Introduction to Business Law Chapter on Legal System and Sources

Copyright © 2012 McGraw-Hill Australia Pty Ltd
PowerPoint slides to accompany Barron Fundamentals of Business Law 7e 1-1
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Introduction to the
legal system
Chapter 1

Learning objectives
At the end of this chapter you should understand:
• the definition of the term ‘law’
• why there is a need for law
• the outline of the origins of the Australian legal system
• the components of our legal system
• the difference between public and private law
• the historical development of the common law, equity
and statute law
• the process by which English law was received into the
Australian colonies
• the federal nature of the Australian legal system

Learning objectives (cont.)
• the difference between exclusive and concurrent law-
making powers of the Commonwealth
• the process by which a statute is enacted and be
able to identify those responsible for that process
• delegated legislation, its purpose, advantages and
disadvantages.

What is the law?
• There are many definitions of the term ‘law’.
• One definition is:
The law is a set of legal rules that govern
the way members of a society act towards
one another.

Why do we need law?
Laws are required in society:
to regulate the behaviour of the individual
to correspond with what is acceptable to
the majority of individuals.

Components of the legal system
Institutions Laws People
Parliament Statute law Members of
parliament
Courts Common law Judges and
magistrates
Government
departments
Equity Barristers and
solicitors
Correctional
institutions
Delegated
legislation
Court officials
Police officers
Correctional
service officers

The rule of law
Our legal system is based on the ‘rule of
law’—which requires the law to conform to
minimum standards of fairness and to
ensure that all persons are treated equally
before the law.

Branches of law
• Private law allows individuals to take
action against others (e.g. to sue one
another for breach of contract or
negligence to obtain compensation).
• Public law allows the state to take action
to enforce the laws which support our
society as a whole (e.g. criminal law where
a police prosecutor will proceed against a
defendant).

Branches of law (cont.)
TYPES OF LAW
PUBLIC LAW PRIVATE LAW
CRIMINAL CONSTITUTIONAL TAXATION PROPERTY TRUST CONTRACT

Distinction between civil law
and criminal law
• Civil law = private law
– Law of torts
– Contract law
– Property law
• Criminal law covers offences with which
an individual can be charged.

Distinction between civil law and
criminal law (cont.)
Parties Aims Outcome Proof
Civil law Plaintiff
commences
action
against
defendant
Compensation
for the loss or
injury suffered
by the
individual
Damages,
specific
performance,
or an
injunction
On the
balance of
probabilities
Criminal
law
Government
commences
proceedings
against
defendant
Punishment of
the offender,
deterrence of
the offender
and others
who may
offend the
community
Prison terms,
fines, good
behaviour
bonds,
community
service
orders
Beyond a
reasonable
doubt

Sources of law
The current Australian legal system is the product of
three distinct branches of English law.
• Common law
– Judges follow decisions made and recorded in similar,
previously decided cases.
– Remedy is damages
• Equity
– Judges follow decisions that have been made in similar,
previously decided cases but may also consider issues of
fairness.
– Remedies are broader
• Statute Law
– Legislation or Acts passed by parliament

The doctrine of reception
To determine laws to be applied
NEW COLONY
SETTLED CONQUERED
 Laws of settlers  Law of the conquered
(English) would apply would apply

Legislation dealing with reception
of English law
• 4 Geo IV c96 (1823)
• This legislation:
– created legislative council
– provided that members were nominated by governor
– empowered enactment of legislation consistent with
English law
– allowed for the creation of an executive council
– authorised the issue of letters patent.

of English law (cont.)
• The Third Charter of Justice—1824
– Established the Supreme Court of New South Wales.
• The Australian Courts Act 1828
– Provided that all suitable statutes and common law in
force in England as at 25 July 1828 should be applied
in New South Wales and Van Diemen’s Land
– Provided that laws passed after 25 July 1824 did not
automatically apply to colonies and Van Diemen’s
Land

of English law (cont.)
• The Colonial Laws Validity Act 1865 (UK)
– Provided that colonial legislation would be void
only if it was repugnant with British laws
extending to the colonies

Federation and the establishment
of the Commonwealth of Australia
• The colonies agreed to hand over certain
powers to form a central government.
• Commonwealth of Australia Constitution
Act 1900 (UK)
– This legislation created the Commonwealth of
Australia (the Commonwealth Parliament).

