Fusion Fallacy Research Paper

I THE FUSION FALLACY

If an Australian lawyer were asked about the significance of 1975 in the development of Australian law, he or she would no doubt point to the famous constitutional crisis that culminated, on Armistice Day of that year, in the use by the Governor-General of the ‘reserve powers’ to dismiss the government of the day. That event generated great legal and political controversy for many years, and ‘left many unresolved problems’.[2] Yet, except as an issue in the now muted republican debate,[3] it is not currently a matter of focus in constitutional law; nor is it part of the consciousness of young Australians. Another, less dramatic, event in 1975 has had a more profound and lasting effect on the fabric of Australian law:
And, as Spigelman CJ has recently reminded us, the method of common law systems demands that lawyers ‘acknowledge and respect the collective wisdom of our predecessors’,[6] a comment that is, of course, as applicable in
Two reasons require that analysis. First, the late Justice John Lehane challenged, rightly, those who assert that law and equity are fused to explain what they mean, how fusion happened and what flows from it.[23] And Justice Gummow has recently pointed out that ‘explanations have been slow in coming’.[24] Secondly, the fusion fallacy has recently been the subject of intense judicial scrutiny in the important decision of the New South Wales Court of Appeal in Harris v Digital Pulse Pty Ltd (‘Harris’).[25] In breach of their contractual and fiduciary duties of loyalty, the defendants diverted projects away from the plaintiff, their employer. The trial judge found the defendants liable to pay equitable compensation or, at the election of the plaintiff, to account for profits. In addition, the trial judge made an award of exemplary damages against the defendants for their breach of fiduciary duty. By majority (Spigelman CJ and Heydon JA), the Court of Appeal reversed the trial judge’s decision, holding that there was no power to award exemplary damages for the breach of the fiduciary relationship in issue in the instant case.[26] The basis of the majority’s decision was that equitable relief does not pursue penal objective s,[27]