In deciding an appeal about an accountant's liability for a negligent tax computation, a Supreme Court justice remarks that the result would have been different if the client had been told to take independent advice. Years later, the High Court hears a case in which the client was told exactly that. What status does the justice's remark have in the later case?

Correct answer: C) It is obiter dictum, so it is persuasive but not binding, because it was not necessary for the decision on the material facts

Explanation

Only the ratio decidendi, the legal principle necessary to the decision on the material facts, binds lower courts. A remark about what would have happened on different, hypothetical facts is obiter dictum. Obiter dicta of senior judges can be highly persuasive, and the High Court may choose to follow one, but it is not obliged to. Agreement by other justices does not turn an obiter remark into ratio, and it is wrong to say such a remark has no significance at all.