2013, pp. 2126). Nowadays the sheer bulk of case law is almost overwhelming, though its accessibility has been improved greatly with the advent of computerisation. All the superior courts maintain an Internet site, with court administration details as well as reported cases being made available.

While historically, the decisions of judges were of persuasive not binding value, the system of precedent hardened over time, so that the previous decisions of higher superior courts in a court hierarchy (e.g., Queensland District Court, Supreme Court and Queensland Court of Appeal, then the High Court of Australia) came to bind courts lower in the hierarchyif that lower court judge wasnt able to avoid that earlier otherwise binding decision on cogent grounds. However, the previous decisions of a judge in a court dont strictly bind later judges in the same courtat least that is the general rule. In some jurisdictions however, such as Queensland, the Supreme Court has regarded itself as bound by its own prior decisions. However, a decision of the full court of the Supreme Court of Queensland (three of more judges) should hierarchically bind a later single judge in that Court. So in effect, Supreme Courts are typically two-tiered: decisions can be heard by either a single judge or the full bench and appeals are permitted to the full bench against the decision of a single judge.

That hierarchical system in which the system of precedent operates is known as stare decisis (Latin for let the decision stand). It is important to note that the High Court, which is at the apex of the Australian legal system (the final court of appeal from the various state court systems as well as the Commonwealths own court system) in contrast to the House of Lords (which until 1966 regarded itself as bound by its earlier decisions) doesnt regard itself as strictly bound by its earlier decisions either but is very reluctant to overrule them. In an exercise of judicial comity, to maximise the degree of uniformity of legal rulesand the common law as a wholethe various Australian State Courts (NSW, Vic, Tas, SA, WA, Qld) do endeavour to follow each others decisions ,and also pay close attention to decisions of the New Zealand Court of Appeal, English Privy Council which still hears appeals from a few Commonwealth countries, and the House of Lordsthe highest British Court.

The Ratio Decidendi and Obiter Dicta of a case

Decisions of a court of law are, in essence, a law-fact complex, combining essential facts (the material facts) and relevant legal rules and principles, as the definition above of legal power suggests.

The identifying mark of the common law system, is that the judge delivers (orally or written) a reasoned account of his/her final decision and orders. Judges in superior courts dont just say: I find for the plaintiff (the person who brought the suit) in the sum of $70,000 against the defendant. While that would be enough for the present plaintiff, it wouldnt contribute to the invaluable build up of case law, because it is the detailed reasoning behind the judgment (really, the orders of the court) which is of real value to later litigants, lawyers and judges. Rather, the superior court judge canvasses the evidence, makes findings of material fact, surveys the potentially applicable law, chooses what primary rules of law to apply, applies them to the material facts and concludes with a decision. The hallmark of the common law system, is that judges meticulously outline and justify their decisions, and that the entire process is public. Judicial decision-making comprises the very public process of practical legal reasoning. Giving reasons is a necessary part of rationality. Indeed for lawyers, justification is at the very essence of argumentation, especially given the contingent nature of judicial decision making. Where it cannot be argued that a decision could not have been decided differently, it is no doubt appropriate to adduce reasons for one possibility of deciding rather than others (Luhmann 1995, p. 285). Furthermore, reasonable legal argumentation is a special case of reasonable practical argumentation because its purpose as Peczenik (1994, p. 147) notes, is not to absolutely justify or ground a normative statement such as a Courts judgment, but to demonstrate that it is reasonable in the framework of valid law.

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Example of the judgment of a court

A Judge might hear an action in tort law (negligence, as opposed to a contract law action) by a plaintiff in which it is alleged, for example, that she had suffered financial damages of $70,000 from the loss of her potato crop. Further, she alleged (in the statement of claim) that such loss was caused by water supplied (actually under contract) for a fee by the defendant containing a toxic substance. If the Judge:

finds that the facts as alleged are proven on the balance of probability (the civilas opposed to criminalevidential standard of proof)

determines that the chain of causation is established between the defendants wrongful actions and the plaintiffs loss

reasons that the legal principle of negligence is applicable because the damage was foreseeable and the defendant failed to exercise due care, and avoid causing that damage

then the Judge would issue a judgment in which damages of $70,000 plus costs (and interest) were awarded to the plaintiff.

The above example is based on Puntoriero & Anor v Water Administration Ministerial Corporation (1999) 165 ALR 337, in which the High Court (by a 41 majority) confirmed the first instance decision by Justice Grove (and a jury) of the New South Wales to award the plaintiffs some $2 million in tort-based damages against a Government Corporation, in relation to their lost potato crop. Students might usefully note that actions for damages in tort law (which we examine in Module 10) often actually occur in the context of contract-based transactions between two parties and that, the modern law of negligence is, in many respects, an offshoot of 19th century contract law (Atiyah 1986, p. 41). The Punteriero family presumably hadin theory at leastequally available to them rights under contract law to sue the Corporation for selling them water toxic to their potato crop. The following extract at pp. 3445 from the joint High Court judgment of Gleeson CJ and Gummow J neatly shows the linkage of material facts, as detailed by Grove J, the chain of causation which was necessary to be established if the action was to succeed and the relevant principles of law.