Federation and the establishment
of the Commonwealth of Australia
(cont.)
• The Statute of Westminster 1931 (UK)
– Ensured independence of Commonwealth Parliament from
British Parliament
– Was adopted in Australia by the Statute of Westminster
Adoption Act 1942 (Cwlth)
– Meant no British Act should extend to a dominion unless it
had requested and consented to the statute

Separation from the British legal
system
Total separation did not come until 1986
• The Australia Act 1986 (Cwlth and UK):
– Repealed Colonial Laws Validity Act 1865
– Abolished appeals from Australian courts (e.g. state
Supreme Courts) to the Privy Council in England
– Provided that states could not legislate on foreign affairs
• Privy Council (Appeals from the High Court) Act
1975 (Cwlth):
– Abolished appeals from the High Court to the Privy
Council

The Mabo case
• Mabo v. Queensland (No. 2) (1992) 175 CLR 1
– Overturned doctrine of terra nullius
– Recognised the form of native title to land
• Native Title Act 1993 (Cwlth)
– Provided for the statutory recognition of native title
– Established the Native Title Tribunal

The Wik Case
• Wik Peoples v Queensland (1996) 187 CLR
– Decided native title rights could co-exist with pastoral
leases.
• Native Title Amendment Act 1997 (Cwlth)
– Native title rights could co-exist with pastoral leases.
– Where there is conflict, the rights of pastoralists survive.

Amendments to native title
legislation
• The Native Title Amendment Act 2007 (Cwlth)
– Responds to government reviews and
recommendations
– Ensures native title processes are effective and
efficient
• The Native Title Amendment (Technical
Amendments) Act 2007 (Cwlth)
– Clarifies or improves existing provisions

The Commonwealth of Australia
and law-making powers
• Australia has a federal system of government.
• Both the federal government and the state governments have
law-making powers.
• The Commonwealth of Australia Constitution Act 1900 makes
provision for the division of law making.
• Section 51 lists subject matters in respect of which the
Commonwealth Parliament has power to legislate, some being:
– taxation
– defence
– currency, coinage and legal tender
– marriages
– external affairs.

Law-making powers
• Concurrent power
– Section 51: allows Commonwealth and states to
share powers, e.g. taxation, banking.
– Section 109: if conflict, federal legislation stands
• Exclusive power
– Section 52(i): Commonwealth has sole authority to
legislate in some areas.
– Section 90: specific areas of customs, excise and
bounties
• Residual power
– States have sole power to legislate in other areas not
prohibited by the Constitution.

Laws made by parliament:
stages in the passage of a Bill
Bill Act
– Introduction of Bill by minister in first house
– First reading
 Name of Bill
 Date of second reading
– Second reading
 Minister explains general principles of Bill
 General debate
– Committee stage
 Committee formed to examine and debate
 Amendments made
– Third reading
 Vote on Bill
– Moves to second house of parliament (cont.)

Bill Act
Stages in the passage of a Bill
(cont.)
Second house of parliament
Acceptance
Royal assent > Act of Parliament
Non-acceptance
could lead to a
double dissolution
Notified in
government
Gazette

Delegated (subordinate) legislation
• Made under the authority of an Act of Parliament:
– Types
 Regulations
 By-laws
 Rules
 Ordinance
– Due to:
 Time limitations
 Expertise limitations
– May be overruled by the government that enacted
legislation giving authority

Introduction to Business Law Chapter on Legal System and Sources

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