Question 1.1 What are the two main sources of law in Australia? Which is most powerful? Why? Which tier of government, federal, state or local do you think has the greatest influence/effect on businesses in the financial services environment? Why? There are two main sources of law in Australia: legislation, law made by the parliament and case law or common law based on the decisions of judges in the superior courts. The practical result of the principle of parliamentary sovereignty is that legislation prevails over common law. If there is a conflict between the 2, legislation will over-ride common law. However, that conflict must be clear. There is a presumption that rights under common law continue unless the legislation clearly does away with them