In time, these equitable rules became as fixed as common law rules because of thetendency, by Chancellors as well as judges, to decide cases in accordance with precedent.Equity and common law, though, remained as separate bodies ofrules, administered inseparate courts in England, until the 1870s. Legislation of that period, later copied inAustralian States and Territories, provided for the ‘fusion’ of common law and equity. Allcourts would apply principles of common law and equity to each matter that came beforethem; in cases where the principles were inconsistent, the equitable rules were to prevail.In this way, then, English law recognized certain matters as being within the province of thecommon law courts, and others as being within the province ofthe Chancellery. Thus,‘common law’ and ‘equity’ developed as two streams of legal rules and procedures. And thisdistinction was received in Australia as part of the English legal system. Even since thefusion, ‘equity’ still exists as a specialized and identifiable body of legal rules and principles.But now that all courts apply both sets of principles, the distinction between the two is oftenblurred, since it may not matter in practice whether a particular rule is derived from commonlaw or equity.(R. Chisholm & G. Nettheim, Understanding Law, Butterworths, 6th ed., 2002, pp. 24-30)50
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CO5119:03 Business Law SUBJECT MATERIALS >>SCHOOL OF LAWJAMES COOK UNIVERSITY3.2Common Law as a Source of LawOfthe two sources of law - case law and legislation - case law is increasingly losing someof its importance. There are three reasons for this:(1)Judges can only make law about cases that come before them, whereas thelegislature can make law about any subject, at any time, subject only to constitutionalconstraints (in Australia, for example, the Federal Parliament can only make lawsabout those matters which are listed in the Constitution - these, however, are verywide);(2)In the event of a conflict between them, statute law prevails over case law; and(3)Legislatures are increasingly enacting legislation over a great range of topics, hencereducing the impact ofcase law in those areas.Nonetheless, the role of case law is still significant. Let us now examine the developmentand operation of this source of the law from the following extract from P. Gillies, BusinessLaw, Federation Press, 7th ed., 2001, pp. 14-20, 24-27.Judge-Made Law and Statute LawAs it has been seen, law falls into two categories, in the technical sense, judge-made lawand statute law. Judge-made law may be referred to very generally as ‘common law’, but forboth historical and functional reasons it is appropriate to divide judge-made law into twocategories - the common law proper, which represents the principles settled by the commonlaw courts ofEngland, as modified over time, and equity, which represents those principlessettled by the Chancery Court in England, also as modified over time. For this reason thecommon law and equity will be discussed separately, following which statute law will bereviewed.
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