Values in Law: How they Influence and Shape Rules and the Application of Law

Chief Justice Allsop AO 20 October 2016

2016 Hochelaga Lecture
Centre for Comparative and Public Law
Faculty of Law, University of Hong Kong


RTF version (387 kb)


1 Law, at its very foundation, is conceived and derived from values. These values are such as inform and underpin a rational and fair expectation of how power should be organised, exercised and controlled at a private and public level.

2 These values find their expression not only in the formal law, but also in societal expectations, behaviour and actions (which may, in time, also come to be reflected or incorporated within the law, but which, in any event, do not require formal legal expression for society to understand their correctness or importance). This is not, however, to say that these values, or indeed that the laws, rules, principles and expectations derived from, and reflecting such values, are merely specific cultural manifestations, or that they are culturally or jurisdictionally derived. It may well be the case that such values form part of a culturally-specific heritage. But they are far more than that. At least some transcend cultural boundaries. They lie at the heart of every individual, and at the heart of society – as human values.

3 The essential human values most particularly relevant to public law are: a rejection of unfairness and an insistence on essential equality; respect for the integrity and dignity of the individual; and mercy. Each goes to the core of what we understand humanity and the individual to be, and to what is expected when power is exercised by or against individuals. Dignity can perhaps be seen to drive the soul[1]; it lies at the foundation of self and ultimately informs the rejection of unfairness. These values find expression in the rules, principles, precepts and norms developed by society and by the law. But the nature of these values is such as to make it necessary to recognise the limits of text in their expression, drawn ultimately, as they are, from the human condition, and the intuition and sensibility therein.

4 The law, in its creativity and flexibility, has drawn upon these values in numerous manners and forms. The concern of public law to prevent the exercise of power which is arbitrary, capricious, or unreasonable can be seen to reflect a concern with rejecting unfairness. This is the reasonable expectation of each individual that power will not be exercised against her or him in a manner that fails to respect her or his integrity and dignity. The same can be seen in the concern of private law to prevent unconscionability and to deter behaviour that is antithetical to honest, reasonable, mutually beneficial commercial relations.

5 There is an important balance to be struck in this respect. Legal systems and societies cannot be built or sustained by reference only to generally expressed values. Neither, however, can they be built upon strict textually-rooted rules alone. Rather, a balance must be struck of rules, principles, precepts, norms and values. These are not clearly identifiable separate vehicles, but expressions along a gradation of particularity. The proper balance to be struck must recognise the requirement that rule and principle conform to moral standards as the gauge of the law’s flexibility and as its avenue for growth, and in order to accommodate changes in society’s conceptions of the application of unchanged values. The balance must also recognise the danger of absence of adequate rules that may confound law by a drift into a formless void of sentiment and intuition.

6 In the James Spigelman Oration last year[2], I identified certainty as a value. On reflection, I think the preferable approach is to view the reasonable certainty as a part of the product of the striking of the balance to which I refer. That is not to underrate its importance. It is a foundation of a stable and predictable legal system. But it is not reached by rules alone; indeed, a rule for everything is to invite complexity and incoherence.

7I make the taxonomical distinction between public and private law to reflect the fact that, even though they share a concern with the control of power, there is something super-added, something meaningful, sometimes something menacing in the presence of state authority, adding an urgency or pungency to the exercise of state power. Further, private law has within it values of a broad kind which attend the conduct of private parties in their relevant milieu. In the course of this lecture, however, I trust that it becomes clear that despite the distinction between public and private law, human values inhere across the entire fabric of law.[3]

The control of power in public law

8 Public law encompasses various areas or subjects in which society as a whole has an interest and where a form of state power is exercised. This includes not only constitutional and administrative law and the law concerned with the organisation of legislative and executive power, but also areas such as criminal law and the law of insolvency.

9 In each area of public law, power is distributed, exercised and controlled primarily by reference to text – constitutional and statutory. Those texts are in turn to be read and understood by reference to the organised values that surround them, and to the purposes and aims of the texts in the social and political milieu of their creation, including a consideration of how people should be treated in the exercise of power in a just and decent society.

