State of New South Wales v Ryan & Ors S261/2001 [2002] HCATrans 108 (12 March 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S258 of 2001

B e t w e e n -

GRAHAM BARCLAY OYSTERS PTY LIMITED

First Appellant

GRAHAM BARCLAY DISTRIBUTORS PTY LIMITED

Second Appellant

and

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

First Respondents

GREAT LAKES COUNCIL

Second Respondent

STATE OF NEW SOUTH WALES

Third Respondent

Office of the Registry

Sydney No S259 of 2001

B e t w e e n -

GRANT RYAN

Appellant

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 S261 of 2001

B e t w e e n -

STATE OF NEW SOUTH WALES

Appellant

and

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

GLEESON CJ

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

HAYNE J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 12 MARCH 2002, AT 10.16 AM

Copyright in the High Court of Australia

MR C.R.R. HOEBEN, SC: May it please the Court, I appear for the appellants in the Graham Barclay matters - that is matter No 258 of 2001 - with my learned friend, MR A.P. COLEMAN. (instructed by PricewaterhouseCoopers Legal)

MR T.K. TOBIN, QC: If your Honours please, I appear with MR J.B.R. BEACH, QC and MR B.M. ZIPSER for the appellant against the Council in S259, and the respondent in the appeals by Barclay, S258, and the State of New South Wales, S261. (instructed by Slater & Gordon)

MR B.W. WALKER, SC: May it please your Honours, I appear with my learned friends, MR P.W. TAYLOR, SC and MR M.J. WINDSOR, for the appellant, the State of New South Wales in 261 of 2001 and as the third respondent to Graham Barclay's appeal and as the fourth respondent to Mr Ryan's appeal. (instructed by Crown Solicitor for the State of New South Wales)

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

GLEESON CJ: There is an application to intervene?

MR R.J. MEADOWS, QC, Solicitor-General for the State of Western Australia: May it please the Court, I appear with my learned friend, MS J.C. PRITCHARD, on behalf of the Attorney-General for Western Australia, seeking leave to intervene. (instructed by the Crown Solicitor for the State of Western Australia)

GLEESON CJ: Is that application opposed?

MR TOBIN: No, your Honour.

MR WALKER: No, your Honour.

GLEESON CJ: You have that leave.

MR MEADOWS: May it please the Court.

GLEESON CJ: There is a certificate from the Deputy Registrar in relation to matter S261 of 2001 that she has received letters regarding the non-appearance of respondents Scott Callaghan, Kevin Gower, David Holness, Geoffrey Bennett, Bryan Hocking and Brosow Hardy in the form of a letter from Slater & Gordon, solicitors, advising that no determinations have been made in respect of those parties throughout the progression of the matter to date and consequently they have no interest in the appeal.

There is a letter received in relation to Clift Oysters Pty Limited from Phillips Fox advising that the proceedings against that respondent were discontinued some years ago. There is a letter received in relation to the respondents M.W. & E.A. Sciacca Pty Limited and Tadeven Pty Limited from Minter Ellison advising those respondents do not seek to be heard on the appeal and submit to any order of the Court save as to costs. In relation to the respondent The Oyster Farmers Association of New South Wales Pty Limited, there is a letter from Slater & Gordon, solicitors, advising that that respondent was dismissed as a respondent in the Federal Court proceedings and there is no interest in the appeal.

In relation to the respondents R.A. King (Wholesale) Pty Ltd and Smiths Oyster Service Pty Limited, there is a letter from PricewaterhouseCoopers Legal, solicitors, advising they are not instructed to participate in the appeal on behalf of those respondents. In relation to the respondent Manettas Limited, there is a letter from Ebsworth & Ebsworth, solicitors, advising that that respondent does not wish to take any active role in the substantive hearing.

In relation to the respondent Shonid Pty Limited (trading as "Tim & Terry Oyster Supply Pty Limited"), there is a letter from Deacons, solicitors, advising that that respondent will not take part in the High Court proceedings. In relation to the respondent Victorian Frozen Food Distributors Pty Limited (trading as "Richmond Oysters"), there is a letter from Corrs Chambers Westgarth, solicitors, advising that the twelfth respondent does not wish to formally participate in the appeal. And in relation to the respondent Georges Oysters Pty Limited, there is a letter from Henry Davis York, solicitors, advising that that respondent does not wish to play an active part in the appeal.

I understand that there is leave sought to amend, in one respect.

MR HOEBEN: Yes, that is right, your Honour. It is just a minor housekeeping matter, but leave is sought in matter S258 of 2001 to amend the notice of appeal to add the other members of the Ryan class. They were those persons named in the letter from Slater & Gordon, Scott Callaghan, Kevin Gower, David Holness, Geoffrey Bennett, Bryan Hocking and Brosow Hardy.

GLEESON CJ: Is that application opposed? You have that leave. There is a memorandum from the Deputy Registrar to the effect that she has been informed by Slater & Gordon, solicitors, that no determinations have been made in respect of those additional respondents that you have just named throughout the progression of the matter and consequently they have no interest in the appeal.

Has there been any agreement between counsel as to an order of addresses and division of time?

MR WALKER: Yes, there has as to order of addresses. There has been discussion about division of time which has not resulted in any exact division but seems to have resulted in a consensus as to how the matter should proceed. May I tell your Honours what the Bar table would respectfully suggest? That I commence for New South Wales in its appeal against Mr Ryan. That the learned Solicitor for Western Australia follow me in support of the State's position. That Mr Hoeben follow in Barclays' appeal against Mr Ryan and also in Barclays' appeal against the Council. Then follow Mr Tobin as respondent to the appeals respectively by the State and by Barclays and as appellant against the Council. Then follow Mr Nicholas for the Council as respondent to the appeals respectively of Mr Ryan and Barclays. Then follow Mr Hoeben in any reply thought necessary with respect to Barclays' appeal against the Council. Then follow Mr Tobin in any reply thought necessary in the appeal against the Council. Finally, me, in any reply thought necessary in the appeal against Mr Ryan.

GLEESON CJ: Thank you, Mr Walker. Yes, Mr Walker.

MR WALKER: Your Honours, the liability which has been held at trial and on appeal by majority of the State of New South Wales for the injuries undoubtedly suffered by Mr Ryan, held to have been caused by the ingestion of an oyster or oysters containing hepatitis A virus, appears to be based upon a reading of certain statutes which, in our submission, will reveal on a proper and full reading the insecurity of the foundation of the finding. It would appear there are two statutory schemes still in play, as it were, namely, those to do with fisheries and those to do with food, though there may be a third about which your Honours might hear on behalf of Mr Ryan, namely, those to do with pollutions in clean water.

In my address I will concentrate particularly upon the fisheries, to a lesser extent on the food legislative schemes, and in particular, the way in which the fisheries management regulations evolved but, in our submission, it will be inescapable to observe how the pleading was mounted, how the trial judge stripped down issues, it would appear both in deference to or acquiescence in issues not being pressed and by a dismissal of various of the claims as they were formulated on behalf of Mr Ryan.

Those findings which found the dismissal of certain of the claims are important for our present position, eliminating, as they do, in our submission, reliance in this Court, as it appeared to eliminate reliance in the Full Court of the Federal Court, on a number of the statutory provisions which might otherwise have been thought very important in a claim against the State.

May I start with the proposition, which is repeated against us in the Full Court and which so far as it goes must be correct, that the submerged land and waters upon which the oysters in question must have grown, by inference, was land owned in the sense that that appertains to a State by the State. Then if I may take your Honours to the bundle of legislation, commencing with the Fisheries Management Act 1994 itself, leap straight to section 163 by which matters moved on from that bald statement of ownership.

It is our submission that at the end of the day ownership will have very little light to cast indeed on the relevant aspects of control and management which, on all sides of the Bar table, would appear to be a pivotal feature of the case.

McHUGH J: You seem to want to frame the issue in terms of whether the State's statutory powers give rise to a common law duty to exercise the power. May it not be the correct way to look at this case that you would have had a duty of care whether any legislation was passed or not, simply by reason of (a) your ownership and (b) the fact that you are a government, and that there is in these waters viruses and other risks to the health of people in this State?

MR WALKER: The short answer to your Honour's question is no, that is not an available way of looking at it, but there are two levels of answer to it which require different elaboration.

The first is to inspect the pleadings, the submissions as they are recorded and determined at trial and in the Full Court because it is not, in our submission, possible in this Court to throw open the gates which have been closed, both by concession on the part of the applicant and also by decision not challenged. But the second and more far-reaching answer is that the twin factors of ownership and governmental power have not been relied upon in any of the decisions against us as simply and solely sufficient to make out a claim for a failure to exercise more or different control from that which was exercised.

McHUGH J: Are there any decisions where a State, as such, has been sued? It seems to me that you are into a different area of discourse when you are talking about the duties of a government owed to all its citizens. Supposing there was a smallpox outbreak, why would there not be a duty to protect the population which is vulnerable?

MR WALKER: Your Honour, I do not wish to be pedantic about nomenclature but, first, it is important to distinguish between government being the ministerial party, government being the activity, and the State being the polity. I appear for the polity.

McHUGH J: Yes, I know.

MR WALKER: Its affairs include both private and public. It is public affairs which are in question in this case as they impinge upon private affairs. The activities of government, small "g" as it were, are largely carried out by the Government, spelt with a big "G", which has its officers, from a Minister, at least two of whom are relevant to this case, to various heads of departments of State such as Directors-General, through to relatively much more lowly officers such as persons who may or may not carry out inspections of various places.

So when one talks about government, it is going to be important, not least because we do not operate in a statutory vacuum in this case, to identify who are the players, what are their roles and what are their powers, because this case has never been put against us in a way which would have been truly radical, namely, to say that once one has a polity and a government given by constitution power of governmental control in the broadest sense, there is an executive capacity to do things for failure of which a breach of an antecedent duty of care may be detected. The case was not put in that fashion.

GUMMOW J: Well, there is no executive capacity to do things involving expenditure of money without legislation, for starters.

MR WALKER: Quite. That is the first reason why, in our submission, that would be a truly radical suggestion, because it would require, not least, proper interaction with the law - constitutional, as it happens - concerning appropriations. One may leave to one side at the moment the theoretical possibility of executive action that requires no government money, subject to some important observations we are going to make later about the political choices about funding which underlay the background in this case. In short, there was going to be an industry funding of an industry participation, so-called self-regulation - more accurately, perhaps, called nowadays co-regulation.

The second reason why what your Honour Justice McHugh has suggested is simply not available in this case comes up because of what your Honour Justice Gummow has noted, namely, that at the very outset, even if one is thinking about a so-called pure executive matter, the legislation intrudes. In this case, naturally, the even more radical, one would say completely quixotic, attempt has never been attempted, to argue that the government's capacity - using that word in a loose sense - to have prevented Mr Ryan's illness came about because it had, through Parliament, and through delegated legislation controlled by Parliament, the powers, obviously, of legislation. So this is not a case which undertakes to have the judiciary opine about the wisdom of legislating or not, or the form of particular legislation. Once one puts that aside - - -

HAYNE J: But if the area for immediate debate is whether foresight, plus capacity, equals duty, capacity requires the closest attention to capacity to do what, and what was it that was alleged that the State could have or should have done?

MR WALKER: Yes. Your Honour, that is why, like the man in the Bateman cartoon, I am going to go to the pleadings, perhaps for the first time in a long time in this case, but one thing we can say very simply: we are held liable at the moment, about which we complain to this Court, on, it would appear, one single basis, elaborated though it may be in some of the supporting reasons, but the single basis appears to be that the State, through its officers - through designated officers, in particular - had the capacity to close the fishery.

Now, that is a capacity which requires quite precise attention, to which I will be coming. It is section 189 of the Fisheries Management Act 1995 but if your Honours will forgive me I do not want to go there straightaway.

CALLINAN J: Mr Walker, it seems to be entirely to develop, implement and enforce programs and plans. Is there anything else alleged against New South Wales?

MR WALKER: Your Honour has correctly anticipated what one will observe from the pleading and, with great respect, that is the summary. I was going to undertake to summarise it in even just one word, "programs", because every pleading against us in the main claim against us is programs. I need to qualify that because there are two other forms of claim to which I will be taking your Honours in the pleading which stand apart from that, but as against the State simpliciter your Honour is correct. We have findings in our favour from the trial judge, not open to sensible challenge in this Court, about those programs.

CALLINAN J: But it would need not only the development of a program but also its enforcement and that might require a large sum of money of the kind to which Justice Gummow referred.

MR WALKER: One of the choices which for the State was never absent and is not merely theoretical in this case, for once, was between funding directly from consolidated revenue by an entirely State apparatus which would have involved, no doubt, without too much exaggeration, State officers on punts, State officers at wharfs and State officers in workrooms where date labels are applied, for example, to bottles of oysters. That was one possibility. Another possibility was to involve, as regulation of many industries or professions seems nowadays to be indicated, the active engaged participation of those who profit from the industry or profession. The latter was the political choice made and it included financial ramifications, including statutory and regulation powers to recoup costs from those who profited from the commerce.

McHUGH J: Yes, but you are the lessor here, are you not, of these oyster leases?

MR WALKER: Yes.

McHUGH J: So, you own the lake and you lease it?

MR WALKER: Yes, we are no mere owner.

McHUGH J: You say you are not a mere owner but - - -

MR WALKER: We are the polity.

McHUGH J: Yes, but you are, nevertheless, the lessor.

MR WALKER: Yes.

McHUGH J: And you allow these oysters to be grown in your waters. You want to look at the case in terms of an analysis of whether the State statutory powers give rise to a duty to exercise them. What I have been putting to you is that the cases can be looked at in a much more narrow sense.

MR WALKER: No. Your Honour understands that my first response to that is that at this stage it cannot be looked at in that way for the two reasons, one peculiar to the forensic course of the case and the other because the necessary premises, namely, that one could identify either bare executive action or legislative choices as rendering the State liable, is simply not available and is not pressed. Could I before being taken too readily to assent to the question of lease however take your Honours to the particular provisions in which that word - - -

McHUGH J: Could I could just interrupt you. Has nobody ever sought to compare this sort of case with a reserves case? One asks whether or not the Crown owns - - -

MR WALKER: Your Honour means naval or - - -

McHUGH J: - - - a public reserve on land, or whatever it is, duty owed to occupiers, Aiken v Kingborough Corporation type case, one does not ask whether or not there is money available or whether there has been an appropriation before a duty of care is owed.

MR WALKER: No.

McHUGH J: The duty arises from the fact that you allow things to be done or you invite people onto your reserve.

MR WALKER: There are traces in the reasons against us of ownership being treated as important, and I am going to take your Honours in particular to the way Justice Wilcox, whose conclusions and, to an extent, reasoning, seems to be adopted by the majority of the Full Court, dealt with that matter. However, there is no explanation proffered as to what it is about this form of ownership that carried the control and management of the kind that one sees discussed by this Court in Nagle v Rottnest or Romeo v Northern Territory. So I think the proper answer to your Honour's question is no, exact analogy was never urged, though it is clear that there are matters called in aid which are common to Nagle, Romeo and Ryan.

McHUGH J: Just so you will know what my thinking is at the moment about this sort of case. What is the difference between this sort of case and the private landlord who allows a lessee to produce some deleterious material which the landlord knows will cause harm to outsiders and knows that there are no efficient safeguards? Now, in that sort of case I would have thought the landlord owed a duty of care to - - -

MR WALKER: Your Honour, an authority does not spring to mind which imposes on a landlord who has truly parted with the leasehold estate with knowledge or perhaps even sometimes, as one sees, a stipulation as to the use of the land, where simply and solely by reason of that there is liability, for example, for, say, food poisoning. Now, perhaps the key to why it is difficult to think of an authority which involves that indirectness of causation, that is, a production of a commodity to standards which are clearly unacceptable, their consumption by acts of quite extraneous volition of third parties, the biological effect which either always or very often will lead to disease et cetera, because, as in this case, there is no neat inevitability, be it about any of the matters of knowledge or outcome to which your Honour's example understandably does not suggest any doubt.

In this case it is factually critical that the description by Justice Lee of the outcome as inevitable be considered against the findings which have been made. The findings which have been made include two salient features, to which we may return in more detail later. They are that in Wallis Lake, with its catchment and its farmers and its techniques of depuration, none of them perfect because the world is not, there had been no outbreaks of HAV in the past. It was unprecedented. That is the first fact.

The second fact is - and this is a fact that one sees from gaps in the book. What one sees is there has never been a suggestion that the sources of faecal pollution, be they people, where people are or the moving locations of where people are, there is no suggestion that they were either newly created or greatly and recently magnified between the last heavy rain and the November 1996 rains in question in this case. In short, the fact that the outbreak was unprecedented has a realistic and material effect on predicting the matter of risk. For reasons which I am going to come, that is a critical factor for the one and only statutory method by which the question of the State's capacity is held to render it liable both at trial and on appeal.

McHUGH J: But Professor Brown's evidence condemns that, does it not?

MR WALKER: No, your Honour.

McHUGH J: You may have a good legal point in this case, but I do not think any of the respondents in the application have much merits about them.

MR WALKER: No, your Honour. We, with respect, urge our merits with some vigour for this reason: the notion that all water is pure or all food is pure need only be stated to be rejected. These are all relative states. The question is whether something had been brought to our attention, whether it be in the highly particular manner of the remote case of Pyrenees v Day or whether it be in some more generalised fashion, as to Wallis Lake oysters, rainfall and HAV. The fact is there had been Wallis Lake oysters grown, sold and eaten since the beginning of last century at least and there had been heavy rainfall from time to time during the same period.

There had also been habitation on the shores of the land which drained into the oyster-growing area. So the notion that one can simply put to one side the unprecedented nature of this outbreak as been of no moment and as somehow nonetheless justifying a finding that what happened was inevitable is a classic case of retrospective reasoning.

McHUGH J: But was it not until around 1980 that the connection between the faeces and this virus in the oysters was really come to attention?

