Precedents are decisions made by judges beforehand right? I'd think that they'd make their judgement on the law/knowledge and make their own decision, therefore setting their own precedent. (not sure, just my guess)
This. But when there is no precedent, it means that the judge must use their own knowledge and discretion to make a decision. This decision is then made precedent. I should note. However that when there is no precedent a judge could look at similar cases from other jurisdictions. It can still also look at decisions made by the privy council... NOTE that decisions of th privy councils are not a binding precedent but they are persuasive which means that the courts here can use that decision as a guide to form their own decision.