10 This is not about being nice. Rather, it is about how those who are the subject of the exercise of power in civil society should be entitled to expect that the lawful exercise of power involves attributes or characteristics that recognise and reinforce human dignity and integrity, and that reflect the high trust that society has placed in those with public power to exercise it lawfully and for the common good. Such considerations, which inform all aspects of public law, include: the reasonable expectations of women and men in their lives, the notion of civil society (meaning a just society in which there is a shared and expected reciprocity), and freedom from the exercise of arbitrary and unreasonable power.[4]

11 This influence and place of values can be seen, as an example, in the concern expressed in maintaining the integrity of the judicial process. In 1996, in Kable v DPP (NSW)[5] the High Court of Australia was faced with an act of state power (by Parliament) that purported to permit pre-emptive imprisonment. Mr Kable had been convicted of a violent crime: the manslaughter of his wife. As he approached the end of his sentence, he sent letters from prison to individuals that caused it to be thought that, upon release, he might well commit further violent crimes against those individuals. An Act of the New South Wales Parliament was passed that provided for his continued detention by order of the Supreme Court upon satisfaction of certain conditions (not being conviction of any crime). The argument of Sir Maurice Byers on Mr Kable’s behalf reached to the very foundations of civil society: he submitted that the statute was not a law, but rather, in substance, an order to the Court to imprison Mr Kable; he submitted that the New South Wales Constitution assumed the rule of law as a constitutional imperative, the continuation of which was a working assumption of the Australian Constitution; he submitted that the statute was inconsistent with a basal element of representative parliamentary democracy thus founded on the rule of law, by its call for imprisonment otherwise than pursuant to conviction for an offence; and the undermining of State courts making them unfit for the investiture of federal jurisdiction.

12 Aspects of these arguments were woven into the reasons of the majority[6]; a critical feature being the centrality of the chapter of the Constitution (Ch III) devoted to the federal judicature. Justice Gaudron’s starting point was the constitutional structure of an integrated Australian judicial system for the exercise of the judicial power of the Commonwealth.[7] The Court was concerned with the freedoms and liberty upon which Australia’s whole system of government is founded. The Court held that the Judicature is vested with a form of power distinct and different from executive and legislative power; the power is based on pre-existing law (though part of the Judicature’s task is the law’s health and direction and so its change from time to time) and, as part of its essential fabric, the execution of judicial power is constitutionally required to be fair, equal and just. This is not rhetoric. These features are part of the defining character of the power. They are features that reach back to the rejection of inequality of status that was the foundation of the Ancient World, and to the recognition of one man or woman’s soul (however lowly she or he were born) as the spiritual equal of the soul of a king.[8] The forging of the place of the individual and the recognition of her or his human dignity lie at the root of our conceptions of fairness and equality. They are the features that engender the consent, trust and respect of society in the administration of justice in its daily contact with people, often in circumstances that can be productive of distress, a sense of abject failure and crushing humiliation. I leave to one side, for another occasion, the discussion of the driving influence of the human demand for dignity and the rejection of unfairness as an immanent human response, even in the absence of a social system grounded on the essential equality of individuals, where rule, authority and imposed certainty for the common good are, or may be, dominant ideas.

13 The prohibition upon the Parliament conferring functions on courts that are incompatible with their essential features of judicial power protects courts, as the vehicles for judicial power, from any suggestion that they wield power (often in circumstances of the above kind) other than fairly, equally and justly. This creates and protects a constitutional guarantee of liberty (that is perceptible to all lay people) that the power of the state will be judged fairly, equally and justly by the institution recognised by the Constitution to undertake that task: the Judicature. Thus, the organisation of power and the independence of the judicial power come to be important elements in reciprocity and consent, as part of the sovereignty of the people. These considerations pervade Kable and are why it is of such enduring importance within Australian public law.

14 The presence of these human values is also demonstrated in the pervasive legal notion of natural justice or procedural fairness[9]. Procedural fairness, although coherently structured around developed rules and precedents[10], has at its heart the abiding informing principle of fairness. In 1985, in Kioa v West[11] in the High Court of Australia, Justices Mason and Brennan agreed that the informing principle was fairness, but disagreed as to the vehicle for the carriage of the principle. Justice Mason viewed it as a principle of the common law affecting (unless limited or excluded by statute) the exercise of public power.[12] Justice Brennan viewed it as a part of the statutory command, capable of being limited or excluded by Parliament, such being ascertained in the process of statutory interpretation.[13] The difference may be of limited practical importance, arising only when non-statutory power is being exercised. The difference is, however, important for legal theory. If immanent within the common law, it draws its source from some well of fairness as an incident of the common law. If immanent within the sovereign command of Parliament it implies a necessary character of, and, to a degree, defeasible limit on, that law-making from some well of fairness attending Parliament’s acts.

