Over the years, there has been a lot written on the subject of what exactly constitutes the ratio decidendi. Professor Goodhart kicked off the debate in 1930 with his article Determining the Ratio Decidendi of a Case and legal academics have been arguing ever since. Turns out, determining the true ratio is not as simple as identifying ‘the reason for deciding.’ Unfortunately, the precedent judge doesn’t explicitly announce the ratio so it’s up to future judges and everyone else to figure it out. The reason for this, according to Cross & Harris, is that if the mere act of declaring the ratio made it binding, then judges would have infinite law-making power. They would be like gods among mere humans. Cross & Harris write:

"If a judge has this amount of freedom to determine which of his observations is ratio decidendi and which obiter dictum, is there not a grave danger that he will exercise an undue influence on the future development of the law? He only has to state twenty propositions and say that he bases his decision on each of them to have created twenty new legal rules."[1]

Thus, this article is my attempt to simplify and clarify the ratio decidendi for the Australian jurisdiction. To do this, I’ve considered the relevant sections in 9 books, 12 academic journal articles, and 38 cases.

First, I start with a summary checklist of what constitutes as the ratio decidendi and the obiter dictum. Secondly, I provide an explanation on the distinction between descriptive ratio vs prescriptive ratio. This is fundamental for understanding the difference between identifying the ratio vs applying the ratio to the matter at hand. Then, I explain that the ratio is applied by way of analogy and I give some suggestions on how to escape the binding ratio. Thirdly, I provide an in-depth description on what constitutes a) the ratio decidendi, b) obiter dictum, and c) binding obiter dictum from the High Court. Lastly, I provide some suggestions on how to rapidly find the ratio if you’re in desperate need.

Before we proceed, there is a distinction that I want to emphasise: the distinction between law and empiricism. What the law is, does not necessarily imply how lawyers and judges actually think and behave. For example, some theories claim that judges have an intuitive hunch for the solution of a case, then reason backwards, that is, they find authorities and believable reasons for why their hunch is correct.[2] How judges think and behave is an empirical question and cannot be answered by legal rules. Therefore, the following article is a legal analysis of what the ratio and dictum is, not an empirical description of what really occurs in courts and in the minds of lawyers and judges.

1. SUMMARY CHECKLIST: RATIO & DICTA

1.1. The Rules of the Ratio Decidendi

1. Must be a necessary step to the conclusion.
2. Must be directly related to the issue.
3. Must come from disputes of law, not disputes of fact.
4. Must be argued in Court.
5. The facts of the precedent case shape the level of generality.
6. The later courts decide the level of generality.
7. When a precedent has multiple reasons, all reasons are binding.
8. The ratio can come in multiple forms:

1. Common law rules;
2. Interpretation of statute;
3. Interpretation of the common law rules.

9. Where there are multiple judges:

1. The majority of judges must agree to be binding.
2. If the judges have different reasons, find essential areas of agreement.
3. If the majority of judges agree on the order but do not agree on the reasons, cannot discard the precedent.
4. Cannot construct a ratio by the aggregation of various elements of separate reasons.

10. A precedent can be binding without a ratio.
11. When the ratio cannot be determined, later courts may not be bound.
12. Not all cases must have a ratio.
13. Unstated assumptions are not the ratio.

1.2. The Rules of Obiter Dicta

1. Generally, obiter dictum is not binding;

1. Except, the High Court’s ‘seriously considered dicta’ is binding.

2. Obiter dictum is persuasive

1. However, obiter dicta can have different degrees of weight.

2. THE DESCRIPTIVE-PRESCRIPTIVE DISTINCTION

Before we get into the actual law, we will first examine the distinction between Descriptive ratio decidendi and Prescriptive ratio decidendi. The essence of the distinction is that the descriptive ratio is the ratio from the original case and the prescriptive ratio is how the ratio may be applied to a future case. I give credit to Professor Julius Stone for expounding this distinction in his article, The Ratio of the Ratio Decidendi.[3]

2.1. Descriptive Ratio Decidendi

Ratio decidendi is Latin for ‘the reason for deciding.’ This ‘reason’ is not 1) the facts of the case, 2) the law that the case applies, or 3), the orders of the case. Instead, it’s the ‘necessary step’ that the judge needed to resolve the case.

For example, consider the following hypothetical judgment from the book Legal Technique by Christopher Enright. Imagine that there’s a Dog Act 1947 and s 6 states: ‘A person may bring an action against the owner of a dog if the dog enters land owned by that person.’

Now, imagine the following extract is the judgment:

Elisabeth owns a meadow. Elisabeth sues Kit Walker because Kit allowed his pet wolf Devil to walk onto her meadow and molest her pet rabbit, much to the distress of both Elisabeth and the rabbit. Elisabeth now brings proceedings under s 6 of the Dog Act 1947.

Three things are clear regarding a breach of s6. First, Elisabeth's meadow is land. Second, Elisabeth is owner of the land so Elisabeth is entitled to bring the action in her own right. We add that this would be the case even if Elisabeth had not discharged her mortgage to the Rural Bank some years ago. It would not have been necessary in that case for the action to be brought by both Elisabeth and the Rural Bank as co-plaintiffs. Third, Devil has entered Elisabeth's land.

What is not immediately clear is whether Devil, a wolf, is a dog within the meaning of s 6 of the Dog Act 1947. From a zoological perspective a wolf is a member of the dog family. On the surface this may seem conclusive on the question of whether a wolf is a dog. However a number of the provisions of the Dog Act 1947 referring to dogs clearly mean only dogs of a type which are ordinarily domesticated. Given this we feel that we have to interpret s 6 in the same way and so find that in s 6 ”dog" means only a dog of a type which is ordinarily domesticated. In this case the offending animal is a wolf. While the particular wolf was domesticated, as a species wolves are not usually domesticated.

For this reason Devil is not a dog within the meaning of s6 of the Dog Act so the plaintiff fails in her claim.

The ratio decidendi from this fictional judgment was the interpretation of the word “dog” in s 6 of the Dog Act. Reason, it was the only part of the judgment that needed an extra step. The other parts of the judgment were simply the facts, the existing law, and the application of the law to the facts. Therefore, the ratio decidendi from this fictional judgment was: the term “dog” under s 6 of the Dog Act 1947 “means only a dog of a type which is ordinarily domesticated” and did not extend to wolves.

To illustrate this point further, there was a phrase in this judgment that sounded like the ratio but was in fact, obiter dictum:

We add that this would be the case even if Elisabeth had not discharged her mortgage to the Rural Bank some years ago. It would not have been necessary in that case for the action to be brought by both Elisabeth and the Rural Bank as co-plaintiffs.

