Graham Barclay Oysters Pty Ltd & Anor v Ryan &Ors S212/2000 [2001] HCATrans 504 (12 October 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S212 of 2000

B e t w e e n -

GRAHAM BARCLAY OYSTERS PTY LIMITED

First Applicant

GRAHAM BARCLAY DISTRIBUTORS PTY LIMITED

Second Applicant

and

GRANT RYAN, SCOTT CALLAGHAN, KEVIN GOWER, DAVID HOLNESS, GEOFFREY BENNETT, BRYAN HOCKING, BROSOW HARDY

First Respondents

GREAT LAKES COUNCIL

Second Respondent

STATE OF NEW SOUTH WALES

Third Respondent

Office of the Registry

Sydney No S217 of 2000

B e t w e e n -

GRANT RYAN

Applicant

and

GREAT LAKES COUNCIL

First Respondent

GRAHAM BARCLAY OYSTERS PTY LIMITED

Second Respondent

GRAHAM BARCLAY DISTRIBUTORS PTY LIMITED

Third Respondent

STATE OF NEW SOUTH WALES

Fourth Respondent

Office of the Registry

Sydney No S218 of 2000

B e t w e e n -

STATE OF NEW SOUTH WALES

Applicant

and

GRANT RYAN, SCOTT CALLAGHAN, KEVIN GOWER, DAVID HOLNESS, GEOFFREY BENNETT, BRYAN HOCKING, BROSOW HARDY

First Respondents

GREAT LAKES COUNCIL

Second Respondent

GRAHAM BARCLAY OYSTERS PTY LIMITED

Third Respondent

GRAHAM BARCLAY DISTRIBUTORS PTY LIMITED

Fourth Respondent

CLIFT OYSTERS PTY LIMITED

Fifth Respondent

M.W. & E.A. SCIACCA PTY LIMITED

Sixth Respondent

TADEVEN PTY LIMITED

Seventh Respondent

THE OYSTER FARMERS ASSOCIATION OF NEW SOUTH WALES PTY LIMITED

Eighth Respondent

R.A. KING (WHOLESALE) PTY LTD

Ninth Respondent

MANETTAS LIMITED

Tenth Respondent

SHONID PTY LIMITED (TRADING AS "TIM & TERRY OYSTER SUPPLY PTY LIMITED")

Eleventh Respondent

VICTORIAN FROZEN FOOD DISTRIBUTORS PTY LIMITED (TRADING AS "RICHMOND OYSTERS")

Twelfth Respondent

SMITHS OYSTER SERVICE PTY LIMITED

Thirteenth Respondent

GEORGES OYSTERS PTY LIMITED

Fourteenth Respondent

Applications for special leave to appeal

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 OCTOBER 2001, AT 2.14 PM

Copyright in the High Court of Australia

MR C.R.R. HOEBEN, SC: May it please the Court, I appear for the Barclay companies with my learned friend, MR A.P. COLEMAN. (instructed by PricewaterhouseCoopers Legal)

MR W.H. NICHOLAS, QC: If the Court pleases, I appear with my learned friend, MR T.G.R. PARKER, for the Council in the various matters. (instructed by Coudert Brothers)

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend, MR P.W. TAYLOR, SC, for New South Wales in each of the applications. (instructed by Crown Solicitors Office for New South Wales)

MR T.K. TOBIN, QC: If it please the Court, I appear with MR B.M. ZIPSER, for the applicant below, the plaintiff, as it were. (instructed by Slater & Gordon)

GAUDRON J: I hold a certificate from the Deputy Registrar who certifies that she has been informed by Phillips Fox, solicitors, that the fifth respondent, Clift Oysters Pty Limited, has no interest in taking part in this application. Similarly, she has been informed by Minter Ellison, solicitors, advising that the sixth and seventh respondents, M.W. & E.A. Sciacca Pty Limited and Tadeven Pty Limited, do not seek to be heard on the application and submit to any order of the Court save as to costs.

Similarly, there is a letter from Slater & Gordon, solicitors, advising that the eighth respondent, the Oyster Farmers Association of New South Wales Pty Limited, was - well, I suppose I have "was discontinued", but was dismissed from the proceedings, I suppose, in the Federal Court and is not party to these proceedings. Also, that she has been informed by PricewaterhouseCoopers Legal, that the ninth and thirteenth respondents, R.A. King (Wholesale) Pty Ltd and Smiths Oyster Service Pty Limited, do not wish to take an active role in this application and by Ebsworth & Ebsworth, solicitors, advising that the tenth respondent, Manettas Limited, do not wish to take an active role in the proceedings.

Similarly, she has been advised by Deacons, solicitors, acting for the eleventh respondent, and by Corrs Chambers Westgarth, acting for the twelfth respondent, that neither wishes to take an active role or to participate in these proceedings. Finally, she has been informed by Henry Davis York, solicitors, advising that the fourteenth respondent does not wish to play an active role in the application.

Now, I think you have agreed between yourselves as to the order of play?

MR WALKER: Yes, may it please your Honours, and that involves me starting.

GAUDRON J: Now, you are starting for the State of New South Wales.

MR WALKER: In 218, may it please your Honour.

GAUDRON J: Why is that a convenient course? I ask that only because I would have thought that if Graham Barclay got special leave - I would have thought that was the critical one - that one was really in a situation of one in, all in.

McHUGH J: You are right down the bottom of the pole.

GAUDRON J: Of the oyster chain.

MR WALKER: We underlie everything, your Honours, is another way of putting it. Yes, the logic can be constructed in either direction, with respect. If we are not granted special leave, it may be that my learned friend, Mr Tobin, has much less interest in other people because we have money.

GAUDRON J: We are not interested in the money here. We are interested in the legal principle.

MR WALKER: No, but your Honour asked about the logic of order and using the resources of the Court's time.

GAUDRON J: Yes.

MR WALKER: I entirely accept that if Barclays were to get leave then, in our submission, it should be a fortiori that we got leave, or at the very least, as your Honour puts it, "one in, all in".