MR WALKER: Well, if your Honour is talking about virology and the effect of oysters and the survival rates of viruses, no doubt the knowledge is still not anywhere near perfect. But, yes, it is relatively recent, the state of knowledge which was presented to the court. One would expect that in the nature of things, that is, that the court would have the most up-to-date knowledge in these areas. That does not mean, however, that it has not been known for a long time that you can get sick from eating bad oysters and that nothing is more calculated to make oysters bad than bad water and nothing is more calculated to make water bad than human faeces.

Now, your Honours, section 163 of the Fisheries Management Act is where one starts to move, as we submit, away from this image of pure owner, simple owner. One sees that public water land may be leased for use for aquaculture. Section 142 defines aquaculture in a way that includes the oyster farming carried out in this case. One sees that under subsection (2), as if it were a common law lease as it were, it can occupy specified strata. One then sees that one moves to activity rather than parcel, as it were, so as to define the species of fish, et cetera, which are "authorised to be cultivated". One sees other indicia similar to true leases.

When one comes to section 164, one finds that the exclusive right, however, in paragraph 164(1)(a) is the right to cultivate the relevant species of fish and to take them. It is the right to the ownership of those fish. It does not confer, subsection (2):

the right of exclusive possession of the leased area.

And then in subsection (3), it:

is subject to the public right of fishing and to any right recognised by the regulations, except as provided by subsection (1) -

Subsection (4) applies generally, obviously, both to the lessee and, more to the point, people, for example, exercising the public right of fishing whereby they cannot tear up the oyster beds. One then finds, with respect to the lease as such, section 177, which we emphasise has not been used as a basis of liability in this case, subsection (1):

The Minister may . . . call on the lessee to show cause why the lease should not be cancelled -

and paragraph (b) of that subsection:

the leased area is so polluted that fish . . . are unfit for human consumption and the pollution is likely to continue indefinitely.

McHUGH J: Are these truly leases, having regard to Wik?

MR WALKER: No, that is why I am drawing to your attention the specific provisions. The word "lease" is used, and perhaps none the worse for that, however, there are obvious distinctions between this and what one is taught, for example, in Radaich v Smith as the indicia of a common law lease.

GUMMOW J: Well, section 180 is interesting.

MR WALKER: Yes, but that is a dealing of course with the statutory creature.

GUMMOW J: Yes.

MR WALKER: And the lease referred to in section 180 is that which emerges by the process commencing in 163. Section 177, as I say, section 177(1)(b) was not used in this case, but is a powerful indicator of the way in which Parliament intended such matters to proceed. It is a "show cause" procedure. Subsection (3), procedural fairness must be afforded. Subsection (4) are merits appeal, so-called, to the District Court. No more an appeal, perhaps, than a lease is a lease, but there is a case taken from the executive to the judiciary about the merits of the determination of pollution and the likelihood of continuing indefinitely.

May I then take your Honours back for the next link to section 163(3), the second sentence of which refers to the connection with an aquaculture permit. May I then take your Honours back to the provisions with respect to aquaculture permits.

They commence at section144 with the most familiar manner of, to use the jargon, control by a State of any activities on any territory, whether it owns it or not, namely, to prohibit the activity and to licence its conduct, either in return for money, or on other conditions. In our submission, that is a degree of control which should not, in this Court, be held to be an integer leading to a duty of care being imposed. The capacity of a polity as the supreme law maker and enforcer in a territory, by legislation, to forbid activity and then to licence it, should not, of itself, lead to the imposition of a duty of care which is by way of an indemnity or any carelessness of the person so licensed.

Section 144(1) imposes that prohibition. Subsection (2) permits permits of various classes. Section 145 regulates the mode of application for a permit. Section 146(2) makes it crystal clear that these are not to be withheld on whim. This is not the role of a private owner of land who can choose, subject to anti-discrimination legislation, who he, she or it will permit to conduct any activities on the owners land. Subsection (2) regulates the ways in which people who want to go into oyster farming to earn their livelihood have, by Parliament's protection, certain expectations that they will get a permit and they have to do, amongst other things, with satisfactory preparation and qualifications for undertaking the aquaculture in question.

Section 147 obviously relates to the lease power because it requires specification of the areas of authorised aquaculture and your Honours will have noted, I apologise, subsections (3) and (4) of section 146 render justiciable by way of so-called:

appeal to the District Court . . . a refusal . . . to issue a permit -

So this is not an owner simply able to control by its say-so who is on its land and even what they may do. Section 152 permits the aquaculture, or authorises aquaculture permits to be conditioned in various ways. We have not faced in this case any findings going to the liability conclusion against us concerning the nature of conditions which were imposed, the enforcement of conditions which were imposed or conditions which may have been imposed but were not.

HAYNE J: Is the holder of a permit bound to exercise it?

MR WALKER: I think not, your Honour. I think your Honour is raising the question as to whether there is an obligation to be an oyster farmer if you have a permit to be one.

HAYNE J: Are you bound to carry on aquaculture or does it simply permit you to do it?

MR WALKER: No, it is a permit. One of the grounds of cancellation - - -

GUMMOW J: Paragraph (f)?

MR WALKER: - - - yes - looks to what would clearly be a factual decision as to whether you have given up - not undertaking is the expression. Now, your Honours know, of course, that oyster farming, or oyster harvesting I should say, is seasonal. I apologise to oyster farmers for suggesting they have six months off every year, but it is the harvesting that is seasonal and no doubt there would be factual questions as to somebody who is not carrying out activities in the usual fashion, whether they are no longer undertaking the matter. There is no question that you will not get one unless you say you propose to undertake it, see section145(2) - - -

GUMMOW J: There is an appeal to the District Court against cancellation as well.

MR WALKER: Yes, your Honour, so there would be a factual inquiry as to whether your state of passivity amounts to not undertaking the aquaculture permitted. I think that is an answer to your Honour Justice Hayne's question. May I then move to - - -

HAYNE J: But it would be consistent with that regime for the permit holder by the current commercial farm development plan to say that, "I will carry this on only at such times and in such ways as will produce a product that is entirely safe."

MR WALKER: Yes. Safety, efficiency, market advantage - that is, will not produce while the market is glutted, for example - no doubt, all of those matters, which will be an amalgam of self-interest and altruism - to produce only good oysters is obviously in one's self-interest, notwithstanding it serves the purpose of protecting others.

One sees, in section 151, the concept of cancellation is the method by which the duration otherwise stipulated can come to an end. There is also the question of suspension. Before getting to those, could I draw to your Honours' attention section 156, which is one of the provisions in this case concerning funding matters. Under section 156, subject to the requirement being in regulations, annual contributions towards certain costs, including in paragraph 156(1)(b) quality monitoring, may be recovered from the permit holder.

One sees in subsection (6) that Parliament has required - and we unashamedly call this a matter of policy - that there be a committee on whom the majority are "relevant representatives of the aquaculture industry" to "advise the Minister about the level of services", which in turn, of course, will inform the amount of costs which can be recovered. Following various financial provisions about that, may I take your Honours then to cancellation and suspension, which commence with 159, a power which did not exist in this case and need play no further part. That is peremptory cancellation or suspension. But section 160 is the one which might have played a part in this case, but it did not. Under section 160(1)(i) your Honours will see a head of cancellation or suspension concerning an area:

being so mismanaged that the production of fish . . . has been prejudicially affected or that the suitability of that area or any surrounding area for aquaculture is threatened -

et cetera. That, also, is not called in aid in this case, perhaps not surprisingly, on the facts. The area, of course, is the permit area, which will be the submerged land and water. Under subsection (2), procedural fairness is required, and under subsection (5), an appeal to the District Court is provided.

I should draw to your Honours' attention, perhaps against ourselves, section 100 is a statutory immunity provision which does not apply to any of the matters that were germane in this case. I apologise, your Honours do not have it in your folder, for which I am sorry, however, I can tell your Honours that section 100 refers only to immunity with respect to the exercise of powers or actions taken under Part 3, Division 9, which has to do with the share management fisheries appeal power - sorry, a share management fisheries register - Division 10 of Part 3. It has nothing to do, therefore, with this case. The statutory provisions your Honours have been looking at, and will look at, in the Fisheries Management Act do not come with an immunities provision that we can call in aid.

Could I then take your Honours to section 189 which, as we apprehend the case still put against us and as we respectfully read the findings against us, is the sole - - -

GUMMOW J: It was never pleaded, was it?

MR WALKER: I am sorry, your Honour?

GUMMOW J: There was no pleading based on section 189.

MR WALKER: No, there is not.

GUMMOW J: How did it all happen?

MR WALKER: I do not know. I am going to trace for your Honours the way in which one moves from the pleading to the critical passage in Justice Wilcox's reasoning. In our submission, it is, on any view - - -

GUMMOW J: The pleadings are over 100 pages long.

MR WALKER: Yes. The way in which issues - - -

GUMMOW J: Why bother?

MR WALKER: There is chaos, your Honour, with respect to - - -

GUMMOW J: This sounds like a product of case management.

MR WALKER: It may be a polluted product of case management, your Honour.

GUMMOW J: Yes, but you do not see many - - -

MR WALKER: Like oyster farming, case management, no doubt, can be carried on more hygienically. There is real chaos in trying to compare the pleading to the first instance judgment. There are some queries, with great respect, when one moves from the first instance judgment to the appeal. We would not dissent from what your Honour suggests, namely, that the pleading really did not convey what one would expect, even pre-Brodie, as a pleading which called in aid the capacity granted by section 189.

KIRBY J: That often happens in the way parties run cases.

MR WALKER: That is why your Honour will not hear me run a pleading point as such, but it is very important in evaluating the kind of arguments which anew might be put in this Court, or for the first time might be put in the Court, nonetheless to observe the way in which the case was presented and argued.

GLEESON CJ: I am looking at page 110, paragraph 47(d).

MR WALKER: Yes, your Honour. That is it, I think, your Honour. That is the means by which - it is the only means by which one can get there. I will come back to why that is a most unsatisfactory pleading for what is said to arise from it in just a moment.

GUMMOW J: That says:

But for the acts of negligence pleaded in paragraphs 38, 41 & 44 - - -

MR WALKER: That is the means by which I would seek to demonstrate its unsatisfactory nature, your Honour.

GUMMOW J: They are all about, as Justice Callinan said, plan.

MR WALKER: Yes, your Honour, quite. In one word, they are about program. Section 189 refers to "a fishing closure under Part 2", to which I will take your Honours back in a second. This is the capacity permissive, that is, a power - and, yes, we are obliged - obviously, pace what your Honour Justice McHugh said in opening, we are obliged to observe. There is no duty imposed by that statute. There is the power to prohibit, during a specified period, the taking of oysters cultivated under a permit, if the Minister is satisfied.

GUMMOW J: There is a jurisdictional fact, which is the existence of the satisfaction.

MR WALKER: Yes. It has been found in this case that that did not exist, that jurisdictional fact, namely, ministerial satisfaction, and, in our submission - - -

KIRBY J: That would not be his subjective satisfaction, would it?

MR WALKER: No. It would, undoubtedly in this case, your Honour, be a la discussion in Peko-Wallsend. It would be a satisfaction formed in the public service hierarchy, the subject of recommendation, ultimately, to the Minister.

GUMMOW J: And on reasonable grounds.

MR WALKER: It has to be on reasonable grounds, yes, in our submission. This is a fact which, not subjectively, but objectively, needs to exist:

if satisfied:

(a) that the area is in such a condition that the taking -

of oysters:

ought to be suspended or -

and the one that probably is the important one, paragraph (b), that the oysters:

are, or are likely to be, unfit for human consumption.

One therefore has to go back to Part 2, because it is the Part 2 method by which that is carried out. Part 2 is "GENERAL FISHERIES MANAGEMENT", the last word of which is, no doubt, called in aid against us in this Court as it was in the reasoning below. In our submission, there is management and management.

KIRBY J: Where is Part 2?

MR WALKER: It starts at section 8. Section 8(1), the Minister has the power:

from time to time, by notification, prohibit, absolutely or conditionally, the taking of fish -

which will include oysters:

from any waters or from specified waters.

It is a very general provision which, as your Honours could see, could apply throughout the whole State or to particular waters specified to include many different estuaries, for example. That is a "fishing closure" says subsection (2). Subsection (9) stipulates for the mode of notification, which is primarily to be by publication in the Gazette - notoriously, not something which is instantaneous. However, in the event that the Minister considers urgency is required, subsection (2) authorises much more rapid notification, including radio broadcast.

The duration is limited to five years and otherwise, as specified. It may be amended or revoked. Section 11 - again, I apologise for something missing from the bundle. Section 14 makes it an offence to take the fish in contravention of a closure. Your Honours will find a reference to that in volume 19, Justice Wilcox's reasons at 4515, paragraph 102. That, in our submission, gives the force of law in the sense of changing the regime for permitted activities with respect to oysters, generally or in particular places, to a fishing closure.

I need then to draw to your Honour's attention the way in which the Act otherwise provides for what is called in the Act "management". Section 57 provides for management plans for so-called share management fisheries. Then, may I take your Honours, in particular, to section 143 which provide for:

aquaculture industry ("development plans").

Your Honours there see a power, not, we submit and stress, a duty to determine plans, development plans. It may relate - subsection (2) - to any aspect of the industry. Subsection (3) - they are given the status that they must be taken into account, that is, the Minister must have regard to them when he is exercising his other functions under the Part. Then, under subsection (4) there is permissive list of what the plan may contain which by paragraph (e) extends to matters very general indeed, according to what the Minister considers appropriate, no doubt including by reference to what on any view would be policy matters.

Subsection (8) is of some significance because it continues the pattern of industry consultation compulsorily. The Minister is required to give the industry and the public an opportunity to make submissions on the proposed plan and to take that into account.

CALLINAN J: Mr Walker, I am sorry to interrupt you but could I just ask you these questions. The allegation in the pleading seems to be, as we have discussed, failure to develop an implement a plan. That is correct, is it not?

MR WALKER: That seems to be the main allegation against the State.

CALLINAN J: The main allegation.

MR WALKER: Simply as to State, yes.

CALLINAN J: Yes. Now, am I correct in thinking that the ratio, as it were, of the decision of her Honour Justice Kiefel is at page 4660 in paragraph 603 where her Honour seems to be saying at line 16:

In my view, the State thereby came under a duty to exercise its powers and prohibit harvesting until the Minister could be assured -

in effect of quality.

MR WALKER: Yes.

CALLINAN J: Now, if that is the ratio, it does not seem to involve any plan.

MR WALKER: No, it does not.

CALLINAN J: If you go then to 4694, paragraph 61, and the judgment of Justice Lee, he seems to reach the same conclusion in the same way except he seems to be making some sort of a distinction between a core policy and some other policy. Now, I will come to that, but the ratio seems to be something different from what is pleaded. Is that your point?

MR WALKER: It is certainly one of the points, that investigating - I should say in considering whether this is correct.

CALLINAN J: That is a very simple case.

MR WALKER: That is our attack in this Court.

CALLINAN J: But the finding seems simply to be in the case of the majority in the Full Court a negligent failure to ban harvesting for a period.

MR WALKER: That is right. Could I urge on your Honour that paragraph 62 on page 4694 is also critical to an appreciation of Justice Lee's ratio. I will not go to it now but paragraph 62 is a very important paragraph.

CALLINAN J: Yes. But, that does - - -

MR WALKER: At line 39 the point that your Honour has been making is, with great respect, well made again. In particular, his Honour says:

in failing to close the Lake fishery -

et cetera.

CALLINAN J: It is probably me - it is a very record - but is that the case that was made against you, or sought to be made against you, that there was simply a failure to close the oyster bed or to prohibit harvesting for a period?

MR WALKER: By evolution, throughout the litigation, yes.

CALLINAN J: How does the program or plan come into it then?

MR WALKER: It does not. We have a finding from Justice Wilcox that there was nothing wrong about Cabinet determining that that ought to be the way in which the industry regulated - was regulated with respect to its product's quality, that there was no legal wrong in the time it took after regulations were promulgated, coming into effect at the middle of 1995, the timing being, of course, that they had not come into effect by the heavy rains at the end of November 1996.

CALLINAN J: Can you, for completeness, refer me to the passage in Justice Wilcox's judgment where his Honour, if he does, reaches the same sort of conclusion as the majority judges in the Full Court?

MR WALKER: It starts, your Honour - perhaps it would be convenient, in deference to that and other questions, if I jumped out of my intended order to go straight to that part and deal with it once and for all of Justice Wilcox's reasons. May I step back then, in volume 19 of the record, to page 4589 commencing at paragraph 316. I apologise this is going backwards in one respect because the pleading would come first, but one could be forgiven in this case that it did not keep up with the race.

At paragraph 316 there are four elements by that stage, identified by the trial judge, in the applicants' case against the State. There is the first, which was described as "essential" by themselves was:

the State failed to prepare or implement any proper oyster management plan -

that could be called the "program case" which one does find in the paragraphs referred to in the pleading.

CALLINAN J: I am sorry again to interrupt you, but that does not seem to loom very large, if at all, in the majority judgments in the Full Court. Am I right about that?

MR WALKER: That is right. Your Honour is right.

GUMMOW J: Had it disappeared in the Full Court?

MR WALKER: I cannot say it has disappeared because the same considerations that informed his Honour's determination of that matter seemed to underlie their Honours' avowed acceptance of his Honour's conclusions.

CALLINAN J: It seems to me to be a different case, Mr Walker.

MR WALKER: Yes, your Honour. The second aspect in paragraph 317 was to do with the Environment Protection Authority, and your Honours really should not hear much more about that than the fact that it does not go anywhere.

GUMMOW J: It is pleaded at great detail.

MR WALKER: Pleaded in great detail. There is even more detailed pleading about some committees that your Honours need not hear about. The third aspect, paragraph 318, had to do with the Health Department and the depuration facilities. You will not hear about that either, not least because we win on the merits. If I may be so bold as to remind your Honour Justice McHugh that we have not been found as it were to have conducted, through our various organs, a ramshackle approach to the monitoring of oyster qualities. His Honour says:

The third and fourth point may summarily be dismissed.