The jury answered yes to the following questions:

1. Was the damage to the [appellants] crop caused by a phytotoxic substance applied to it with the water from the Cudgel Channel, when the [appellants] irrigated the crop, in October 1992?

2. Between November 1991 and 10th October 1992 was it foreseeable to the [Corporation] that the [appellants] crop could be damaged by the application of contaminants in the irrigation water of the Cudgel Channel?

3. Did the [Corporation] fail to exercise reasonable care in any one of the following ways:

(i) by failing to test the water supply for chemicals likely to damage crops

(ii) by failing to warn the [appellants] that the water was contaminated

(iii) by failing to take any steps to clear the water supply of contaminants which the [Corporation] knew or ought to have known were in the Cudgel Channel

(iv) by permitting and/or allowing the contaminants to be and remain in Cudgel Channel?

Grove Js instructions to the jury included the following passage:

The evidence before you is that if a user draws from the [Corporations] water it goes through the Dethridge wheel and a bill is forthcoming for the amount of water used, so that there is this relationship of supplier and user. Arising out of that relationship there is what the law calls a proximity. The duty is imposed upon each of them to take reasonable care in relation to his or its activities for the other. But the relevant duty upon which this case is founded is that which is imposed upon the [Corporation]; that is to say, the supplier of water. The [Corporation] in this case is required to take reasonable care in relation to its activities so as not to expose the user of the water to unnecessary risks of harm.

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This action in tort law (negligence) was based on the landmark case Donoghue v Stevenson [1932] AC 562 in which Lord Atkin in effect set out a broad and a narrow legal principle. Lord Atkins broad tort law principle (the ratio decidendi or basis for the decision) was that: You must take reasonable care to avoid acts and omissions which you can reasonably foresee would be likely to injure your neighbour (cited in Turner and Trone 2013, p. 737). That broad version of the ratio has been treated as the authoritative version and followed in later cases rather than the equally available narrow version which imposed legal responsibility for the foreseeable damages resulting from the careless manufacture of a consumer item (in this case, an opaque bottle of ginger beer containing a snail).

As Julius Stone (cited in Enright 1995, para. 20.7) has shown, the material facts of a case and related legal rules/principles can be couched in varying degrees of generality. Enright states that, different degrees of abstraction throw up a number of possible ratios and in this way create two or more versions of a principle. This variable degree of ratio abstraction gives judges considerable leeways of choice, and which provides a basis for reasoned judicial creativity. As does the process of distinguishing an earlier case on the facts so as to avoid having to apply it as binding precedent.

Furthermore, not all the judges discussion of the law is always strictly relevant to and/or binding on later courts, only the articulation of legal rules and principles necessary and sufficient to justify that earlier decision. Or as Sir Anthony Mason (former Chief Justice of the Australian High Court) said, the principle or statement of law on which the previous decision is based to the extent to which it is essential to the decision (Vermeesch & Lindgren 2005, p. 62). In brief, that minimal binding component is the ratio decidendithe reason(s) for the decision. In contrast, the obiter dicta comprises the non-essential discussion of legal rules and principles that the judge sees fit to make, which may include a wide ranging discussion of the whole legal issue and suggested solutions for a range of problems beyond the factual base of the present legal dispute. In this way, a case may be authority for more than one ratio and that later courts may expand or contract the scope of that earlier ratio decidendi.

Statutes and statutory interpretation

Although as noted above, the legislative creativity of parliaments far exceed that of the law courts, it is the courts, i.e., judges who authoritatively interpret and apply that legislation (and its interaction with pre-existing common law principles and earlier statutes) in the context of hearing disputes between litigants. Statutes are also frequently amended by parliament so that there is an endless judicial process of interpreting new, and/or amended legislation. The task of reading, making sense of (interpreting and construing) and applying a piece of legislation to a specific set of facts (factual matrix) is really just a specific instance of the general task of making the maximum sense of a document or text. Further, statutory interpretation is to be distinguished from statutory construction. Interpretation refers to ascertaining the meaning of the words used, while construction is the application of the rules of law to the document in question after the sense of it has been established. In reading a document, the object is to discern its sense and give it maximum coherence. Otherwise stated, the overriding endeavour or object of legal interpretation is to ascertain the true intent of the documents author, that true intent being evidence by the language used to convey the writers overall meaning and intent.