GAUDRON J: Similarly, if Mr Ryan got leave against the Great Lakes Council, it would seem to me that you would be - - -

MR WALKER: The principles to be ventilated in an appeal for which that kind of leave would be granted would be so closely related to the way in which we have been held liable, or at least there would be evocative similarities, such that, yes, we entirely agree that if he was to get that leave we should have leave.

GAUDRON J: As the parties have agreed on a particular course - I think at this point, the parties having agreed that the State should go first, we might disrupt proceedings to this extent, by saying we would be better assisted by hearing opposition to the State's application for leave.

MR WALKER: May it please your Honours.

MR TOBIN: Your Honours would know the background of the proceedings was an outbreak of hepatitis A virus following the contamination of the Wallis Lake estuary by a virus which entered the oyster beds and entered the oysters, resulting in 180 or so people contracting hepatitis A. Mr Justice Wilcox in the court below found against the State and against the Council and against the grower and distributor, the two Barclays companies.

The factual background, your Honours, relevantly is this. There is a period of high risk in the harvesting of oysters after what is known as "a fresh", steady or continuous rain washing contaminants into an estuary in which oysters are grown. This is a well-recognised phenomenon that a fresh is associated with a period of high risk. The risk deriving from hepatitis A is solely a risk sourced to faecal contaminants - human faecal contaminants, not animal. The risk is greater where oysters are grown not in pristine waters, such as in parts of Tasmania, but in urbanised areas such as the Foster-Tuncurry estuary, in this case.

So, the background is that from the 1980s on there were episodes, state-wide, of viral infection of oyster beds, perhaps famously the Georges River were 1,200 people were infected by virus, and in the year of the episode in question when Mr Ryan digested the oysters there had been an episode in the Tweed River of another viral contamination.

In 1994 the Parliament enacted the Fisheries Management Act and that Act was designed to regulate the aquaculture industry, including the operation of oyster farms in estuaries throughout the State. Mr Justice Wilcox at 191 and following of the first volume of the application book maps out the statutory regime which is the background or environment in which his Honour and the Full Court considered the question of whether there was a duty of care.

GAUDRON J: But you assert negligence in the failure to exercise legislative powers by the State.

MR TOBIN: It was a failure to exercise a range of powers which were granted under this Fisheries Management Act.

GAUDRON J: In circumstances in which a supervisory body had been set up with the area?

MR TOBIN: No. In fact, there had not been a body set up. The legislation required the Minister to establish a program which would include local area bodies to supervise this, but that, in fact, was not done. His Honour dealt with the legislation at 191 and following. If I could just take your Honours briefly to those two or three pages of the application book because they identify one relevant factor, which is the factor to do with fitness for human consumption of oysters. At the bottom of 191:

Section 143 of the Act empowered the Minister to make aquaculture industry development plans. Such a plan could contain provisions describing "areas suitable for aquaculture -

that includes oysters.

Section 144 made it an offence for a person to undertake aquaculture except under the authority of an aquaculture permit.

Section 152, which is not referred to by his Honour, made permits subject to regulations, and I will pick up a regulation in a moment that is relevant.

Section 160(1) empowered the Minister to cancel or suspend an aquaculture permit under certain circumstances - - -

GAUDRON J: Is it suggested that any of the circumstances applied here?

MR TOBIN: No, the Minister did not intervene with regard to withholding any permits or taking any - - -

GAUDRON J: No, but is it suggested that any of the circumstances which would empower the Minister to cancel or suspend the Barclay companies' licences existed?

MR TOBIN: No, that was not litigated. That was not a matter that was before the Court.

GAUDRON J: No.

MR TOBIN: Section 189 provides that:

The Minister may, by a fishing closure under Part 2, prohibit during a specified period the taking of fish -

that includes oysters -

or marine vegetation cultivated under an aquaculture permit . . . if satisfied:

(a) that the area is in such a condition that the taking of fish . . . ought to be suspended, or

(b) that the fish or marine vegetation are, or are likely to be, unfit for human consumption.

That power was not, in fact, invoked. There was a voluntary suspension of - - -

GAUDRON J: Do you rely on the failure to do that?

MR TOBIN: Yes, we relied upon, in the pleading, a failure to carry out a systematic survey of the waters which would enable the Minister to determine if harvesting was likely to be - of oysters - unfit for human consumption.

GAUDRON J: Ultimately, what you rely on is the failure to undertake inquiries to determine whether or not the Minister was satisfied?

MR TOBIN: Yes.

GAUDRON J: So you do not really rely on breach of statutory powers?

MR TOBIN: No, not directly, your Honour.

GAUDRON J: Not breach, I am sorry, failure to exercise statutory powers.

MR TOBIN: No.

GAUDRON J: You rely on failure of the Minister to inform himself, ultimately?

MR TOBIN: We did not frame it that way, your Honour.

GAUDRON J: But that is how it works out, is it not?

MR TOBIN: Not really, your Honour. The failures were that the State was aware, had foreknowledge of the risk, knew of the dangers and even close to the time of the events in question - - -

McHUGH J: But your case was, was it not, that the State failed to exercise its management powers?

MR TOBIN: Yes, it failed to manage - - -

McHUGH J: Is there any prior case where a State has been held to owe a duty of care, in those circumstances?

MR TOBIN: Perhaps not in those direct circumstances, your Honour, but the way we approach the question of whether leave should be granted to the State is this: how close is this to the principles enunciated by the Court in Crimmins and in Brodie?

GAUDRON J: I would have thought it was a fair way distant.

McHUGH J: A fair way removed. Justice Gaudron spoke about "one in, all in" or "one out, all out", but it seems to be very difficult to determine what duties are owed in this case without being informed as to what the duties are owed, if any, by various parties. It may be if the Council owes a duty, it throws some light on whether the State does, and vice versa. But over and above that you have strong dissent in the Full Court. You have reasoning between the majority judges which differs - and if my recollection is right, their reasoning also differs from Justice Wilcox in some important respects - and then you have Justice Kiefel describing the duty in terms, I would have thought, that went to breach rather than the duty. When you look at the whole situation, I think if the Court is going to look at the matter, it has to look at the matter from everybody's point of view.