So depuration goes. The fourth point, paragraph 321 on page 4590, emerged late in the hearing. Perhaps that is a relevant comment with respect to what therefore may be my pedantry about pleadings. It is said to depend upon conjecture. It is gone. Then his Honour turns back to the first point and goes to some provisions of the regulation, to which I was otherwise about to go, concerning the scheme by which Cabinet's decision was implemented, namely a regulation by which the Minister and the industry and various State officers co-operated in producing programs. We really ought not have to say more than that than that Justice Wilcox finds no falling short of any relevant standard in the way we went about that activity.

GLEESON CJ: Whereabouts is that?

MR WALKER: That is coming up, your Honour, at paragraph 331, page 4593. In understanding that conclusion, your Honours need to see on 4590 at the foot of paragraph 322 that about line 41 his Honour recorded:

Counsel argue this program could, and should, have been approved earlier.

The timing point. So that if the State consults with the industry, and that takes a while, people who are injured in the meantime can complain about negligence. In our submission, it is self-evidently wrong, to argue in that fashion.

CALLINAN J: Mr Walker, I am having a lot of difficulty here. There is no reference at page 4589 - I am sorry, there is. Where is his Honour's finding on the first element, Justice Wilcox - - -

MR WALKER: On the first element?

CALLINAN J: Yes. The plan point.

MR WALKER: It is found in 331, 4593, foot of the page:

I accept the submission that neither the Fisheries Management Act nor the Fisheries Management (Aquaculture) Regulation imposed an obligation on the Minister to approve a quality assurance program within any particular period of time.

So that is an answer to the argument recorded three pages earlier.

In any event, I would not be prepared to say a delay of about 18 months, between the making of the Regulation and the Wallis Lake "rainfall event", was so excessive as to constitute a breach of the Minister's obligation, under cl 12B of the Regulation, to approve a quality assurance program.

CALLINAN J: So his Honour is saying, even if there was an obligation to have a plan, there was no negligence because it was not in operation at the time.

MR WALKER: Yes, he does not use the word "negligence". He specifically says "no breach of that duty", so that falls away. It fell away at trial, it remains fallen away in the Full Court, and it surely cannot be resurrected here, in our submission. Going back to the ways in which there was summary dismissal of various matters by his Honour, at the foot of page 4590, paragraph 323, the Environment Protection Authority case disappears.

CALLINAN J: Where does the case that was found in the Full Court come from?

MR WALKER: I am sorry, your Honours, may I complete that reference?

GLEESON CJ: Page 4597.

MR WALKER: Yes, may I complete that - - -

GLEESON CJ: Paragraph 340.

MR WALKER: Yes, may I just have my references in order? I had given your Honours the first part of the reference to the EPA. The second part of the reference to the EPA is paragraph 330, page 4593 - it falls away. The basis upon which the trial judge found us liable is introduced by the first sentence of 331 on 4593:

the State failed to exercise its management powers in such a way as to minimise the risk of HAV infection of oyster consumers.

With great respect, that appears to be his Honour's pleading.

McHUGH J: But it is in 332 - and that is what I was putting to you earlier - - -

MR WALKER: Paragraph 332 is the critical paragraph to which I wish to come, if I may, in just a moment, your Honour. Your Honour the Chief Justice referred to 340. Paragraph 339 and 340 on page 4597 is where his Honour then makes the finding on what he described as the only case open against the State.

GLEESON CJ: He refers to the State - and I am not sure exactly what this means - as "the ultimate manager of the fishery".

MR WALKER: Yes. Now, the word "ultimate", your Honour, is one of the reasons why I started with ownership, because it may well be that that is one of the aspects - 332 would suggest this - that his Honour had in mind in talking about "ultimate", that is, in the last analysis it all starts with ownership by the State.

GLEESON CJ: And a control of the kind given by section 189.

MR WALKER: Yes, it would appear to be only 189 now, though the matter is not clear. May I, in an attempt to clarify the degree of that lack of clarity, go now to 332, which is truly critical? At that passage his Honour says that he has in mind certain facts to support his conclusion that the State already had - that is, before it determined to embark upon and embarked upon the course of getting a program - "a responsibility to ensure the matters identified by counsel in their paragraph 62.1".

GLEESON CJ: Just before you pass from that word "ensure", does that mean something different from "take reasonable care to prevent harm"?

MR WALKER: As a matter of English, it is emphatically different and is the language of warranty or insurance. However, as a matter of law, bearing in mind other matters to which his Honour has referred, namely that perfection is not to be expected, it must be charitably read as meaning "reasonable efforts towards achieving". Now, the 62.1 reference - - -

HAYNE J: If that is so, where do we find his Honour dealing with the absence of reasonable effort? If you are right to say that that sentence is to be understood as "had a responsibility to take reasonable steps", where do we find his Honour dealing with what was, in the circumstances, reasonable to undertake?

MR WALKER: I think, to be fair, your Honour, I have to give a paradoxical answer: everywhere and nowhere. The whole history that his Honour sets out is of the material that he says imported upon the State, as one must say it would import upon the growers and anybody concerned with the commercialisation of oysters, the fact that pollution on land tends, by the inexorable operation of rain hydraulics and gravity, to go into water bodies; if you grow fish which will be eaten by humans in the water bodies, et cetera, et cetera, et cetera. Now, that is everywhere. His reasons are understandably imbued with that. There is also the simple finding, not contested, that we did not close the fishery at the relevant time - it came later.

Otherwise, we are entitled to observe that what his Honour found in detail - and Justice Lindgren in the Full Court sets it out perhaps in even more detail - namely, the political course of industry self-regulation or co-regulation which had not yet culminated in a program at the time of Mr Ryan's misfortune - otherwise, what his Honour finds there, in our respectful submission, tends against the notion that there was a failure to achieve a reasonable standard. His Honour deals with it quite differently. He observes, in effect, not having closed, bearing in mind what was known in general terms state of art about viruses, oysters, water and human habitation, means that there was, as we would put it, without much more, probably without anything more, a duty of care which had been breached.

HAYNE J: Well, that seems at the moment, at least to me, to be an argument "could have, did not, equals liability" with no consideration given to "should it have".

MR WALKER: Yes. Now, assuming that one can go from could - - -

GUMMOW J: Well, look at paragraph 336 and the first line of 337.

MR WALKER: Yes. The first sentence of 336 - it is unfair, no doubt, to take a sentence in isolation, but standing on its own, in our submission, is a completely unsatisfactory statement of reasoning which could lead to liability. Now, it is unfair to take it on its own, because his Honour has made some very detailed findings about what he calls "the State's involvement in the management", but, in our submission, boiled down it all comes back to the 189 power, a matter which was never the subject of an undertaking to prove and, therefore - - -

GUMMOW J: Was 189 mentioned in the anterior material before 336?

MR WALKER: Yes, I am going to come back to that. Justice Lindgren, of course, points out that 189 - there was no evidence, indeed, it must be the contrary, of it becoming available as a power. Capacity is too glib an expression for the nature of the statutory regulation, binding the State as much as it binds the oyster farmers, of this fishery.

Your Honours, if I can pick up the internal reference. Paragraph 332 refers to the content of the matter that his Honour held the State already had a responsibility to ensure, and one finds that on page 4592, paragraph 329, and they are the items (a), (b) and (c) just below line 40. So that reading those, one has Justice Wilcox, with great respect, formulating, perhaps despite the pleading, a case whereby the State had a responsibility, presumably to take reasonable effort towards achieving, one, requirements for sanitary surveys; two, cessation of harvesting after a fresh, that is when the rainwater rushes off the land into the estuary; and (c) extreme caution in reopening.

Now, it is, with respect, quite difficult simply to import 62.1 into paragraph 332. Doing the best one can, it would appear that the State's responsibility, which his Honour says already devolved on it in a way which rendered breach actionable, or failure to achieve it actionable, had to do with the conduct of sanitary surveys, ceasing harvesting by a statutory means that his Honour does not identify apart from closure, and the need for extreme caution in reopening.

May I interpolate a reference to the facts, namely that the evidence showed - there is no doubt about this - that Wallis Lakes, the oyster farmers, did routinely, as was lore in the industry, cease to harvest after a fresh.

GLEESON CJ: Did the fresh occur in November 1996?

MR WALKER: Yes, your Honour.

GLEESON CJ: Well, at paragraph 340 Justice Wilcox seems to have said, not that there was any negligence in the response to the fresh, but that "long before November 1996" they should either have required a "sanitary survey or closed the fishery".

MR WALKER: That is right.

GLEESON CJ: Who was responsible for conducting the sanitary survey?

MR WALKER: That raises a question which may go a long way to explain why we are simply sued as the State. A sanitary survey, as the evidence shows and as one might expect, involves literally scouting the land and the water to find the sources, relevantly, of faecal contamination into the growing area. So that one does not know in advance, as it were, of conducting it where you are going to find things. It should go without saying that faecal contamination can be washed into an estuary from private land.

Your Honours will recall my opening reference to the Clean Waters Act. That is because, on our analysis - we may be wrong - so far as the State is concerned, assuming that it is proper to elide distinction between the statutory authority, the EPA, on the one hand, and the polity of the State on the other - assume that in favour of the applicant - it is under the Clean Waters Act that officers of the EPA would have authority to enter upon private land on certain conditions in order, for example, to inspect whether one's septic tank is leaking into the lake.

Now, that is not a satisfactory answer to your Honour the Chief Justice's question, but it means that whoever is to conduct it, if it is to be a sanitary survey which actually scouts the land which might be the source of faecal contamination, it must have included, presumably, the EPA.

Your Honours, may I point out that the mere conduct of a survey would simply describe rather than rectify. So there must be shorthand in his Honour's reference back to 62.1, the shorthand must be for: having conducted a survey, do something to prevent detected - that is, evaluate the contamination and do something to prevent it. That, of course, is where it is quite difficult to ascertain, and one finds that in his Honour's findings about sanitary survey, which are found in his paragraphs 42 and following - I do not think I need to take your Honours back to it - that is the reference - which commence on page 4491 of volume 19. Paragraph - - -

GLEESON CJ: Justice Wilcox seems to have concluded that before November 1996, there was such a risk of the kind of contamination that ultimately occurred in November 1996, that these businesses should have been closed down.

MR WALKER: That is exactly what he is saying. May I just add one more reference. His Honour's paragraph 47 of page 4493 includes his quotation from evidence he accepted concerning the principal components of a sanitary survey. It can be seen that the word "survey" is definitely elliptical, because it involves doing things after you have detected bad things, in order to rectify them. Your Honour the Chief Justice is, with respect, correct. The gravamen of the case, the only means by which we were held liable, was that at an indeterminate time, long before November 1996 - thereby severing any nexus with the idea of a program, for example - a stage had been reached whereby unless there was a sanitary survey - meaning, description plus rectification - the fishery had to be closed.

McHUGH J: But his Honour was talking about shoreline testing. That is clear from the last sentence of his paragraph 42.

MR WALKER: That is part of the survey, your Honour. That is not exhaustive.

McHUGH J: He said:

A sanitary survey is a comprehensive and detailed inspection of the foreshores and tributaries of the relevant waterway, the purpose being to identify all points of pollution - - -

MR WALKER: That is right. It is the catchment, your Honour.

McHUGH J: Yes, exactly. Then at paragraph 337, his Honour referred to the fact that counsel for the State described:

"the requirements for sanitary surveys" as being "notorious in the industry".

Which seems to indicate that, before his Honour, the State said it was notorious.

MR WALKER: Your Honour, the fallacy in all of that is to say that once something is described as best practice, it becomes the minimum required by the common law of negligence. In our submission, one is entitled to prefer experience to the admonition of practitioners of a technique. And in this case, the experience was that there had not been HAV outbreaks, notwithstanding the coincidence of human habitation, human defecation, contamination and rainfall.

McHUGH J: Well, you might be more accurate to say that none had been publicised - - -

MR WALKER: Your Honour, there is no attempt - - -

McHUGH J: - - - nor identified.

MR WALKER: Yes. The point is, with great respect, well taken, but there is no attempt anywhere, in the findings against us, to point out that it was, as it were, a magnification of negligence for the unprecedented nature of the outbreak to be called in aid by us. There is no suggestion that there - - -

McHUGH J: But you cannot reject the experience of the European Union, of the United States, of what happened in China. This caused deaths in Shanghai. I would be surprised, if somebody had died as a result of this, that you could not have made out an indictment for manslaughter against some public official here.

MR WALKER: Your Honour, you would first have to identify which was - - -

McHUGH J: But what about other States? New South Wales is out on its own. It will not go along with Tasmania. I mean, you may have good - - -

GLEESON CJ: It brought the New South Wales Bar to its knees a few years before 1996.

MR WALKER: That was a strategic hit at one occasion, your Honour, yes.

McHUGH J: It was back in 1978, although I think it was then the Georges River oysters got the blame.

MR WALKER: I am not sure whether your Honour is declaring an interest or not on this litigation. It is probably statute barred. Your Honours, the answer to the levelling against us of discrepancies between practice in New South Wales and practice elsewhere is, first of all, as we have tried to point out in our written submissions, particularly in the passage that your Honours will find - we do not have time to go to in detail - in the reply submissions, paragraph 41, which continues to the end of those reply submissions. In our submission, it is not a simple story that Europe good, New South Wales bad, for example.

Now, a point is made that I do not have time to go into in detail, with, for example, the comparison of the US which was even more levelled against us and New South Wales in subparagraph 12 on pages 4 and 5 of our reply submissions, that, in some respects, the standards we applied were more stringent. The point is simply this: one set of standards is triggered by a count of faecal coliforms as a class, and another set of standards, ours, were triggered by a count of certain faecal coliform, namely escherichia coli.

The fact that one member of the class was obviously capable of being less numerous than all members of the class led to the conclusions and possibilities that we have referred to in that subparagraph. So, this is emphatically not a case where there was simply, on a consistent scale of comparison, a shortfall of quality in New South Wales.

GLEESON CJ: Mr Walker, this kind of a power to close down an operation is not uncommon. It is the sort of power that is exercised when there are diseases that strike cattle or sheep or plants of some kind.

MR WALKER: Yes.

GLEESON CJ: Was there any litigation in Europe in relation to or arising out of the disease that struck cattle some years ago?

MR WALKER: Our researches do not include up to the minute - with respect in particular to the latest foot and mouth outbreak, but with that deficiency we do not know of any. One may speculate that is because it is often dealt with by remedial legislation and regulation.

CALLINAN J: There are compulsory slaughter orders in respect of mad cow disease. Hundreds of thousands of cattle were slaughtered by government directives.

MR WALKER: Yes. One might observe that if the law authorises you to kill a beast, then there cannot be any complaint about the beast being killed unless jurisdictional facts granting the power have not fallen in and even then there would be questions about interaction of public and private law.

GLEESON CJ: I was wondering if there were any complaints about the absence of orders that beasts be killed.

MR WALKER: We have not found one, your Honour. Could I go back, then, to 332 in Justice Wilcox's reasoning, the importance of which is that, as both of their Honours in the majority in the Full Court point out, they accept the way by which he came to the simple sole ground of liability.

GUMMOW J: I am not sure that is right. I am not sure Justice Kiefel's reasoning is the same as Justice Lees.

MR WALKER: No, it is not, I do not think, your Honour.

GUMMOW J: I think hers focuses on the events of November 1996.

MR WALKER: Yes.

GUMMOW J: Whereas Justice Lee seems to be endorsing Justice Wilcox.

MR WALKER: Endorsing and perhaps even adding rhetorical force by describing that which Justice Wilcox found to be extremely likely. His Honour Justice Lee, for reasons which with great respect are unaccountable, describes them as inevitable.

GUMMOW J: Yes.

MR WALKER: These are extremely likely - Justice Wilcox - or inevitable - Justice Lee - matters which somehow had escaped occurring, notwithstanding all known conditions for them must have coincided many times in the past. In our submission, that is the point at which common sense empiricism ought to be preferred to what falls from experts.

CALLINAN J: I think Justice Lee's reference to core policy at 4694 probably comes from what Justice McHugh said in Crimmins, is that right?

MR WALKER: It must, yes, your Honour.

CALLINAN J: I have not seen it anywhere else.

MR WALKER: No, it is a - - -

KIRBY J: The policy is referred to in the Caparo formulation as an alternative to the so-called attempted course to find little rules that expressed upon it.

MR WALKER: Yes, your Honour. It is also a reference of course to the policy operation dichotomy which has been subject to a deal of either criticism or very faint praise in this and other ultimate courts of appeal. Your Honours, 332 at 4594 therefore seems to be close to the way in which findings of fact combined with views of law to hold us liable at trial. It starts with ownership, and I need say not much more about that. As to powers of control, where that is referred to in item (a), one is not sure whether that is some supposed executive control which is to be rejected or whether it is the undoubted legislative control that the Parliament has within its powers, which are very broad, over everything in New South Wales. It surely could not be that. (b) refers to the State doing something through the Department of Fisheries, which is said:

supervised the operations of, a mosaic of oyster leases.

The notion that the Department of Fisheries accompanied, that is ran, the operations of oyster farmers, so as to dictate what they harvested when, is to be rejected.

(c) through the Department of Fisheries, it issued, and enforced the provisions of aquaculture permits.

There is no finding of any shortfall or deficiency falling short of any relevant legal standard in either the issue or administration of any permit in this case.

(d) through the Department of Health, the State supervised the depuration process -

His Honour has already rejected the notion there was any relevant negligence causing any relevant injury as to that. It is difficult to understand why that is called in aid.