Obiter dicta are statements within a judgment that do not constitute as the ratio and is subsequently non-binding on future cases. The statement sounded authoritative and definitive and had the feel of being ratio, however, it was obiter because Elizabeth did not discharge ‘her mortgage to the Rural Bank,’ and therefore, the statement was not necessary to the decision. The phrase ‘her mortgage to the Rural Bank’ had nothing to do with the matter.

Now that we’ve examined the descriptive ratio, we need to examine the prescriptive ratio, that is, how the precedent ratio may apply to future cases.

2.2. Prescriptive Ratio Decidendi

There is a logical dichotomy between the descriptive ratio decidendi and the prescriptive ratio decidendi.[4] We may be able to identify the ratio in the precedent case but it is not possible to directly apply it to a future case. Reason being, the precedent case and the future case will never be precisely identical. There will always be distinctions between the two. What is the probability that identical facts in the past will occur in the future? Very slim. Thus, there needs to be a level of generality.

2.2.1. Level of Generality

I define the ‘level of generality’ as the transformation of a single judgment to the future judgment. Inevitably, a transformation needs to occur as a precedent may be utterly useless if we wait for the exact facts of the case to exist again. Thus, the level of generality is the determination of how similar or different the facts need to be from the old case to the new case.

To briefly illustrate, the book Laying Down the Law gives us a good example:

In Donoghue v Stevenson [1932] AC 562 … the House of Lords held that the manufacturer of a bottle of ginger beer could be liable to the consumer if, before the bottle was sealed, the ginger beer was contaminated by the remains of a snail and the consumer became ill as a result of drinking it. At the lowest level of abstraction the decision would be binding on later courts on in cases with precisely the same facts. On that basis, it would not be binding in a later case where the drink was Coca-Cola. But, in terms of the legal rule, why should there be a distinction between ginger beer and Coca-Cola? Logic suggests that the principle should apply, at the lease, to all food and drink which is packaged so as to prevent inspection.[5]

Thus, if we stopped at the level of describing the ratio, Donoghue v Stevenson would only be applicable to cases that involve: 1) Women, 2) from Scotland, 3) in the year of 1932, 4) in which harm can only come from snails, 5) in ginger beer bottles, 6) placed negligently, 7) by Mr. Stevenson, 8) etc., etc.

To push this further, Professor Julius Stone’s article, The Ratio of the Ratio Decidendi,[6] listed a spectrum of ways that the level of generality could be formulated from the case:

(a) Fact as to the Agent of Harm. Dead snails, or any snails, or any noxious physical foreign body, or any noxious foreign element, physical or not, or any noxious element.

(b) Fact as to Vehicle of Harm. An opaque bottle of ginger beer, or an opaque bottle of beverage, or any bottle of beverage, or any container of commodities for human consumption, or any containers of any chattels for human use, or any chattel whatsoever, or any thing (including land or buildings).

(c) Fact as to Defendant’s Identity. A manufacturer of goods nationally distributed through dispersed retailers, or any manufacturer, or any person working on the object for reward, or any person working on the object, or anyone dealing with the object.

(d) Fact as to Potential Danger from Vehicle of Harm. Object likely to become dangerous by negligence, or whether or not so.

(e) Fact as to Injury to Plaintiff. Physical personal injury, or nervous or physical personal injury, or any injury.

(f) Fact as to Plaintiff’s Identity. A Scots widow, or a Scots-woman or a woman, or any adult, or any human being, or any legal person.

(g) Fact as to Plaintiff’s Relation to Vehicle of Harm. Donee of purchaser, from retailer who bought directly from the defendant, or the purchaser from such retailer, or the purchaser from anyone, or any person related to such purchaser or other person, or any person into whose hands the object rightfully comes, or any person into whose hands it comes at all.

(h) Fact as to Discoverability of Agent of Harm. The noxious element being not discoverable by inspection of any intermediate party, or not so discoverable without destroying the saleability of the commodity, or not so discoverable by any such party who had a duty to inspect, or not so discoverable by any such party who could reasonably be expected by the defendant to inspect, or not discoverable by any such party who could reasonably be expected by the court or a jury to inspect.

(j) Fact as to Time of Litigation. The facts complained of were litigated in 1982, or any time before 1932, or after 1932, or at any time.

And finally, Professor HK Lucke writes:

…if the strongest possible case for application is the case involving the closest possible factual similarity, and if growing dissimilarity weakens the case for application, then a precedent would never be completely binding, for some difference between the precedential facts and the facts of later cases can always be detected.[7]

2.2.2. How to Determine the Level of Generality

There seems to be no strict rules for what constitutes the precise degree. While it is impossible to determine the exact level of generality, commonsense suggests the prescriptive ratio will inevitably fall in the middle ground. The ratio decidendi becomes useless if it’s restricted to the precise facts of the precedent and also becomes useless if it can be widened infinitely. Therefore, the level of generality will fall in the middle ground somewhere even if we don’t know what that middle ground is. Erwin Griswold, professor and dean of Harvard Law School said:

…There is in nearly every case an area of choice. How a judge marks out and determines that area largely determines the type of judge he is. In this area, most matters are ones of degree, ones of more or less. They are not black and white.

If a judge keeps this area too small, he is likely to be a poor judge, for he will be too hidebound by precedent, too much tied to the past, too unaware of the relevance of variations in the situation before him.

On the other hand, if a judge allows this area to be too broad, he is not likely to be a good judge. He may run some risk of deciding according to his own personal choice rather than according to law as he is given light to understand the law; he may give too little weight to precedent, and make the law unsettled.

Most judges successfully avoid these extremes. Even then, there is an area of choice. That is what judges are for. Within this area, it may not be possible to give a purely logical demonstration that one result is better than another. A judge has to call on all the resources of his experience and wisdom in coming to a conclusion. Some judges hew rather closely to the line; some are more free-wheeling.[8]

There are, however, some general indicators which will shape the level of generality:

1. ‘The more general, or abstract, the statement of the facts is, the greater the number of subsequent cases which will fall within the principle which is being formulated, and therefore the wider the ratio will be.’[9]
2. The fewer the facts and the less specific the facts, the broader the prescriptive ratio.[10]

2.2.3. The Court Decides the Level of Generality

Ultimately, it is for the future court to decide how narrow or wide the precedent ratio ought to be. This was elaborated by Gleeson CJ, Gummow, Hayne And Heydon JJ in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA, at [61]:

…if later courts read down the rule of the case, they may treat the proclaimed ratio decidendi as too broad, too narrow or inapplicable. Later courts may treat the material facts of the case as standing for a narrower or different rule from that formulated by the court that decided the case. Consequently, it may take a series of later cases before the rule of a particular case becomes settled. Thus for many years, courts and commentators debated whether the landmark case of Donoghue v Stevenson was confined to manufacturers and consumers and whether the duty formulated in that case was dependent upon the defect being hidden with the lack of any reasonable possibility of intermediate examination. If later courts take the view that the rule of a case was different from its stated ratio decidendi, they may dismiss the stated ratio as a mere dictum or qualify it to accord with the rule of the case as now perceived.

