Enterprise Law

Unit 700254

Topic 1: Introduction to the Australian Legal

System

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Topic Outcomes
On completion of Topic 1, you should be able to:
◦ Understand the importance of the law as a regulatory tool in society and
enterprise
◦ Discuss the foundation and application of common law, equity and statute law
in Australia.
◦ Recognise and explain the characteristics of a legal system and the main
sources of Australian law (Common Law & Statute Law)
◦ Identify characteristics of different legal systems and define civil and criminal
law under the common law system

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What is ’law’?
ACTIVITY: In pairs, spend 5 minutes brainstorming the meaning
of the word ‘law’ and find two examples of laws that apply in
NSW.

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 A definition of Law
LAW is set of legally-binding rules, regulating people’s interactions with one another
(and with the government), applicable to all members of the STATE and ENFORCED
by the STATE.

How is this different to a non-legally binding RULE?

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Laws vs Rules
RULES:
-Not legally binding;

-Apply to a sub-set of society; and

-Enforced by a sub-set of society

-What is an example of a non-legally binding RULE?

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Law as a regulatory tool
• The law is a regulatory tool that:
• prescribes what people (including enterprises) cannot do
• informs people what they can do and
• informs people what they must do
• Eg, crime, ownership of property, taxes

• The law also allows for the settlement of disputes through the courts

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Relevance of Law to
Enterprise
The law is relevant to the following aspects of running an enterprise:

• Business Structure

• Registering a business name

• Leasing Premises

• Obtaining appropriate licences

• Employment Agreements

• Purchase/Supply/Sale Agreements

• Liability for injuries to employees or customers

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Legal Systems
A ‘LEGAL SYSTEM’ is the framework in which the law is created,
adapted, applied and enforced.

There are many different legal systems throughout the world.

Two important legal systems are:

CIVIL
CIVIL LAW
LAW
SYSTEM
SYSTEM
COMMON
COMMON LAW
LAW
SYSTEM
SYSTEM

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Civil law system
◦ Civil law system
◦ Has its origins in Roman law and Napoleonic Codes.
◦ The meaning of the term ‘civil law’ depends on the way it is
used and can mean:
◦ a reference to a legal system used in much of Europe,
Latin America and parts of Asia;
◦ a reference to an area of law within the common law
system, governing relations between private individuals;

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Common law system
◦ Common law system
◦ Australia inherited the common law system from England.
◦ The meaning of the term ‘common law’ depends on the way it
is used and can mean:
◦ a reference to a legal system used in much of the
Commonwealth countries
◦ A reference to the law historically developed by the
Common Law courts in England as opposed to Equity, a
body of law developed by the Courts of Chancery

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Origin of Common Law
◦ Prior to 1066 - most parts of England were governed by customary
law which differed across the country
◦ 1166 – King Henry II declares ‘circuit judges’ shall travel and apply
the law of Westminster to all parts of England
◦ The application of this new ‘common law’ was seen by many as
harsh and inflexible, particularly after the passing of the Provisions
of Oxford in 1258

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Origin of Equity
◦ Due to the strict/inflexible application of the common law, people
made pleas directly to the King to hear their cases
◦ Role was taken over by the King’s Chancellor
◦ By the 14th century petitioning the King’s Chancellor had become
so popular, the Courts of Chancery were established.

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Characteristics of Equity
◦ decisions based on notions of fairness and justice
◦ equity law does not apply to all civil disputes; and
◦ an equitable remedy has to be specifically asked for, it is not
available ‘as of right’.
◦ if conflict between equity and common law, equity prevails;

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Sources of law

There are TWO main SOURCES OF LAW in Australia

COMMON
COMMON LAW
LAW

STATUTE
STATUTE LAW
LAW

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COMMON LAW

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Common law
COMMON LAW is the law created via the reported
decisions of judges.

Also known as:

case law; judge-made law; un-enacted law

It is based on the DOCTRINE OF PRECEDENT

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Doctrine of Precedent
The hallmarks of justice are that it:

should be certain; and

should be universal.

The doctrine of precedent was developed to provide the

necessary certainty and universality.