(e) through the EPA, the State had powers under the Clean Waters Act to remove, disperse, destroy or mitigate pollution of waters (s27) and to carry out inspections and investigations of premises (s29) -

which is the compulsory power of access to which I referred earlier. Now of course the EPA, as to the head of negligence alleged against the State, through it - the preposition is difficult; through the EPA it becomes - that also had already been rejected by his Honour as a head of liability. So it is difficult to see why that is referred to.

(f) through a number of agencies, the State was a participant in the Wallis Lake Estuary Management Committee -

of course a participant along with the other participants:

one of whose objectives was to prepare a management plan -

we are back to the plan, but his Honour has already dismissed the case based upon either lack of or content in a plan. Then introduced by the two words, which really are not accurate but are evocative, his Honour says, the next one, "most importantly", a phrase picked up by Justice Kiefel in the passage to which Justice Callinan has already drawn attention, "most importantly" really translates, when one analyses how the other matters preceding have been dealt with in his Honour's reasoning, it really translates to this is the simple and sole method by which liability is brought about, and that - - -

GLEESON CJ: Does this involve the idea that if legislation confers upon a public authority a power to close down an activity on the ground that it is endangering public health, the State will owe a duty of care to anyone whose health is damaged by the activity?

MR WALKER: In our submission, that is exactly what has been held.

CALLINAN J: That is what has been troubling me too, because there does not seem to me to be anything unique about these sorts of statutory provisions. They would apply to restaurants, almost anywhere that food can be prepared or sold.

MR WALKER: If one moves away from fisheries and goes to the Food Act, what your Honour says is correct. It has to do with the harvesting, preparation, serving of everything, every comestible.

CALLINAN J: Mr Walker, one can perhaps understand why Justice Wilcox has not gone into it in any detail - by that I mean the statutory framework - and looked at very specific provisions. He decided the case before Crimmins and I think Crimmins is the last word in this Court, and this Court had particular regard to the unique statutory provisions and relationships that they created there.

MR WALKER: Yes.

CALLINAN J: By the time the matter came to the Full Court Crimmins had been decided and Justice Kiefel mentions it, but he does not really attempt to analyse it and apply it, so far as I can see.

GUMMOW J: Pyrenees had been decided.

MR WALKER: Yes.

GUMMOW J: His Honour referred to it.

MR WALKER: We urge on this Court the analysis and reasoning of Justice Lindgren, subject to the necessary qualification that his Honour's judgment was delivered before this Court's decision in Brodie and in Ghantous, and there is the contrast shown on the matters that his Honour Justice Callinan has asked me about. Your Honours, the matter I have just referred to, namely, paragraph 332(g), page 4594, contains a cross-reference back to paragraph 102 on 4515 - - -

GUMMOW J: But not to 106?

MR WALKER: No, I was about to say. Now, that is actually a reference to 8 and 14 but, charitably, one must read it as intended to include paragraph 106 on page 4516, which is section189, which picks up the Part 2 closure powers. That is the method by which, in our submission, in the critical paragraph, it can be seen that is what it is all about, and Justice Lindgren's answer to that remains good here, with respect. But the Minister was not satisfied of what he had to be satisfied for that capacity to be available. That then brings up, obviously, questions about, "Why wasn't he?", or "Should he have been?", or "Is it actionable that he wasn't?".

McHUGH J: But you have not dealt with the heart of his Honour's reasoning. The heart of his Honour's reasoning is not at 332. They are the facts that give rise to the essence of his reasoning. His reasoning is in 334.

MR WALKER: Paragraph 334 has the following elements in it. The second sentence, in our submission, is perhaps the most difficult. His Honour has already passed over the question of the local quality assurance program and the reference to whether or not it should have a sanitary survey, and then he says:

it does not follow that the absence of a sanitary survey is irrelevant to the case against the State.

He had already pointed out that whether that was in the program or not would not have mattered. Then he says:

Although the State - - -

McHUGH J: The reason for that is that it has to be dealt with in the context, the context that you owned and had powers of control over the lake and, as his Honour goes on to say, that you had involved yourself in the management.

MR WALKER: Your Honour, we have powers of control through our Parliament over everything everywhere, not just where we own. They are not greater over where we own.

McHUGH J: Well, of course you do, but we are dealing here - I mean, you want to lift this case up as though it was some general case about failing to exercise a power, and the judge at 332 through to 334 is confining it in a very narrow way to these lakes and what you had done and what you knew about.

MR WALKER: Your Honour, if he was confining it to these lakes, how can he leave out of account that the farmers who had traditionally not harvested after a fresh, and did not harvest after this fresh either - how can he leave out of account that there had been no HAV epidemic here?

McHUGH J: We are talking about a duty of care, not a question of breach.

MR WALKER: No, no, I am talking about the duty of care, your Honour. The fact of ownership has to be taken along with the statutory regime by which people could obtain permits. That is the first thing. We are not an owner. You can simply say we have a choice not to have this land at our whim used by anyone for anything. Yes, we can exclude certain parts of the State's land from being available for permits but it is not suggested we were negligent for failing to do that. That would clearly be a quasi-legislative - - -

McHUGH J: Yes, but the point is that you do not lease the whole of the lake.

MR WALKER: Nor, your Honour, do we control the water in the lake, any more than King Canute controlled the tide.

McHUGH J: I know, but it is your lake.

MR WALKER: No, but we do not control it because it is deemed to be owned by us. We do not, any more than we control the viral load of people who defecate into an incompetent septic system. We do not control those matters. Now, those are the matters that caused Mr Ryan's illness.

McHUGH J: Yes, but that is not the point. The point that is put against you is that you have not tested - notwithstanding what you know, you do not do anything because Mr Bird says it is too costly.

MR WALKER: It is simply not true that we did not do anything. The very fact that - Mr Bird's reference to money, of course, can scarcely be criticised by a public servant advising a government. That is the first thing. The second thing is it must be a policy decision beyond criticism by any court for a State, through its requisite agencies, including the Parliament, most importantly, to decide that these are matters where the costs should be borne or shared by the industry, and to decide a quality assurance program starts with enlisting those in the industry rather than imposing bureaucrats on them.

Those are choices, in our submission, where we do not have to adduce evidence of our budget papers or of the budget submission to us from sub-branches of the Department of Health or Department of Fisheries. We are entitled to say those were reasonable political actions and we do not have to fight that point in this case because his Honour did not find against us on those points.

What he has said, simply, is: "Notwithstanding you are doing something that I do not criticise by way of consultative, co-operative regulation of this estuary which has a clean record hitherto" - and I stress "record hitherto", notwithstanding that, "you are liable because of what has happened, because at some indeterminate time beforehand you should have prevented farming in an estuary which had successfully farmed, and was successfully farming, at the time ex hypothesi, you should have prevented it." A closure which would have called in aid procedural fairness, in our submission, where all these issues, undoubtedly, would need to be debated. In short, the notion of peremptory closure which underlies what his Honour is talking about, is simply not within the capacity of the State.

McHUGH J: Why not?

MR WALKER: Your Honour, there needs to be a statutory power.

McHUGH J: There is a statutory power.

MR WALKER: To get rid of the lease. To get rid of the lease would have shunted the matter to the District Court. To get rid of the permit would have shunted the matter to the District Court. To close the fishery would have involved procedural fairness.

McHUGH J: Ultimately, they would, and procedural fairness has to fit the facts of the case.

MR WALKER: Yes, but his Honour never finds any fact about this indeterminate time, some time long before November 1996. We do not know whether that is a matter which would have involved, in his Honour's view, a committee being set up to investigate things and, in our submission, before you find the existence of a duty to have done something you need to be able to describe the something. Here, all his Honour says is "peremptory closure". After what kind of process and what would be done, for example, with respect to the clean record of this estuary as opposed to others? That is why paragraph 334 compounds the difficulties of accepting the reasoning of Justice Wilcox as it then informs the reasoning of Justice Lee, for example.

McHUGH J: There is finding of fact in there that you managed this area.

MR WALKER: That is not a finding of fact, your Honour, that is a characterisation which may be no more profound than noting that the statute in question is called The Fisheries Management Act. There is management, and management.

GUMMOW J: The last two sentences of paragraph 334, are they an expression of some bird's-eye view of the legal situation or some findings of fact as to what is happening?

MR WALKER: It would appear to be adopting a legal characterisation, hence the word "operational", the second last word, for the purposes of characterising that which has been factually described. In our submission, the notion that is day to day, is - - -

GAUDRON J: What does that mean?

MR WALKER: It certainly does not mean what that expression means in English, but if I could be forgiven for Latin, perhaps it simply means that per diem in diem the Parliament of New South Wales and the executive officers of New South Wales had conditional capacities or might obtain capacities to close the fishery. That is a trivial statement at best. The law, of course, operates per diem in diem, it is always there. That does not render anything here controlled of day-to-day operational decisions. It does not mean it never descends to the question of how many oysters will I take from this bed, what day will I take them, when will I send them to market? Those are day-to-day operational decisions.

GAUDRON J: Yes, but earlier in that paragraph his Honour specifies what he mean by day-to-day activities.

MR WALKER: When one looks at - - -

GAUDRON J: Operational activities, rather. I just do not understand what are the operational decisions.

MR WALKER: Can I try and list what appears beforehand. Your Honours will see another reference to "management", about line 21:

the State actively involved itself in the management . . . This is understandable.

Then there is a list of things what are partly explanations and partly examples. There is a "direct financial interest . . . as lessor", "indirect financial interests and (presumably) social and political concerns." That has nothing to do with day to day, in our submission. Then we have the determination of the area to be leased. No one has ever suggested there is the faintest negligence in any of that, nor could there be, actionably, in our submission. That is quasi-legislative, surely.

HAYNE J: Is that right? You say that his Honour did not find that there was negligence in leasing but in light of what is said at paragraph 340, is a reading of the findings below - - -

MR WALKER: That "closure? equates to never should have been there in the first place.

HAYNE J: Well, the State could have tested, the State should have tested. Having tested, the State should have closed the lake permanently at some unspecified time before November 1996.

MR WALKER: No, that is a form of reasoning which could have been expressed were that available. There would certainly be an inadequacy of reasons were that now to be seen as the ratio. When your Honour talks about - - -

HAYNE J: How do you say we understand the finding?

MR WALKER: That it is really no more than could have and should have, because someone has been injured.

HAYNE J: Could have tested, should have tested - - -

MR WALKER: When your Honour says "tested", testing really needs to be - - -

HAYNE J: Well, sanitary survey is what I have in mind, not testing the meat of the oyster.

MR WALKER: There is meat of oyster, or there is water in which they grow; all of which are quite different and, as everyone accepts, imperfect in terms of prophylactic efficacy.

HAYNE J: Could have had sanitary survey, should have had sanitary survey. What then is the step, if any, that follows those?

MR WALKER: Someone was injured. In our submission, that is inadequate. That is simply not the law. Your Honours, returning to 334, you have then the supervision by Fisheries Department "of the areas to be leased". Your Honours will look in vain for anything there that amounts to day-to-day control. I mean, one envisages men in uniforms on punts, but that is not what the evidence reveals. They are said to be "activities within the operational area". This is all for the purpose of the policy/operation dichotomy; it is defensive reasoning, rather than a reasoning that explains affirmatively why there is a duty - "as were the depuration activities of the Health Department".

Now, apart from the fact that there is no negligence found - to the very contrary, with respect to that - it is not seen why that is a day-to-day matter. Those activities of the Health Department have to do with the certifying and monitoring of the conduct by the industry of licensed purification plants. That is not control of day-to-day operational decisions; it is the checking of day-to-day operational decisions, no doubt, not day to day. Then there are the:

decisions by the Minister as to the closure or non-closure of the fishery -

which really is the inescapable heart of what is alleged against us. There is then a reference to EPA which, by now, is becoming embarrassing surplusage in our submission, unless we are to ignore what is said about the EPA in the earlier part of the reasons. Then:

Decisions by EPA regarding the necessity to inspect premises for the purpose of determining whether they were sources of water pollution were decisions in the operational area.

So at this point, it would appear, we are not talking about anything specific rejected by his Honour about caravan park sites against the EPA, we are talking about something in the air, in definite times, in definite places, and no evidence about operational consideration by the EPA, at some time long before November 1996, when they might have entered land to check a septic tank. That is said, then, to add up to what is described as "In sum total". In our submission, paragraph 334 is indefensible for those reasons.

GLEESON CJ: Mr Walker, did the trial judge find, in relation to any of the government agencies that had some involvement in the management or supervision - including the EPA - of this area, that there was any negligent act or omission on the part of the agency?

MR WALKER: No, and to the contrary. I have already drawn to your Honours' attention findings acquitting the Minister of negligence with respect to a program, and saying that it was immaterial about the EPA - declining to make any finding against the EPA.

GLEESON CJ: You see that expression at line 35 on page 4595, where his Honour says:

It exercised that control by day-to-day operational decisions.

Was there any finding of negligence in any of those day-to-day operational decisions?

MR WALKER: No, unless one counts, in that inapt expression, the non-closure of the fishery, found just before line 30. There remains the possibility which, in our submission, over-extrapolates, raised by Justice Hayne, namely, that the critical conclusion in paragraph 340 on 4597 - which has a false alternative, namely, either:

the making of a comprehensive and competent sanitary survey -

or closure. It is not a true alternative at all. Presumably, the closure was to follow the survey, given what one would infer were his Honour's expectations of what would have been found. One does not know - and that is another defect in the reasoning. But that perhaps one could seek to extrapolate from that, "Well, that means there should never have been a permit, should never have been a lease". But there are no findings to that effect, and in a judgment of this length and this detail, one should not seek to extrapolate in that fashion.

GLEESON CJ: Am I right in thinking that the plaintiffs sought out to make a case in part based upon negligent acts or omissions of some governmental agencies?

MR WALKER: Yes.

GLEESON CJ: And that failed?

MR WALKER: Yes. Your Honours, in the interest of time, could I simply refer you - I do not mean to sell them short by this method. There are very important provisions with which your Honours are familiar from the reasons referred to in paragraph 10 of our written submissions in-chief of the New South Wales Fisheries Management (Aquaculture) Regulation coming into effect on May day, which put in train the process which has been held by the courts below not to have been negligent or, I should say, not to have been in breach of any legal duty. They are very important, because they represent the executive subject to parliamentary control carrying out of the Cabinet policy decision to which your Honours have already seen references. That Cabinet policy decision is found, both in the traveaux that lead up to it, plus in its implications, discussed in Justice Lindgren's reasons in volume 20, 4822 to 4826, a very important passage. I will not take your Honours to it, but, in our submission, what it shows is the - - -

GUMMOW J: Paragraph?

MR WALKER: Sorry, I apologise, your Honour, paragraph 405.

GUMMOW J: Thank you.

MR WALKER: They culminate in paragraph 415's first sentence and, in our submission, that first sentence, if there be any current content in the word "policy" in this area of discourse, is a sentence which is well and truly made good by the passage to which I have just drawn attention.

May I, in further answer to your Honour the Chief Justice's question, then briefly go to the pleading. It starts at page 104, and I will try to do this in peremptory fashion. In paragraph 37 it is alleged against the Minister that he "owed duties of care", given the Fisheries Management Act 4661 and the Regulations to which I have just made reference, to determine a number of things which are programs to insure the safety of shellfish. One sees that in (a), (b) and (c) in that paragraph. The particulars start, not surprisingly, with a reference to the Regulations. Now this is the case that they lost.

Page 106 of the book, paragraph 38, there is then the matching allegation of breach, where it can be seen that the other side lost. Paragraph 39 then recites the narrative of carrying out what had to be done. Paragraph 40 then alleges a duty of care against the State Committee; a group of people contemplated by statute, but not given legal identity by the statute as a legal person. That does not have any further part in the case, or so it would appear from everything available to me in the record. Paragraph 41 was therefore the now irrelevant allegation of breach against that State Committee. Then we had the Wallis Lakes Committee, paragraph 42. Paragraph 43 on page 108 point 1 alleged also to have a duty of care. That also seems to have dropped right out.

McHUGH J: But does not - I mean, there are certain paragraphs between 332 and 340, particularly 335, 336 and 339, where the judge does seem to make a finding that Mr Bird was negligent and it was because of his negligence that the State was negligent?

MR WALKER: Well, no, your Honour; it is not negligent to describe as prohibitive something which is expensive, and nor are we sued for that.

McHUGH J: No, no, at 339 his Honour said that all these matters were well-known. At paragraph 339:

those matters were well known to State officers.

He singled out Mr Bird knew all about these things, he wrote the reports and - - -

MR WALKER: I think it is fair to say the case is run on the basis, hence the word "notorious" from our written submissions at trial. It is fair to say that, state of art, a perfectly general matter about human faeces, hydraulics and gravity, oysters, viruses, was at such a position where no one was in a position to say that they had never dreamed, and did not have capacity to dream, that HAV might cause people to be sick by ingestion via an oyster.

McHUGH J: Yes, I know, but you have stopped reading 334, but at paragraph 335, his Honour, in effect, refers to admissions as to management.

MR WALKER: Those are admissions supposedly about the nomenclature of management, your Honour.

McHUGH J: The Minister said that the permits for "the tool by which the industry is managed".

MR WALKER: But when one goes to the permit - - -

McHUGH J: Their officers are going to be there every day, or should be there every day, or from time to time anyway.

MR WALKER: But your Honour cannot be serious about the notion of - - -

McHUGH J: Well, I will withdraw the words "every day", but from time to time, checking for breaches of the lease, et cetera, et cetera.

MR WALKER: But, your Honour, we were not sued, as it were, for failure to have the gamekeepers on the poacher's back. We were not sued for that.

McHUGH J: No, but these are all factors to be taken into account. That is what the judge is saying. There are all these things - - -

MR WALKER: Your Honour, these are not factors simply to be mixed up out of which then to spell a duty of care which focuses on a failure to close a fishery. We are trying to focus on the duty question, conscious always that there is a danger of shifting to breach.