15 What is unfair will often be a matter of debate; it will often be affected by the terms of a statute or the content of a precedent; but in essence, it is an enduring human response rooted in a civilised society’s expectations of equal and fair treatment of individuals by organs of power. Syllogistic reasoning expressed in language seeking to define an operative rule is often inadequate to express why an exercise of power is unfair. The difficulty arises from the fact that the exercise of power must be assessed in its human dimension taking into account evaluative assessment of, sometimes indefinable, characteristics and nuances of the human condition. This is an example of the limits of text. In many analytical reviews of the exercise of governmental power there is the partly legal and partly human response to the facts: Is this how people should be subjected to the power of the state? It is an expression and reflection of the importance and enduring place of human values and human intuitive response in the development and application of public law.

16  It is crucial, however, that the appropriate balance be struck in the law between rules and values. That balance must itself take account of the particular objects and subjects of an area of law. We can take, as an example, the attempt in criminal law to strike a balance between rule based certainty and individual evaluative justice.

17  It is an overarching object of the law that the legal system be fair, equal and orderly. This reflects a societal need to minimise the distress, uncertainty and confusion of parties affected by the law. In the context of criminal law, and particularly at the point of ascertaining criminal liability, it has thus been said that “the operation of the criminal law should be as certain as possible. If the interpretative choice is between making a value judgment and applying a rule, a court exercising criminal jurisdiction should prefer the rule.”[14] At the point of sentencing, however, certainty gives way to equality, humanity and a regard for the individual, as well as the just demands of society.

18 The importance of evaluative assessment by the court toward the reaching of just punishment that recognises the humanity of the individual has been a feature of the High Court of Australia’s jurisprudence of the last 15 years in appeals on criminal sentencing. In 2001, in Wong[15], a majority of the Court rejected the legitimacy of guideline sentencing in respect of federal crime. The case illustrated the tension implicit in striking the balance of certainty, equality and individual justice. The guidelines were an attempt by the judiciary to introduce a degree of consistency and predictability into the sentencing process, otherwise at large. In the minority, Gleeson CJ recognised that inconsistency (the reduction of which was the aim of the guidelines) could itself constitute a form of injustice,[16] stressing the apparent inequality that human discretion can produce, and that criminal justice works as a system. That system should be systematically fair, involving reasonable consistency. In contrast the majority[17] rejected the utility and legitimacy of the approach of guidelines because of the “core difficulty”[18] of the complexity of the sentencing task. That complexity was not of mathematical or algorithmic significance; rather, it was of human significance – the necessary humanity and individuality of the sentencing task. Sentencing principles must lead, it was said, to “just sentencing of offenders whose offending behaviour is every bit as diverse as is their personal history and circumstances.”[19] This emphasis has revealed the competing considerations of rule and principle, consistency, fairness, equality and intuitive response to the individual as moving forces that determine how law responds to intensely human, often tragic or violent, situations.[20] The consistency required in the context of sentencing is not numerical consistency, but consistency of principle.[21]

19  Sentencing raises the place of mercy. Mary Stuart, foreseeing her fate, said that mercy was for dispensation to subjects not to sovereigns. But it is a mark of equality, dignity and fairness encapsulated in a human response to wrong, to the individual and to life that raises the humanity of both grantor and grantee. As Sir Victor Windeyer said[22] it plays its part not in merely seasoning justice in Portia’s sense, but in acting to avoid the rigidity of inexorable law as the very essence of justice. Again one finds the limits of text: Mercy, like beauty and genius, is not amenable fully to textual expression.

20 Across the entirety of law (both private and public) this same objective of achieving balance has been pursued – a balance built upon the relationship between rule and value, between definition and flexible evaluation. This is not a logically dialectical process of the confronting of opposites, but an attempt to balance the competing demands of law through the recognition that law is life, and life is infused with values.

The control of power in private law

21 Private law is no different in its need to recognise the human and societal dimensions involved in the control of power and to take into account the values that surround private relations. Commerce and trade, in particular, have long held a central place in the formation of sophisticated legal systems, largely because they produce the need for rules of relational activities.[23] Commerce must be certain, but fair and just; simple and practical, but comprehensive; and it must be able to be employed and enforced without undue expense, delay or confusion. One obligation of the commercial lawyer and the commercial judge is to understand the limits of legitimate self-interest and the relationship between self-interest, in its inherently selfish character (that is, the search for commercial gain), and honesty, reasonableness, mutual respect, reciprocity, decency and trust, being the qualities that make it possible for commercial people to be self-interested, but to at the same time deal with each other peacefully, with mutual benefit and to promote long term commercial success.