MR TOBIN: Your Honours, obviously the applicant below wants to hold what he has.

McHUGH J: I understand that. I do not want to be mischievous - - -

MR TOBIN: No, your Honour. So, I do not join in the rainbow coalition - - -

McHUGH J: - - - but how does the Federal Court get jurisdiction in this case anyway?

GAUDRON J: With respect to the Council and the State? I take it we are not talking about joint tortfeasors, are we? On no view are they joint tortfeasors, and it is not even clear that they are concurrent tortfeasors.

MR TOBIN: I am not sure, your Honour, that I would adopt that, if I may say with respect.

GAUDRON J: No, but I am just saying it is not clear.

MR TOBIN: The facts are fairly dense, but if I could draw the parallels that your Honours resist with Crimmins, they strike us as rather powerful. If one goes through two exercises, the first would be to take up - - -

McHUGH J: Well, the State was not sending consumers down to eat these oysters, was it, as in Crimmins, when they directed the waterside workers down into the asbestosis-ridden holes?

MR TOBIN: No, but with regard to the oyster eaters, your Honour, the State had significant control over this whole industry, as did the Council. To start with, the State had significant control.

McHUGH J: I appreciate that, but that is why it is such an important case. If you are entitled to a verdict against the State in these circumstances, it seems to me that the consequences for government administration in this country are very large, to say the least. It is almost tantamount to saying that if a State government sets up a legislative scheme and has powers of management in respect of it, it ought to foresee risks to persons engaged in the industry or affected by it, then they owe a duty of care.

MR TOBIN: Your Honours, I do not say that there would not be consequences of a financial kind that might attach to the decision of the Federal Court if upheld, but the question seems to us to be, with respect, this: if you analyse the issue from the point of view of control - and I have both Brodie's Case and what various of the Justices said in Crimmins - or if you exercise it with a view to questions of vulnerability and foreseeability and power to control the outcome, as Justice Gaudron analysed it in Crimmins, or if you approach it in the manner that your Honour laid out in paragraph [93] of Crimmins, the six-point test, on any of those approaches the court below, both Justice Wilcox and certainly the Federal Court, which had Crimmins available to it as his Honour did not, applied those criteria.

When your Honours say that this is far from Crimmins, is this not perhaps just another legislative scheme in which the court, in this case the Federal Court, has available to it what, in our respectful submission, are fairly clear and strong criteria and principles laid down by this Court for the resolution of those matters?

Now, in making that submission, your Honours, I do not say that fixing the State with liability would not have consequences such as might attach to the fixing of liability of the State or State instrumentalities with regard to medical health issues and medical negligence. Those consequences may well follow. The issue seems, in our submission, however, to be this, that if this Court - and I may not be able to convince your Honours of this - has laid down criteria in the way which we understand it to have done, is it not then the function of the courts lower down the hierarchy to apply those principles?

McHUGH J: That is the theory, but common experience suggests that there is often a form of judicial censorship at lower levels - - -

MR TOBIN: We call it respect, your Honour.

McHUGH J: - - - in which judgments of this Court are censored to some extent. They are not applied.

MR TOBIN: If I could say, having prepared a chart as to adherence by the Full Court to the principles that your Honour enunciated, they are very loyal - they reach different views, as your Honour sees from the dispute in the judgment.

McHUGH J: I am not talking about this case in particular. I am just talking - - -

MR TOBIN: But in this case the Full Court paid dutiful attention, in particular to what your Honour said, because your Honour had provided a framework, and all of the judges seem to have made an effort to go through the questions of core policy and foreseeability and knowledge of risk and the like in reaching the conclusion that they did.

Now, the issue that your Honour Justice McHugh puts to me is whether, if the State be liable, this would, as it were, be a matter of significant public importance. In my submission, that Rubicon was crossed in Crimmins. Crimmins laid down, with respect, and perhaps after incremental advances, a new regime in which the Commonwealth and its instrumentalities or government instrumentalities in general would be liable.

GAUDRON J: No, it did not. What Crimmins decided was that in the particular circumstances of that case - - -

McHUGH J: In a quasi-employment relationship, almost.

GAUDRON J: - - - there was a duty of care by a government instrumentality to the people whose work activities it controlled.

MR TOBIN: Well, in reaching that conclusion at the moment, I think I could say with a little confidence, your Honours laid down more than simply a rubric for that particular set of facts. I mean, what was laid down in Crimmins, as your Honours would appreciate, reappears in the courts, both State and, no doubt, federal, day in and day out in actions involving statutory authorities.

If I could make one other submission, your Honours, and it is this. The decision in Brodie's Case, which applies, of course, to the context of a local government but, notwithstanding that, to one of the tiers of government, postulated and laid down issues of fixing that entity, that government authority, with liability and looked at the question of significant and special measures of control over safety. That, pre-eminently, in the case that we made below, was the source of his Honour Mr Justice Wilcox and two other of the judges' conclusion that the State itself should be fixed with liability in the circumstances of this case.

Your Honours, our primary objection to special leave for the State then is based upon the fact that it is hoeing, we say, an old furrow. I suppose that is permissible but it does not seem to us to be useful.

GAUDRON J: Very pre-modern technology, is it not?

MR TOBIN: Your Honour, I am from the stump-jump plough school of thinking, which is, if you cannot plough it, you may be able to jump over it. But, your Honours, with the assistance of Brodie and Crimmins it is our submission - - -

GAUDRON J: But you must concede that the result, at least, seems to extend beyond what was considered in those cases.