Also, in Povey v Qantas Airways Limited [2005] HCA, McHugh J said at [76], ‘Later courts commonly treat the material facts of a case as standing for a narrower or broader ratio decidendi than that expounded by the court that decided the case.’ For example, in Smits v Roach [2006] HCA Kirby J found differences between the cases but he widened the level of generality of Ebner v Official Trustee in Bankruptcy [2000] HCA to extend to the present case.

[112] Strictly, the ratio decidendi of Ebner (and Clenae) concerned an issue that is not present in this appeal. It concerned disqualification of judges for pecuniary interests of their own in a bank which had its own pecuniary interest in the outcome of the litigation (in Ebner) or was actually a party to proceedings before the judge (in Clenae). In the present case, the primary judge had no personal pecuniary interest whatever in the outcome of the proceedings. His brother had a pecuniary interest that was indirect and contingent. In so far as the primary judge had an interest, or apparent interest, its nature was potentially familial, emotional or empathetic. It was not pecuniary. This was, therefore, a case of disqualification by familial association with the brother who, in turn, had an indirect, contingent pecuniary interest in the dispute which the judge, his brother, was deciding.

[113] Notwithstanding the differences between the issues raised in Ebner and Clenae, and in this case, I accept that, by analogy, what the Court held in Ebner, if extended, would apply to this appeal. Certainly, it could be expected that the approach adopted in Ebner and Clenae would be adapted to the circumstances of this case.

2.2.4. Clarity by Time

Overtime, through litigation, the level of generality for the particular ratio will become clearer.[11] To illustrate, a ratio that’s been applied 1,000 times has clearer picture than a ratio that has been applied 1 time. The ratio becomes increasingly cemented by restatements in subsequent cases and commentaries.[12]

2.3. Applying the Ratio: Analogical Reasoning

Moving from descriptive ratio to the prescriptive ratio works by way of analogy. However, the analogy is never exact, only to related to degree. The descriptive ratio is similar or dissimilar to the future case. The greater the similarity to the future case, the more likely the ratio will be binding. The more dissimilar the ratio, the less likely it will be binding.

Some legal academics have debated whether precedential reasoning works by way of deductive logic, inductive logic, or analogy. In my opinion, deductive logic was ruled-out by Professor Julius Stone’s article where he illustrated that we cannot deductively move from descriptive ratio to the prescriptive ratio (See the section titled, ‘PRESCRIPTIVE RATIO’). This leaves inductive logic and analogy. Inductive arguments of the kind that the scientific method employs, such as an array of probabilistic methods,[13] are not really applied in legal reasoning. Therefore, in my opinion, precedential reasoning uses more of a rough form of inductive logic, that is, analogy. For judicial support, some judges will explicitly use the word ‘analogy’ in their reasoning when applying the ratio. For example, Kirby J writes in Smits v Roach [2006] HCA:

[88] Were the circumstances of Ebner, in this respect, analogous to those of the present case, thereby rendering the ratio decidendi of Ebner binding in these proceedings? Was it open to the Court of Appeal, in the light of factual differences between Ebner and the present proceedings, to approach the issue of disqualification in the way that it did?

…

[113] Notwithstanding the differences between the issues raised in Ebner and Clenae, and in this case, I accept that, by analogy, what the Court held in Ebner, if extended, would apply to this appeal. Certainly, it could be expected that the approach adopted in Ebner and Clenae would be adapted to the circumstances of this case.

2.4. Distinguishing: Escaping Binding Ratio

To avoid being bound by the precedent case, a common technique is to distinguish between the precedent case and the present case. In Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA, McHugh J at [61] said, ‘If later courts take the view that the rule of a case was different from its stated ratio decidendi, they may dismiss the stated ratio as a mere dictum or qualify it to accord with the rule of the case as now perceived.’ According to Neil Duxbury in his book The Nature and Authority of Precedent, a judge may distinguish ‘cases not because they have a law-making agenda but because following the precedent will not produce what they consider to be the right outcome.’[14] However, he further writes that the judge will likely not distinguish on a whim:

The judge who tries to distinguish cases on the basis of materially irrelevant facts is likely to be easily found out. Lawyers and other judges who have reason to scrutinize his effort will probably have no trouble showing it to be the initiative of someone who is careless or dishonest, and so his reputation might be damaged and his decision appealed. That judges have the power to distinguish does not mean they can flout precedent whenever it suits them.[15]

And lastly, Mason J writes in H.C. Sleigh Ltd. V. South Australia [1977] HCA, ‘If it is not distinguishable, then this Court has no alternative but to follow its earlier decisions.’

2.4.1. Example

In the book Legal Method, 9th Ed (2013), Ian McLeod give us a simple example of distinguishing:

…in Bridges v Hawkesworth (1851) LJ 21 QB 75, a customer was held to be entitled to keep money which he found on the floor of a shop. By way of contrast, in South Staffordshire Water Company v Sharwood [1896] 1 QB 44, the finder of two gold rings in the mud at the bottom of a reservoice was held to be not entitled to retain them, because the site of the finding had not been open to the public.[16]

A longer example of distinguishing is found in Channel Seven Adelaide Pty Ltd v Manock [2007] HCA. Here, Kirby J distinguished between the precedent case Pervan V. The North Queensland Newspaper Company Limited and Another [1993] HCA and the present case. In summary, the distinctions Kirby made were the legal issues in question and the factual circumstances. I have emboldened the key points.

[142] …this Court must find the rule applicable to the present case in its own earlier authority. They nominate Pervan. However, when Pervan is properly analysed, it can be demonstrated that neither the joint reasons in that case, nor any other decision of this or another Australian court, answer the exact problem now presented for our decision.

[143] Pervan was a case concerned not with the common law of defamation but with the enacted provisions of s 377 of the Criminal Code (Q). Section 377(8) of that Code provided that there was a "lawful excuse for the publication of defamatory matter" if the publication was "made in good faith in the course of, or for the purposes of, the discussion of some subject of public interest, the public discussion of which is for the public benefit, and if, so far as the defamatory matter consists of comment, the comment is fair". The reference in the first part of the enacted Queensland defence to the requirement that the relevant discussion must be "for the public benefit" has never been part of the common law. In particular, it has never been part of the law of South Australia.