22 It has been said that the law should facilitate and not hinder commerce.[24] That is so, but there are some assumptions involved in that proposition. It is honest commerce that is to be facilitated; dishonest commerce is to be hindered. The norms that will bear upon the answer to whether an activity should be facilitated or hindered are the values we bring to our rule making and rule application in commercial law. Thus, there will be attitudes and practices in commerce that will be the subject of disapproval, control and correction by the state through statute and legal rule: examples are dishonesty, duress, oppressive use of power and market domination.

23 We can see this place of values (not necessarily limited to and often quite different from the essential human values to which I have referred) within the process of contractual analysis. How contracts are to be understood, how they are to be given meaning and how they are to be given operation are questions of technique and legal policy of the highest importance. Often those processes of understanding, meaning and operation take place through interpretation and construction, fact-finding, and rule-application; but sometimes (and often at points of particular importance) there is something more happening – something different, something further, something less precise and not amenable to logical expression or definition, which I will call characterisation. Generally this process is one where a value judgment is made by reference to ascribed meaning, found facts, an expressed rule or principle and the relevantly organised values that are to be brought to bear for the task. It is those values that are often disguised, hidden and suppressed.

24 Take the question of whether a contractual provision is ‘of the essence’, a task exemplified by what that great judge, Chief Justice Sir Frederick Jordan, said in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd[25]

The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of strict or substantial performance of the promise…and that this ought to have been apparent to the promisor.

25 It may look simply like construction (that is, ascription of meaning). But there is something more happening. There is an evaluation of importance based, of course, on what is the meaning of the contract, but in the context of the general nature of the contract as a whole, which inevitably brings a range of contextual values to bear.

26 The test has been variously expressed: ‘root of the contract’, ‘unfair’, ‘fair carrying out of the bargain as a whole’ and ‘in a vital respect’. The essential element is the deprivation of a benefit or an entitlement, or the imposition of a burden, sufficiently serious as to change the character of the grant to, or of the obligations or entitlements of, the other party to the contract to such a degree that it can be said to be a commercially different bargain.[26] The test is not definitional; it is based on a characterisation of the seriousness of the breach, by understanding the nature and commercial operation of the contract as a whole, understanding the context (including commercial context) and imperatives of a given contract or type of contract, and coming to an evaluation of the seriousness of the breach by reference to all the circumstances and to commercial fairness. It is from that understanding that the relevant values are drawn. That understanding is also essential to the proper interpretation and construction of the contract (in the sense of ascription of meaning). That is because understanding the values and imperatives in and of the contract is essential to any decision about what the parties meant by the words they used.

27 The leaning of the courts towards construing terms as intermediate rather than as essential, for example, is informed by the values of justice and fairness in the avoidance of termination on technical or unmeritorious grounds.[27] This illuminates the process of assessing what is serious and what is not as one being based significantly on values.

28  Take unconscionability and good faith. The notions of conscience or unconscionability pervade Equity and private law. They were the insight and guiding force of Equity acting in personam. They were a basis for setting aside or refusing to enforce certain transactions and contracts. They were also a thematic feature of Equity, reflecting a standard exacted of parties, often in a commercial context: restitution, the constructive trust, defences to specific performance. The spirit of Equity lay in the creative tension in, and the dialectical creation of energy by, the reconciliation of the search for rules and predictability (including certainty) and the vindication of values, morality and justice.

29 The bargain is the timeless epitome of human exchange. It is the foundation of commerce. Its binding force lies in the rooted concept of the promise, the faithfulness to one’s word, and the place of trust in the building of human social relationships and structures. The moral roots of the binding character of the bargain also breathe life into the other evaluative considerations, rules and principles that surround the bargain: the rules of construction and implication that smooth and mould the content of the bargain to its reasonably intended purpose; the rules and principles of addressing injustice in the bargain: non est factum, rescission for mistake or misrepresentation, frustration and its consequences, undue influence, and estoppel.

