Judicial inconsistency ‘should not be repeated’

The need for judicial consistency, between different appellate courts, was recently reiterated by the High Court in The Queen v Falzon,[1] in relation to the law concerning the use of cash of the accused as evidence in drug trafficking prosecutions. There are other options if the High Court’s entreaties are not followed.

The doctrine of precedent usefully allows certainty and predictability in the law. The need for courts to follow prior reasoning is particularly important, and perhaps easier, when the same provisions are being interpreted. It is even more necessary when the same law is a national law, like the Corporations Act, which is being interpreted by many judges from our various Supreme Courts and the Federal Court.

In The Queen v Falzon,[1] under the heading Adherence to authority, the High Court concluded its judgment by mentioning “one further matter”.

“As this Court has emphasised on several occasions, Australian intermediate appellate courts are bound to follow the decisions of other Australian intermediate appellate courts in both matters of statutory interpretation and matters of common law unless persuaded that those decisions are plainly wrong”.[2]

The High Court went on to say that this case, the admissibility of the evidence of cash, as circumstantial evidence of drug trafficking and, therefore, as probative of the accused’s intent to sell, is supported by

“a succession of decisions of other Australian intermediate appellate courts including an important previous decision of the Court of Appeal of the Supreme Court of Victoria which has been followed in other States”.[3]

However, the High Court pointed out that the majority judges in the Court of Appeal did not suggest that those decisions were “plainly wrong”, as was open to them as a means of not following them. The High Court said that the majority could not properly have considered them to be so … “rather, the majority purported to distinguish them”.

“So to hold was in effect to refuse to follow those earlier decisions while purporting to observe them. That was not a course properly open to the majority and it should not be repeated”.

Two special leave applications

In the field of commercial law, the need for certainty exists in relation to the interpretation of the national Corporations Act.  That Act was the prompt for the High Court’s decision and ‘direction’ in Marlborough Gold v ASC, referred to in Falzon, explained earlier.

The High Court currently has an application before it for special leave to appeal from the Victorian Court of Appeal decision in Amerind (comprising 5 judges), being heard on 17 August 2018. There is also the Federal Court ‘trial’ decision (comprising 3 judges) in Killarnee.  The judgments concern the complex issues arising from the winding up of a trustee company but they are not entirely consistent.

That in itself may be a ground for special leave being granted, in both matters, under section 35A(a)(ii) of the Judiciary Act – that each is a matter “in respect of which a decision of the High Court, as the final appellate court, is required to resolve differences of opinion between different courts, or within the one court, as to the state of the law” – apart from other relevant criteria.

Harmonised insolvency laws

While the High Court has focused on intermediate appellant courts, judicial consistency is important across all courts.  With the harmonisation of insolvency laws, under the Insolvency Law Reform Act 2016, there is now the added dimension of consistency in interpreting largely the same provisions found in both personal and corporate insolvency law.  Other courts dealing with those new provisions include the Federal Circuit Court and the Family Court.

These courts are now making decisions, for example, under s 90-15 of the Corporations Schedule and the same section 90-15 of the Bankruptcy Schedule, each court assessing the limits of the extent to which the court may make orders as it “thinks fit”.  For example, the Court in Andersen v Lennon [2017] FCCA 2452 read down section 90-15 as being limited by other trustee remuneration provisions.

The courts are also interpreting the use of those sections in comparison to the wider or narrower provisions which they supplanted – in Neffati v Aravanis [2018] FCCA 1966, as to the previous s 178 Bankruptcy Act; and in Rubix Investments Group Pty Ltd (in liq) [2018] NSWSC 1184 as to former s 479(3) of the Corporations Act.

We should expect some consistent interpretations of that and the many other common provisions across all the relevant courts.

Other options

Coming back to the High Court’s concern, while courts do generally abide by the need for consistency – and that it itself can be difficult – some alternative options are:

  • for Supreme Courts of Appeal to include Federal Court judges, and vice versa; a recent example was Sakr Nominees [2017] NSWCA 38; or
  • as applied in some instances, to give judges joint commissions; or
  • as considered some time ago but rejected, to give the Full Federal Court sole jurisdiction in appeals on the Corporations Act from the Supreme Courts.

It will be interesting to see the outcome of the High Court special leave application in Amerind.   


[1] [2018] HCA 29

[2] Citations omitted.

[3] Citations omitted.

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