McHUGH J: In paragraph, I think it is in 338, one of them, his Honour says:

it might be thought unduly disruptive to require immediate cessation of harvesting. It may be reasonable -

to do this -

However, a point must arise after which it is not reasonable for a management authority to have failed to carry out a sanitary survey or, alternatively, terminate production.

MR WALKER: We are not told in 340 when that was reached; we do not have findings of fact which show when that was reached. We do know that this must be a continuum - see what his Honour says in that paragraph 338. We do know - - -

McHUGH J: That sounds like the argument that you do not know where the defence power finishes its secondary stage.

MR WALKER: No, it is not a characterisation argument, your Honour, this is a good old, "What is alleged against me; what did I do wrong; what should I have done and when?", the elements of a negligence action which we do not find here.

McHUGH J: His Honour said it was long before November 1996.

MR WALKER: What was long before, your Honour? What was it about this very successful oyster fishery that had not, and a very major one as well on the facts?

McHUGH J: But you had never done any of these safeguards that Professor Brown in his evidence damned.

MR WALKER: Your Honour, a negligence action is not whether or not one's conduct satisfies the strictures of an expert.

McHUGH J: Of course it is not, but it is often powerful evidence when you find you are the only one out of step.

MR WALKER: If one, however, looks to Pyrenees v Day, for example, or to Romeo or to Nagle, and most of all to Crimmins, and if you were bold enough to say all of those suggest to look for a relationship between the person with this very generalised potential or actual degree of control and the person who claims compensation for the injury, then, in our submission, one does not find by analogy from any of those decisions a case which fits this one because the people we were to protect were anybody - transient tourists, residents; whoever might eat an oyster that emanated from New South Wales - and anywhere, not just in New South Wales, a perfectly general duty triggered by perfectly general information, near state of art, about oysters and viruses and human defecation and pollution.

In our submission, from that, one cannot spell out anything in the nature of the kind of relation, people encouraged to splash in the shallows in Nagle; people encouraged to enjoy the recreation area in Romeo; the people subject to being told which ship to go to, what to do and, in effect, to being allowed or disallowed from working, in Crimmins, in our submission, there is nothing analogous here at all.

McHUGH J: Well, except the vulnerability of the consumers.

MR WALKER: Vulnerability, however, with great respect, cannot be either - - -

McHUGH J: I mean, poliomyelitis, meningitis, are among the risks involved in not monitoring.

MR WALKER: There is no causation appeal, your Honour, and there can be no doubt - - -

McHUGH J: I know, but it all shows what the risks are.

MR WALKER: Poisoned food can kill people, we accept that, your Honour, and that is no doubt why the Food Act exists, although now, perhaps more realistically, it is no longer called the Pure Food Act, and in our submission, it is of real importance that one starts with the proposition that you cannot say against a State, because you can legislate, "You have requisite control" - nobody is bold enough to say that. You cannot say, "Because you have certain executive powers over land you own that you are liable".

One starts with a statute and, in our submission, the conditional powers, the capacity, if one chooses, available in this case and actually relied upon in this case, and supported by findings which might be thought to be against us in this case, do not add up to anything more than, "could have, therefore should have, because some one has been injured", and, in our submission, runs into real trouble, bearing in mind the timing issue found in our favour on the quality assurance program.

His Honour does not criticise nor could he properly even embark upon criticising Parliament or the executive for determining to go down that route. He goes out of his way to find we had not been sluggers in getting on with it.

McHUGH J: What you have in your favour, I suppose, is Parliament has put a majority of representatives of the industry in charge of it.

MR WALKER: Yes.

McHUGH J: It rather looks like lunatics being in charge of the asylum. That is probably a point in your favour, although on one view it might be a point against you.

MR WALKER: I am just wondering what kind of asylum the Bar Association is, your Honour.

HAYNE J: Do not go there, Mr Walker.

MR WALKER: No.

McHUGH J: Some people are unkind enough to say it is a trade union and does not act in the public interest.

MR WALKER: Yes, they are very unkind. Your Honours, could I go back to the pleading - page 109 of volume 1, so the committee has disappeared. They went nowhere. Then in paragraph 45 we had a kind of pivot paragraph that does not go very far, either. The Minister and the two committees:

are organs or parts of or represent the Crown in the right of the State of New South Wales:

(b) in the premises, the Crown owed the duties of care -

One sees the collocations there, "38, 41, and 44", in particular, and, "in the premises" we can be used. Then in the alternative in paragraph 46 we have got responsibility, vicarious presumably alleged in 46, and all of that culminates in 47 to which your Honour the Chief Justice has drawn attention earlier, paragraph 110. That is 38, 41 and 44 is what it is talking about, and those are failure to devise a program allegations not anything else.

What is pleaded in 47 is not duty and not breach but a consequence of breach if there had been a duty, namely, what would have happened leading to the causation that one finds in (f). But for all of that, as it were, for want of....reasoning we have he would not have consumed. In our submission, it all pivots on the notion that under (d) there would have been a closure under 189. Now, we have passed on the way about a program that they lose on the merits on that allegation in (a); (b), the permits, there seems to have been no concerted effort of any kind to make good that claim and I have to your Honours' attention the statutory regime which the applicant would have had to tackle could they have made out that the precondition existed? No, we submit. That is why they did not try. The same is true with (c) concerning permits. So leases and permits go and we are left with the closure and no attempt to show anything about the Minister either by way of actual, or, much more importantly, constructive knowledge.

GLEESON CJ: Mr Walker, was this one of those cases where the plaintiff relies upon a change in system after an occurrence to demonstrate negligence in the absence of any such system before the occurrence?

MR WALKER: Not quite so blatantly as perhaps sometimes happens, your Honour. They are entitled to point to the fact that there was eventually a QAP and that there were eventually closures. To that extent it may fall in the category your Honour raises but it is not quite as simple as the case that points to the fact that an extra balustrade was added, therefore this is to be treated as an implied admission of the ease of preventative action and so, therefore, an admission. It is not quite as simple as that.

There is no doubt about the fact that given statutory preconditions there was a power to close. That had been there. I need then to skip to the fact that paragraph - - -

McHUGH J: That sort of argument goes only to breach. This has nothing to do with breach. This is all about duty.

MR WALKER: Yes. Page 111, paragraphs 49 and following, introduce alternatives that surely now can be dealt with peremptorily. The EPA - paragraph 49 then commencing - that is no longer in the case so far as his Honour's declining to make findings against the EPA. Your Honours will see that that was a highly detailed set of particulars which start with comparative information from Tweed Heads and goes to various sewer outfalls and caravan parks and the like as you will find talked about on paragraph 112.

That all culminates in paragraphs 52 and 53 with the supposed causation of loss by that for a failure to exercise statutory powers under the Clean Waters Act. Then we go to paragraph 54. This is the second of the two statutory schemes upon which I opened, namely the Food Act where in paragraph 54 we now have the Director-General or the Minister of Health - not Fisheries - not the EPA - owing duties. They were in respect with the depuration plants, that is the so-called purification plants, and as well as the selling of oysters, 54(d).

Paragraph 55 alleges the negligence, 57 pages 118 to 119 the causation, and 58 the loss. That is where the matter lay. When one goes to the food provisions, your Honours have in the Food Act section 44, which is the power called in aid:

when the Director-General has reasonable grounds to believe that the making of one or more such orders is necessary in order to prevent or mitigate a serious danger to public health.

The nature of the orders is set out in 45, and they are extremely general. May I hand up to your Honours something to be added, and I apologise for its omission, that part of the statute that contains section 49 which makes it an offence not to comply with an order. Your Honours appreciate, as with the 189 order of closure under the Fisheries Management Act, so with sections 45 or 44 under the Food Act, we submit that, properly characterised, they fall within the category that has been called for some purposes "quasi-legislative".

That leads me back to a further delayed response to something your Honour Justice Callinan raised apropos Crimmins. With all the special features of control in Crimmins, one thing, in our submission, by majority emerges, and that is that in Crimmins the section 18 order was excluded from the conduct which was to be measured against a duty of care; that is, whether or not, and if so what, to put in a section 18 order was excluded by the majority because it was in effect quasi-legislative given the force of law, a fortiori in these particularly general provisions about, for example, the forbidding of taking of any oysters or oysters at any time, from a particular time or oysters from a particular place. For those reasons, in our submission, the simple sole way in which we were held liable in fact fits within the ratio in Crimmins by which the section 18 order was excluded from the scope of conduct which could be sanctioned by the imposition of a duty and the finding of a breach. May it please your Honours.

GUMMOW J: Wait a minute, Mr Walker. Did Justice Lindgren deal with section 8 of the Fisheries Management Act? I mention section 8 because it does not require satisfaction in any way - on its face anyway.

MR WALKER: Your Honour appreciates that when I talk about procedural fairness, it is because - - -

GUMMOW J: No, I am talking about - sorry, go on.

MR WALKER: When I am talking about procedural fairness it is because of the nature of the decision to be made.

GUMMOW J: Yes.

MR WALKER: The closest one finds, your Honour, is 4836 paragraph 457.

GUMMOW J: Yes. He talks about 45; I see that.

MR WALKER: Second line, 8 and 189.

GUMMOW J: I know, but he does not then go on to talk about 8 again.

MR WALKER: No, that is right, your Honour.

GLEESON CJ: Yes, thank you, Mr Walker. Mr Solicitor?

MR MEADOWS: May it please the Court, the submissions which I wish to make on behalf of the Attorney-General for Western Australia addressed the legal principles pertaining to the question whether a statutory authority can be subject to a common law duty of care, the satisfaction of which requires the exercise by the authority of its powers.

GLEESON CJ: Which is the statutory authority of which we are concerned in this case?

MR MEADOWS: This is the question in this case, your Honour. We do not seek to intrude on my learned friend Mr Walker's analysis of that. Here there seems to be an attempt to sheet home to the State liability in respect of a failure on the part of various personnel working within the government and its agencies, liability in negligence.

We would submit that the State itself could never be liable in negligence for failing to exercise some general power. Perhaps, if I could just use an analogy, if, for example, there was a beach within the State, which was clearly a dangerous surfing beach, and somebody got into trouble on the beach and there was a tragedy, the State could not be liable in negligence. He could not sheet home to the State a duty to take care to protect that person from the tragedy that occurred.

KIRBY J: Is this founded on some concept of the immunity of the State inherited from the Crown or is it from some other - - -

MR MEADOWS: No, it is not so much founded on an immunity, but more on the inability to discern the existence of a duty of care. It might be said that in general terms there might be an obligation on the State as a polity to care for its citizens, but that cannot give rise to the existence of a duty of care which might result in an action sounding in damages.

McHUGH J: But surely it depends upon the facts of the case. I mean, take the Crown's role as parens patriae in respect of children, there is a fiduciary duty and the failure to do something affirmative may be a breach of duty.

MR MEADOWS: But you are there referring, your Honour, to the existence of a fiduciary duty, one which is recognised by the law, but we are here talking about the general concept of negligence.

McHUGH J: I understand that, but the fact is that the common law will impose duties on the State. So, it may be - it can seldom be that case that the State would come under a duty, but I am not sure at the moment that there may not be particular facts and circumstances which might not give rise to a duty of care on the part of the State.

MR MEADOWS: Well, we would eschew that, your Honour.

McHUGH J: Yes, I understand that.

MR MEADOWS: Getting back to my analogy, it might be that the Executive Government, assuming it has the financial resources appropriated to it, might set up a system at this particular beach where they engage a lifeguard who puts up red and yellow flags in order to protect the public. Now, it may well be that the people that come to the beach ignore the red and yellow flags and the lifeguard can do nothing about it, because there is no power. So the next step might be that the State would enact legislation to create a statutory power, maybe a statutory authority to administer the power.

McHUGH J: But take the case where the State is the owner of land and it allows people to come on its land, surely it owes a duty of care to those people and in certain circumstances it may be under an affirmative duty.

MR MEADOWS: Well, there, of course, your Honour, you are getting to the situation where effectively the Crown is the occupier of the land.

McHUGH J: Well, exactly, but that is a fact and circumstance that creates the duty. All I am putting to you is that it seems to me too wide a proposition to say that a State, as such, can never owe a duty of care. When it owns land, it obviously does.

MR MEADOWS: Well, I am positing these submissions, and perhaps my analogy, on the footing - - -

McHUGH J: If it runs railways, it owes a duty of care.

MR MEADOWS: Well, that is a different situation, your Honour.

McHUGH J: Well, I know but - - -

MR MEADOWS: It is going too far, we would say, to say that there is an ability to simply say that a duty of care will arise because the State has an overall capacity to control or dictate what might happen at a particular location.

KIRBY J: So your point is that the mere fact that the State, in some general political sense, owes obligations to citizens in that State is not enough, alone. To get duty, you have to lift it up into some particular category which is recognised by the law.

MR MEADOWS: Yes. There has to be some relationship recognised by the law which - - -

GLEESON CJ: Well, if you got into this area, you would need to start thinking about exactly what you meant about the expression, "the State", would you not?

MR MEADOWS: Yes. Well, in this instance, we are talking about the State as a polity. At least, I am, and I understand my learned friend Mr Walker to be - - -

GLEESON CJ: As I understand it, in our law, we do not have the same kind of concept of "the State" as they have in continental legal systems, for example. I am not sure exactly what would be meant by the proposition - whether you expressed it positively or negatively - that the State has a general duty to care for its citizens. I am not sure who you would talking about or what you would be talking about.

MR MEADOWS: In terms of the State as a polity, we would accept that, in general terms, the State has some obligation to care for its citizens. But not - - -

GLEESON CJ: But it is a bit like using the expression, "the powers that be".

MR MEADOWS: Yes, it is. Well, it is "they ought to". It is the "they" in "they ought to".

McHUGH J: We are talking about the Crown in right of the State, are we?

MR MEADOWS: Well, in this case - - -

McHUGH J: If you read Sir Maurice Byers' argument in the Seas and Submerged Lands, I think it is, he draws attention to these notions. It is really the Crown in right of the State, the Crown in right of Commonwealth, et cetera. Take the First Fleet - bring out the convicts. Now, leaving aside the question of not being able to sue the Crown in tort in those days, surely the Crown would owe a duty of care to those people, having brought them all the way out here, would it not?

MR MEADOWS: Well, those people were - - -

McHUGH J: It might be a fairly thin duty, but - - -

MR MEADOWS: Those people were in their custody, just as any other prisoner would be, and there are limited duties owed to prisoners. But that, again, arises out of a particular relationship. Coming back to my analogy, if, having set up the statutory authority, whereby they have a lifeguard in their employ, and they do put up flags, if the statutory authority were to decide for budgetary reasons that during the week the number of people at the beach did not warrant the employment of the lifeguard during that period, and the tragedy were to happen when the lifeguard was not on duty and there were no flags, or the beach was not closed when it might have been closed, there could not be any liability sheeted home to the State, we would say.

KIRBY J: There was such a case in Western Australia. I sat on a special leave application in respect of it.

MR MEADOWS: Yes, at Cottesloe Beach.

KIRBY J: Liability was refused at trial, I think, and in the Full Court, and we refused special leave.

MR MEADOWS: Yes, your Honour. The point I make is that unless you can discern from the legislation which establishes a statutory authority some legislative intent that the authority should be liable, or should be obliged to exercise a particular power, then, in our submission, you cannot find the existence of a duty of care.

GAUDRON J: Now, why should one go that far? One can well understand that if the legislative intent indicates that there should be no duty of care, that is the end of the matter, but governments operate not simply in mysterious ways, but in a myriad of places, and they can, for example, involve themselves so directly in things that unless the statute says otherwise, you would think: duty of care. Take, for example, let us assume that a government or a government agency takes upon itself the supervision, management and day-to-day control of a nuclear reactor. You can point to some negligent act or omission as a result of which somebody gets a dose of a radiation poison. Why would you say, you must, in that situation, find a positive indication in the statute that there is a duty of care? Why would it not simply come from the nature of the operation in which the government agency was engaged?

MR MEADOWS: For a start, your Honour, you are dealing with the situation where there has been some omission to exercise a power by that authority. What we say is that, in the case of an - - -

GAUDRON J: Well, it might be a power to give directions to its servants and agents and it fails to do so.

MR MEADOWS: In that situation, your Honour, unless it can be discerned from the legislation that there is some obligation to exercise that power, then a duty of care cannot arise.

GAUDRON J: I know what your submission is. I want to know why you say it. Why can it not come about, I say, from the nature of the activity undertaken and the way in which the activity is in fact undertaken? I am not saying it will happen in every case but I am saying absent an indication to the contrary, why would you not just look and see whether they are in any relevantly different position from anybody else? Why in the case of a nuclear reactor, for example, do you not just go and look at what was said in Burnie Port Authority and say - - -

MR MEADOWS: We would concede that in some circumstances that finding would be open, that there was a duty of care, and we acknowledge that in our submissions, that there are cases, because of the circumstances or the relationship, where it is possible to discern such a duty of care.

GAUDRON J: But what is the legal theory that drives you to say, "You have to find a positive indication of a duty of care in the statute"? It must be based on old notions of Crown immunity, must it not?

MR MEADOWS: Not so much Crown immunity, as I said earlier, but on the notion that the State, the polity, does not owe a duty of care to its citizens in the abstract.

GAUDRON J: I do not think we are arguing about citizens in the abstract, are we? We are arguing about people who are at a foreseeable risk of injury by reason of the failure to do something.

MR MEADOWS: The mere fact that it is foreseeable that somebody may be injured does not give rise to a duty of care on the part of the State to do something.

GAUDRON J: No, we know that.

MR MEADOWS: That is the premise. If you start with that premise - - -

GAUDRON J: Yes, well, the premise is a given. You do not have to convince us on that, we all know that. I think everybody here has said it many, many times.

MR MEADOWS: You start with that premise, then you say the State has done something to set up a statutory authority with certain powers, and in order to take the next step to say that if the authority fails to exercise those powers, there is to be - - -

GAUDRON J: "In circumstances in which there is a foreseeable risk of injury by reason of the way it is conducting its activities", add that in.

