BSB250 · Business Citizenship
The Australian Legal System & Accountability
This chapter sets the legal foundation of BSB250: where Australian law comes from — judge-made common law built case-by-case through the doctrine of precedent versus statute passed by parliament — how the court hierarchy makes precedent binding, and the ILAC method that structures every problem-question answer. It matters because the open-book final is a method test, not a memory test: marks live in citing the right authority (case or section) and applying it to the facts, so mastering sources of law and ILAC here is what unlocks every later compartment (contract, negligence, agency, structures).
What this chapter covers
- 01Common law (judge-made) vs statute (parliament-made)
- 02Doctrine of precedent & stare decisis
- 03Where the two collide: valid statute prevails
- 04The Australian court hierarchy (High Court down to Magistrates)
- 05Ratio decidendi vs obiter dicta; binding vs persuasive
- 06Reading a case: material facts & distinguishing
- 07Legal compartments — one event, several claims
- 08The ILAC method: Issue, Law, Application, Conclusion
Source-spotting mini-ILAC: name the source of each rule and cite it
- +1ISSUE: Did the store owe, and breach, a duty of care to the shopper, and did that breach cause the injury? Frame one precise legal question.
- +1LAW — duty (common law): occupiers owe entrants a duty of care; this is an established category from the common law (Australian Safeway Stores v Zaluzna). Source = a case.
- +1LAW — breach (statute): breach is governed by the Civil Liability Act 2003 (Qld) s 9 — no breach unless the risk was foreseeable, not insignificant, and a reasonable person would have taken precautions. Source = a section.
- +1LAW — causation (statute): Civil Liability Act 2003 (Qld) s 11 — factual 'but for' causation plus scope of liability. Source = a section.
- +1Note the hybrid: one negligence answer cites BOTH a case (duty) and sections (breach, causation), because valid statute now governs breach and causation while duty remains common law.
Key terms
- Common law
- Judge-made (case) law built up case-by-case from court decisions; whole fields such as contract and negligence (duty of care) are largely common law.
- Statute
- Legislation enacted by a parliament — Commonwealth (Cth) or State/Territory (e.g. Qld). Read by statutory interpretation; cite the relevant section (e.g. s 9).
- Doctrine of precedent (stare decisis)
- The rule that a decision of a higher court binds lower courts in the same hierarchy on the same point of law, so like cases are decided alike.
- Ratio decidendi
- The legal reason essential to a court's decision — the part of a case that binds later courts. Contrast obiter dicta, which is persuasive only.
- Obiter dicta
- Remarks made 'by the way' that are not essential to the result; they are only persuasive, never binding.
- ILAC
- The answer structure Issue, Law, Application, Conclusion — name the legal question, state the rule and cite its authority, apply it to the facts, then reach a defensible conclusion.
The Australian Legal System & Accountability FAQ
What is the difference between common law and statute in Australia?
Common law is judge-made law built from court decisions and grown case-by-case through the doctrine of precedent; statute is law enacted by parliament. They are the two primary sources of Australian law. Where a valid statute is inconsistent with common law, the statute prevails — for example, in negligence the duty of care is common law (Donoghue v Stevenson) but breach and causation are now statutory under the Civil Liability Act 2003 (Qld) ss 9 and 11.
What is the difference between ratio decidendi and obiter dicta?
The ratio decidendi is the legal reasoning essential to the decision — it is the part of a case that binds later courts in the same hierarchy. Obiter dicta are 'by the way' comments not essential to the result; they are persuasive only and never binding. When you read a case for an exam, identify the ratio first, because only it carries binding force.
When is a precedent binding versus only persuasive?
A precedent is binding when it is the ratio of a decision by a higher court in the same hierarchy on the same point of law. Decisions from a lower court, from a different hierarchy, or mere obiter are persuasive only. You can also avoid an unfavourable precedent by distinguishing — arguing your material facts are different so the rule does not control.
What is the ILAC method and why does it earn marks?
ILAC stands for Issue, Law, Application, Conclusion. You name the precise legal question, state the rule AND cite its authority (a case or a statutory section), apply the rule to the actual facts arguing both sides, then reach a clear conclusion. The marks live in Law (cite the authority) and Application (use the facts) — a bare conclusion with no applied law scores very little.
Why can one set of facts raise several legal issues at once?
Law develops in separate compartments — criminal, contract, tort (including negligence), statutory regimes and vicarious liability — so a single incident can fall into several at once. For example, an employee who makes a deal and then injures someone can raise contract, agency, negligence, vicarious liability and a business-structure question. Problem questions are deliberately stacked, so you score by spotting every compartment the facts trigger.
Exam move
Treat this chapter as the rail every other answer rides on. First, drill the source question until it is automatic: for any rule you write, label it as a case (common law) or a section (statute), and remember valid statute beats inconsistent common law — negligence is the classic hybrid where you cite a case for duty and CLA ss 9 and 11 for breach and causation. Second, practise stripping a case to its ratio (the binding rule) and ignoring obiter, then test whether a precedent is binding by asking 'higher court, same hierarchy, same point?'. Third, write everything in full ILAC and never skip the citation in the Law step — the open-book exam rewards structure and application, not recall. Build a notes set indexed by issue (contract / negligence / agency / structures / SDGs) with each rule beside its case or section, so under time pressure you spend your minutes applying the law to the facts and scanning for every compartment a stacked problem triggers, rather than searching for the rule.