[144] Necessarily, in deciding Pervan, this Court was therefore concerned not with the common law of Australia but with the meaning of the defence provided in the Queensland Code. The primary holding in Pervan was that s 377(8) of the Code did not import a requirement that the "comment", upon which the defendant relied, had to be based on facts which were true. Nor did s 377(8) require that the publisher hold the opinion expressed in the defamatory publication. Such were the issues in that case.

[145] The publication sued upon in Pervan was an advertisement in a regional newspaper. The advertisement, in the public notices section of the newspaper, summoned a meeting of ratepayers. The notice repeated statements made originally under privilege in the Queensland Parliament.

[146] Factual circumstances more different from the present case would be difficult to imagine. Pervan addressed a statute not the common law. It related to a defence of fair comment expressed in distinctive terms in a particular setting. It concerned a publication in a regional newspaper, not a broadcast on a commercial television station. And the publication appeared in a notice in permanent printed form, not a brief broadcast of a promotional advertisement.

[147] To conclude that, for the defendant to succeed in invoking a defence of fair comment in the circumstances of the present case, it must persuade this Court to overrule a legal principle for which Pervan stands (as the joint reasons suggest) mis-states the requirement of the Australia law of precedent. Although due respect will be paid to judicial observations, as a matter of law, only the ratio decidendi is binding. The ratio decidendi of Pervan is, as I have demonstrated, far removed from the legal question in issue in this appeal. That question is, relevantly, whether, in a publication such as the words and images broadcast by the defendant in the promotion, the facts in respect of which the defence of fair comment was claimed were sufficiently "indicated".

3. RULES OF THE RATIO DECIDENDI

After a judgment is written, there is a period of discovery that is needed to figure out what the ratio truly is. This involves deciphering whether it has fallen outside of what constitutes as the ratio and how narrow or wide the ratio is likely to be or ought to be. Therefore, the following is a list of rules for what constitutes the ratio decidendi.

3.1. Must Be a Necessary Step to the Conclusion

To constitute as the ratio, it must be a necessary step to the conclusion. There are many ways to conceptualise this rule. Christopher Enright in his book Legal Technique describes it as, ‘To be the ratio a rule of law formulated in a case must determine the case.’[17] In the book Precedent in English Law, Cross and Harris write, ‘The ratio decidendi of a case is any rule of law expressly or impliedly treated by the judge as a necessary step in reaching his conclusion, having regard to the line of reasoning adopted by him, or a necessary part of his direction to the jury.’[18] Or, the High Court judge Anthony Mason describes it in his article as, ‘The ratio is the principle or statement of law on which the previous decision is based to the extent to which it is essential to the decision.’[19]

The case law begins at Bole v Horton (1673) stating, ‘An opinion given in court, if not necessary to the judgment given of record, but that it might have been as well given if no such, or a contrary had been broach’d, is no judicial opinion; but a mere gratis dictum.’[20] In Osborne v Rowlett (1880) Jessel M.R. writes:

Now, I have often said, and I repeat it, that the only thing in a Judge’s decision binding as an authority upon a subsequent Judge is the principle upon which the case was decided: but it is not sufficient that the case should have been decided on a principle if that principle is not itself a right principle, or one not applicable to the case; and it is for a subsequent Judge to say whether or not it is a right principle, and, if not, he may himself lay down the true principle. In that case the prior decision ceases to be a binding authority or guide for any subsequent Judge, for the second Judge who lays down the true principle in effect reverses the decision.[21]

Kirby J in Garcia v National Australia Bank Limited (1998) 194 CLR 395, said at [56], ‘Judicial remarks of a general character upon tangential questions or issues not necessary to the decision are likewise discarded, however persuasive the reasoning may appear.’ Lastly, in Tabet v Gett [2010] HCA, Heydon J expressed the dangers of stating opinions that are not necessary for the outcome of the case. He argues that all players in the case - both parties and the judges - should feel as if their arguments will impact the outcome because the subsequent ‘consciousness … sharpens’ the quality of the law:

[97] The question of law which the plaintiff wishes to agitate was argued by the parties fully and forcefully because on one factual basis it would have been a live and decisive issue. But now the question has ceased to be live and decisive. The question has become hypothetical in the sense that the assumption it rests on has turned out to be incorrect. The question is controversial among lawyers and in other cases, but as between the plaintiff and the defendant in this case the controversy has turned out to lack concreteness. For them it has become moot. There is no answer to the question posed which will produce any consequences for the parties. The question has become purely abstract and academic. The only significance of an answer would lie in what future courts would make of it. They are likely to treat it not as a decision, but only as a dictum; not as the resolution of a controversy, but only as advice; not as an event, but only as a piece of news.

[98] The consciousness of parties and their legal representatives that the outcome of a debate about the correctness of contested propositions of law is decisively important to the interests of those parties often greatly assists the sharpness and quality of that debate. Doubtless it did so here. But the efficacy of a debate does not depend only on whether the participants in the debate have that consciousness. The efficacy of its resolution depends on the court sharing that consciousness and being assisted by that consciousness. Here a stage has been reached in a journey along the path to decision which has caused that consciousness to cease to exist because an issue has ceased to be decisively important. No assistance can be gained from a consciousness that has ceased to exist. In this field, for me, at least, to embark on difficult and doubtful inquiries in an attempt to answer the question without the assistance to be gained from that consciousness is a potentially very dangerous course. This is a case in which, since it is not necessary to do so, it is desirable not to.

[99] Accordingly, the appeal must be dismissed.

3.1.1. Example

To illustrate, the following hypothetical contains a statement that is not necessary to the judgment. The facts of the case are as follows:

At 12:30 pm on Monday 13 April, Jack, a Fletcher by trade, was walking down Holly Lane. He stopped when he came to the field which Jill, a cooper, held as a tenant of Lord Sheffield. Jack Decided that he wanted to take a short cut to get to the market. Therefore he walked across Jill’s field. Jill did not say to Jack that could walk across her field.[22]

Assume the Jack’s actions were held as trespass and assume the judge further stated the following: ‘Ms Jones Raised in the argument the consequences if a defendant tunnels under land possessed by the plaintiff. This also, we believe, would constitute trespass.’[23] However, the facts of the case did not involve tunneling. Therefore, the statement was irrelevant to the case and does not constitute as the ratio.

For a longer example of this rule, scroll up to the section entitled ‘DESCRIPTIVE RATIO DECIDENDI.’