MR MEADOWS: But then you are talking about the way in which it is conducting its activities and, therefore, you have a direct correlation between the conduct of its activities and the resultant injury.

GAUDRON J: Well, not necessarily. I mean, given the way in which certain activities are being carried out, or given even a knowledge of the way in which activities are being carried out by others, there is a foreseeable risk of injury to a certain particular class - it does not matter whether it is a specific class or not. It is a foreseeable risk of injury if something does not happen, but associated with the way in which it is conducting its activities. Now, in that situation, I am asking you, why do you look to see, and what is the theory behind your submission that you look to see, that the statute compels discharge of the power or exercise of the power rather than that it does not forbid exercise of the power?

MR MEADOWS: In the example that your Honour posits, it would appear that the legislation which created the statutory authority was enacted to protect or look after the interests of that particular - - -

GAUDRON J: Not necessarily.

MR MEADOWS: Your Honour identified a particular - - -

GAUDRON J: Let us say it is a particularly dangerous thing like - let us take for example, genetically modified farm. The government has undertaken through its agents the day-to-day supervision of the farm. It says what can be planted, what cannot be planted, when it can be planted, where it can be planted, what fences have to be put up, what natural barriers have to exist, and it has powers to do other things as well. One of those other things may be to notify adjoining land-holders of the pollen count - I presume genetically modified things have pollen counts - and it does not, and the farmer comes along and says, "If I'd known that the pollen count was such-and-such I wouldn't have sown my seed on that day". Why do I have to go looking in that legislation to see that it was intended to be exercised as distinct from looking simply at the activities and the relationship brought about by those activities?

MR MEADOWS: Once again, your Honour is positing an example where the State has undertaken activities in performance of the powers.

GAUDRON J: Yes.

MR MEADOWS: But the situation of a failure to - - -

GAUDRON J: No, has undertaken some activities in relation to what becomes the source of danger, or what poses the risk.

MR MEADOWS: It has created the risk.

GAUDRON J: No. It has not created the risk, but it has involved itself in what becomes the risk.

MR MEADOWS: As I say, your Honour's example is one in which the State has done something which has - - -

GAUDRON J: Not necessarily. Not necessarily magnified the risk at all. All it has done has got power to minimise it.

MR MEADOWS: And it fails to exercise that power. We would say that you have to be able to discern from the legislation an obligation to exercise the - - -

GAUDRON J: I know what you say, Mr Solicitor. I am just asking you - and this is the last time I will - what is the legal theory which leads you to that submission? Is it State immunity? Is it a rule of statutory construction? What is it?

HAYNE J: I will offer you either a lifeline or a knife in the napkin. You may choose which it is.

MR MEADOWS: Your Honours have done that to me before, I might say.

HAYNE J: The answer may lie, may it not, in the fact that the State and its actors do not have that general freedom of action that the individual has? The State and its actors are hedged about by legislative permission and restraint. In general, perhaps, they cannot act without legislative permission and they cannot act contrary to legislative permission. Does not the answer that you offer have, if it has any basis, have its basis in the intersection between statute and action? Once you have begun from the premise that the State and its actors cannot respond with absolute freedom to perceived risk of danger, but can act only pursuant to legislative authority and in accordance with it, you are driven, are you not, at once to an understanding of the statute?

MR MEADOWS: Notwithstanding your Honour's threat, I would adopt what your Honour is saying - - -

HAYNE J: Well, good luck, Mr Solicitor, and all who sail in her.

GAUDRON J: Certainly one can understand on that, if there is an express or implied indication that persons are not to be held liable, then so be it, but going back to some of the earliest cases in this area, Sutherland Shire Council v Heyman, it is a statutory authority, where is the indication in that that it was to be held liable? Where is the indication in Crimmins, or any of those cases, that anybody was looking for the positive indication that it was to be held liable as distinct from the negative indication that it was not?

MR MEADOWS: Well, there are indications in some of the judgments that it was necessary to go to the statute and if I take - - -

GAUDRON J: Yes, we know that. Nobody disputes that. But you are going one direction and I am - there are three possible ways you could look at the statute: expressly or impliedly excludes liability; two, no indication one way or another; three, expressly or impliedly indicates that there is to be liability. Now, I would have thought in that last territory you probably had a statutory duty and you could sue on the duty and that would be consonant with all sorts of industrial safety regulations and so forth. But you want to say that is the precondition for liability and negligence.

HAYNE J: And where in this leaky boat I have launched you on does action and inaction lie?

MR MEADOWS: Yes, and particularly in circumstances where there may be a discretion or an incapacity to act because of lack of funding, for example.

GLEESON CJ: And by whom? It is one thing where there is a statutory authority with existence and powers and duties, but the power under section 189 is conferred on the Minister.

MR MEADOWS: Yes.

GLEESON CJ: Is the case against the State of New South Wales here that the Minister negligently failed to exercise the power to close the oyster farms?

MR MEADOWS: The starting point, your Honour, is, did the Minister have a duty of care which required the Minister to make an order for closure?

GLEESON CJ: Perhaps we can come back to this at 2.15, Mr Solicitor. We will adjourn until 2.15.

MR MEADOWS: May it please the Court.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

GLEESON CJ: Yes, Mr Solicitor.

MR MEADOWS: May it please the Court. The fundamental proposition which we put is that in a situation where the State, that is, the Executive Government, if the Executive Government failed to act and there would not be found to be a duty of care which required it to act, if the Parliament legislates to give a statutory authority the power to act, it is not to be assumed that that gives rise to a common law duty of care to act. Rather, absent discernible legislative intent, no such duty should be assumed. In other words, it should be assumed that the Parliament would have allowed the matter to remain as is so far as the liability of the government is concerned.

McHUGH J: That means there can never be a common law duty of care - I think they were your opening words. If the statute indicates a duty, then one would sue for breach of statutory duty. The cases in this area have said, quite apart from the existence of a statutory duty - a statutory authority, for example - it may have a common law duty to exercise powers, but you go so far as to say that doctrine does not apply to the States.

MR MEADOWS: No, we do not, your Honour. What we say is that it is only where the legislature evinces an intent that the common law should apply so as to impose a positive duty - - -

McHUGH J: But it never does. Is there any recorded case where it is suggested that a State government must comply with a common law duty? The statute itself provides the duty and you sue on the statute.

MR MEADOWS: That is my point, your Honour, that unless you can gather from the legislation itself an intention on the part of the Parliament that the common law should impose a duty of care which would require the statutory authority to act, then there is no duty of care.

McHUGH J: What about a State factory, where the Factories and Shops Act does not bind the Crown? Is there a common law duty to fence dangerous machinery?

MR MEADOWS: There may well be, there, because of the relationship which exists between the State as an employer and the worker. We are not denying that there can be a relationship created or a situation created whereby a duty of care will arise.

McHUGH J: It comes down to this, on your argument, does it, that the relationship of the State to the general public is not itself sufficient to create a duty to exercise a power?

MR MEADOWS: That is right. What we are saying is the starting point is to look at the statute, and I would suggest that there is authority to support that proposition, both in Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424, in the judgments of Justice Mason at 459 and 460; Justice Brennan at 482, 483, and 485; and Justice Deane at page 500. We also would gain support from what your Honour Justice Gummow said in Crimmins [1999] HCA 59; 200 CLR 1.

GUMMOW J: Justice Hayne and I were in the wilderness in that case.

MR MEADOWS: In the circumstances of that case, your Honour, but when it comes to the proposition which I am putting, I would suggest not so and that is the starting point is to look at the statute. Could I just also refer to - - -

McHUGH J: Perhaps I should have asked Mr Walker this, but the cases have failed to produce any really satisfying principle, or any satisfying principle in terms of formulating a duty. What do you say about what Justice Priestley said in Avenhouse's Case which is referred to in paragraph 319 of Justice Lindgren's judgment, namely that you have to go back to what was the approach immediately after Donoghue v Stevenson, that is to say the court asked itself the question:

`is the relationship between the plaintiff and defendant in the instant case so close that a duty arose?' and then answering `yes' or `no' in light of the court's own experience-based judgment.

MR MEADOWS: That seems to me to be postulating a proximity test, which may be of some utility.

KIRBY J: Not really because it refers to proximity, but in the neighbourhood principle there must be proximity of some kind. There is a relationship.

MR MEADOWS: Yes.

KIRBY J: The problem is that this Court and other courts have found it difficult to express exactly what it is. Different theories have ruled from time to time. But there must be some notion of relationship coming out of proximity or some feature of association to give rise to the heavy burden of a legal obligation.

McHUGH J: That was the great contest in Donoghue v Stevenson. The dissenters, led by Lord Buckmaster said you only have a duty to take reasonable care when there is a relationship - landlord and tenant, employer and employee, carrier and passenger, and so on. So there was a much more specific relationship. Lord Atkin's test was to develop it more widely. Why is not Justice Priestley's formulation at least something worth looking at?

MR MEADOWS: It certainly explains those cases where liability has been found on the basis of the existence of a relationship and we are not denying that liability can arise in such a situation, but it is because of the existence of the relationship.

McHUGH J: But is there any case anywhere where somebody has been held to owe a duty of care, although there is no relationship?

MR MEADOWS: Not that I am aware of, no.

McHUGH J: No.

KIRBY J: The criticism of the test propounded would be that it is simply subsuming the issue to be decided in the words "relationship". What is the relationship? A close relationship is that of neighbour. Who then is my neighbour? We go round and round in circles. When one reads the judgments in this case of the primary judge, and more so in the Full Court, one can only have sympathy for trial judges and appellate courts dealing with problems like this and clients and lawyers and insurers and if you add up all the time that is taken trying to extract a principle or a methodology from the decisions of this Court the total cost to the economy, the nation and anxiety must be enormous.

MR MEADOWS: Yes.

KIRBY J: Speaking for myself, I pressed on with the Caparo approach which had supporters in other common law countries but the Court has rejected that. So I have to face up to, for my own part, the need to subsume any views I have into trying to find something better than we have offered at the moment. What Justice Priestley says is what after all Professor Fleming, who was a great jurist, said was the product of the jurisprudence up until 1998. So if it helps, it may be a way of trying to find a common principle that lawyers throughout the country can apply. The present state of the law is chaotic.

MR MEADOWS: I hear what your Honour says and I think our submissions reflect the uncertainty that currently exists in this particular - - -

KIRBY J: It is not your fault.

MR MEADOWS: No.

McHUGH J: But it means that the judge has got to make a value judgment. But, so what? Judges are making value judgments all the time. The question of reasonableness itself is a value judgment.

MR MEADOWS: I accept that, your Honour, but let me say this. What we are here to say is that where a State authority fails to act, you cannot look to the common law to impose a duty of care to act.

GLEESON CJ: But the State authority here, in so far as reliance is placed on section189, is the Minister.

MR MEADOWS: Yes, quite so, your Honour. I am not sure if it is the Minister as a body corporate - it is not, your Honour, as I am given to understand. So we are talking about the Minister as an instrument of the Executive Government.

McHUGH J: Yes, I know, but these arguments reflect the sort of thinking that until, say, FAI and Winneke, and Peko and cases like that said you could not really have judicial review of ministerial acts. It is the same sort of thinking - it is just a comment.

MR MEADOWS: Yes. Well, in respect of the position of the Minister, I would support what my learned friend, Mr Walker, has said.

GLEESON CJ: But what exactly is the criticism of the Minister in the present case? What is it that he failed to do? What did Mr Martin do wrong?

MR MEADOWS: Apparently, because he did nothing.

GLEESON CJ: But according to Justice Lindgren, in circumstances where he was not satisfied that the occasion for closing the oyster farms existed and it is not found against him that he should have been so satisfied.

MR MEADOWS: Yes. The fact that he did nothing may well have been soundly based, I take your Honour's point, but the failure is the failure to do anything in circumstances where, presumably, it is being contended that he had a duty to do something. I was just going to refer the Court to an article which I have made available to the Court, a very recent article by my learned friend, Mr Selway, the Solicitor-General for South Australia, which is about to be published in the Tort Law Review Volume 10 No 1.

I provide that for the information of the Court and also to support the view which we are putting that the starting point is to look at the statute and discern the legislative intent. May it please the Court, I do not believe I can usefully add anything further.

GLEESON CJ: Thank you, Mr Solicitor. Mr Hoeben.

MR HOEBEN: Your Honours, before I start, there is a housekeeping matter. On page 8 of our submissions under paragraph 9, there are a number of references. Regretfully, your Honours, they are all wrong - not one is correct. We now have the correct references. Could I hand up a copy for your Honours. It is an attack by the gremlins of massive proportions.

KIRBY J: There were just any old references that were thrown in anywhere just to confuse us.

MR HOEBEN: I have a theory but I will not trouble your Honours with it.

KIRBY J: May I ask you why did we get all these appeal books? Does anybody really think we are going to sit down and read the appeal books cover to cover?

MR HOEBEN: I was of the view we could do it with about five, but others apparently could not agree. I am not sure why. Your Honours, I am really dealing with two appeals. The first is the narrower and rather more simple one, and that is on behalf of the Barclay companies against the finding of negligence against them, and the second is against the finding in favour of the Council.

In relation to the first appeal, although it forms part of the overall matrix of facts against which all of the appeals will be decided, the particular facts relating to it are much narrower in compass. Before going into the submission and what we wish to say on that issue, could I remind the Court that the oyster growers, and in particular the Barclay companies, in this particular case were in a rather unusual position for a food producer. It is fundamental to an understanding of what was going on to realise the weakness, if you like, or the vulnerability of their position.

Most food producers at least control the land, if they are a land producer, where they are operating. Certainly, the wind may blow contaminants and things of that kind, but in this particular case all that the grower could control was his product and the particular lease which he, using a generic "he", was working on or in relation to. There was no control over the littoral and what happened on the littoral and there was no control over what happened up the river. Those matters, of course, could be of fundamental importance to what was happening in the particular oyster lease.

The situation can, perhaps, be put no better, your Honours, than a very brief extract from one of the experts in the matter, a man known as Gerhard Grohmann, who was the virologist expert. He was, in fact, the Health Department expert. In volume 7 of the appeal book - your Honours do no need to go to it necessarily. I can read the passage. It is very short. But he, very succinctly, outlined the problem faced by the oyster growers. Your Honours, is at page 1779 in volume 7 of the appeal books. It is paragraphs 59 and 60 of the statement of Mr Grohmann, but relevantly it reads as follows, your Honours:

Having regard to the path by which viruses may pass, through sewage, into the environment and hence into human food sources (such as oysters), there are a series of barriers which can be applied to minimise the risk of viral contamination of food. Nearly all of these - and all of the more effective ones - are at the beginning of the chain. That is, in the effective collection of sewage; in proper treatment of it through primary, secondary and tertiary stages and in the controlled disposal of effluent. A further barrier, also available to those controlling sewage treatment and disposal, is the verification of sewage processing by monitoring water quality at points where any failure of the process would be likely to be revealed.

The barriers which can be set up at the other end of the chain - by oyster farmers - are fewer and less effective.

GLEESON CJ: Is this an argument against eating oysters?

MR HOEBEN: Your Honour, the whole case, in one sense, was an argument against eating oysters, but at the moment I have my "growers' hat" on and the point I wish to make is they were in a very unusual position for a food producer and it is fundamental to the case against them.

HAYNE J: So what? What follows from it other than an appeal ad misericordiam?

MR HOEBEN: With respect, your Honour, a little more than that. The whole question - this is where we come to the argument - is what could they have reasonably done? What was the nature of their duty and did they breach it? If your Honour would bear with me I will come to that and, put bluntly, we say they did everything reasonably possible to produce a safe oyster and that the reason the particular oysters they produced were not safe was a matter entirely beyond their control. That, in a nutshell, is our position.

HAYNE J: That is an argument there was no breach.

MR HOEBEN: Yes, your Honours, but to understand that you have to understand the nature of the duty and the duty, we say, was never properly articulated either at first instance or on appeal, except by Justice Lindgren, who, in fact, looked at what was the appropriate duty and then looked at the Shirt v Wyong Council approach to breach.

Your Honours, just following the initial introduction, if I may, along the same lines and I trust it goes further than an ad misericordiam plea, an understanding of the facts in this case and our statement of the facts in the submission is important. For example, your Honours, in paragraph 6 of the statement of facts, an important - and this all comes from the review of the facts by the trial judge - at paragraph 6, in relation to the question of depuration, for example, it has been assumed in all the judgments that depuration is virtually useless. In fact, that is a considerable understatement to the effectiveness of it. The correct statement is that which we have set out. It is taken from the judgment at first instance:

The experts' evidence as to the usefulness of depuration was that, when carefully performed, it yielded satisfactory results. Nevertheless, shellfish might still contain viruses after depuration if the waters were heavily polluted due to uncontrollable environmental factors.

Your Honours, that is a very important qualification, "if the waters were heavily polluted", because in the course of the trial and on appeal two concepts became elided and, we say, to the detriment of the growers. That is the question of what was a known risk - and I have just read out the known risk - and the question of whether or not actual viral contamination was known. The risk, with respect, your Honours, was known. The fact of viral contamination, or even heavy faecal contamination such as the expert said depuration would be ineffective to deal with, was not known by the growers. It was known, we would submit, in due course by another party but not by the growers. Your Honours, that particular concept is important.

We also adopt paragraphs 44 and 247 of the submissions made by the State in my learned friend Mr Walker's submissions. I will not take your Honours to that in detail but, in effect, what they say and what they set out is all of the evidence which deals with the occurrence of this kind of outbreak, a viral outbreak of this kind worldwide and in Australia and conclude, we would submit quite correctly, that this was an extremely rare and unforeseeable event, not due to a simple fall of rain, but due to a combination of circumstances which may or may not have been building up and the precise trigger was not really known. The rain certainly played a part but there were other matters which also played a part. For example, one of the investigations carried out after the outbreak also implicated water skiing races which took place over a week in the river.

