We live in a country with a legal system that is largely based on legislation; but in some cases that legislation is derived from decisions in superior courts. A court will make a ruling on a particular case and the hierarchy of courts in Australia generally sees the lower courts being bound to follow the decision of the higher courts. This Doctrine of Precedent has been the backbone of the English Westminster system of law in Australia having been inherited from England since our early settlement.
The reasoning behind the doctrine is essentially to achieve a balance between certainty, consistency and development of the law in a controlled and orderly fashion. The rationale being that society changes over time, so the law must be flexible and change with it.
On 5 July 2009, Malgorzata Poniatowska pleaded guilty to 17 charges of Centrelink fraud in the Adelaide Magistrates Court. Essentially she failed to report her income to Centrelink who claimed they were $71,502.00 out of pocket while Ms Poniatowska was working. Ms Poniatowska was given a suspended sentence for offences occurring between May 2005 and May 2007.
She tried to appeal her conviction to a single judge of the Adelaide Supreme Court who dismissed the appeal. She then sought leave to appeal before the Full Court of the South Australia Supreme Court who set aside her convictions 2:1. The case can be read here – Poniatowska v DPP (Cth)  SASCFC 19.
Both Doyle CJ and Duggan J determined that (at par 38) in order for a person to be liable for an omission, there must be a legal duty. In this case, the court was satisfied the prosecution had not identified any such duty and therefore the complaint by Centrelink could not be substantiated. Essentially, the court found that no offence had been committed because she did not have a legal obligation or duty to inform Centrelink about her change in financial circumstances.
This decision has created a stir of controversy bearing in mind our Doctrine of Precedent. It opens the gates for appeals and failed prosecutions in thousands of Social Security court matters throughout Australia. Naturally Centrelink itself would be concerned considering its prosecutions rely on their federal legislation, which is principally designed by Parliament to stop customers obtaining a financial advantage by omitting to inform Centrelink of any other income.
Rightly so, it is an area of law that needs to be settled and the High Court has seen fit to fast-track an application for leave to settle the dust that has been disturbed by the Adelaide Supreme Court. In the meantime, lawyers acting for clients would be joining the ‘holding pattern’ of similar matters until this area of law is settled.
The hearing has been listed for 12 November 2010 and no doubt all eyes will be on it.
Update – Posted 12 November 2010 – by Mark Williams
On 12 November 2010, a special leave application was heard in Sydney, brought on by the Commonwealth Director of Public Prosecutions. The High Court saw fit to refer the matter to a full court sitting, which will hear further argument, before deciding whether to grant leave for the case to proceed.
A date has not been set yet by the High Court.