Commercial & Property Law CHAPTER 1 – The Framework of the Australian Legal System

Introduction The current legal system is derived from several sources: Legislation - laws created by Parliaments Case law (common law) - decisions handed down by the courts Principles of ‘equity’ - procedures to provide fairness and equitable remedies in those situations where common law is considered too strict and narrow

The Australian Legal System Australia operates under a federal system of government. This means there is a division of law-making power between the central Commonwealth government and State governments. When the Commonwealth government makes a law it applies to all States and Territories. When a State government makes a law it only applies within that particular State.

The Australian Legal System the Commonwealth government cannot simply make laws about whatever it chooses and must act within the limits of the power given to it by the Constitution. If a law made by the Commonwealth government is challenged by a claim that it falls outside the limit of its powers, the dispute is referred to the High Court of Australia.

Categories of law Making Powers There are three key categories of law making powers: Exclusive powers Concurrent powers Residual powers

Division of Powers S. 51 Specific Powers Examples: S.109 states that if there is a conflict between Commonwealth, the Commonwealth will prevail. S. 51 Specific Powers RESIDUAL POWERS Held By the States Examples: Education, Hospitals, Roads and Transport EXCLUSIVE POWERS Held By The Commonwealth Examples: Customs and excise, Currency, Military CONCURRENT POWERS Shared Between Commonwealth and the States Examples: Taxation, Industrial Relations, Banking

Strengths of Australian Federalism Federalism divides and limits the power of central governments, protecting individuals from one all-powerful government. Federalism provides increased choice - Voters can vote for one political party at the State level and another at the national level for example. Encourages co-operation between States and Commonwealth – e.g. proposals being more thoroughly debated and thought through.

Weaknesses of Australian Federalism Federalism can lead to duplication of government and inefficient, overlapping or contradictory policies in different parts of the country. Federalism can lead to inequality between the States. Federalism can lead to neglect in an important area of public policy. Could result in our nation becoming over-governed. In relation to business, federalism has meant differences on a State by State basis, and sometimes duplication and confusion in many areas such as business and trade licensing, taxation etc.

Referendum S.128 of the Constitution states that the only way to change an actual provision of the Constitution is by calling a referendum. A referendum is a nationwide vote where citizens are asked to say either ‘yes’ or ‘no’ to a proposed change to the Constitution.

Judicial Interpretation by the High Court The High Court has the jurisdiction to hear dispute that arise from the Constitution or cases involving disputes regarding the interpretation of the Constitution.

Referral of State Powers to the Commonwealth Commonwealth power has increased in the area of commercial law as a result of the referral of State law-making power to the Commonwealth government, provided for under s51 (xxxvii) of the Constitution.

Case Study – High Court Interpretation REFER TO CASE STUDY – Chaplains safe despite High Court ruling: Roxon

Sources of Law The application of commercial law within Australia is subject to legislation, common law and equity, which together form case law. MAIN SOURCES OF LAW: Legislation / Delegated legislation or subordinate legislation Common Law

Sources of Law STATUTE LAW COMMON LAW   STATUTE LAW COMMON LAW Passed by Parliament and Subordinate authorities   Can be referred to as Legislation or Statute law Laws made by Judges   Can be referred to Common law (Case law) OR Statutory interpretation Criminal Civil Criminal Civil

Legislation Legislation is law made by the elected Parliament and it is also referred to as statute law or enacted law. The parliament can delegate its law-making powers to an executive body.

Common Law Common law is when judges make decisions on disputes brought before them, on a case-by-case basis. At the heart of this system is the concept of precedent - This means that if a case with particular facts has been previously decided by a higher court, a lower court hearing a similar case at a later date is bound to follow the decision of the higher court.

Common Law If a similar case has been heard in a court from a different hierarchy, or lower in the same hierarchy, then the precedent is only considered to be persuasive. This means the judge hearing the case may be influenced by the decision, but it is up to them whether or not to follow it.

Court Hierarchy

Equity Law Equity, the law of ‘fairness and good conscience’ was developed to provide fairness in those cases where the common law was unable to. Equity provides alternative remedies in cases where money simply cannot resolve a dispute, or where technicalities would result in an unfair result at common law. Equitable remedies include: 1. An injunction - an order by the court requiring a person not to do something. 2. An order for specific performance - an order by the court requiring a person to complete the conduct they promised to perform in a contract.

Role of Tribunals Tribunals play an important part in resolving disputes. They are specialised bodies set up by governments under specific legislation which gives them power over specific types of matters. Hearings are less formal than courts and are designed to deal with matters in a speedier and simpler manner. They are less costly process than going to court. Tribunals offer more flexibility than going to court.