Statutes are frequently poorly drafted, often on the run rather than systematically and consequently have gaps and omissions, unintended applications and consequences. Complaints of this sort are not new. But poor legal draftsmanship and deficiencies of language that care and foresight would avoid, doesnt account for all the difficulties that arise in interpreting and applying statutes. As Julius Stone (1985, p. 51) explained, the main problem isnt deficiency of languageits ambiguitybut the nature of language itself:

All word bear potentially many meanings as they appear in different verbal contexts and at different points in time and space. The number of possible meanings can conceivably be reduced on a particular occasion to a single meaning, by reading the words syntactically in their sentences and reading the sentences in their contexts Words like law, equity and civil law, for example, may mean a vast range of things according to time, space and context Even technical terms like estoppel, or negligence may behave this way, though less flamboyantly.

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Turner and Trone (2013, pp. 1618) sets out the judicial principles of interpretation. Those principles are a mixture of:

1. general common law rules (e.g., the literal, golden and mischief rules) with the High Court in Cooper Brookes (1981) having articulated a hybrid version of the literal-purposive rule;

2. statute-based rules of statutory interpretation which now entrench purposive interpretation eg. ss.15AA-AB Acts Interpretation Act 1901 (Cth), s33 Interpretation Act 1987 (NSW) which seek to vary the Courts preference for a literal rule approach, requiring a purposive approach, giving meaning to the words to effect their intended purpose, rather than a strict or literalist approach and s14A Acts Interpretation Act 1954 (Qld), with similar requirements. They also allow (contrary to strict common law rules) resort to extrinsic material (e.g., Parliamentary debates and reports etc) in aid of interpretation; and

3. particular or specific rules and presumptions. These include the maxims of interpretation briefly discussed by Turner in para. [1.420] and more expansively as 14 rules of interpretation by Vermeesch and Lindgren (2005, pp. 7475). There are presumptions for example, that a statute does not have: retrospective effect, abrogate common law rights, extra-territorial effect or bind the Crown. Nowadays statutes frequently override that latter presumption. Section 22 Environmental Protection Act 1994 (Qld) states that, This Act binds all persons, including the State, and, as far as the legislative power of the Parliament permits, the Commonwealth and the other States. While s24(1) preserves existing rights: This Act does not limit any civil right or remedy that exists apart from this Act, whether at common law or otherwise. Similarly, the Environment Protection and Biodiversity Conservation Act 1999 (Cth) provides in s4, This Act binds the Crown in each of its capacities.

References

Allars, M 1990, Introduction to Australian administrative law, Butterworths, Sydney.

Atiyah, P 1986, Essays on contract, Clarendon Press, Oxford.

Barzel, Y 2002, A theory of the state: economic rights, legal rights and the scope of the state, Cambridge University Press, Cambridge.

Breton, A 1996, Competitive governments: an economic theory of politics and public finance, Cambridge University Press, Cambridge.

Enright, C 1995, Studying law, 5th edn, The Federation Press, Sydney.

Hart, HLA 1961, The concept of law, Oxford University Press, Oxford.

Locke, J 1690, 2002, Two treatises of government, edited with an introduction and notes by Peter Laslett, Cambridge University Press, Cambridge.

Luhmann, N 1995, Legal argumentation: an analysis of its form, The Modern Law Review, vol. 58, no. 3, pp. 285298.

McHugh, M 2004, The strengths of the weakest arm, Australian Bar Review, vol. 25, viewed 8 May 2005, http://www.hcourt.gov.au/speeches/mchughj/mchughj_2july04.html

Montesquieu, Baron de 1748, 1949, The spirit of the laws, translated by Thomas Nugent, with a Introduction by Franz Neumann, 2 vols, Hafner Press, New York.

North, DC 1981, Structure and change in economic history, WW Norton & Co, New York.

Peczenik, A 1994, Law, morality and truth, Ratio Juris, vol. 7, no. 2, pp. 146176.

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Perillo, JM 2004, Robert J Pothiers influence on the common law of contract, Research Paper 63, Fordham University School of Law & Texas Wesleyan Law Review, Forthcoming, viewed 25 January 2013, http://ssrn.com/abstract=610601

Stone, J 1985, Precedent and law, Butterworths, Sydney.

Turner, C & Trone, J 2013, Australian commercial law, 29th edn, Thomson Reuters, Sydney.

Waldron, J 1999, The dignity of legislation, Cambridge University Press, Cambridge.

Vermeesch, RB & Lindgren, KE 2005, Business law of Australia, 11th edn, LexisNexis Butterworths, Chatswood.

[Acknowledgement: Some of the material contained in this module is sourced in Modules 23 of the Study Guide, LAWS20039 Environmental Law and Regulation as developed by Lawson Smith, various passages of which relating to the Australian legal system were originally contributed by Ms Suzanne Rigney BA, LLB, LLM.]