In a recent patents law case, concerning veterinary pharmaceuticals, and processes for determining the novelty of a process the subject of a patent application, Justice Ian Jackman declined to follow the reasoning in a 2005 decision of Justice Emmett, saying that single judges of the Federal Court are not bound by decisions of previous single judges sitting at first instance.
This comment followed recent High Court decision in Lendlease Corporation Ltd v Pallas, concerning the approach an intermediate appellate court should take when faced with competing intermediate appellate court authorities, and the Full Federal Court decision in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents – concerning the eligibility for patent protection of computer-implemented inventions, an issue on which the High Court had previously been evenly divided, hence providing no binding precedent.
There has been a similar series of dissents, between Full Federal Courts, in bankruptcy.
Du Pont is wrong
In the patent case, Justice Jackman, “with great respect” regarded the reasoning in the 2005 decision of EI Du Pont de Nemours v ICI Chemicals & Polymers[1] as “wrong” and “decline[d] to follow it”. That was despite several decisions since Du Pont following it.
As he explained,
“it is often said that a single judge of first instance will usually follow the decision of another judge of first instance of the same jurisdiction as a matter of “judicial comity” unless “convinced” the earlier decision is wrong, or “clearly” or “plainly” wrong”.
Justice Jackman found two difficulties with such statements.
Maintaining judicial consistency and predictability may lead to the perpetuation of an erroneous understanding of the law
First, whether a Judge should follow a previous single judge decision on a question of law should not, he said, be regarded as one based on “judicial comity” which suggests that priority be given to “questions of courtesy and politeness to each other over their duty to apply the law …”.
“Firm but respectful disagreement on questions of law does not involve a breach of proper standards of judicial etiquette”.
Rather, whether a decision of a previous judge is followed
“concerns the desiderata of the rule of law that the law should generally be consistent and predictable, rather than the question being viewed as one of “judicial comity””.
But a tension can arise, in that “maintaining consistency and predictability in decision-making may amount to the perpetuation of an erroneous understanding of the law”.
How that is resolved depends on the particular nature and circumstances of the legal issue in question, and there cannot be an inflexible or rigid approach.
Just wrong, with no vituperative epithets needed as to the egregiousness of the court’s error
Second, he went on to say that
“it is neither necessary nor desirable to add vituperative epithets, such as “plainly” or “clearly” wrong. A more “constructive articulation of the principle is whether there is a compelling reason to depart from the earlier decision, this going to the “quality and cogency of the case made out for departure from the earlier decision, rather than the egregiousness of the Court’s error”.
This approach is appropriate for the question whether a single judge at first instance should depart from an earlier decision of another single judge in the same jurisdiction.
This is but part of a broader debate as to full courts following decisions of other full courts and the role of the High Court discussed in Pallas and Aristocrat, referred to earlier
Justice Edelman described one scenario as being where
“the same question is being considered by a third intermediate appellate court, which is the same court as the first intermediate appellate court whose first decision has been held to have been plainly wrong by a second intermediate appellate court”.[2]
Judicial confusion in bankruptcy
Similar issues arose in respect of Full Federal Courts disagreeing with each other in relation to the principles to be applied under the remedial section 306(1) of the Bankruptcy Act as to the validity of bankruptcy notices.
Of 18 Federal Court judges’ decisions, 11 went one way, 7 another, with full courts thrown in.
In Kirk v Ashdown [1999] FCA 1664 a Full Federal Court held that the requirement to state the provision under which interest was claimed on a judgment debt was not made “essential” by the Bankruptcy Act, hence did not invalidate a bankruptcy notice, relying on the High Court decision in Kleinwort Benson v Crowl [1988] HCA 34.
In Bendigo Bank v Williams [2000] FCA 482, a majority – 2:1 – regarded Kirk as wrongly decided, and declined to follow it, citing authority to the effect that a Full Federal Court
“is not bound to perpetuate error if error there be” at [45].
With a view to providing authoritative guidance on the issue, a court of five judges was convened in Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915. A majority of 3 of the 5 held that Bendigo Bank was correctly decided and that Kirk was wrong.
The subsequent full court in Marshall v General Motors Acceptance Corporation Australia [2003] FCAFC 45 felt obliged to follow the majority in Australian Steel.
Only when an appeal heard by the High Court in another matter was the issue resolved, in favour of the minority two in Australian Steel: Adams v Lambert.[3] This seems to have restored a level of consistency in judicial decisions since then.
See my 2000 discussion of these issues in the Insolvency Law Bulletin – Bankruptcy notices: professional mistakes, judicial confusion and legislative complexity.[4]
What were they arguing about?
But the broader context is that the Federal Court Judges were deciding on bankruptcy notices and the ancient concepts of acts of bankruptcy and relation back, all the more litigated because of their present and continuing legal significance.
As Gyles J said in one of the cases
“if a bankruptcy notice is too readily set aside as invalid, the consequence is that transactions of a person who may turn out to be insolvent, which have the effect of improperly prejudicing creditors, may escape scrutiny”.[5]
But the act of bankruptcy and the doctrine of relation back are antiquated concepts the latter of which the Harmer Report recommended be abolished as a “fictitious, artificial and abstract concept … rarely understood”: [697].
Well before then, relation back was described by the drafter of the 1924 Bankruptcy Act as “a useless doctrine, approaching almost final extinction in the final English legislation,”[6] but it is said to have been retained at the insistence of the colony of Victoria, and the banks, and then maintained since.
Much ado about nothing?
Between federal and state courts etc
Justice Jackman was also dealing with decisions of other Federal Court judges. In our federation, different issues arise when decisions of both Federal and Supreme Courts differ on the interpretation of uniform national legislation (Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151-152 [135]), or between Supreme Courts, with the law of each state and territory court preserving and protecting its own little sphere of influence.
See also Judicial inconsistency ‘should not be repeated’ – Murrays Legal
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[1] Du Pont de Nemours and Co v ICI Chemicals & Polymers Ltd [2005] FCA 892.
[2] Lend Lease v Pallas [2025] HCA 19 at [111].
[3] Adams v Lambert [2006] HCA 10
[4] (2000) 1(4) INSLB 99, M Murray
[5] The Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915
[6] Bill file 1924/37, Part 6, Austin Brown, 27 March 1923, cited in Officially Receiving, ITSA, 2010. The doctrine has been abolished in the UK and NZ where bankruptcy commences on the date that the bankruptcy order is made: see Mason and O’Mahony, (2014) 14(3) QUT Law Review, “Perspectives on Australian Bankruptcy Law through the Prism of the World Bank Report on the Treatment of the Insolvency of Natural Persons”.