3.2. Must Be Directly Related to the Issue

To constitute as the ratio, it must to be directly related to the issue. In Garcia v National Australia Bank Limited (1998) HCA, Kirby J writes, ‘It is fundamental to the ascertainment of the binding rule of a judicial decision that it should be derived from… a matter in issue in the proceedings.[24] Next, McHugh J said forcefully and plainly in Coleman v Power (2004) HCA, at [79]:

The essence of judicial power is the determination of disputes between parties. If parties do not wish to dispute a particular issue, that is their business. This Court has no business in determining issues upon which the parties agree. It is no answer to that proposition to say that this Court has a duty to lay down the law for Australia. Cases are only authorities for what they decide. If a point is not in dispute in a case, the decision lays down no legal rule concerning that issue. If the conceded issue is a necessary element of the decision, it creates an issue estoppel that forever binds the parties. But that is all. The case can have no wider ratio decidendi than what was in issue in the case. Its precedent effect is limited to the issues.

3.3. Must Come From Disputes of Law, Not Disputes of Fact

The ratio must be derived from disputes of law, not disputes of fact. Rations will not come from cases where the parties only disagree on the facts.[25]

3.4. Must to Be Argued in Court

To constitute as the ratio, it must first be argued in court. A point of law that will become precedent should have the opportunity to be argued by both parties in court, or the law will go without the benefit of counter arguments and fine-tuning. This rule was first proposed in the old case R v Warner (1661) 1 Keb 66 at 67: "[T]he presidents … sub silentio without argument, are of no moment". Many years later, Gleeson CJ, Gummow And Heydon JJ re-expressed this point in CSR Limited v Eddy [2005] HCA, at [13]:

It is of course commonplace for the courts to apply received principles without argument: the doctrine of stare decisis in one of its essential functions avoids constant re-litigation of legal questions. But where a proposition of law is incorporated into the reasoning of a particular court, that proposition, even if it forms part of the ratio decidendi, is not binding on later courts if the particular court merely assumed its correctness without argument.

Mansfield J later affirmed this in Taylor v Rudaks [2007] FCA at [39] by writing:

Although his Honour’s remarks suggest that he held the view that a claim under s 588M(2) of the Corporations Act is not a claim provable in the bankruptcy of a director, that view was not expressed after the benefit of argument on the matter. It does not form part of the ratio decidendi of the decision. It is not a view which his Honour reached after the opportunity of considering the decisions to which I have referred or the analysis of the precise wording of s 588M. I accordingly do not think that the decision obliges me to reach a conclusion different from that I have reached; nor that I should do so.

3.5. The Facts of the Precedent Case Shape the Level of Generality

The facts of the precedent case shape how narrow or wide the ratio should be applied to future cases. I expanded on this point above in section titled, ‘The Descriptive-Prescriptive Distinction.’

While it’s impossible to determine the precise level of generality, some general indicators are:

1. ‘The more general, or abstract, the statement of the facts is, the greater the number of subsequent cases which will fall within the principle which is being formulated, and therefore the wider the ratio will be.[26]
2. The less facts and the less specific the facts, the broader the application of the ratio.[27]

3.6. The Court Decides the Level of Generality

Ultimately, it is for the future court to decide how narrow or wide the precedent ratio ought to be. This was elaborated by Gleeson CJ, Gummow, Hayne And Heydon JJ in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA, at [61]:

…if later courts read down the rule of the case, they may treat the proclaimed ratio decidendi as too broad, too narrow or inapplicable. Later courts may treat the material facts of the case as standing for a narrower or different rule from that formulated by the court that decided the case. Consequently, it may take a series of later cases before the rule of a particular case becomes settled. Thus for many years, courts and commentators debated whether the landmark case of Donoghue v Stevenson was confined to manufacturers and consumers and whether the duty formulated in that case was dependent upon the defect being hidden with the lack of any reasonable possibility of intermediate examination. If later courts take the view that the rule of a case was different from its stated ratio decidendi, they may dismiss the stated ratio as a mere dictum or qualify it to accord with the rule of the case as now perceived.

Also, in Povey v Qantas Airways Limited [2005] HCA, McHugh J said at [76], ‘Later courts commonly treat the material facts of a case as standing for a narrower or broader ratio decidendi than that expounded by the court that decided the case.’ For example, in Smits v Roach [2006] HCA Kirby J found differences between the cases but he widened the level of generality of Ebner v Official Trustee in Bankruptcy [2000] HCA to extend to the present case.

[112] Strictly, the ratio decidendi of Ebner (and Clenae) concerned an issue that is not present in this appeal. It concerned disqualification of judges for pecuniary interests of their own in a bank which had its own pecuniary interest in the outcome of the litigation (in Ebner) or was actually a party to proceedings before the judge (in Clenae). In the present case, the primary judge had no personal pecuniary interest whatever in the outcome of the proceedings. His brother had a pecuniary interest that was indirect and contingent. In so far as the primary judge had an interest, or apparent interest, its nature was potentially familial, emotional or empathetic. It was not pecuniary. This was, therefore, a case of disqualification by familial association with the brother who, in turn, had an indirect, contingent pecuniary interest in the dispute which the judge, his brother, was deciding.

[113] Notwithstanding the differences between the issues raised in Ebner and Clenae, and in this case, I accept that, by analogy, what the Court held in Ebner, if extended, would apply to this appeal. Certainly, it could be expected that the approach adopted in Ebner[83] and Clenae would be adapted to the circumstances of this case.

3.7. When a Precedent Has Multiple Reasons, All Reasons Are Binding

In Commissioners of Taxation (NSW) v Palmer [1907] AC 179 at 184, Lord Macnaghten for the Privy Council said, ‘It is impossible to treat a proposition which a court declares to be a distinct and sufficient ground for its decision as a mere dictum, simply because there is another ground stated upon which, standing alone, the case might have been determined.’ Next, in Cheater v Cater [1918] 1 KB 247, at [252], ‘If a judge states two grounds for his judgment and bases his decision upon both, neither of those grounds is a dictum. In London Jewellers Ltd v Attenborough [1934] 2 KB 206, at 222, Greer LJ said:

In that case two reasons were given by all the members of the Court of Appeal for their decision and we are not entitled to pick out the first reason as the ratio decidendi and neglect the second, or to pick out the second reason as the ratio decidendi and neglect the first; we must take both as forming the ground of the judgment.

Later, in Jacobs v London County Council [1950] AC 361 at 369 Lord Simonds said, ‘There is in my opinion no justification for regarding as obiter dictum a reason given by a judge for his decision because he has given another reason also.’ And finally, in McBride v Monzie Pty Ltd [2007] FCA 1947, at [6] ‘If a judge gives two or more alternative reasons for reaching his (or her) decision each reason is part of the ratio.’ While this rule comes from UK, these cases have been affirmed in many Australian cases, such as McBride v Monzie Pty Ltd [2007] FCA.