MR TOBIN: I do accept that, your Honours, and I would submit that it, as it were, has not got so far ahead of the field that it is a matter that the Court should revisit at this stage with - - -

GAUDRON J: Now, which particular statutory power do you say should have been exercised, or which particular statutory powers?

McHUGH J: Well, it was 12B, was it not, that regulation?

MR TOBIN: The regulation was 12B, yes, your Honour. The general regulation is at 193 line 25. This power was to develop a:

program to assure the quality of shellfish taken from estuarine waters for sale for human consumption.

The way his Honour Mr Justice Wilcox dealt with that, however, was to say - - -

GAUDRON J: It was simply to make a plan.

MR TOBIN: No, no. The way his Honour dealt with that was - I will just turn up the page.

McHUGH J: Well, Justice Wilcox frames the duty at 272, does he not?

MR TOBIN: Is your Honour on a page or a paragraph? I am sorry, your Honour.

McHUGH J: Paragraph 336.

MR TOBIN: Yes, your Honour.

McHUGH J: Line 11:

But it was under a duty to take those steps that were reasonably open to it to minimise the risk of consumers contracting a viral - - -

MR TOBIN: His Honour avoided a direct conclusion, as it were, that there was a breach of a statutory duty to close the fishery, for example, or as your Honour Justice Gaudron put to me, whether there was a duty simply to lay down a program. His Honour said that:

the State's involvement in the management of the Wallis Lake oyster fishery was so extensive and significant as to warrant the conclusion that it -

owed that duty. In the previous two pages, your Honours, at 270 and 271, beginning at paragraph 332 of the judgment, his Honour lays out the powers and control that the State had.

McHUGH J: It is paragraph 340 where he specifies or identifies the breach, does he not? He says that:

Long before November 1996, the stage had been reached by which the State . . . should either have ensured the making of a comprehensive and competent sanitary survey or closed the fishery. It was negligent of the State to have failed to do one or other of these things.

Well, this is a far-reaching proposition, is it not?

GAUDRON J: And it could only close the fishery if satisfied, could it not?

MR TOBIN: Yes.

GAUDRON J: So, ultimately, there is some notion of a duty to inform yourself so you can be satisfied?

MR TOBIN: Your Honours, as a practical matter in this litigation, the knowledge of danger of hepatitis infection from sewage flowing into oyster beds is historic and trite. I do not mean that to mean the consequences or that there is anything trite about the case, but the knowledge - - -

McHUGH J: Foreseeability of the risk was hardly in issue in this case.

MR TOBIN: There is no foreseeability issue and there is no foreknowledge issue and there is no question that the State was fully au fait with the question of the risks. So, in a sense, your Honours, when it gets to the question of the Minister being satisfied as to whether they are unfit for human consumption, it almost goes without saying that because fisheries, oyster harvesting, always stops or is supposed to always stop during these heavy rain periods, the Minister or the State would be au fait with that fact. That does not seem to us to operate. Where it operates is his Honour's conclusion at the bottom of page 273 where he picks up expert evidence, the last three lines:

"Growing oysters in water of acceptable sanitary quality is the first critical control point..." If the water quality is satisfactory, viral contamination problems should not arise. If it is not, they may confidently be expected; and when they do arise, neither depuration -

which was the cleansing process that the State had mandated -

nor flesh testing will be an effective weapon against likely infection - - -

GAUDRON J: I think you have exceeded your time in answer to the State. Yes, perhaps you could deal with your case against - perhaps you do not even have to do that. Prima facie, it seems to me, if one is giving leave to the State, one really does have to make an analysis of the Council's position to determine what, if any, duty devolved on the State.

MR TOBIN: I accept what your Honours say. If the State is in, I imagine everyone would be.

GAUDRON J: Well, Mr Nicholas, do you resist that proposition?

MR NICHOLAS: Well, I would like to, your Honour.

GAUDRON J: I know. I am sure you would like to. Do you wish to come to the centre, or are you comfortable there?

MR NICHOLAS: If your Honours can hear me, I am happy to - no, I will come to the centre.

GAUDRON J: Perhaps from the point of view of making sure your words are properly recorded you could come to the centre.

MR NICHOLAS: Your Honours, we are in a substantially different position from either the State or Barclays and, with respect to the majority in the Full Court, their analysis made that perfectly plain. We would submit to your Honours that it is very clear from the Full Court's majority judgment, the one that concerns us, that the distinctions between the so-called statutory powers which were available to the Council - there is some overlap, certainly, but when it came down to powers perhaps more closely directed to the conduct and operations of the lake, the oyster areas, and the control of them, then, on our submission, the analysis, particularly of Mr Justice Lindgren, makes it very plain that one is dealing with completely separate categories of powers. Thus, we would put to the Court that nothing arises in these applications - - -

GAUDRON J: But you certainly had power to minimise the risk, did you not?

MR NICHOLAS: Well, your Honour, in its most general terms, yes, but when one descends into analysing what those powers really are and whether, in effect, any duty could be imposed by reason of the existence of them, in our submission, your Honour, it just simply does not get to the point where a duty can be either formulated or imposed.

So, what I am putting to your Honours, with respect, as far as the Council was concerned what the Full Court had to say has been demonstrated to be entirely correct by subsequent judgments of this Court. It is not without significance in relation to a leave application, we would submit, that since the Full Court delivered its judgment in this case in August 2000 this Court has delivered its judgments, amongst others, in the Modbury Case and in the Brodie Case.

Now, we would say to the Court, with respect, that both the statements of the various Justices in each of Modbury and Brodie, in effect, provide a complete answer to these applications and as to why leave should be refused in relation to the Council, because if one takes Modbury, one is dealing with the activity, as far as Council is concerned, of obviously polluters.

His Honour the trial judge - and there is really no issue about this - could make no finding of fact which identified a particular site, or sites, which as a matter of probability was a source of contamination. The best he could do - and it was all that the then applicant/plaintiff could present - was a range of sites which had the potential for being, or, as his Honour found, were possibly - - -

McHUGH J: Was there any evidence before Justice Wilcox as to the cost of inspecting the several hundred points at which faecal matter could have entered the catchment area?