30 An assessment of unconscionability involves characterisation of conduct as against conscience, by reference to the values organised for the task. That evaluation is not a formless void of personal intuition. Rather it is an evaluation which must be reasoned, to the extent that the limits of text permit, and enunciated by reference to the values and norms recognised by the text, structure and context of any relevant legislation, and by reference to the legal values of the common law and Equity and perceived community values, made against an assessment of all connected circumstances. In Australia, by statute[28] the notion of unconscionability has been directly transposed to business relationships, and may be summarised by a concern with fairness and equality, prevention of advantage being taken of ignorance or vulnerability, and good faith and fair dealing.

31 The necessary evaluation includes a recognition of the deep and abiding requirement of honesty in behaviour; a rejection of trickery or sharp practice; fairness when dealing with consumers; the central importance of the faithful performance of bargains and promises freely made; the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage; a recognition that inequality of bargaining power can (but not always) be used in a way that is contrary to fair dealing or conscience, in particular having in mind the explicit and implicit assumptions or impositions of risk attending any transaction and the legitimate business interests of the parties; the importance of a reasonable degree of certainty in commercial transactions; the reversibility of enrichments unjustly received; the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and the conduct of an equitable and certain judicial system that is not a harbour for idiosyncratic or personal moral judgment and the exercise of power and discretion based thereon. It is ultimately a process of characterisation. The variety of considerations that may affect the assessment of unconscionability in this process of characterisation only reflects the variety and richness of commercial life.

32 Because the conclusion as to what is, or is not, against conscience will often be contestable, and is value based, any agonised search for definition, for distilled epitome or for crisp rule is not possible and will lead to disappointment, to a sense of futility, and to the likelihood of error. The evaluation is not a process of deductive reasoning predicated upon the presence or absence of fixed elements or fixed rules. It is an evaluation of business behaviour (conduct in trade or commerce) as to whether it warrants the characterisation of unconscionable, in light of the values and norms recognised by Equity, society, and statute.

33 Private law, like public law, must search for the appropriate balance between rules and values. That search can be seen in the place of rules and implications that give effect to the elements of a duty of good faith and fair dealing: the implied engagement to do nothing to put an end to the circumstances by which the contract can take effect;[29] the implied agreement to do all that is necessary to be done for the carrying out of what has been agreed;[30] the implication that each party will do all things necessary on his part to enable the other to have the benefit of the bargain;[31] and the construction of every express promise as containing a negative covenant not to hinder or prevent fulfilment of the express covenant.[32] It can also be seen in: the implied obligation to act honestly and reasonably in exercising a right to rescind a contract unless satisfied with finance;[33] the limitation of clauses in a building contract as to satisfaction of a state of affairs to a reasonable construction meaning only what is reasonable and just;[34] the limitation of a clause giving absolute discretion to remove work from a contract to what is reasonable;[35] the limitation of a right to rescind a sale of land if unable or unwilling to comply with or remove an objection by the purchaser to what was not unconscionable[36] or not arbitrary or unreasonable.[37]

34 This search can also be seen in the development (and struggle over the structure) of the law of restitution or unjust enrichment, a struggle that has spanned centuries.[38] At what level of abstraction is the statement that “a person who has been unjustly enriched at the expense of another is required to make restitution to that other” useful or valid or operative? The High Court of Australia has been clear that such a statement is not an operative rule to decide upon liability; rather, it is an informing and unifying legal concept.[39] Yet the place of such an informing or unifying legal concept has been, and will remain, critical to the coherent development of the law of restitution of, or for, unjust enrichment. It assists in the ordering of related ideas and principles that have come into use over time from different sources. An informing or unifying legal concept can also form a bridge between law and Equity. One example is the remedy of money had and received upon a failure of consideration, and the Quistclose trust and the resulting trust; another is the restitutionary monetary remedy (at law, if one likes) for a proprietary benefit traceable in equity (but not law) into the hands of a volunteer.[40]

35 One part of the balance between rules and values is the ability of less particularly expressed principle to accommodate changes in values in society, without the need to change rules. Conceptions of legal liability and what is right and just to be vindicated by law change with time and with changes in society. This balance is essential to meet the challenge of the need for stability with the inevitability of change.[41] Generally expressed principles are likely to capture such changes without the need for re-expression of particular rules. This helps vindicate the necessity for historical continuity.[42] No more eloquent example of this can be seen in the expression by Cardozo CJ of two fundamentally important duties in commercial law – that of the fiduciary and that of the participant in the market in Meinhard v Salmon.[43] The “punctilio of an honor the most sensitive” of the former compared to the “morals of the market place” (by which he meant honesty) of the latter.

