Lecture Fundamentals of business law (7/e): Chapter 1 - M.L Barron

This is the prescribed
textbook for your course.

Available NOW at your campus bookstore!
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-1


Introduction to the
legal system
Chapter 1

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-2


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
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-3


Learning objectives (cont.)
• the difference between exclusive and concurrent lawmaking 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.

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-4


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.

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-5


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.

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-6


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

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-7


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.

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-8


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).
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-9


Branches of law (cont.)

TYPES OF LAW

PUBLIC LAW

CRIMINAL

CONSTITUTIONAL

PRIVATE LAW

TAXATION

PROPERTY

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd

PPTs to accompany Barron, Fundamentals of Business Law 7Rev

TRUST

CONTRACT

•2-10


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.

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-11


Distinction between civil law and
criminal law (cont.)
Parties

Aims

Outcome

Proof

Civil law Plaintiff

Compensation
for the loss or
injury suffered
by the
individual

Damages,
specific
performance,
or an
injunction

On the
balance of
probabilities

Criminal Government
commences
law

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

commences
action
against
defendant

proceedings
against
defendant

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-12


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
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
– Legislation
or Acts
passed
by parliament
PPTs to accompany
Barron, Fundamentals
of Business
Law 7Rev

•2-13

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

CONQUERED
 Law of the conquered
would apply

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-14


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.

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-15


Legislation dealing with reception
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

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-16

Legislation dealing with reception
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

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-17


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).

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-18

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

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-19


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

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-20


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
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-21


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.
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-22


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
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-23


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.
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-24


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.

Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd
PPTs to accompany Barron, Fundamentals of Business Law 7Rev

•2-25