3.8. The Ratio Can Come in Multiple Forms

The ratio can come in three forms:

1. A common law rule; or
2. Interpretation of statute, or
3. Interpretation of a common law rule.[28]

3.9. Where There Are Multiple Judges: a) The Majority of Judges Must Agree to Be Binding

To constitute as the ratio, the majority of judges must agree where there are multiple judges.[29] By implication, dissenting judgments are not binding. ‘Dissenting judgments’ are judgments by the minority of judges, such as 2 out of 6 judges.

The first case comes from Bone v Commissioner of Stamp Duties [1972] NSWLR at 654. Jacobs P writes in reference to a statement made by Owen J in a High Court Decision:

That decision is naturally entitled to the greatest respect. It is of its nature a most persuasive precedent, but it is not a precedent which is binding upon this Court. It was not a decision given by Owen J when sitting as a member of a court in the framework of the appellate structure of which this Court is part.

In the same case, Hope JA states:

A decision of a justice of the High Court sitting at first instance is of course of the greatest persuasive authority for this Court, but this Court is not bound to follow it, and since the decision is challenged, it becomes necessary to decide whether the construction placed upon the agreement by Owen J was the correct one.[30]

McLelland J affirms this in Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] NSWLR:

Nor am I bound by a decision of the High Court constituted by a single justice (cf Bone v Commissioner of Stamp Duties [1972] 2 NSWLR 651, at 654, 664), or by a decision of the House of Lords, although in either case such a decision is also entitled to great weight and respect.[31]

In Federation Insurance Limited V. Wasson and Others [1987] HCA Mason C.J., Wilson, Dawson And Toohey JJ write at [17]:

It is not strictly necessary for this Court now to resolve the controversy as to what Deaves actually did decide. If it matters, we agree with the assessment made by McHugh J.A. Certainly, it would not be proper to seek to extract a binding authority from an opinion expressed in a dissenting judgment … That is not to say, however, that a dissenting judgment may not deserve respectful consideration. A dissenting judge will often see his or her judgment as an appeal to the brooding spirit of the law, waiting for judges in future cases to discover its wisdom.

Kirby J said in Garcia v National Australia Bank Limited (S18/1997) [1998] HCA at [56]:

…the rules governing the ascertainment of binding precedent observe principles which are at once majoritarian and precise. Even so great a Justice of this Court as Dixon J cannot speak for the Court unless his reasoning attracts the support, express or implied, of a majority of the participating Justices (disregarding for this purpose any who did not agree in the order of the Court disposing of the proceedings on the point in question).

In New South Wales v Commonwealth of Australia [2006] HCA at [487] Kirby J also said:

First, in Pacific Coal, Gaudron J (along with McHugh J and myself) was in dissent. Her reasoning therefore forms no part of the ratio decidendi of that case.

Again, Kirby J writes in Vasiljkovic v Commonwealth of Australia [2006] HCA, at [188]:

Detention and criminal punishment: The Commonwealth argued that the broad statements in Chu Kheng Lim v Minister for Immigration, about the exclusive judicial role in imposing involuntary detention in the context of criminal punishment, were not endorsed by a majority of the Court in that case. They were not, therefore, part of the ratio decidendi of that case.

And Lastly, in Novartis AG v Hospira Pty Limited [2012] FCA, Yates J said at [64]:

Whilst a decision of a single justice of the High Court is deserving of close and respectful consideration, I am not bound by the observations quoted above. This is because, first, they are obiter dicta and, secondly, the decision in F Hoffman-La Roche is not binding on me as a matter of precedent in any event: Bone v Commissioner of Stamp Duties [1972] 2 NSWLR 651 at 654 and 664.

3.9. b) When Judges Have Different Reasons, Find Essential Areas of Agreement

When judges have different reasons for their decision, find essential areas of agreement. Justice Kirby gives us this advice in his speech, Precedent – Report on Australia:

Determining the ratio decidendi of a judicial decision becomes a complex task when multiple concurring reasons are published by several judges in a single case. In such a case, the ratio must be drawn from the essential areas of agreement found within the reasons of the judges in the majority.”[32]

Frederick Schauer in breaks it down in his book, Thinking Like a Lawyer: A New Introduction to Legal Reasoning:

So if judge A decides for the plaintiff for reasons x, y, and z, and judge B decides for the plaintiff for reasons p, q, and x, and if judge C decides for the defendant, then the ratio decidendi is x, the reason (and the only reason) shared by a majority of judges.[33]

3.9. c) Cannot Discard a Case Where the Majority of Judges Agree on the Order but Do Not Agree on the Reasons

In Garcia v National Australia Bank Limited (1998) 194 CLR 395, Kirby J wrote at [57]:

As all of the Justices concurred in the order of the Court allowing the appeal in that case, the reasoning of none could be discarded. As none of the Justices expressly concurred in the reasoning of another, the analysis depends upon a comparison of the reasons which each gave.[34]

3.9. d) Cannot Construct a Ratio Decidendi by the Aggregation of Various Elements of Separate Reasons

In Great Western Railway Company v Owners of SS Mostyn [1928] AC 57 at 73, Viscount Dunedin said: ‘With great hesitation they have added the opinion of Lord Hatherley to that of Lord Cairns and then, with still greater difficulty, that of Lord Blackburn, and so have secured what they think was a majority in favour of Lord Cairns’s very clear view.’ Viscount didn’t think that this method ought to be binding.

Barwick C.J. affirmed this in Victoria V. The Commonwealth (1971) HCA, at [39], ‘It is not permissible to construct such a ratio by the aggregation of various elements from separate reasons given by their Honours.’