36 Another part of the balance is that sometimes a sensible, simple rule can only be expressed coherently and without complexity by a generally expressed norm. The rule, as Lord Mansfield said, “easily learned and easily retained”[44] is often one based around some norm such as reasonableness or honesty that is formulated to accord with the expectations of honest and reasonable commercial participants. No better example of this can be seen than in the contracts that govern the international shipping industry. They are concise, well-drawn documents, often prepared by industry groups. The standard forms that are the basis of countless daily commercial exchanges, often between strangers, are expressed in terms of values and norms accessible to, and known by, commercial people in the industry. Examples are: “thoroughly efficient state”,[45] “due dispatch”,[46] “all customary assistance”,[47] “suitable” and “unsuitable”,[48] “safe dock [or] place”.[49] Though these kinds of words may lack an apparent element of morality, they do all contain judgment and evaluation premissed on reasonable performance satisfactory to an honest person familiar with the business of shipping. The broad general rule is informed by common understanding and expectation and knowledgeable dispute resolution, usually by skilled arbitrators. Reasonable evaluation is made comfortable by the stable, well-known values that inform the exercise.

37 This same process of balancing values and rules, and same need to recognise and consider the inhering place and influence of values, attends many other concepts within private law, including the fiduciary relationship, doctrine of penalties, and the nature of insurance. Modern commercial law, as a part of a global commercial community, rests on principle and values (in particular, the values of honest fair dealing) rather than minute rule making. This in turn requires clear recognition and enunciation of the process of evaluation or characterisation. Whilst that process takes its place in a legal framework of relevant and related rules, its separate existence as a conceptual process should also be recognised in order that the values being brought to bear can be understood.

To conclude

38 Law is not just command; it is societal will amenable to rational and general expression, engendering loyalty and consent through its utility and practicality and through its characteristics of certainty, fairness and justice. That amenability to expression must recognise, however, the limits of text to which I have referred. Law can, ultimately, only work practically and usefully through consent and loyalty. And no system of law can engender loyalty and consent without an inhering justice – some intuitive response from acceptable and accepted values, not necessarily by reference to each individual provision within the system, but by reference to its whole, including its defects and its shining examples. Each gives content to the whole. Nothing is perfect. Further, no system of law can engender a sense of security without an acceptable degree of certainty. The need for balance of, and the inevitable complexity of the relationship between, rules and values and their interconnectedness should be recognised as a central feature of the law and the administration of justice. There is no point pretending that such complexity can be addressed by eliminating values and textually expressing more rules. That process is just to create other values, and likely darker ones, masquerading as rules.

39 We should accept that any system of law worthy of being called just must be founded on fundamental values. Part of that acceptance is the recognition that sometimes rules can only be expressed by reference to values or general concepts and cannot (unless incoherence is to be courted) be reduced to concrete, in-abstract propositions. We live with this every day; we are familiar and comfortable with rules that lack case-specific precision, but which have meaningful content, and which provide for acceptable, if contestable, application: for example, the common sense and evaluative conclusion of causation; the requirement of subjective and objective honesty; the requirement of a reasonable time for conduct in all the circumstances in various situations such as contract; the expectation of a reasonable response to risk created by one’s own conduct when concepts of duty of care are examined. Essential to our being comfortable with these rules expressed by reference to values or general concepts is the existence of a stable contextual framework and a relevantly organised body of values (explicit or implicit) for the resolution of the question.

40 Assessing how power should be controlled and exercised in society (within both private and public law) is the daily task of the law. Law is not value free. Law is not built and defined solely by rule making, by formulae or by inexorable command, but rather it is organised around, and derived from, inhering values (human values) and serves as an expression or manifestation of natural human and societal bonds of conduct.[50]

41 The human beauty of the law does not come from the sounds of tongues, talking of grand ideas, so often making them seem physical, limited and prosaic by superficial language, taxonomical arrangement and metallic repetition. Rather, it is in the daily application of life that the dignity of the individual, the mercy of the soul, and fairness as part of the human condition inform the exercise of lawful power. In life’s small, selfish and mundane intersections, these values assume a daily modesty in expression, and in context. But that modesty in expression and in context reaches back towards essential humanity and towards the echoing inflection of the infinity of law. The human beauty of the law does not come from grand expression, but from modest application to the humans in question, to the conflicts in resolution, to the pages of the lives of people – in fairness required, in dignity expressed and accepted, and in mercy given.