MR NICHOLAS: There was some, but to put it bluntly, your Honour, not much. There was some evidence as to various activities which were undertaken by Council and were later stopped and there were issues as to Council's priorities. There was certainly not, my recollection is, a quantification of the exercise which might have been involved in going round the different villages, going round the stormwater drains and so on. There was none of that, your Honour.

Your Honour, with respect, it is difficult to imagine how there could have been because when one looks at the evidence as to the location of these various sources over a shoreline which, I think, was to the order of about 250 kilometres, the range, variety and number of possible sources such as stormwater drains, private houses, boats, villages - some with 600, some with 200 people - and so on, it was an exercise which was completely impossible to achieve. Of course, as soon as one raises the question of the cost of inspection, it immediately begs the question of priority, "Where does one stop? How far does one go?", and so on.

McHUGH J: Can I tell you the matter that worries me about Justice Kiefel's judgment? It appears, at least on the first reading, that she thought there could be no duty to reduce the risk, that one had to show a duty to avert the harm. If you look at 527, 528, she said at paragraph 595:

A finding that it would actually "minimise" is not, with respect, apparent and in any event the Council could not have acted such as to prevent the viral contamination -

and over on 528, about the fourth line:

Tested another way, one could not say, on balance, that the performance of the duty identified would have averted the harm . . . the case against the Council should have been dismissed.

Earlier she said at 595:

Had the Council undertaken the management strategies referred to by -

Justice Wilcox -

it would follow from the evidence that the best outcome would have been a reduction of the risk.

But there are many cases, particularly in the dust diseases area, where it has been held that there is a duty, either to eliminate the risk or to reduce it.

GAUDRON J: And it is not entirely original to say that a failure to minimise a risk can be held causative of the actual harm that results.

MR NICHOLAS: Perhaps it is not, your Honour, but in this particular case the trial judge accepted - and I am looking your Honour at a paragraph in our argument at page 603. If I can just take your Honours to page 603 just to remind the Court of the trial judge's conclusions. If one comes to paragraph 2 on page 603 of our notes, although the learned trial judge found that the oyster industry is a major contributor to the economy, et cetera, he held that the Council had no direct responsibility for the operation of the industry. He also found that the Council was not obliged to undertake general quality control of the oysters harvested from the lake.

Then this passage, your Honours. His Honour accepted that the Council was not under an absolute duty to prevent pollution of Wallis Lake, and that prevention could never be guaranteed. He held that any duty must be confined to a duty to take those steps that were reasonably open to the Council in order to minimise human faecal contamination of the lake.

Now, your Honours, we would have put, with respect, that the way in which the duty was alleged as against us, that there was a duty to take reasonable steps to minimise the contamination of the lake - and one might assume, obviously, by others - and that we were negligent in failing to exercise our powers to minimise that risk.

Now, that notion of minimisation was considered, for example, and despatched, we might say, quite firmly, for example, in Modbury where Justice Hayne at paragraph [109] - if I can read it to you - had this to say:

The duty which the respondents alleged - - -

McHUGH J: Which paragraph?

MR NICHOLAS: I am sorry, your Honour, [109] in Modbury.

McHUGH J: Yes.

MR NICHOLAS: And we would say that, by analogy, it fits directly with the Council's situation. Perhaps I can bring the Court down about 10 or 12 lines from the commencement of [109] to the sentence beginning:

The duty which the respondents alleged that the appellant owed must be understood to have been a duty to take reasonable steps to hinder or prevent criminal conduct of third persons which would injure persons lawfully on the appellant's premises. The particular step to which the respondents pointed as being reasonable was leaving on the car park lights. The particular criminal conduct of which complaint was made was assault occasioning bodily harm to the first respondent. The duty alleged cannot, however, be confined by those two features. If the appellant owed the first respondent a relevant duty of care, it was to take whatever steps were reasonable in all the circumstances to hinder or prevent any criminal conduct of third persons which injured the first respondent or any person lawfully on the premises. But the acts of those third parties resulted from the choices which they made. Moreover, they were choices which were, as I have said, not necessarily dictated by reason or prudential considerations. It was, therefore, a duty to take reasonable steps to attempt to affect the conduct of persons whom it had no power to control. No such duty has been or should be recognised.

Now, we would submit, with respect, that fits very well.

GAUDRON J: But you are not entirely powerless to control some things.

McHUGH J: That proposition cannot be taken as a general application. There are many circumstances where one does have "a duty to take reasonable steps to attempt to affect the conduct of" other persons. I mean, the classic illustration is the gaoler who has a duty to ensure that one prisoner does not assault another.

MR NICHOLAS: And that is very easily explained, with great respect, because the gaoler has control over that person. He has the authorities which are vested in him in the gaol over that person in whose custody he is.

McHUGH J: You have general powers of management, your control over this area, have you not?

MR NICHOLAS: But we had, with the greatest respect, no powers of control at all. What we had were powers which enabled us to react to situations. We had no power of control over a person's premises from which were being disgorged effluent.

McHUGH J: But if you inspected and you found there were problems, was it not open to you to take steps?

MR NICHOLAS: In that situation, yes, but, your Honour, it is the dog chasing its tail in the circumstances left by the trial judge, because no site, or sites, was identified as being a source of pollution. It was all left on the possibilities and his Honour said it is not possible to determine where this came from. There were hundreds of sites where it might have come from.

Your Honours, part of our submissions, both to the trial judge and to the Full Court, and we repeat them here, with respect, was that absent some finding as to a location then one is not able to take the matter any further because it begs the question: what particular power is available to be exercised in relation to somebody's houseboat or an island on which people go and relieve themselves or is it a village in Nabiac of 600 houses and one has clandestine dumping of effluent into the stormwater drains?

McHUGH J: That may mean that in a particular case there has been no breach. The question is, is a duty owed?

