By James Lee

This post considers a specific feature of the High Court of Australia’s approach to precedent. Since the 2007 decision in Farah Constructions v Say-Dee [2007] HCA 22, the Justices have moved to restrict the scope of the lower courts to develop the law, by asserting that lower courts are bound by ‘seriously considered dicta’ ([134] and [158]) of the High Court, admonishing courts below for raising new arguments in the course of judgments. Keith Mason has claimed that, in so doing, the High Court has effected a ‘profound shift in the rules of judicial engagement’ (Keith Mason, ‘President Mason’s Farewell Speech’ (2008) 82 Australian Law Journal 768, 769, see the original remarks here at 18–22). An excellent feature-length examination of the issues has been provided by Associate Professor Matthew Harding and Professor Ian Malkin (‘The High Court of Australia’s Obiter Dicta and Decision-Making in Lower Courts’ (2012) 34 Sydney Law Review 239). In this short post, I argue that the approach has uncertain implications for the Australian doctrine of precedent and the scope for intermediate courts of appeal to develop the law.

What is the High Court’s approach? Farah v Say-Dee and subsequent cases
Farah v Say-Dee concerned a claim for a variety of equitable reliefs in respect of various properties which were the subject of a joint venture development scheme between the claimant and defendant. The planning application for the property was unsuccessful, because the site was considered too small to ‘maximise its development potential’. During the application process, the defendant learned that permission was more likely to be granted if adjacent properties were included in the planned development. The defendant bought these properties through a company which he controlled. The claimants contended that these properties had been acquired through a breach of fiduciary duty and that consequently the recipients had knowingly received the properties, which were held on constructive trust for the claimants. The Court of Appeal of the Supreme Court of New South Wales allowed the claimant’s claim, reversing the judge’s finding that there had been no breach of fiduciary duty, and instead held that the defendants were liable in knowing receipt. The Court of Appeal also found that a strict liability claim in unjust enrichment was available. Continue reading →