Lastly, In Perara-Cathcart v The Queen [2017] HCA, the majority judgment at [134] states:

Authority makes plain that it is not permissible to construct a ratio decidendi by the aggregation of various elements of separate reasons, still less to extract an element from a dissenting judgment and combine it with an element from a majority judgment in an attempt to create a majority in favour of that element. Parity of reasoning dictates that, where a majority of the Court of Criminal Appeal has decided that there has been a miscarriage of justice, it is not permissible to construct a further decision by a majority of that Court that there has been "no substantial miscarriage of justice" by aggregating the decision of one member of the Court to that effect with the decision of another member of the Court who was not persuaded, at the point of the anterior question, that there had been a miscarriage of justice. In such circumstances, a majority of the Court has decided that there has been a miscarriage of justice, and it follows that the appeal to that Court must be allowed.[35]

3.10. A Precedent Can Be Binding Without a Ratio

Where the material facts are the same, judgments may still be binding on lower courts even if there was no ratio, providing that the facts are the similar. The book Laying Down the Law phrased this point well: ‘Where the material facts are the same, the lower court will still be required to reach the same outcome, applying the same rules of law as the superior court, even if the law had not been in dispute in that particular superior court decision.’[36]

In Re Tyler; Ex Parte Foley [1994] HCA, McHugh J said:

[4] The divergent reasoning of the majority judges in Re Tracey and Re Nolan means that neither of those cases has a ratio decidendi. But that does not mean that the doctrine of stare decisis has no relevance or that the decisions in those cases have no authority as precedents. Because it is impossible to extract a ratio decidendi from either of the two cases, each decision is authority only for what it decided ((59) Dickenson's Arcade Pty. Ltd. v. Tasmania (1974) 130 CLR 177 at 188; Philip Morris Ltd. v. Commissioner of Business Franchises (Vict.) (1989) 167 CLR 399 at 496.). But what is meant by saying that a case, whose ratio decidendi cannot be discerned, is authority for what it decided? It cannot mean that a court bound by that decision is bound only by the precise facts of the case. Stare decisis and res judicata are different concepts.

[5] In my opinion, the true rule is that a court, bound by a previous decision whose ratio decidendi is not discernible, is bound to apply that decision when the circumstances of the instant case "are not reasonably distinguishable from those which gave rise to the decision" ((60) Scruttons Ltd. v. Midland Silicones Ltd. (1962) AC 446 at 479 per Lord Reid.).

However, Harris & Cross argue that ‘the authority of a decision for which no reasons are given is very weak, because it is so hard to tell which facts were regarded as material and which were thought to be immaterial.’[37]

3.11. When the Ratio Cannot Be Determined, a Court May Not Be Bound

When the ratio cannot be determined, a court may not be bound. In Great Western Railway Co v Owners of SS Mostyn [1928] AC 57, at [73]:

When any tribunal is bound by the judgment of another court, either superior or co-ordinate, it is, of course, bound by the judgment itself. And if from the opinions delivered it is clear … what the ratio decidendi was which led to the judgment, then that ratio decidendi is also binding. But if it is not clear, then I do not think it is part of the tribunal’s duty to spell out with great difficulty a ratio decidendi in order to be bound by it.

At first instance, this seems as if it conflicts with the last point (10). However, the court may not be bound by the ratio but may still be bound by the precedent.

3.12. Not All Cases Must Have a Ratio

Not all cases have a ratio decidendi. In Perara-Cathcart v The Queen [2017] HCA, Gageler J said:

[74] The individual members of a multi-member court will sometimes disagree. Sometimes disagreements will be resolved by dialogue, one member ending up convinced by another to take a different view; sometimes not. Where disagreements are not resolved, the law supplies a decision-making rule which allows the court to produce the order that is necessary for its institutional duty to be fulfilled.

[75] The decision-making rule applied to produce the order of a multi-member court in a case in which there is disagreement between its members is different in timing, concept and purpose from the principle applied in an attempt to extract a ratio decidendi from the reasons for decision of the members of that court in that case. The decision-making rule is applied at the time of decision. The rule is directed to ensuring an outcome in the case. When triggered by disagreement, the rule applies to produce a result. The principle is applied subsequently and in retrospect. The principle is directed to the ideal of ensuring that cases are decided consistently through time. The principle cannot be expected always to achieve that ideal. Every case must have an outcome, but not every case need have a ratio decidendi.

[76] When members of a Full Court of the High Court are "divided in opinion as to the decision to be given on any question", the decision-making rule is supplied by s 23(2) of the Judiciary Act 1903 (Cth). If the case is in the High Court's appellate jurisdiction and there is an equal division of opinion, the decision appealed from is left to stand. If there is an equal division in the High Court's original jurisdiction, the opinion of the Chief Justice or Senior Justice prevails. In each of those circumstances of equally divided opinion, the applicable decision-making rule produces a resolution of the case at hand. In neither of those circumstances does application of the rule produce a decision which necessarily constitutes a binding precedent. When the division in opinion in the High Court is not equal, the decision-making rule is that "the question shall be decided according to the decision of the majority". That decision-making rule produces a resolution of the case at hand notwithstanding that aggregation of the reasons for decision of members of the majority can sometimes fail to yield a ratio decidendi.

3.13. Unstated Assumptions Do Not Constitute the Ratio

Unstated assumptions do not constitute the ratio. In Muldoon v Church of England Children's Homes Burwood [2011] NSWCA Campbell JA at [39] writes:

Reasons for judgment are not authority for a matter that has been assumed, rather than actually decided, in the course of those reasons for judgment: Baker v The Queen [1975] AC 774 at 788; Archer v Howell (1992) 7 WAR 33 at 46; Savouts v Minister for Immigration and Multicultural Affairs [2000] FCA 1059 at [32]-[33]; R (Kadhim) v Brent London Borough Council Housing Benefit Review Board [2001] QB 955 at [20]-[25], [33]-[39], 962-963, 965-966; Markisic v Commonwealth of Australia [2007] NSWCA 92; 69 NSWLR 737 at [56].

4. RULES OF OBITER DICTA

Obiter dictum is typically seen as statements that don’t constitute the ratio decidendi, that is, obiter is everything else but the ratio. However, not all sentences in a judgment fall under either ratio decidendi or obiter dictum. The book, Laying Down the Law writes:

Frequently during the course of a judgment a judge will restate and discuss proposition of law from previous cases. Such recitations may provide a useful foundation for the judge’s reasoning but they will neither be ratio no obiter unless they receive the endorsement of the judge.[38]

Thus, obiter dicta are statements made during the course of a judgment that do not fall under the other categories, such as the ratio, the orders,[39] the headnote, the restatements of law, etc.

4.1. Generally, Obiter Dictum Is Not Binding

Generally, obiter dictum is not binding. John Chipman Grey in his book, The Nature and Sources of The Law writes, ‘It must be observed that at the Common Law not every opinion expressed by a judge forms a Judicial Precedent.[40] However, the exception is ‘seriously considered dicta’ from the High Court (See the section titled, ‘Binding Dicta: The High Court Exception’). Therefore, all obiter that is not from the high court, is not binding.

