Surely not. The English Court of Appeal (not sure whether the High Court of Australia gets to overrule itself; I assume it can though) make a decision in a case - A. That decision is appealed to the House of Lords on the basis that the HL had previously said B - i.e. the CA ignored a HL decision exactly on point. The HL (and by extension any final appellate court) has to decide what the substantive law is - is it A or B. To decide that they do not need to decide whether the CA was or was not bound by statements in the previous HL decision; they only need decide whether they are going to follow that HL decision. If they do, they overrule the CA; if they don't they don't. If they overrule it - it's because the CA was substantively wrong on the merits - not because they failed to follow the rules of precedent; if they don't want to follow the prior HL decision, they won't overrule the CA - irrespective of whether the CA says about following HL decisions. The Court of Appeal may get a ticking-off, but it will make no difference to the decision on the merits, and cannot be ratio.

As it happens, it seems to me that what Say-Dee says at [135] is a reasonably sensible rule, but not one the HCA can lay down as ratio, any more than they can lay down a ratio rule about "seriously considered dicta" which is one reason why I wish they'd actually done the question justice rather than simply trying to slap the NSWCA down, and put together a proper argument for their conclusion that knowing receipt is nothing to do with unjust enrichment. In the end though I also agree with Neil about the rather peculiar application of the rule (and the correctness of Macquarie).

Duncan  

Dr Duncan Sheehan
Senior Lecturer in Law
Director of Research
Norwich Law School
University of East Anglia
Norwich NR4 7TJ
United Kingdom

Papers at http://ssrn.com/author=648495

From: Neil Foster
Sent: Tuesday, June 24, 2008 1:26 AM
Subject: Re: [RDG] Mason P retirement

Dear Rob

I hesitate to do this but I think I have to disagree with you on this comment:

Any statement made by the High Court on what a Court at a lower level should consider binding is necessarily obiter dicta as it cannot be necessary for the outcome of the case before the High Court.

If the role of the High Court on appeal is, in part at least, to decide whether the intermediate appellate court made a legally correct decision, then their role must include formulating principles about the law of precedent which bind the intermediate court. Hence they are entitled to say that an intermediate appellate court must (1) now observe what would otherwise be regarded as "dicta" from previous decisions of the High Court, and (2) follow previous decisions of other intermediate appellate courts. And when they say that, it will be part of the ratio of the High Court decision (necessary for them in coming to a view on whether the intermediate court was correct), and hence it will indeed be binding on future intermediate courts.

It is important in any case to note what the High Court actually said in Say-Dee at [135]:

Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong (fn: Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 per Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ). Since there is a common law of Australia rather than of each Australian jurisdiction, the same principle applies in relation to non-statutory law.

The first sentence relating to Commonwealth legislation or "uniform" national legislation, as the footnote demonstrates, has long been accepted. It is the extension of the principle to the common law which is controversial. And even there the principle is now that there ought not generally to be departure, but that there can be if the intermediate appellate court in question is "convinced" that the earlier judgement is "plainly wrong".

There is something odd about the new rule, however, which is illustrated by Say-Dee itself. Interestingly it does not come up in the main discussion of the Court of Appeal's mistake in its attempt to decide the case on unjust enrichment principles (which is resolved by the rule about intermediate courts in future following "seriously considered" dicta, in reference to Consul.) The second limb of the new rules as to precedent comes up in the concluding paragraphs of the discussion, on the topic of indefeasibility.

The background is that there were three previous decisions of intermediate courts of appeal on the question of whether the rule in Barnes v Addy could be an in personam exception to statutory indefeasibility under the Torrens system. Two of the decisions said it could not: Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 at 156-157 and LHK Nominees Pty Ltd v Kenworthy (2002) 26 WAR 517; one of the decisions said that it could: Tara Shire Council v Garner [2003] 1 Qd R 566. In effect the NSWCA here followed the decision in Tara rather than the other two.

What were they meant to do according to the High Court? Say-Dee at [196] says they ought to have followed Macquarie Bank and LHK. I happen to agree with the High Court (and did so even before Say-Dee) that these are correct and that Tara is wrong on the indefeasibility point. But was the NSWCA meant to follow Macquarie Bank simply because it was first in time? I suppose this is what they are saying, in which case Tara was in any event wrong to have also followed the earlier case. I suppose the logic of the HC is that if the issue is up to whichever intermediate appellate court gets it first, then it will avoid some of the problems for trial courts knowing who to follow (unless someone is "convinced" of the wrongness of the earlier one.)

The other odd thing is that in fact this issue is hard to describe as one of "common law". It is really a question of statutory interpretation. The Torrens statutes around Australia perhaps ought to be a "uniform" scheme of national legislation (the rule previously accepted), but they are not (I take it that in Australia what we mean by a uniform scheme is one where all the States have formally agreed on a model and agree to keep the local versions in step with each other, as we had with the Corporations scheme before a formal reference of Constitutional power). So even if the principle of State intermediate appellate courts deferring to each other on common law was intended to be part of the ratio of Say-Dee (as a reason offered by the High Court why the CA was wrong), it was not actually applied in Say-Dee itself!