There is a whole series of factors which came together, and those references to which my learned friend, Mr Walker, referred are of great assistance in laying that background, that this was an extremely rare event. One gains an impression - we would submit, an incorrect impression - certainly from the judgment at first instance that this was something which everyone expected to happen. That is certainly not the case, and that would be quite contrary, in fact, to what the expert opinion was. The expert opinion was this was a possibility.

GLEESON CJ: And still is?

MR HOEBEN: And still is. Has to.

GLEESON CJ: It could happen again at any time?

MR HOEBEN: Anywhere - in fact, Mr Grohmann, in his evidence, said: "There is probably a build-up of sediments happening as I speak."

GLEESON CJ: You are not a very good salesman, Mr Hoeben.

MR HOEBEN: It is a fact. So, your Honours, that whole question - and it is a very important one, because, really, it is the issue between my learned friends representing Mr Ryan and our interest - is this whole question of what really was known, and what should have been done in relation to the knowledge of the growers. Can I then, very quickly - as I say, I do not want to take too much time - go to, simply, the question of the content of the duty of care in the submission. It seems, from the reply we received from the legal representatives for Mr Ryan, that they accept our articulation of duty on page 6, in paragraph 1; they do not seem to put forward a contrary duty.

Certainly, that which was put forward by the majority in the Full Court in paragraph 3 is clearly articulated in terms of breach. In fact, the problems associated with that were dealt with by your Honour Justice Hayne in Brodie's Case, at paragraph 309 of that case, where your Honour indicated that once you start defining duty in terms of breach, it makes it all the more likely for breach to be found, because you are almost starting from an end result - an ex post facto reconstruction - and working backwards, instead of starting from what, we would say, the correct premise is: there was a duty to take reasonable care to ensure that oysters harvested and supplied were safe for human consumption, and then saying, "Well, what did you have to do to behave reasonably in producing that product?" But you have to get, with respect, we would say, the correct content of the duty before you go to the next inquiry.

Your Honours, on that issue of duty - and this now, of course, is trespassing on the issue of breach - it is a simple factual issue but obviously of great importance to our clients - we deal with that in paragraph 6 and also on paragraphs 7 and following, on the issue of breach, but if I may deal very briefly with, if you like, the two particulars of breach articulated by the majority in the Full Court. The first was a duty not to expose consumers to the risk of a virus. Well, that is strict liability. You just simply cannot produce an oyster that complies with that. If the words had been added, "to act reasonably not to expose consumers to risk of a virus", then there is less complaint. But that was not added. So we were always going to be guilty of that, because the moment we supplied an oyster that had a virus, then that particular test, if that be the duty, was complied with. We would say, that cannot possibly be right.

The other breach, if you like - duty qua breach - and it is difficult to see which we are dealing with - was 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. Two things, your Honours: "a sufficient period" and "tests". The one thing in this case that came through beyond argument was that there were no tests - just no tests - which could, before an event such as this, detect viruses in water or in oysters. The only experts in this area, Mr Murphy and Mr Grohmann, said that the PCR testing, which is the only test we know - and it has considerable disadvantages, and we have set those out in our statement of facts - they are in the judgment - that is an ex post facto test.

You only carry that out once you have an outbreak to try and work out where the outbreak came from and to try and control it. The only thing you can do before an outbreak is to carry out what is known as water testing, and you test for something called E. coli, which has a close link-up with human sewage, or you test the meat of the oyster. The reason you test the meat is because the oysters suck in lots and lots of water, and if there is anything out there, they can be regarded as a sentinel, and they may well pick it up. It does not matter which approach you use, but all you can do is test for E. coli. If you have high readings of E. coli, chances are you have viruses; you certainly have some human faecal material there.

The problem is this, that E. coli does not last very long. It might only last a few days. Viruses can last anything from six weeks to three months. They have even found them in sediments 18 months later, I think even up to two years. There is just no test available, so to express a duty in that particular way or even to express an obligation in terms of breach in that way is impossible to achieve.

We then come to the second aspect.

GAUDRON J: Is that right? If you say wait a sufficient time before selling and if you know that a virus can last for weeks, then maybe you should not sell oysters for weeks after you have taken an E. coli reading. I see no difficulty in that.

MR HOEBEN: Your Honour, the difficulty is this. If you have taken your readings, as happened here, and they are clear - - -

GAUDRON J: Your E. coli?

MR HOEBEN: Your E. coli readings.

GAUDRON J: You have never had any bad E. coli readings?

MR HOEBEN: None, and they waited as they usually do, they have the fresh, they wait until the water clears, you carry out salinity tests because that indicates the fresh water has gone and you have salt water coming back from the ocean, they carried out those. You do not do E. coli tests if the water is murky because that is just a waste of time. It will definitely contaminated, one would assume, with all kinds of things. You wait until it is clear, you do your salinity tests, then you do either your water tests or your flesh tests and the - - -

GAUDRON J: Why? That seems to me to be putting the cart before the horse. Why are you not testing regularly for it?

MR HOEBEN: I am sorry, your Honour, I was talking about the - great emphasis was placed in this case on the rainfall event, but they test all the time.

GAUDRON J: Yes. I should have thought if at any time you have E. coli or murky waters, which you seem to suggest will have E. coli, then why do you not wait for days or weeks before selling?

MR HOEBEN: This is the problem, your Honour. They wait until it clears, they do their tests and then they sell. That has worked perfectly - - -

GAUDRON J: But why? You see, that seems to be - - -

MR HOEBEN: Because there is no particular time, your Honour. If viruses can last - for example, on this particular occasion they were still finding viruses in oysters as late as February and March of 1997.

GAUDRON J: Well, how did they find - I thought you just said they could not test for virus.

MR HOEBEN: No, it is an ex post facto test. What they were doing is now knowing there were viruses in the area and the whole oyster field was closed, they then carried out - Mr Grohmann and his team tested various samples to make sure that there was just no virus anywhere in the region and they did not come with "all clear" tests until April, the point being that - - -

GAUDRON J: So there were tests for virus?

MR HOEBEN: But ex post facto tests, your Honour.

GAUDRON J: But why would they be ex post facto?

MR HOEBEN: Because they are enormously expensive and the science was such - these were findings made at first instance - unfortunately, they give you false negatives. If you have a positive then you know there is a virus there. If you have a negative there may be a virus there but the test just has not shown it up, so it is of very limited utility. We have set all that out in the statement of facts, your Honour. His Honour made some specific findings about the limitation about PCR testing. That is the reason why we succeeded on the 75AK test under the Trade Practices Act. But, your Honour, there is no sufficient period.

The crucial issue is this. If you know the waters are polluted, if you know there is sewage going into the water, then you may have to take additional steps along the lines your Honour is saying. What they are we do not know other than the sanitary survey, or, I think as somebody else - - -

GAUDRON J: No. If you know there is sewage going into the water, which I dare say everyone did - well, I would assume everyone did - - -

MR HOEBEN: With respect, not, your Honour.

GAUDRON J: You may not know how much but if you know the general topography and you know that there are - I presume one knows that there have been problems with pollution, and there can be problems with pollution - I do not see what is so difficult about imposing a duty of care that says you do not sell oysters for a very considerably long time afterwards.

MR HOEBEN: But, your Honour, no one knows how long. It would be of no greater benefit to freeze the oysters - to suspend sales for two weeks, three weeks, four weeks, five weeks. You might still get viruses at the end. It just would make no difference.

HAYNE J: Then the solution would be: do not grow them there. Your argument proceeds from the unstated premise that there is necessarily going to be growing of oysters in this area. That premise needs to be challenged, does it? If the grower knows of the risk of viral contamination, knows that it cannot be detected readily, why does that permit the grower to say, "I don't owe any duty of care to anyone. I'll sell what I like"?

MR HOEBEN: But, your Honour, that is not what we are articulating. Could I deal with the two issues your Honour is raising. The first is this: the proposition your Honour puts applies to every single oyster field where there are people. If you have people, you have the risk of faecal contamination.

GAUDRON J: And that would be known to most oyster growers. You can assume that, can you not?

MR HOEBEN: Indeed, and it was so found. But that is every single oyster field in Australia. That is why we say the implications are enormous. That is No 1. No 2, with respect, your Honours: the duty, we would say, is to act as reasonably as you can to produce a safe oyster, and that is what they did. They complied with all the State requirements. The Barclay companies went further. He carried out his own meat testing. For 50-odd years there had been no problems - well, before that, but at least 50-odd years there had been no problems with viruses. You can have faecal contamination without viruses.

The final point though, and what we say is the most important and that which appears to have been glossed over somewhat in the factual finding, is that which I made early on. There is a real distinction between knowing of a risk, which your Honour was putting to me, and - - -

GAUDRON J: What is the risk we know of?

MR HOEBEN: The risk is exactly what your Honour said, that where you have people you may have people doing the wrong thing where you have a septic tank system generally, that there could be some malfunctions, and therefore there is a risk that there may be human faecal contamination of the growing area. That is all there is. As I say, for the reasons set out in Mr Walker's submission, that is a very low risk but it is a risk. It is an entirely different matter - - -

GAUDRON J: And there is knowledge, I take it, based on experience that the risk increases at certain times, including after rain, because of the run-off that goes in? I presume that was uncontroversial?

MR HOEBEN: Indeed, and that is why they wait again until the run-off clears.

GAUDRON J: A few days?

MR HOEBEN: No, your Honour. It happened to be a few days. It may be much longer. It depends upon till the water is clear, when the salinity tests are clear and when the meat testing tests are clear. If any one of those does not operate, you do not resume harvesting - as simple as that. The real issue, with respect - - -

GAUDRON J: Even though a virus can last much longer than the E. coli for which you are testing the water?

MR HOEBEN: Indeed, your Honour.

GAUDRON J: That seems to me to be the fallacy in the step.

MR HOEBEN: But, your Honour, the implication of what your Honour is putting to me is this, and it is a very practical implication. It means every time there is any kind of rain event where you might have waters coming down, you must stop for the rest of the season.

GAUDRON J: That may be right. If you are in that area, so be it. That comes back to what Justice Hayne said to you. You are not obliged to produce oysters in these places. There are presumably other places where you can.

MR HOEBEN: With respect, your Honour, you only need people -

and it does not need all that many - and oyster growing and you have a risk. With respect, if what your Honour is putting to me is correct, you simply cannot grow oysters in this country unless you have some pristine environment banned to folk.

GAUDRON J: You are talking about the harvesting season. We have already heard that the harvesting season is six months of the year. What you are talking about doing is losing out on harvesting if there is rain in and around the harvest period.

MR HOEBEN: Your Honour, it is a little further. You might have a number of rain events. The moment you have a first rain event, that is it; that is the end of the oysters. They only last five years. You harvest them between three years and five years. After five years there is no use taking them out of the ocean. So what your Honour is postulating is the moment you have rain or any other potential - - -

GAUDRON J: What is a fresh?

MR HOEBEN: A fresh is rain. What happens is it rains, it washes over the land, brings down whatever is sitting on the surface of the land, so you get - we have all seen it - the brown water in any kind of estuary and you have to wait till that clears and then you carry out your salinity tests, you carry out your meat - and that had worked without a problem for - in this lake there had never been this kind of viral problem. In fact, there is no real evidence of any problem at all.

So the point we make is why was this rain event in November any different from any number of rain events which had occurred before? Why would the growers, on this occasion, or let us assume on an earlier occasion, why would they have acted any differently? There was no trigger, with respect, your Honours.

GAUDRON J: All that you are saying, really, Mr Hoeben, is that the risk did not materialise on other occasions and because the risk did not materialised, you assumed it had gone away.

MR HOEBEN: No, your Honour. It was an ever present risk but of a very, very low order and that is where you come to the breach test. Looking at the Shirt test, the magnitude, the likelihood of its occurrence, all of those matters which are set out in Mr Walker's references and our own, and really, your Honours, there was just no reason at this stage to do anything. Now there has been an outbreak, it is a whole different ball game, but until then it simply remained a possibility. I think, as one of the witnesses said, a real possibility but no greater than a possibility.

GLEESON CJ: What was the finding that gave rise to the conclusion of negligence on the part of your client?

MR HOEBEN: It was this, your Honour - we have set it out in the - in book 19, your Honour, it is dealt with. In fact, this whole issue with the growers is of relatively short compass. Your Honours, it starts at page 4598.

CALLINAN J: Paragraph 349, is it?

MR HOEBEN: Yes. What his Honour does is to review the various submissions and, as your Honour says, he deals with the conclusions and, in fact, his Honour appreciated, with respect, the very matters which I am putting to your Honours, that there was no test available, no safe time, and that is why he expressed the duty - more happily, perhaps, he should have talked in terms of breach - as involving a requirement of the Barclay companies to do their own, as it were, ad hoc sanitary survey, because he appreciated there was really nothing else they could do via testing or delay. But the specific findings, your Honours, were at paragraph 351:

The existence of a duty of care is conceded -

and we did. We said it was a duty to act reasonably to produce a safe oyster:

the only issues relate to breach of duty and damage -

These were the specific findings, that at all times Mr Barclay was aware of the:

potential sources of a viral pollution in the lake -

that is, there were septic tanks, there were stormwater drains and if they were not properly looked after, yes, they may, but not necessarily would or did - - -

CALLINAN J: Did not Mr Barclay know that there had been an increasing problem of which Professor Brown had warned in August 1994?

MR HOEBEN: With respect, your Honour, the Brown Report has been misquoted. What Professor Brown says is that Wallis Lake is very good by comparison with other locations in so far as sewage input is concerned, but he warned that with increasing urbanisation the problem would become worse in the future unless certain steps were taken, which he spelled out, and this was a report paid for by government for government of which Mr Barclay and the other growers had a copy.

CALLINAN J: The Council had ceased testing in 1993, is that right?

MR HOEBEN: They had, and the growers had then picked up the flesh testing. It is a distinction without a difference. The growers had a point of view that because the oysters absorbed, every hour, 20 litres of water, it was more useful to test an oyster because it had access to more water than just to take the water from various pockets. But, as I say, it is a distinction without a difference. They picked up the flesh testing after the Council stopped doing water testing.

GLEESON CJ: Is the finding of negligence in the first sentence of paragraph 354?

MR HOEBEN: Yes, and - - -

GLEESON CJ: Well now, I want to understand that finding. Is it a finding of absence of warning?

MR HOEBEN: Well, in a sense it has to be, but the absence of warning which everyone agreed is the same as not selling an oyster. If you sold an oyster with a warning - and Justice Lindgren agreed and Justice Kiefel said it makes the selling of the oyster nugatory - to say, "Here is the oyster, but beware it might have hepatitis A in it", it is a limited market.

HAYNE J: It is not prominent on your point of sale advertising.

MR HOEBEN: Next case, your Honour. It is those words, with respect, your Honour, known to be subject to possible undetectable viral contamination. It applies to every oyster ever sold.

GLEESON CJ: Was there evidence as to whether Mr Barclay ate oysters?

MR HOEBEN: I am sorry, your Honour?

GLEESON CJ: It does not matter. The negligence, as found, consisted in selling oysters without telling people that it is impossible to detect whether or not they are contaminated.

MR HOEBEN: Yes.

GAUDRON J: Nobody suggested you should have professional oyster tasters.

MR HOEBEN: The defence team in this case, your Honour, certainly gave it their best efforts.

GLEESON CJ: Does this apply to all oysters anywhere?

MR HOEBEN: Yes. I am glad somebody reminded me. Including America. The great NSSP example in America, which was put up to us as the example, their most recent outbreak was only a couple of years ago. It was the people actually harvesting the oysters, who were not bothering to go to land. They were doing their business from the boats. That led to quite a significant viral outbreak. Where you have people and oysters, you have the risk. You can minimise the risk, but you cannot eliminate it. Of course the duty which was imposed on us with effect involved elimination.

McHUGH J: I appreciate the criticism that you make of the first sentence on paragraph 354, but I wonder whether or not that really is the basis of his Honour's finding against you. Does it not really appear from 352 that it was your failure to take any steps to get a sanitary survey done.

MR HOEBEN: With respect, your Honour, that is really where we move on in due course to our appeal against the Council. You have growers as a la that extract from Mr Grohmann's report which I read out - you have growers focusing on growing who are doing what they can to grow a safe oyster and carry out their tests. Now, what is imposed here is to say, with respect, something which is almost impossible of achievement. You have a group of oyster growers, without any powers at all, without any right of entry who are going to, as I read it, wander about the countryside in a somewhat officious fashion and if they see something report it. They do that anyway. If they see a pollution source they report it to the council, but when does that stop, your Honours? When should it have started? What would it have achieved had they been able to do that?

McHUGH J: Where do these submissions stop? If you are right and Mr Walker is right and Mr Nicholas is already off the hook, these plaintiffs have no cause of action.

MR HOEBEN: With respect, your Honour, we would say they do and they have against the Council. When we come to sanitary surveys - it is unfortunate name - one of the other experts called it a "pollution audit" because with respect, your Honours, the only group in this of the three targets if you like that had actual knowledge, we will submit in due course, or we would submit, was the Council, and they had considerable knowledge.

GUMMOW J: What happened to the claim against you under the Trade Practices Act?

MR HOEBEN: We lost.

GUMMOW J: That is how this entire case got into the Federal Court, I assume.

MR HOEBEN: Yes.

GUMMOW J: Have you an appeal against that?

MR HOEBEN: No we have not, your Honour. We have an interest in this matter because if we succeed in this appeal, that is the appeal against the finding of negligence, we also have a cross-claim which is in the wings - it has not been decided - against the Council not only for our losses under the Trade Practices Act but also for our loss of profits in being closed down for a year, and what that involved. So we have standing to bring this. We have a real interest. We lost the Trade Practices Act, and we have not appealed against that. That is set in concrete.

GUMMOW J: What was the Trade Practices ground?

MR HOEBEN: I am sorry, your Honour?

GUMMOW J: What was the Trade Practices provision you contravened?

