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Legal Environment

Australian law consists of Federal laws passed by the Federal Parliament, State laws
passed by the State Parliaments, and the common law. The common law is derived from
English common law, as developed by the Australian courts. Most commercial law is State
law, with the major exceptions being taxation, competition and trade practices, bankruptcy
and copyright, trade marks and patents, all of which are Federal laws.

The Corporations Act regulates matters in relation to corporations and securities
which since 15 July 2001 has operated as a Commonwealth act for the whole of Australia
Australia has both a Federal system and a State system of courts.

The Federal system is headed by the High Court of Australia that decides all constitutional matters and is the nation's final court of appeal. The Federal courts have jurisdiction to decide all matters of Federal law such as trade practices, bankruptcy and industrial law.

The State courts have jurisdiction to decide all matters of State law but have also in many cases the right to hear matters of Federal jurisdiction in the first instance. The State court system in each State is headed by the Supreme Court of that State.

The Court System

High Court

Australia's final appellate court on all questions of law is the High Court. It consists of 7
judges and sits primarily in Canberra. The judges of the High Court are appointed by the
Federal Cabinet. The High Court deals primarily with appeals from the Federal Court of
Australia and the State Supreme Courts. Usually, special leave must be granted by the
Court before a matter comes before it. The High Court is required to determine issues
involving a wide range of Australian law, as well as establish in appropriate cases new legal
precedent. It is primarily involved in constitutional law matters and the scope and validity
of Commonwealth laws, but as the final appellate court, it also deals with issues of State
law and the Common Law.

Federal Court

The Federal Court of Australia generally exercises statutory powers. It sits in all Australian
capital cities. It primarily deals with taxation matters, trade practices, bankruptcy,
copyright, trade marks and patents. Appeals from the Federal Court go firstly to a Full
Bench of Federal Court Judges. Leave may then be sought to appeal to the High Court.

State Courts

State Supreme Courts have different "Divisions" or "Lists" so as to "stream" the different
types of cases with which they deal. For example, in New South Wales, the Supreme

Court has:

• a Commercial Division, which deals with significant commercial disputes, including
  banking and financial matters, commercial contract disputes and some insurance claims;
• an Equity Division, which exercises jurisdiction outside strict "common law" remedies;
• a Common Law Division which deals primarily with personal injury claims and with
  contract disputes which are not of the type dealt with by the Commercial Division or the
  Equity Division; and
• a Building Construction List and various specialist divisions.
  Underneath the State Supreme Courts, each State has lower Courts which deal with claims
  of smaller monetary amounts. For example, in New South Wales, the District Court deals
  with claims of up to $250,000.

"Cross vesting" legislation has ensured that the Federal Court and the Supreme Courts
throughout Australia can usually exercise jurisdiction conferred on each other, so that there
is considerable overlap in work done by the State Supreme Courts in their various
Divisions and the Federal Court.

Industrial Courts

The States also have their own Industrial Courts or Industrial Tribunals. The Federal
industrial body is the Industrial Relations Commission. These industrial tribunals sometimes
exercise judicial powers but ordinarily exercise statutory conciliation and arbitration powers
to resolve industrial disputes. They are far less formal in their proceedings.