MR NICHOLAS: In the circumstances of this case, there was no duty. There could be no duty found because none could be formulated, with respect. None could be formulated which would have any content. If, with respect, I could come back to - Justice Gaudron raised the question of the content of minimisation and in Modbury Justice Callinan at paragraph [136] had this to say - and we, with respect, would submit it is entirely apt in our case - about 10 lines into the paragraph the sentence begins:

Furthermore, it will never be possible to eliminate entirely, or indeed "substantially minimise", as the respondents' submission and the language of the Full Court would have it, the risk of injury by a criminal act -

we would add "by that of a polluter or a third party" -

All that will be possible is some reduction in the risk.

Now, your Honours, that is exactly what Justice Kiefel, we would submit, with respect to her, correctly recognised because the case against us was a case, in effect, that by reason of a failure to take unspecified steps to reduce or minimise somehow or other we increased the risk. Now, there was no finding to that effect, nor could there have been. It is difficult to imagine how it could be said in those circumstances there could be any increase or change, at worst, in the status quo. But the house of cards that the applicant in the court below, Mr Ryan, endeavoured to erect, collapses once it is recognised that there can be and was never any finding as to where, as a matter of fact, this pollution came from.

Your Honours, it then enables weight to be given to what the trial judge had to conclude, namely, recognising no absolute duty to prevent. Prevention could never be guaranteed. It enables them, with respect, Justices Lindgren and Kiefel, to correctly conclude that in the circumstances of this case it had simply never been established that anything the Council did - - -

GAUDRON J: Or did not do.

MR NICHOLAS: - - - or did not do, could lead to the consumption by this person of a polluted oyster. That situation is reinforced, we would say, when one recognises - perhaps looking at the concepts of control - how far removed the Council was from what was happening. The Council, on an analysis of its statutory powers, it is quite plain, had no power whereby it could interfere with, in this case, Mr Barclay, and what he was doing in relation to selling and harvesting oysters. It had no powers whatsoever in relation to the management of the waterways or of the conduct of the oyster beds.

Those powers were vested, firstly, in the State, who did have, under the Fisheries Management Act, particular powers which enabled it to prevent harvesting, to suspend operations and to prevent an oyster coming from a contaminated area getting into the hands of a consumer. Likewise, of course, obviously, the vendor similarly had powers of control which, if exercised, could have prevented the contaminated oyster being consumed. A fortiori, where the polluter is obviously some person who is conducting him or herself in a way over which it is impossible to imagine that the Council had any control whatsoever.

So, we submit, with respect, that whatever happens in relation to the applications of the State, Barclay and Ryan that are presently before you, none of them raise matters which warrants this Court reviewing what we would put to you, the entirely correct conclusion of the majority of the Full Court that there is just simply no duty established as against the Council and the consequences that, a fortiori, no breach and so on.

GAUDRON J: Can you tell me something, Mr Nicholas. I know there were three applications, but there was only one proceeding in the Federal Court, was there not?

MR NICHOLAS: Yes, your Honour.

GAUDRON J: Relevantly, there was only one proceeding there. Was it alleged that you and the State were concurrent tortfeasors?

MR NICHOLAS: Not concurrent, your Honour, no. There was a claim for apportionment, for contribution.

GAUDRON J: Yes. There was a claim under the Trade Practices Act against Barclays.

MR NICHOLAS: Yes, that is so.

GAUDRON J: To which was appended a negligence claim against Barclays.

MR NICHOLAS: Yes.

GAUDRON J: Presumably for failing to take reasonable steps to ensure that their oysters were fit for consumption.

MR NICHOLAS: Your Honour, I might be able to interrupt you. I am wrong in what I put to you. I think the contention was that they were concurrent.

GAUDRON J: That they were not?

MR NICHOLAS: Yes - that they were.

GAUDRON J: That you and the State were concurrent tortfeasors?

MR NICHOLAS: Yes.

GAUDRON J: But it could never be contended, could it, that you and Barclays were concurrent tortfeasors, could it?

MR NICHOLAS: I think it was contended but there was no basis for it.

GAUDRON J: I want to know how you were there.

MR NICHOLAS: At all?

McHUGH J: Yes.

GAUDRON J: I mean, it may well be that had Barclays sustained a judgment against it, they could have contended in proceedings against you and the State that their liability was caused by your negligence.

MR HOEBEN: I think we had. We have, your Honour.

GAUDRON J: You have?

MR HOEBEN: We have.

GAUDRON J: Yes.

MR NICHOLAS: That is how they dragged us into it but the - - -

GAUDRON J: Did the plaintiff not drag you into it?

MR NICHOLAS: Yes, it did. Yes, we were the target.

McHUGH J: Yes.

GAUDRON J: That is what I thought, the plaintiff dragged you into it. I will just state it so counsel can have notice, it is not obvious to me that the claim of Ryan against the Council and the State was so intimately connected with the claim of Ryan against Barclays as to be part of the same matter and it is not obvious to me that the claim by Barclays against the Council and the State is anything other than a separate matter distinct from the claim by Ryan against the companies. There may be an answer but it seems to me this is - - -

MR NICHOLAS: Your Honour, we await our friends to be able to indicate that to your Honours.

McHUGH J: That is why I asked earlier, that I had some difficulty in seeing how the Federal Court had jurisdiction over the State and the Council.

MR NICHOLAS: Your Honour, I think it stemmed from invoking 75B of the Trade Practices Act.

GAUDRON J: I mean, it may be that if leave were granted and appeal filed against you, you could successfully resist it on the grounds that the proceedings were not properly constituted against you.

MR NICHOLAS: That may be so, with respect, your Honour, but we would obviously prefer not to be taken that far, for the reasons that I have put to your Honours..

GAUDRON J: Of course. Yes, thank you. Now, Mr Hoeben, you are seeking special leave to appeal against your liability to Mr Ryan, is that right?

MR HOEBEN: Yes, your Honour. Yes, we are.

