By Associate Professor Matthew Harding
The doctrine of precedent is a fundamental constraint on judicial decision-making in Australia. The general idea behind the doctrine of precedent is that judges, when they are deciding cases, must pay proper respect to past judicial decisions. Sometimes this means that judges are bound to apply the reasoning of judges in past cases — in other words, ‘follow’ past decisions — when deciding cases that raise similar facts; sometimes it means that judges must take seriously the reasoning of judges in past cases even if they are not bound to apply that reasoning. The moral value of the doctrine of precedent is in the way it serves the political ideal of the rule of law; according to that ideal, institutions of the state, like courts, should strive to ensure that the law is developed and applied in a consistent and predictable manner, so that citizens may order their affairs with confidence as to their rights and duties.
The operation of the doctrine of precedent in Australian law raises a number of specific legal questions, many of which implicate the High Court of Australia. In this post I briefly consider two questions:
- When and why does the High Court decline to follow its own past decisions?
- What are the implications of the doctrine of precedent for state and territory courts of appeal?
When and why does the High Court decline to follow its own past decisions?
In Imbree v McNeilly [2008] HCA 40, the High Court had to decide a case arising because a learner driver had a car accident and thereby injured one of his passengers. A driver owes a legal duty of care to his or her passengers; breach of this legal duty constitutes the legal wrong of negligence. The question for determination in Imbree v McNeilly was: what standard of care does a learner driver owe to a passenger who is also supervising or instructing the learner? In the case of Cook v Cook [1986] HCA 73, the High Court had ruled that a learner driver owes a standard of care to a supervising passenger that is lower than the standard of care that an ordinary driver owes to an ordinary passenger.
The High Court is not bound to follow its own past decisions, but it ordinarily does so in cases raising similar facts. Thus, there were reasons to think that in Imbree v McNeilly, the High Court would follow Cook v Cook and rule that the driver in Imbree v McNeilly owed a qualified standard of care to his injured passenger. However, the Court decided not to follow Cook v Cook, and instead overruled that earlier decision. In other words, in Imbree v McNeilly, the High Court rejected the reasoning of one of its own past decisions, in a case raising similar facts. As you might expect given the significance of the doctrine of precedent to the rule of law, what the High Court did in Imbree v McNeilly was both unusual and controversial. Ian Malkin and I have argued in the Melbourne University Law Review that the way in which the High Court overruled its own prior decision in Imbree v McNeilly was problematic and not in keeping with the court’s view of precedent in other cases, and that a clearer framework for overruling practice in the High Court should be developed.
What are the implications of the doctrine of precedent for state and territory courts of appeal?
In another case that came before the High Court recently, Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22, the implications of the doctrine of precedent for state and territory courts of appeal were explored. (The central legal questions in Farah Constructions were about the legal duties of property developers in a joint venture and the liability of third parties for the consequences of breaches of those duties, but we are interested in the case only insofar as the High Court used it as a vehicle to say something about the doctrine of precedent.)
Australian courts are arranged according to a hierarchy. At the top of this hierarchy is the High Court. Immediately below the High Court are the courts of appeal of the various states and territories, and below these are the supreme courts of the various states and territories. Before Farah Constructions was decided, the implications of the doctrine of precedent for state and territory courts of appeal were thought to be settled in two important ways. First, it was thought that although such courts were bound to follow decisions of the High Court, they were only bound to apply certain elements of the reasoning of the High Court and not others. Judicial reasoning is often broken down into two categories. In one category we can place reasoning about the law that is necessary to the decision reached by the judge (in law, this reasoning is known by a Latin name, ‘rationes decidendi’, literally ‘reasons for the decision’). In the other category we can place reasoning about the law that is not necessary to the decision reached by the judge (in law, this reasoning is also known by a Latin name, ‘obiter dicta’, literally ‘things said by the way’). Obiter dicta are often uttered by judges in order to make observations about the law that, while not strictly relevant to the case at hand, are likely to be relevant to other cases in the future. Before Farah Constructions, it was thought that intermediate appellate courts were bound to follow only the rationes decidendi of High Court decisions, and never the High Court’s obiter dicta. Secondly, prior to Farah Constructions, it was thought that a court of appeal in one state or territory was never bound to follow the decision of a court of appeal in another state or territory; judge-made law in each state and territory was therefore conceived along lines emphasising the federal character of our system of government. Thus, judge-made law in Australia has traditionally varied from state to state.
