1. An introduction to case law and the doctrine of precedent

Source: SCU, ‘Study Guide: Legal Research and Writing’, Written by Jill Cowley, Jennifer Nielsen, Beth Finch, Claire Valkenberg and Helen Walsh, Revised by Helen Walsh, 9th Ed, 2014 , pp.95-98

… Australia is a common law country, as opposed to a civil law country. The common law is the law as it has developed through the decisions of judges. In the Australian legal system, the common law exists alongside the laws made by parliament. In civil law systems, the laws are made up entirely of those laid down by the parliament. For example, if you were in France and had a client with a possible negligence claim, you would resort to the Code Civile, which sets out the entirety of the law made by the French parliament. In Australia, or any common law country, you would resort to the common law, either if there were no legislation on the subject, or to see whether the courts have interpreted the legislation.

Note: Từ ‘common law’ strong luật Úc được sử dụng theo ba nghĩa khác nhau:i) Dùng để phân loại hệ thống pháp luật ở tầm quốc gia, ví dụ  common law và civil law; ii)  Trong nội bộ quốc gia, common law dùng để chỉ luật do thẩm phán (judges) làm ra, ngược lại với luật do Quốc hội làm (Acts – các đạo luật).  iii) rules of common law dùng để phân biệt với rules of equity.

While we say that the common law is the law developed through the decisions of judges, it is important to identify the part of the decision that becomes the precedent or the ratio decidendi of the case, that is the part that becomes a binding legal principle. In giving a judgment the court will do two things: one, make a determination (called the formal order) to provide a result to the dispute between the parties, for instance, an order for compensation; and two, describe the principles of law and the reasoning used to arrive at this result. It is this second part that we look at to determine the precedent or ratio decidendi of a case.

The precedent or ratio decidendi is made up of three things:

  1. the material (most significant) facts of the case;
  2. the legal reasoning used by the court (including the previous precedents and legal principles referred to by it); and
  3. the statement of the legal decision (legal principle) made by that court.

This is the information that enables the court to arrive at its legal determination; that is the formal order that it makes to resolve the dispute between the parties before it.

It is frequently said that it is not for the judges to make the law and that they are simply to apply and enforce the law. However, the process of interpreting and applying older precedents through the application of the doctrine of precedent, enables the courts to develop and to modify common law principles, and so to develop and expand the common law to meet the needs of our times.

In O’Toole v Charles David (1990) 96 ALR 1 at 21, Brennan J stated that:

Nowadays nobody accepts that judges simply declare the law; everybody knows that, within their area of competence and subject to the legislation, judges make law. Within their proper limits, judges seek to make the law an effective instrument of doing justice according to contemporary standards in contemporary conditions. And so the law is changed by judicial decision, especially by decision of the higher appellate courts.

These decisions become the precedents on which the courts rely when making later decisions. Simply because a decision has been made on a particular matter does not mean that the decision is binding upon the courts. Consideration must also be given to the hierarchy of the courts. For instance, a decision of the High Court of Australia is binding on all other courts, as it is the final court of appeal in this country. A decision of the Supreme Court of Western Australia is not binding upon the Supreme Court of Victoria, because those two courts are not within the same hierarchy. The state supreme courts are on the same level, and their decisions are described as being persuasive. That is, courts of other jurisdictions will refer to them for assistance but are not bound to follow those decisions.

Even when an earlier decision is binding on a court, there are rules that govern the weight or authority that must be given to these decisions. This is known as the doctrine of precedent.

We will now look at some of these concepts in more depth.

Court hierarchy

As the doctrine of precedent is based on the hierarchical structure of the courts, it is important that you understand the court hierarchy. The court hierarchy changes according to the jurisdiction, though the differences are mostly minor. Courts have both original and appellate jurisdiction. If a matter has gone before the court for the first time, the court is said to be exercising its original jurisdiction. If the matter before the court is an appeal from an earlier decision of a lower court, the present court is said to be exercising its appellate jurisdiction.

Broadly speaking, the court hierarchy in Australia can be broken into two components:

  1. that of the state courts (the territory courts are similar); and
  2. that of the federal courts.

The ultimate court of appeal for both hierarchies is the High Court of Australia.

In some circumstances, the state courts can exercise federal jurisdiction and in these circumstances, the state court comes within the hierarchy of the federal court structure. The next reading provides a very good overview of the court system together with diagrams of federal and state hierarchies.