GAUDRON J: And for special leave to appeal against the Council?

MR HOEBEN: Yes, your Honour.

GAUDRON J: But you have no interest so far as the State is concerned?

MR HOEBEN: That is right, other than the general interest we all had as a result of the partners in misery, as it were, being found liable and the more in, if we remain liable, the more to share the burden. But other than that, no.

GAUDRON J: Yes. We should hear you as to why you should have special leave to appeal at all in relation to Ryan. I do not think we need trouble you at this stage with respect to the Council.

MR HOEBEN: Your Honours, our first point would be this - and that is just picking up the burden of the argument that has gone before - that if your Honours were minded to grant leave to the State and to Ryan against the Council, then we should be there because if ever there was a case of interlocking responsibilities, it is this, and it would distort - - -

GAUDRON J: I am not so sure about that. You have been found liable under the Trade Practices Act and you do not seek special leave to appeal in that regard.

MR HOEBEN: Your Honour, if I could deal with that - and that is the point that was made against us, the moot point argument - there are two answers to that. First of all, there are two Barclay companies, Barclay Distributors and Barclay, the growers - Barclay Oyster Growers or Barclay Oysters, I think it was called. Barclay Distributors was never found was never found liable under the Trade Practices Act. It has only been found liable in negligence.

GAUDRON J: Barclay Growers or Barclay Distributors?

MR HOEBEN: Barclay Distributors. So, it is only liable under negligence and it, therefore, has a right. We would submit it has been found liable as to one quarter as to costs and a quarter as to the damages. Secondly, your Honours, and perhaps most importantly is this, both Barclays companies have a cross-claim on against the Council and the burden of that cross-claim is a loss of profits claim, but also we say our liability under the Trade Practices Act on a Perre v Apand basis was a foreseeable consequence, not only foreseeable, but a damage which ought, if the Council is liable, be one which would entitle us to contribution from them. So, we have a vested interest in, if you like, releasing the finding of negligence against us so that - - -

GAUDRON J: Of course you have a vested interest in it, but what is wrong with the finding of negligence?

MR HOEBEN: I am sorry, I just wanted to deal with the moot point first, your Honour.

GAUDRON J: Yes.

MR HOEBEN: We have a reason to be here. We have a real damage which we have suffered. I am sorry, your Honour, I was at cross-purposes. The reason we are here is this, that the breach of duty found against us at first instance has been overturned by the Full Federal Court - and we would say quite properly - and that was that we should have participated with the other two parties in providing some kind of overall sanitary survey or check on the cleanliness of the waters.

What is now articulated against us - and Justice Lee agreed with Justice Kiefel on this - is an obligation to - and rather than summarise it, your Honour, I will read it out. It is on page 568. The obligation of the Barclays companies is the duty, the content of the duty. We never resiled from the fact we had a duty, as one does as a grower and distributor, but the content of the duty as found by the majority is set out, conveniently, at 568 of the application book. It is just the outline of argument. But it is in these terms, your Honours:

"the Barclay Companies should not have supplied oysters for sale until a sufficient period had elapsed by which the risk of contamination could be regarded as acceptable or tests sufficiently indicated that to be the case".

Now, your Honours, two things with that - this is just to illustrate the decision was wrong. The whole problem in this area is there is no way of determining what is a sufficient period. Once you have had a fresh, there is no way. There is no method of testing. The problem faced by all the experts in this case was that they suggested you have to have the sanitary survey before you even grow oysters, so you know your area and then you proceed.

Unfortunately, here, the oyster growers were there first and the urban atmosphere, if you like, or sprawl, developed around them. So they were there and people came there to live, so you had a complete reverse of what usually happens. Because of that situation, the first step before one could do anything is to conduct this sanitary survey so you can identify the point sources of pollution and monitor them and do various things like that.

So, to say that the oysters should not have been supplied for sale "until a sufficient period had elapsed by which the risk of contamination could be regarded as acceptable" is a test which could never be fulfilled. We are, after all, talking about a period of three days of rain. The usual protocol was followed, as had been followed for 30 or 40 years. All this is set out in the judgment of Justice Lindgren. There was no reason to think this rainfall was anything other than what had happened normally. So, we say the decision of the majority is wrong, that that content of that duty cannot be sustained because it is tantamount to saying, "Stop selling oysters. That's the end of the oyster industry in Wallis Lakes."

GAUDRON J: Let me just get this clear. I take it Mr Tobin is the only person who resists a grant of special leave to you.

MR HOEBEN: I would think so, your Honour, yes.

GAUDRON J: Is that correct?

MR TOBIN: Yes, your Honour.

GAUDRON J: Well, perhaps we will hear from you on that, Mr Tobin.

MR HOEBEN: Your Honour, sorry, just one further matter. We, of course, have an interest in the Council being found - and I do not want to - - -

GAUDRON J: Yes. We will tell you if we need to hear you further on that.

MR TOBIN: Your Honour, the answer to Mr Hoeben's submission is simply this, or can be illustrated by reference to what happened in this case. After the fishery was closed voluntarily by the oyster growers and a sanitary survey was conducted, production and harvesting resumed. It resumed and that is uncontested. When Mr Hoeben says that the duty at page 568 to withhold oysters from sale "until a sufficient period had elapsed by which the risk of contamination could be regarded as acceptable" fits perfectly with the facts of the case, that is, harvesting did resume in circumstances when the risk of contamination was regarded as acceptable.

So, it is simply an error, and I say this with due respect, to suggest that implicit in the Full Court judgments of two of the judges is some form of strict liability. Their Honours simply applied standard common law principles to the conduct of a manufacturer and distributor of a product which was proved to be contaminated.

Your Honours, the argument is not advanced on behalf of Mr Hoeben's client by the suggestion that it would be impossible ever to know with 100 per cent certainty that the oysters were free of contamination because that would only be a question that arose when one studied the issue of breach.