In Farah Constructions, the High Court cast significant doubt on these two previously settled propositions about the application of the doctrine of precedent in Australia, suggesting that courts of appeal in the states and territories are bound to follow ‘seriously considered’ obiter dicta of the High Court, and that a court of appeal in one state or territory is bound to follow the decisions of such a court in another state or territory. These elements of the High Court’s reasoning in Farah Constructions have been heavily criticised for misunderstanding the doctrine of precedent, stifling the development of judge-made law in Australia, and even undermining the rule of law. Ian Malkin and I have argued in the Sydney Law Review that Farah Constructions has had a significant impact on judicial decision-making around Australia, and that in light the principles it espouses, the High Court ought to give more general guidance as to and the circumstances in which its obiter dicta should be followed by lower courts.
Conclusion
The doctrine of precedent depends for its effectiveness on judges not only maintaining a general practice of paying respect to past judicial decisions, but also conscientiously and carefully articulating the content of the practice, and ensuring that the practice is consistent with, while not overreaching, its moral foundations in the rule of law. Arguably, in light of these considerations, some of the High Court’s recent decisions have not lived up to the mark. It is to be hoped that in its future decision-making, the High Court will do better.
AGLC3 Citation: Matthew Harding, ‘The High Court and the Doctrine of Precedent’ on Opinions on High (18 July 2013) <https://blogs.unimelb.edu.au/opinionsonhigh/2013/07/18/harding-precedent/>.
Matthew Harding is an Associate Professor at Melbourne Law School.
An excellent article. That said, I am not sure that it is quite right to say that, in a pre Farah world, one Court of Appeal was not bound to follow another. Indeed, such a proposition is inconsistent with what was said in Australian Securities Commission v. Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492. Further, I am not sure that is correct to say that Farah stands for the proposition that one Court of Appeal is bound to follow another. Importantly at [135] of Judgment in Farah, the High Court indicated that one Court of Appeal should follow another “unless they are convinced that the interpretation is plainly wrong”. That last point is crucially against such a broad interpretation of that authority.
Brent, glad you enjoyed Matthew’s post. I went and had a look at ASIC v Marlborough Gold Mines on the basis of your comment. I think the context of the case you mention was important – namely that the court was making the comments in the context of interpretation of the Corporations Law which was intended to be uniform national legislation, and accordingly, that State courts should not depart from a decision of a parallel State Appellate Court on an analogous provision. That seems to me to make sense – if we have legislation which is intended to apply uniformly across States, courts should be guided by the way in which other States have interpreted it and should only depart from that interpretation if it is plainly wrong. Otherwise we get a situation where different State courts treat legislation which is very similar or identical in a different way, and that seems to raise problems with regard to like cases being treated alike in a rule of law sense.
Personally, I think Farah is a different kind of a case to ASIC v Marlborough Gold Mines. It did not involve uniform legislation which applied across States. It involved a contested area of equity where different State Courts had come to different decisions on the question, so there were already multiple views on the law. I know the High Court says that the New South Wales Court of Appeal was “wrong” not to apply the clear dicta in Consul Developments, but I personally believe that the dicta in Consul was at least arguably unclear. Where the law is unclear (which is more likely to happen with common law and equity than with a statutory provision) and when the statements of the High Court are only obiter dicta, then I think there is more scope for State Courts to differ in interpretation of the law.
In hindsight, I think the NSWCA would have been wiser in Saydee v Farah to (a) put restitutionary liability to the parties so that they could respond before embarking on a judgment based upon it, and (b) in the absence of HCA authority on restitutionary liability, applied the ordinary law of knowing receipt, and made obiter comments about restitutionary liability (much as Hansen J did in Koorootang Nominees Pty Ltd v Australian & New Zealand Banking Group Ltd [1998] 3 VR 16).
But I also think it’s a pity if State Courts are deterred from coming up with different solutions in contested areas because of the tenor of cases like Farah. One of the advantages of having a Federal system is that you can have multiple fora which to try out different ways of responding to a legal problem and then evolve the best solution as a result.
That being said, you are right to say that there’s always room for judges to say that a case is “plainly wrong”, even in the context of the Corporations Act. One of my students brought to my attention the case of ASIC v Ingleby [2013] VSCA 49 where Weinberg JA declined to follow NW Frozen Foods v ACCC [1996] FCA 1134 on the basis that it was “plainly wrong”.
That caveat that a court can disregard another court (at the same level) only if it finds that the other court was ‘plainly wrong’ is pretty invidious. Surely, it can’t be nice to be told by another court that your court got it, not only wrong, but ‘clearly wrong’. Likewise, the requirement that courts must follow ‘seriously considered’ dicta. You wonder how a court can judge whether something a judge said was seriously considered or not. It would all be much nicer if the courts instead could weigh up the benefits of uniformity over experimentation or just minds reasonably differing.