Rules of the doctrine of precedent

Common law countries are said to follow the doctrine of stare decisis. This means that a court is bound to follow previous decisions unless they conflict with a higher court’s decisions or they are wrong in law. Stare decisis is another way of describing the doctrine of precedent. It is said that common law countries must follow this doctrine strictly, but generally this is not the case.

There are general rules that relate to the doctrine of precedent:

  • Each court is bound by decisions of courts higher than it in the court hierarchy.
  • A court can overrule decisions of courts lower than it in the same hierarchy.
  • A decision of a court in a different hierarchy may be of considerable weight but will not be binding.
  • A judge is not bound to follow decisions of a judge at the same level in the same hierarchy, although these decisions will be highly persuasive in order to maintain consistency.
  • Only the ratio decidendi of a case is binding.
  • Any relevant decisions, even if not binding, may be considered and followed.
  • The highest court can overrule its own previous decisions but only will do so in the interests of justice or where the previous decision was obviously wrong.

Ratio decidendi and obiter dicta

As we learnt earlier, not every statement by a judge or the judges in a particular case becomes binding on other courts. The binding part is made up of the most important legal principles used and contained in the decision, and the way these principles have been applied to the particular facts of this case. These principles are known as the ratio decidendi, which literally means the ‘reason for deciding’.

It can be very difficult to identify the ratio decidendi of a case for a variety of reasons. If there are a number of judges making the decision, their reasons for deciding may all differ – even if they arrive at the same conclusion or result. On a more practical note, judges simply do not tend to say ‘the ratio is … ’ or ‘my reasons are … ’. Bear in mind though, that finding the ratio decidendi is a skill that you will get better at doing! (But it requires practice and lots of reading!)

As you are reading the decision in a case, try and identify the three things that make up the ratio decidendi.

  1. the material facts;
  2. the legal reasoning used by the court; and
  3. the statement of the legal decision.

If there is more than one judge, you must identify these three things in each individual judgment. You must then determine the majority judgment, which is the conclusion reached by the majority of the judges hearing the case. The ratio decidendi in this situation will be the ‘common ground’ between the majority judgments – that is the common reasoning used by the most number of judges in the case. Keep in mind, that sometimes there is no or very little common ground between the judges even though they reach the same conclusion or result. In this situation, it is likely that no clear ratio decidendi is present.

There is no one easy method to discovering the ratio and, as we have said, it simply takes time and practice. However, the following approach may assist:

Read the catchwords and headnote (the summary at the beginning of a reported case) of the case, noting the decision of the court; the headnote will usually including a section beginning with the word ‘Held’, after which is given a summary of the ratio of the case. You will then know what was decided.

Read the entire decision asking yourself ‘Why did they decide this way ?’ while watching out for the decision you have noted.

When you reach the statements of principles of law which support the decision you have noted, you have probably found the ratio and answered the ‘why’ question.

We will look more carefully at how to locate and understand the ratio decidendi in a case later in this topic. However, a word of warning: you may in fact be able to determine a simple statement of the ratio of a case by simply reading the headnote, but you will be relying on the publisher or editor of that law report and not your own skill. This is not a good habit to develop, as the publisher or editor (who prepares the headnote) may not prepare the most accurate statement of the ratio. Nor will reading their description enable you to understand the ratio of the case most effectively. Particularly with important cases, read the whole case yourself and highlight or underline the ratio as you come to it.

Apart from the approach mentioned above, you can often learn the ratio by reference to the particular case in either subsequent decisions which have considered it, in publications such as the digests or in casenotes. We will look at locating these sources of information in the next topic.

Apart from the ratio, a judge may make statements that are known as obiter dicta (the singular is obiter dictum). This expression means ‘a remark in passing’. A judge may make these statements about hypothetical situations in order to clarify or explain the principles, which are relevant to the case. Although the obiter is not binding on other courts, it may however be very persuasive. An example where this can occur is when a superior court takes times to explain important principles of law that are incidentally raised by the court case, although those principles are not directly relevant. In situations such as these, the obiter may in fact have more significance in subsequent years than the ratio itself.

The weight given to persuasive decisions

When a judge is deciding whether to follow a decision that is persuasive but not binding, one of the questions raised is, how much weight should be given to the decision. 
The general rules that answer this question are:

  • the higher the court, the more significant is the precedent;
  • a unanimous decision is more significant than one that contains dissenting decisions;
  • a more current decision is more significant than an old decision;
  • a decision criticised by other courts is less significant; and
  • the decision may have been wrongly decided.

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