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Doctrine of Precedent
Before we can consider this doctrine we need to understand the following concepts:

A. COURT HIERARCHY

B. MATERIAL FACTS

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Material Facts
• A material fact is a fact that is relevant to establishing the elements of
a law.

• Eg. In a case for stealing, whether the accused was given permission to
borrow the property would be a material fact. The gender of the
accused or the time of day would not be material facts in this case.

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Doctrine of Precedent
The doctrine of precedent involves a Judge making a decision
based on the decision made by a judge in a
previous case with similar facts.

It is based on the concept of STARE DECISIS

which means ‘let the decision stand’.

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Doctrine of Precedent
There are TWO types of PRECEDENT

BINDING & PURSAUSIVE

The difference in practice:

A binding precedent MUST be followed by a judge.

A persuasive precedent MAY be used by the judge for guidance, if the

judge decides it would be appropriate to do so.

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Doctrine of Precedent
BINDING

A previous decision with the same MATERIAL FACTS

by a judge in a SUPERIOR COURT in the same COURT HIERACHY

PURSAUSIVE

A previous decision with the same MATERIAL FACTS

by a judge in an INFERIOR COURT in the same COURT HIERACHY

OR a judge in a different COURT HIERACHY

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Doctrine of Precedent
!WAIT!
When following a BINDING precedent, the judge is only
required to follow the Ratio Decidendi and is not
bound to follow the Obiter Dicta contained in the
decision

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Doctrine of Precedent
Ratio Decidendi
The reason for deciding based on the application of a rule of
law to material facts before the case

Obtier Dicta
An additional statement of opinion made by the judge that
was not essential to the decision. It may be persuasive
though.

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Doctrine of Precedent
RECAP

Binding: a judge is legally obliged to follow the previous decision.

Persuasive: a convincing argument, but one that does not have to be

followed. Examples include:

o Obiter dicta

oRatio decidendi of courts of the same level or lower in the same hierarchy

o The decision of a court in another hierarchy

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Legal cases as precedent
When a precedent is cited it may be:
◦ adopted – followed or applied
◦ affirmed – agreed with the earlier decision
◦ overruled – an appellate court decides a similar matter, in a later
case, on the basis of a different legal principle; the decision (ratio
decidendi) in the later case in the higher court is to be followed
◦ distinguished – the court finds some material difference between the
facts of the two cases
◦ disapproved – if the court cannot overrule a case it may state (by
way of obiter) that the earlier case is no longer good law.

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Legal cases as Precedent
Advantages of precedent:
◦ promotes consistency
◦ coherence
◦ certainty
◦ efficiency
◦ justice – equality and fairness.
Disadvantages of precedent:
◦ precedent may not be relevant to today’s circumstances, but has
to be followed;
◦ slow to respond to community changes;
◦ may require an Act of Parliament to change.

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STATUTE LAW

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Common Law vs Statute Law

Today, statute law is the most important source of law as the

majority of law comes from the Legislature/Parliament.

Many of the common law principles have been

written into statute law.

If there is ever a conflict between the two,

statute law will prevail.

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 Statute law
◦ It can often react faster to, and better reflect, current community needs
than the common law.
◦ Acts are nouns and must always commence with a capital letter.
◦ It is important to cite Acts (or statutes) appropriately
◦ Eg. Federal: Corporations Act 2001 (Cth)
◦ Eg. State: Retail Leases Act 1994 (NSW)

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Statute Law
- the MAIN SOURCE of law in Australia today

- also referred to as ENACTED LAW, LEGISLATION or an ACT

- the law created by the LEGISLATURE

- can be either, STATE, TERRITORY or FEDERAL Legislation

ACTIVITY: find one example of a piece of NSW legislation and one

example of Federal legislation that could have an impact on enterprise.

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The Legislature/Parliament
NSW
 Bicameral (Two houses)
 Lower House – Legislative Assembly (93 seats)
 Upper House – Legislative Council (42 seats)
 Government Leader – The Premier
 Queen’s Representative – The Governor

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The Legislature/Parliament
Commonwealth
 Bicameral
 Lower House – House or Representatives (150 seats)
 Upper House – The Senate (76 seats)
 Government Leader – The Prime Minister
 Queen’s Representative – The Governor General

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The Legislative Process

THE LEGISLATIVE PROCESS - VIDEO

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