The case law starts at Bole v Horton (1673). Vaughan CJ at 382 said, ‘An opinion given in a court, if not necessary to the judgment given of record, but that it might have been as well given if no such, or contrary had been broach’d, is no judicial opinion: but a mere gratis dictum.’[41] A few hundred years later, Jessel MR writes in Osborne v Rowlett (1880) Ch at 785:

Now, I have often said, and I repeat it, that the only thing in a Judge’s decision binding as an authority upon a subsequent Judge is the principle upon which the case was decided: but it is not sufficient that the case should have been decided on a principle if that principle is not itself a right principle, or one not applicable to the case; and it is for a subsequent Judge to say whether or not it is a right principle, and, if not, he may himself lay down the true principle. In that case the prior decision ceases to be a binding authority or guide for any subsequent Judge, for the second Judge who lays down the true principle in effect reverses the decision.

4.2. Obiter Is Persuasive

Over and over again, you will hear the mantra that obiter dictum is “persuasive.” When someone mentions the word “obiter”, inevitably, you will hear someone robotically respond that it’s “persuasive.” So, if obiter is not binding, what does persuasive actually mean. In my view, it means that the statements made in obiter should be consciously considered, rather than immediately ignored. In Ex parte Bell Cox (1887) QBD:

I do not think that a judge would wish any statement which he may have made in the course of a case, merely obiter and casually, to be treated as necessarily being an authority on the subject in question; but when a judge has thought it necessary for the purpose of the case to make a deliberate examination of the practice of his Court, and to state such practice, I do not think the authority of such statement can be got rid of merely by arguing that it was not really necessary for the actual decision of the case. I think that such a statement if cited as an authority is entitled to great weight, though of course not bind on is as a decision.

Also, in Eslea Holdings Ltd v Butts (1986) NSWLR, at 361 Samuels JA commented on the need ‘to pay the very greatest respect and attention’ to High Court dicta. And, in Forgeard v Shanahan (1994) NSWLR at 226, Meagher JA stated that a lower court should not ‘lightly decline’ to follow ‘considered dicta of a very distinguished High Court.’ Note the High Court’s binding dicta exception (see ‘Binding Dicta: The High Court Exception.’)

4.3. Obiter Has Different Degrees of Weight

Obita dicta have different degrees of weight. On the light end, there are simple passing remarks and on the heavy end, there are statements that have been fully argued, as if it were the ratio.[42] In

Brunner v Greenslade

[1971] Ch, Megarry J states:

A mere passing remark or a statement or assumption on a matter that has not been argued is one thing, a considered judgment on a point fully argued is another, especially where, had the facts been otherwise, it would have formed part of the ratio. Such judicial dicta, standing in authority somewhere between a ratio decidendi and an obiter dictum, seem to me to have a weight nearer to the former than the latter.

Also, some statements made in dicta are so influential that it in effect becomes ratio. In the book Precedent in English Law, 4th Ed, Cross and Harris write: ‘Dicta of the highest degree of persuasiveness may often, for all practical purposes, be indistinguishable from pronouncements which must be treated as ratio decidendi.’[43]

5. BINDING DICTA: THE HIGH COURT EXCEPTION

5.1. Seriously Considered Dicta

Historically, obiter dictum has never been binding. However, In Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA, the High Court unanimously stated that lower courts are bound by the High Court’s ‘long-established authority and seriously considered dicta of the majority of this court.’ They write:

[134] It is true that those statements were dicta in the sense that the case was decided on the second limb of Barnes v Addy. But, contrary to the Court of Appeal's perception, the statements did not bear only "indirectly" on the matter: they were seriously considered. And, also contrary to the Court of Appeal's perception… it was shared by the entire majority… [That] is not a step which an intermediate court of appeal should take in the face of long-established authority and seriously considered dicta of a majority of this Court.

…

[158] The changes by the Court of Appeal with respect to the first limb, then, were arrived at without notice to the parties, were unsupported by authority and flew in the face of seriously considered dicta uttered by a majority of this Court. They must be rejected.

I express my gratitude to Professor Matthew Harding and Professor Ian Malkin for writing a brilliantly researched journal article on the issue of ‘seriously considered dicta’ entitled, The High Court of Australia’s Obiter Dicta and Decision-Making in Lower Courts. The authors analysed a large amount of cases on the effect of dicta by the High Court on the lower courts. Prior to Farah, they found that many judges from lower-courts did not see themselves as having a duty to follow dicta from the High Court: ‘[T]he cases in which lower courts appear to have considered themselves under a duty of obedience to High Court dicta are not numerous. In our view, these cases [that did,] were ‘outliers’ in the pre-Farah world.’[44]

Post Farah, most courts consider themselves under a duty of follow seriously considered dicta and the courts that don’t, are now the outliers.[45] For example, in Zotti v Australian Associated Motor Insurers Ltd (2009) NSWCA, Spigelman CJ wrote, ‘this court is obliged to follow...the clearly expressed dicta of the High Court even if not part of the ratio decidendi.’ In Lassanah v State of New South Wales [2009] NSWDC at [25], Gibson DCJ said ‘[e]ven if, rather than forming a part of the ratio decidendi, this [passage] amounts to “considered obiter dicta”, I am still bound by this decision for the reasons explained by the High Court in Farah.’ Lastly, In Net Parts International Pty Ltd v Kenoss Pty Ltd [2008] NSWCA at [28], MacFarlan JA:

Whilst...the statement of principle in Lion White is strictly an obiter dictum, the statement is one which this Court is in my view required to apply unless and until the High Court opines further on the question, the statement of principle having stood without contradiction for some 90 years and the statement being a well-considered one.

5.2. Distinction Between All Dicta vs Seriously Considered Dicta

There is a distinction between all dicta and seriously considered dicta. For example, Perram J in Australian Capital Territory v Queanbeyan City Council [2010] FCAFC felt that he was not bound by the High Court’s dicta:

The principle thus elucidated is neither long-established by authority nor the result, I think, of seriously considered dicta of a majority of the High Court. Thus this Court is not bound to follow it: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89.

Also, Mercedes Holdings Pty Ltd v Waters (No 3) [2011] FCA, Perram J decided that the High Court’s statement was ‘not a considered dictum otherwise binding on [the court]’.

5.3. Current Ambiguities

Harding and Malkin found a few ambiguities with Farah:

1. What constitutes as ‘long established authority?' For example, 'In Pape v Federal Commissioner of Taxation, Heydon J (in his dissenting judgment) pointed out that certain dicta were ‘seriously considered dicta, but they could not be described as conforming with long-established authority’.’[46]
2. What constitutes as ‘seriously considered?' For example, ‘in the Victorian Court of Appeal in 2010, Doughty v Martino Developments Pty Ltd, Nettle JA said of a statement that was not the product of a consideration of relevant authorities or substantial argument that it ‘does not rise to the level of considered dicta in the sense identified in Farah.’’[47]