Their Honours' formulation, with respect to my learned friend, seems to us to be perfectly apt, as did, again, with respect, what his Honour Mr Justice Wilcox said, namely, if you go ahead and sell oysters in circumstances where you know - and this was a finding made against the companies - of the risks of contamination, then, at least, there is a duty to warn the consumer and it is no answer to say it is impossible to know with certainty that the oysters will be free of any contamination. That is a counsel of perfection.

An oyster may be contaminated, but the question would exercise the court then would be whether the grower and the distributor had done all that reasonably it was required to do to ensure that its oysters, compliable with a duty of care, were sold free of contamination to the public.

McHUGH J: This is part of the problem that is becoming increasingly rampant, and that is that duties are being formulated in terms of what really is breached. The language of the common law is to take reasonable care. One would have thought that, prima facie, ordinarily one states the duty to be a duty, in this particular case, to take reasonable care to avoid the risk of harm to persons in the supply of oysters. The real question then is: has that duty been breached? What did reasonable care require in the circumstances of the case? But the duty here seems to have been specified almost in terms of that you have a duty not to supply unless sufficient period has elapsed.

Now, if you are going to talk about that as a general duty, then there are problems about it, because if you formulate it in terms of a general duty to take reasonable care, then there is the duty. The question is: has there been a breach of that duty? That depends upon the particular facts of the case and you can look at those particular facts. This seems to be stated at a very abstract level.

MR TOBIN: His Honour Justice Wilcox at 568 lines 25 to 30 - this is said of his judgment:

Wilcox J did not in terms ever define the content of the duty of care. He dealt with its content in terms of its breach. While finding that the applicants had acted reasonably in the growing and distribution of their oysters he identified as their breach of duty, their failure to take steps reasonably open to them to obtain a virus free growing environment.

Now, in a sense, that is elliptical in the way that your Honour puts, but what is obviously lying behind it is there is an obligation to sell virus-free oysters to the public as best you can.

GAUDRON J: That might be a Trade Practices Act obligation, but that is not the duty of negligence, is it?

McHUGH J: No, it is the duty to take reasonable care to avoid the risk of harm in supplying oysters to the public. One would have thought that was the - - -

MR TOBIN: Well, your Honour, I do not disagree with what your Honour puts but I am saying that what lies behind Mr Justice Wilcox's formulation about the breach necessarily imports that.

McHUGH J: Yes.

MR TOBIN: It may be that one has reached the stage of ritualism where the traditional formulation, such as your Honour puts to me, correctly, with respect, is then understood by the court below and he proceeded to deal with the breach.

McHUGH J: Well, the problem is being aggravated by the fact that judges now determine questions of fact as well as questions of law. In days gone by, the question of duty was a question of law to be formulated by the judge and the question of breach was the matter for the jury and it was then for the jury to determine whether, in the circumstances of the case, the duty of reasonable care had been breached. You would not state a test in terms as - or you would not put to a jury or charge a jury, except as an argument of one of the parties, in the terms that appear at paragraph 608.

MR TOBIN: Yes. Well, that was the Full Court's reformulation of what his Honour had, as it were, omitted, perhaps incorrectly, from the rubric. But what lies behind the facts of the case, your Honours, is that there would be little doubt, other than in the precise language of the formulation, that what is being said about the grower and distributor of the oysters is that he has to be careful, as is reasonably available to him, to make sure that what he sells to the public is not contaminated so as to cause an injury.

McHUGH J: Yes, I know, but the problem is that once you formulate the test the way I suggested to you, Mr Tobin, then in determining whether there has been a breach, in determining whether there is a causal connection between breach and damage, you have to identify as closely as you can what actually happened in the case and in the way this is formulated, you say, "Well, they didn't do anything for a sufficient period and something's happened and, therefore, everything else falls into place", and I am not sure that you would get the same result if you analyse the case to try and determine what actually happened and ask yourself, in those circumstances, was that a breach of this duty of reasonable care?

MR TOBIN: Well, one underpinning fact, and this is not - - -

McHUGH J: I mean, your difficulty is that you just do not know where this came from.

MR TOBIN: One underpinning fact, your Honours - and I do not want to dive into the evidence - was that there was an awareness of the danger within the company of the risk of disease from the oysters. This was common to oyster growers and oysters are, apparently, very prone to ingest viruses and bacteria and to hang on to them for long periods of time.

McHUGH J: Yes, I know I am harking on that, but you will notice that in Brodie we were particularly careful to put most of the discussion on the question of breach rather than duty.

MR TOBIN: Yes. Well, your Honours, in a sense - and I do not want to turn back to this, but some of Mr Justice Lindgren's analysis of the duty of care, both for State and Council, would perhaps be more apt in the discussion of breach, such as minimisation of harm, and there are a number of aspects of it. I do not offer that critically but it is a thread through the whole of the case. That is something we have to live with, as it were.

The main point we make in opposition to the leave on the negligence issue is that, whatever the formulations, when one takes hold, as it were, of the facts that are not in dispute in the case, there is really very little scope for it rising to the stand of a special leave application. Did your Honours want to hear me on the Council matter?

GAUDRON J: You want leave against the Council, do you not?

MR TOBIN: Yes.

McHUGH J: Yes, yes.

MR TOBIN: Just in answer to Mr - - -

GAUDRON J: No, we do not.

MR TOBIN: Yes, thank you, your Honours.

GAUDRON J: Yes, there will be a general grant of special leave, that is to say, all applications will be granted. I am not too sure whether we need all appeals, or somebody might be in a cross-appeal situation rather than an appeal situation. Presumably you will think about that and presumably also you will work out some appropriate order and division of time. I presume two days would be sufficient. You would not be getting more than two, I should not think. We would expect to deal with major constitutional issues in two days.

MR TOBIN: I think Henry Ford invented that option, your Honour.

GAUDRON J: Yes. Well, you will work out some division of time between yourselves, otherwise anyone may apply for directions.

The Court will now adjourn.

AT 3.30 PM THE MATTERS WERE CONCLUDED