The decision of a court consists of several things:
- The orders made
- A summary of the evidence
- The judge's reasoning from the evidence to their conclusions of what the facts of the case are
- The judge's reasoning from the evidence to their conclusions of what the law applying to those facts is
- The judge's reasoning from those findings of facts and law to the orders that were made (ratio decidendi)
- Reasoning on how things might have been decided otherwise (or the same way) if the facts or the law were different (obiter dicta).
We hope that the judge is articulate enough that we can tell which is which.
Where there is more than one judge there is more than one opinion. However, there is still ratio decidendi and obiter dicta across all the opinions. Typically, a dissenting judge disagrees with the ratio decidendi in whole or part and his reasoning about that is obiter dicta.
The ratio decidendi – "the point in a case that determines the judgement" or "the principle that the case establishes" – creates binding precedent. The obiter dicta creates persuasive precedent.
A binding precedent is just that – it binds the decisions of lower ranked courts in the hierarchy. If the facts of the current case match the facts of the precedent then the judge must follow the precedent even if they disagree with it – indeed there are many decisions where the judge expresses their disagreement with the precedent in no uncertain terms.
In addition, there can be conflicting precedent, for example, where the High Court of Australia has made a decision on a piece of legislation that conflicts with a decision of the Supreme Court of NSW on an essentially similar provision in a different Act. A wise judge in such a situation should do what McDougal J did in Chase Oyster Bar v Hamo Industries  NSWCA 190 and issue orders referring it to a court that can overturn one (or both) of the precedents.
A persuasive precedent can influence the decisions of other courts – they are an authority a judge can look to in formulating their reasons but they are free to consider and reject them even if the facts match. Obiter dicta from same level or higher courts in the hierarchy is persuasive precedent as is ratio decidendi and obiter dicta from same level courts and courts in other jurisdictions.