42 This is the human beauty of the law.

Hong Kong
20 October 2016



! This lecture is a distillation (with some development) of three papers presented in 2015: “Conscience, Fair Dealing and Commerce – Parliaments and the Courts” delivered at a seminar in honour of the Hon Paul Finn; “Values in Public Law” the 2015 James Spigelman Oration; and “Characterisation: Its Place in Contractual Analysis and Related Enquiries” delivered at a University of New South Wales and Oxford University Conference on Contracts in Commercial Law. It has also been amended since delivery in Hong Kong after discussions at and after the lecture. In particular, I express my gratitude to Dr Margaret Ng barrister-at-law in Hong Kong. The lecture is not the product of a comprehensive jurisprudential study; it is more a body of observations and views drawn from the necessary reading and thinking involved in judicial life. The tension, sometimes conflict, between rule and value is part of the daily life of judging.

* Chief Justice of the Federal Court of Australia

[1] See the illuminating thesis of Stephen Margetts Soul Driving (Publishing House Seven, Australia, 2015), from which I take the expression “drive the soul”

[2] 2015 James Spigelman Oration, Values in Public Law

[3] See also: Tim Game SC and Julia Roy “Unifying Principles in Administrative and Criminal Law” (Speech presented to the Public Law Section of the New South Wales Bar Association on 17 August 2015)

[4] See, for example, as Roscoe Pound put it, in the first of four outstanding lectures delivered at Wabash College in the 1930s dealing with the development of constitutional guarantees: the “fundamental reasonable expectations involved in life in civilized society and a freedom from arbitrary and unreasonable exercise of the power and authority of those who are designated or chosen in a politically organized society to adjust relations and order conduct, and so are able to apply the force of that society to individuals. Liberty under law implies a systematic and orderly application of that force so that it is uniform, equal, and predictable, and proceeds from reason and upon understood grounds rather than from caprice or impulse or without full and fair hearing of all affected and understanding of the facts on which official action is taken.” R Pound The Development of Constitutional Guarantees of Liberty (Yale University Press, New Haven, 1957), at 1

[5] Kable v Director of Public Prosecutions for NSW [1996] HCA 24; 189 CLR 51

[6] Toohey, Gaudron, McHugh and Gummow JJ

[7] Kable v Director of Public Prosecutions for NSW [1996] HCA 24; 189 CLR 51 at 99-108

[8] L Siedentop Inventing the Individual: The Origins of Western Liberalism (Allen Lane, London, 2014) at 60-62, 83

[9] I leave to one side the differences of emphasis and character encompassed within the different expressions of the principle. See Justice James Edelman “Why Do We Have Rules of Procedural Fairness?” (2016) 23 AJ Admin L 144

[10] “Natural justice” is traditionally broken down into two rules at common law – the hearing rule and the bias rule: see M Aronson et al Judicial Review of Administrative Action (4th ed, Lawbook Co, Sydney, 2009), at [7.20]

[11] Kioa v West [1985] HCA 81; 159 CLR 550

[12] Kioa v West [1985] HCA 81; 159 CLR 550 at 582-586

[13] Kioa v West [1985] HCA 81; 159 CLR 550 at 609-613

[14] Taikato v The Queen [1996] HCA 28; 186 CLR 454 at 466 per Brennan CJ, Toohey, McHugh and Gummow JJ

[15] Wong v The Queen; Leung v The Queen [2001] HCA 64; 207 CLR 584

[16] Wong v The Queen; Leung v The Queen [2001] HCA 64; 207 CLR 584 at 590-591 [5]-[6]

[17] Gaudron, Gummow and Hayne JJ

[18] Wong v The Queen; Leung v The Queen [2001] HCA 64; 207 CLR 584 at 612 [77]

[19] Wong v The Queen; Leung v The Queen [2001] HCA 64; 207 CLR 584 at 613 [78]

[20] That is the underlying theme variously manifested and expressed in Markarian v The Queen [2005] HCA 25;228 CLR 357; Carroll v The Queen [2009] HCA 13; 83 ALJR 579 at 583; Hili v The Queen; Jones v The Queen [2010] HCA 45; 242 CLR 520 at 528 [25], 532-534 [36]-[45], 537 [54]-[55]; Muldrock v The Queen [2011] HCA 39; 244 CLR 120; Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462; Bugmy v The Queen [2013] HCA 37; 249 CLR 571; Kentwell v The Queen [2014] HCA 37; 252 CLR 601; and CMB v Attorney-General (NSW) [2015] HCA 9; 89 ALJR 407.

