How courts make laws

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Chapter 4

• How courts make laws

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Chapter overview

• This chapter looks at the concepts of
• Common law
• Doctrine of precedent
• Judgments and precedents
• Statutory interpretation

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Common Law

• Developed in England under the Westminster system
• Comprised of a collection of past decisions of
  judges and the facts of cases
• Past decisions of judges are called precedents
  and are recorded in law reports

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Precedents

• Set by Australian Federal Courts can be found in
  Commonwealth Law Reports (CLRs)
• Set by state courts can be found in the relevant
  state law reports

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Doctrine of Precedent

• Allows courts to use past decisions or principles
  developed in earlier cases in order to treat
  cases with similar circumstances and like facts
  equally

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How can a precedent be created?

• When any of the following circumstances arise
• Novel case
• Developing precedent
• Statute law exists

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Novel case

• A precedent may be created where there is no
  pre-existing statute or common law principle
  relevant to the case at hand
• Judge then makes a decision
• Decision is referred to variously as a
  precedent, a court-made law or a judge-made law

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Developing precedent

• A precedent is created where there is no existing
  Act of Parliament and past precedents are out of
  date, i.e. no longer good law
• The judge will have to make a decision and thus
  establish a new precedent for the case at hand

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Statute law exists

• A precedent may be created where the words or
  sections of the relevant statute are unclear or
  uncertain and the Court has to interpret them and
  apply them to the case at hand
• Judge has responsibility to apply the words and
  sections of the statute to the actual facts and
  circumstances of the case at hand

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Statute law exists

• Prior to making any application the judge must
  first interpret the words and sections of the Act
• This interpretation as it is applied to the case
  at hand becomes precedent
• that is applicable only to those words, sections
  or parts of that particular Act

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Deciding a case
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When can a judge use a precedent?

• There is no statute of relevance
• The case at hand has the like facts and similar
  circumstances to the past case
• Decide as to whether the precedent is binding or
  persuasive
• If it is a binding precedent it must be from the
  same court hierarchy

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Types of precedents

• Two types
• Binding - must be followed
• Persuasive - may be used as a guide

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Binding precedent

• Set when lower courts are bound to follow the
  decisions of higher courts in the same hierarchy,
  where the facts of the case are similar

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Persuasive precedent

• Do not have to be followed
• They can be used as a guide or reference by
  courts in future cases
• Persuasive precedents arise in three ways
• Decisions made by lower court levels in the same
  or other court hierarchies
• Decisions made by courts in the same hierarchy
  and at the same level
• Decisions referred to by courts in other court
  hierarchies

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Changing a precedent

• There are four ways precedents can be changed and
  updated
• Overruling
• Reversing
• Distinguishing
• Disapproving

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Overruling

• Occurs when a higher court decides that a
  precedent established by a lower court (in the
  same hierarchy where there are like facts and
  similar circumstances) is no longer appropriate
  and overturns it

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Reversing

• Involves one case and is only used in appeals
• Appeal - review of an earlier judgment
• The judge of the appellate will review the
  previous decision of the court with original
  jurisdiction and may decide to change the
  decision by reversing it

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Distinguishing

• Occurs when the relevant facts of an earlier case
  are not similar enough to be followed in a later
  case
• Judge points out the differences in facts between
  the earlier case and the case under consideration

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Disapproving

• In the case at hand the judge may express an
  unfavourable opinion of the earlier judgment by
  showing disapproval
• Judge cannot overrule the precedent if it was
  established in a higher court but would have to
  follow it as it would be a binding precedent

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Disapproving

• To initiate a change in the law the judge can
  achieve it by expressing disapproval and thus
• A higher court referring to this judgment may
  change the law by overruling the lower courts
  decision
• Parliament may enact an act to change the law

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Two parts of precedents

• Judgement includes

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Judgments include two additional features

• ratio decidendi
• obiter dicta

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Ratio Decidendi

• Binding part of the precedent
• Judge's legal reasoning for reaching his/her
  decision
• Lower courts must follow the ratio decidendi
  established in higher courts
• Difficult to identify as it found throughout a
  judgment

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Obiter Dictum

• Persuasive part of a precedent
• Comments, opinions and observations made by the
  judge throughout the judgment
• Often referred to as a statement or statements
  said by the way

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Statutory interpretation

• Refers to the process undertaken by courts to
  interpret Acts before determining their proper
  application
• Commonwealth and State legislation exists that
  gives courts the power to interpret Acts
• Commonwealth level - Acts Interpretation Act
  (1981)
• For each state, see the table 21

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Reasons for interpreting Acts

• Particular words of Acts may be vague or unclear
• Acts may not clarify all future applications
• Acts may not clarify the intention of Parliament

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Common law rules for statutory interpretation
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Literal rule

• Used to interpret words of an Act as it was
  written
• thus applying the literal meaning of the words
• Judges can use dictionaries to identify the
  meanings of a particular words

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Golden rule

• Used when the literal rule would result in an
  inconsistent or illogical outcome, or when the
  literal rule is inconsistent with the purpose of
  the Act
• Used to apply a more lenient definition by taking
  into consideration the circumstances and the
  purpose of the Act

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Mischief rule

• Applied when the literal rule has been applied
  but the outcome is still ambiguous
• Applied to determine the real purpose behind the
  Act
• Used to identify the mischief or misdemeanour
  that the law is trying to prevent

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Class rule

• Refers to words that can be grouped together and
  labelled under a general term

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Problems with statutory interpretation

• Difficulties in identifying ratio decidendi
• Difficulties differentiating between the ratio
  decidendi and obiter dictum
• Precedent may have more than one ratio decidendi
• Although cases may be similar, it is unlikely
  that they are identical
• Judges may be bound to follow decisions although
  they may lead to unjust outcomes

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Chapter review

• In this chapter you have looked at
• Common law
• Doctrine of precedent
• Judgments and precedents
• Statutory interpretation