[21] Hili v The Queen; Jones v The Queen [2010] HCA 45; 242 CLR 520 at 535 [49]

[22] Cobiac v Liddy [1969] HCA 26; 119 CLR 257 at 269

[23] Plato noted that where there is maritime commerce there must be more law: Laws, Book 8, 842; Montesquieu said that there were more laws in a trading city: The Spirit of Laws Liv.XX, Chapter 18; Jhering spoke of commerce as a pathfinder: Zweck im Recht, I, 237; see R Pound The Formative Era of American Law (Little Brown, Boston, 1938), at 11-12

[24] Lord Justice Devlin “The Relation Between Commercial Law and Commercial Practice” (1951) 14 MLR 249, at 250, 261-263, 266

[25] Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 at 641-642 (emphasis added)

[26] See discussion in Byrnes v Jokona Pty Ltd [2002] FCA 41 at [70]-[80] and comments of Finn J in GEC Marconi Systems Pty Limited v BHP Information Technology Pty Limited [2003] FCA 50; 128 FCR 1 at [493]

[27] GH Treitel, The Law of Contract (11th ed, Sweet & Maxwell, London 2003), at 797 (see also (12th edn, Sweet & Maxwell, London, 2007), at 890); cited in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; 233 CLR 115 at 139 [50]

[28] The Competition and Consumer Act 2010 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) both contain provisions which prohibit a person from engaging in unconscionable conduct in trade and commerce in connection with the supply or acquisition, or possible supply or acquisition, of goods or services or financial services.

[29] Stirling v Maitland (1864) 5 B&S 840 at 852; 122 ER 1043 at 1047 (Cockburn CJ)

[30] Mackay v Dick (1880-81) 6 App Cas 251 at 263 (Lord Blackburn)

[31] Butt v McDonald (1896) 7 QLJ 68 at 70-71 (Griffith CJ)

[32] Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; 45 CLR 359 at 378

[33] Meehan v Jones [1982] HCA 52; 149 CLR 571

[34] Stadhard v Lee (1863) 3 B&S 364 at 371-2; 122 ER 138 at 141

[35] Carr v JA Berrriman Pty Ltd [1953] HCA 31; 89 CLR 327

[36] Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd [1972] HCA 36; 128 CLR 529 at 538

[37] Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd [1972] HCA 36; 128 CLR 529 at 543, 547, 549-555; and see Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13; 130 CLR 575

[38] JP Dawson Unjust Enrichment: A Comparative Analysis (Little Brown and Co, Boston, 1951), at 41-109

[39] Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; 162 CLR 221 at 256-257; ANZ v Westpac [1988] HCA 17; 164 CLR 662 at 673; David Securities v Commonwealth Bank [1992] HCA 48; 175 CLR 353 at 375, 389, 406; Roxborough v Rothmans of Pall Mall [2001] HCA 68; 208 CLR 516 at 543-545 [70]-[74]; Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at 156 [151]; Lumbers v W Cook Builders [2008] HCA 27; 232 CLR 635 at 665 [85]; Equuscorp v Haxton  [2012] HCA 7; 246 CLR 498 at [29]-[30]; though compare Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; 253 CLR 560 at [78] and the discussion in K Mason “Strong coherence, strong fusion, continuing categorical confusion: The High Court’s latest contributions to the law of restitution” (2015) 39 Aust Bar Rev 284

[40] Heperu Pty Ltd v Belle [2009] NSWCA 252; 76 NSWLR 230 at 260-268 [127]-[163]

[41] R Pound Interpretation of Legal History (Macmillan Company, New York, 1923), at 1-11

[42] Holmes Collected Essays (Hogarth, London, 1967), at 211; Brennan J in Mabo v Queensland (No 2) [1992] HCA 23; 175 CLR 1 at [29], [47]

[43] Meinhard v Salmon 249 NY 458 (1928) at 464

[44] Hamilton v Mendes (1761) 2 Burr 1198 at 1214; 97 ER 787 at 795

[45] New York Produce Exchange 1993 Time Charter (NYPE 93) (state of the vessel provided)

[46] NYPE 93 cl 8(a) (performance of voyages)

[47] NYPE 93 cl 8(a) (performance of voyages)

[48] NYPE 93 cl 9(b) (bunkers)

[49] NYPE 93 cl 12 (place of berthing)

[50] WJV Windeyer, Legal History (2nd ed, Law Book Company of Australasia, Sydney, 1959), 3