MR HOEBEN: Section 74B I think and one other - sorry, it is just so long since I looked at that aspect: 74B and D. We were successful in making out a 74AK defence, but modern science had not provided a sufficient test to - and that saved us from some of the others, but no B and D were effective.

HAYNE J: The premise for this limb of your argument is, is it not, that oysters are an inherently risky food source when consumed raw.

MR HOEBEN: Yes.

McHUGH J: Obvious risk.

MR HOEBEN: I tried that, your Honour, it did not work, from the Trade Practices Act.

HAYNE J: And you say that because what, you can do nothing to minimise the risk, you are absolved from warning?

MR HOEBEN: Not at all, your Honour. You can do a lot to minimise the risk. You can do the testing and all the steps which we took.

HAYNE J: But you cannot eliminate, on your case, viral contamination.

MR HOEBEN: On the findings, you cannot guarantee a viral free oyster. No matter what you do. You can do the sanitary survey, you can do all of those things, and you still cannot guarantee a virus free oyster. You can reduce the risk, that is all.

HAYNE J: Maybe you have to give warnings. Just because you smoke cigarettes does not mean you will inevitably going to get cancer, but they have to put a warning on.

MR HOEBEN: Your Honour, this really then comes to the factual issue, if you like, on the breach. It is those matters I set out on the amended page I handed to your Honours. The references there indicate, and we say there was no evidence to the contrary, that the Barclay interests, and Mr Barclay himself, had no actual knowledge that the sewerage infrastructure was broken down and that there were, in fact, sewerage installations overflowing. It was put to him on a number of occasions, "You must have known that." He said, "Look, if I had known that I would have done a lot more testing." He said, "I regard the Council as looking after their aspect and we would look after our aspect", and that was his answer. He did not know. He had accompanied Mr Brooker, a Council officer, for the four years of the water testing, in fact, he had provided the boat, and Mr Brooker had always told him the water quality is good. In fact, that was not the case but that is what he was told and he was never cross-examined to the effect that that was not true.

As far as the Barclay companies knew there was no knowledge of actual pollution, of actual viral pollution. What they did know was the risk, they had knowledge of the risk but not knowledge of actual human pollution taking place. Somebody else had that but not the Barclay company.

GAUDRON J: They had some knowledge of pollution, that is to say, they would have seen the murky water after rain. That is called pollution, is it not?

MR HOEBEN: It is, your Honour, but it is different to human faecal pollution.

GAUDRON J: And they would know that there were septic units in the area?

MR HOEBEN: Yes.

GAUDRON J: I would have thought anyone who had ever lived in the country knew what that meant and I take it Wallis Lake is in the country.

MR HOEBEN: It is, your Honour, and there are a lot of septic units but the situation was, your Honour, that a lot of the pollution - to use the generic term - came from cattle and it came from birds and it does not contain viruses. Viruses only come from human beings and so the crucial issue is - - -

GAUDRON J: I do not think that is right.

MR HOEBEN: I am sorry, this virus, I am sorry, this particular virus comes from human beings. Anyway, this particular virus only comes from human beings.

GAUDRON J: You can get some from bats as I understand it, some from horses, some from monkeys.

MR HOEBEN: We will probably find a bat colony up there as well, your Honour, but we have not yet. Your Honour, the crucial issue is we had no actual knowledge of actual pollution, human pollution, I am sorry. We certainly had knowledge of a risk but a bare possibility which had never eventuated.

GLEESON CJ: What were the findings in the Full Court of the Federal Court about negligence? If you can state, in a summary form, what was the negligent act or omission?

MR HOEBEN: Certainly. I have set those out, your Honour, in the paragraph of the submission which I read out to you. They abandoned the "wandering around the countryside" approach of the trial judge and as best I can define the breach it was a duty not to expose consumers to the risk of a virus. We did. Therefore, we were found liable. We say that is a wrong articulation of the duty.

CALLINAN J: Page 4661, paragraphs 607 and 608, I think, is it not, Justice Kiefel?

MR HOEBEN: Yes.

CALLINAN J: Page , and I think Justice Lee did not say anything different, did he?

MR HOEBEN: He adopted, basically, what she said, yes, at paragraph 608 and I have tried to summarise that in the submission. It is the second limb, your Honour. She expresses the first test a little earlier, your Honour, at paragraph 606 on page 4660.

CALLINAN J: Justice Lindgren's dissenting view is at, I think, page 4850, paragraph 503, is that right?

MR HOEBEN: Indeed, and your Honours we would certainly adopt the entire approach of Justice Lindgren. We say he got the question of duty correct and he also followed the analysis, a la Shirt v Wyong Shire Council, as to the magnitude of risk, likelihood of occurrence, cost, and reasonableness of response. We are talking here a very draconian response, "That is it, stop harvesting." It has even been suggested, "Do not harvest at all in New South Wales." These are very draconian responses when you have not had an incident like this before and you are talking about knowledge of a risk, but a bare risk. We would say that that situation may different now but certainly at the time the requirements of Shirt v Wyong Shire Council were not made out.

That portion at page 4661 of Justice Kiefel's judgment, paragraph 608 is the portion that deals with tests and a sufficient time. There are no tests. There is no sufficient time.

GLEESON CJ: Sufficient period from when? Do you see line 24?

MR HOEBEN: Yes, your Honour.

GLEESON CJ:

should not have supplied oysters for sale until a sufficient period -

from when?

MR HOEBEN: She took it from the rainfall, your Honour, on 23 November 1996.

GLEESON CJ: So her finding of negligence was based, not on what your client did or failed to do up until the rains came, it was based on your client's response to the rainfall.

MR HOEBEN: Indeed. We say, with respect to her, she misunderstood the evidence on that issue because she misunderstood the fact there were no tests that would do that job.

GAUDRON J: But you keep saying that, but you tell me that you had ex post facto tests. You did flesh tests. Now, I mean, I do not know how the case was presented, but let us assume that there are flesh tests, and you may get false negatives. You do not get false positives, do you?

MR HOEBEN: You can.

GAUDRON J: You can get false positives as well?

MR HOEBEN: Yes, and they are experimental.

GAUDRON J: Then, presumably, somebody could say, who applied some sort of mathematical analysis to it, "You should not sell until you have tested for X number of days, which allows X minus Y for days when all the tests are negative."

MR HOEBEN: Your Honour, what happens when you do PCR testing is you destroy the subject, so the oyster is destroyed. You have to do that as part of the test.

GAUDRON J: Yes.

MR HOEBEN: You can have a batch - all this is in Mr Grohmann's statement and in his evidence - of 50,000 oysters of which one has a virus in it.

GAUDRON J: So you then test for another, let us say, five days before selling, let us say.

MR HOEBEN: But, your Honour, all the tests will show you, if you test 500 oysters, will be that those 500 oysters you tested may not have had a virus - may not.

GAUDRON J: Yes, but it is not beyond the wit of those who are trained in mathematics to be able to devise a formula which will tell you that after so many tests which are negative the probabilities of there being positive things are slight, remote.

MR HOEBEN: Your Honour, all this was put to Dr Grohmann and he said there as so many imponderables - - -

GAUDRON J: That is right, but if you are putting it to him on the basis of eliminating all risk, that is one thing. If you are talking about a risk that is other than slight or remote, it is a different question.

MR HOEBEN: Your Honour, he said he could not even do a model that would be of any use.

McHUGH J: Could he not say that you can take a representative sample and if you found nothing in it, then you could have a 90 or 95 percent confidence level that the remainder of the population is not infected?

MR HOEBEN: Your Honour, that is exactly what he said you could not do. He was cross-examined at great length on this. He has his statement. You just cannot do that. He said after this outbreak oyster growers came to him and said, "Look, can you carry out PCR tests for us to see if there are viruses around?" He said, "I refused because it is useless. It would achieve nothing and I refuse to do it."

GAUDRON J: I think you needed to consult a mathematician.

GLEESON CJ: Do oysters that are contaminated with this virus taste bad?

MR HOEBEN: No. No, the oyster is perfectly healthy. You have no way of indicating that it is a - - -

CALLINAN J: It is not too healthy.

MR HOEBEN: It is healthy. The ultimate recipient - no, your Honour, there is no taste.

McHUGH J: Did Dr Grohmann explain why? I mean, manufacturers all over the world use statistical tests of that sort and take a representative sample and they say, "Well, we have got a 90, 95 percent confidence finding that there is no problem with the remainder of the batch."

MR HOEBEN: He did, your Honour. I am very conscious of the time. He gave a very comprehensive statement and he was vigorously cross-examined by my learned friend, Mr Beach, on this issue, and it is all there. I mean, I can take your Honours to it but, quite frankly, it would take, with respect, too much time. But there were specific findings by the trial judge on this issue that it just was not an appropriate test, that there were no tests. Yes, that was one of the matters taken up on appeal by way of cross-appeal from the plaintiffs' point of view and - - -

GAUDRON J: Well, if there were no tests, all that means is, you probably had to suspend sale altogether.

MR HOEBEN: That is the only alternative. With respect, we would say, whereas that may be something which is viable now, knowing what we do, at that time, we would say, it did not satisfy the Shirt v Wyong Shire Council test, because it was at most a bare possibility.

GAUDRON J: You keep saying, "it was a bare possibility". It was a known risk. You have admitted that. You said it was a real risk; you do not say it was remote or fanciful.

MR HOEBEN: There was some evidence, quite a lot of evidence, that it was remote and unlikely to occur, and I have referred you to Mr Walker's paragraphs 44 to 47 of his submissions, which make it very clear how remote it was and unlikely to occur. But it was a real risk. There is no question about that, and I do not back off from that.

GLEESON CJ: But that was exactly the basis of Justice Kiefel's and Justice Lee's finding against you on page 4661, paragraph 608. The finding of negligence was: your supplying oysters before a sufficient time had elapsed, "by which the risk of contamination could be regarded as acceptable".

MR HOEBEN: But, your Honour, that is assuming we knew there were viruses in the area, that we knew there was human faecal pollution - - -

GAUDRON J: No. All you had to know was the real possibility of those things.

MR HOEBEN: That was the situation for the last 50 years, that there have been people with oysters - - -

GAUDRON J: So you have been lucky for 50 years is one way of looking at it.

MR HOEBEN: With respect, there has to be a trigger, your Honour, to why now, or then - November 1996 - do you simply stop the oyster industry in Wallis Lake? You have had a rainfall, nothing else - - -

GLEESON CJ: I am sorry, I may have misunderstood the facts, but I had the impression, from this finding on page 4661, that there was a period of cessation of harvesting and so on.

MR HOEBEN: Yes, there was, your Honour. It was three days.

GLEESON CJ: All right. Well, the finding was that it was not long enough.

MR HOEBEN: But, your Honour, there was no time long enough. That is one of the things the experts say. There is no time. If they could say: "Look, every time there is a fresh, if you do not harvest for three weeks, chances are, you will not get a virus in the oysters", then we may have some hope. But the point is, most of the time, there are not viruses around. It is a rare occurrence, but if you unlucky enough to have one, three weeks is not going to get rid of it and, in this case, they were still around in March 1997.

CALLINAN J: Was there any evidence as to the amount of rain which would be significant and would warrant suspension?

MR HOEBEN: Even this is difficult. In this particular case, they had had a drought, so even though they had had three days of rain, the heaviest of which was two inches, to use the old terminology - - -

McHUGH J: 66 millimetres.

MR HOEBEN: Yes. I will say, two and a bit inches. It may not have run off as heavily as on other years, and, in fact, the year that the evidence was being given by one of the growers, Mr Ellery, they had had a lot of rain. He said that, "Because we have had so much rain, even a small amount of rain causes a fresh, and we have to stop harvesting, because the ground was saturated."

CALLINAN J: Mr Barclay said that it would have been wrong to harvest on 23 November - - -

MR HOEBEN: Indeed.

CALLINAN J: - - - but he was harvesting on the 26th, was he not?

MR HOEBEN: What he did, your Honour, is: he harvested, apparently, on the 23rd, up till about 9 o'clock, and when they could see the water - sometimes, the currents - apparently, the currents take some - - -

CALLINAN J: He got 92 bags or something, and then - - -

MR HOEBEN: Got them out, and then that was it. They then did salinity tests on the 26th; they then did flesh tests on the 26th. They came up zero E. coli, correct salinity. They started harvesting again on the 27th. Yes, and there was an express finding by the trial judge that the harvesting on the 23rd, or the later harvesting, had nothing to do with Mr Ryan's problem. Given that any oysters harvested are moved within three to four days, you can see why. There was just no causal relationship between that particular incident of harvesting and the ultimate consumption by Mr Ryan.

GLEESON CJ: When did Mr Ryan consume his - - -

MR HOEBEN: They were purchased on 21 December and, I think, on the 31st.

McHUGH J: No, 25th. Christmas Day, he - - -

MR HOEBEN: He consumed, but they were purchased. And that is the crucial date, your Honours - when they were purchased. So they were probably harvested any time around about the 17th.

McHUGH J: There were two purchases, were there not? One by his father and one by his uncle - - -

MR HOEBEN: Yes, one by his brother.

McHUGH J: Or brother.

CALLINAN J: They were good oyster eaters, the family. They purchased, I think, 16 dozen, did they not?

MR HOEBEN: We were going to make sure they were not going to miss one. Anyway, I will not be facetious. Your Honours, that is the issue there. There are some specific findings, Justice Gaudron, by Justice Wilcox, in volume 19 at paragraph 40 of his judgment, on PCR testing and its problems. But he deals with it elsewhere, and I would certainly recommend looking at Mr Grohmann's evidence, both the statement in volume 7 and the evidence which is at the end of volume 4.

GLEESON CJ: It is pretty obvious, from the way Justice Kiefel expresses her conclusion, that you can really only understand it in the light of what she found about the State.

MR HOEBEN: Yes, indeed, and even her review of the facts, your Honour - as I say, I do not want to take too much time up with this, but her initial review of the facts at paragraph 583 on page 4652 where she says:

Wallis Lake had been known to be subject to contamination from human faecal material for some time.

That question of "known", known to whom? It certainly was not known, except in a very general sense, to the growers but it was known, we would say, to other folk such as the Council.

GLEESON CJ: We can wait and see whether Mr Tobin wants to rely upon the breach of the duty to warn. They could have been sold at a cut price.

MR HOEBEN: Yes, your Honour.

GLEESON CJ: Thank you, Mr Hoeben. Yes, Mr Tobin.

MR HOEBEN: Your Honour, I also have the Council.

GLEESON CJ: Right.

MR HOEBEN: That then brings us to page 8 of the submission. We really start the argument at page 9. We have expressed the duty of the Council to exercise the statutory powers vested in it so as to minimise the risk of harm to such consumers. We have taken that directly from the finding by the trial judge, Justice Wilcox. There probably is another way we could express the duty, and that is in terms of the way in which the duty was expressed in Brodie's Case in paragraph [150] of that decision. There is an expression of the duty of care and you can without too much massaging express the duty to similar effect to this in terms of how it was done in that case.

Your Honours, the first thing that needs to be understood in relation to the case against the Council is the legislation. That is annexed to the submission. I do not know whether your Honours have had a chance to look at it and how much time your Honours wish me to spend on it. It is attached to the submission. It is not a great deal of legislation. Section 7 of the Local Government Act - and that is the prime piece of legislation - gives the purposes of the Act, one of which is responsibility for the environment and things of that kind. Section 124 of the Local Government Act - this is all at page 15 of the submission - is set out in a rather unusual way. It is in these terms:

A council may order a person to do or to refrain from doing a thing specified in Column 1 of the following Table if the circumstances specified opposite it in Column 2 of the Table exist and the person comes within the description opposite it in Column 3 of the Table.

You then have a three-column situation.

There is a heading, your Honours, "ORDERS REQUIRING OR PROHIBITING THE DOING OF THINGS TO OR ON PREMISES", and we would say that if you talk about demolishing septic tanks and things of that kind, that probably items 1 and 3 would be relevant there. They have a very broad definition of "building". Still under that heading, item 5 starts with this preamble:

To take such action as is necessary to bring into compliance with relevant standards or requirements set or made by or under this Act . . .

(h) a water meter, water supply or sewerage system on premises

They have power to intervene there and the circumstances are set out in columns 2 and 3. Then at item 11:

To do or to refrain from doing such things as are specified in the order to prevent environmental damage, to repair environmental damage or to prevent further environmental damage -

would pick up pollution events. Also item 12:

To do such things as are necessary to control the flow of surface water across land

Then the next heading is "ORDERS REQUIRING THAT PREMISES BE USED OR NOT USED IN SPECIFIED WAYS". Item 15:

Not to conduct, or to cease conducting, an activity on premises (whether or not the activity is approved under this Act)

CALLINAN J: It would be clear enough that any Council would have very, very extensive powers in respect of sewerage. I have no doubt that there are provisions for that. Could you tell me this, please: in what respect was it held at first instance that the Council was negligent and what was it that the Council could and should have done that would have been effective to have prevented what occurred?

MR HOEBEN: It was held, your Honour, that the Council should have participated in or conducted its own sanitary survey or, as I prefer to call it, a pollution audit - - -

CALLINAN J: Yes, there was a recommendation by a Council officer that there should be a review, that there is a widespread problem, there should be a review and consideration should be given to ways and means of preventing the occurrence of sewage seepage or septic seepage. I understand that, but the same responsible officer said that there may be financial constraints upon the Council being able to do all of that and to implement any review. What was it that the Council could and should have done that would have prevented the illness or the occurrence of the infection?

MR HOEBEN: What it should have done is what it did, and that is the best indication - - -

CALLINAN J: What was it found that it should have done?

MR HOEBEN: What it should have done, your Honour, is to be pro-active in pursuing points of pollution around the foreshore, that is, I think they - within a kilometre of the foreshore - - -

CALLINAN J: Was there any evidence? Were there thousands of these or hundreds of them?

MR HOEBEN: Yes, there was evidence and there were not thousands. There was a total of 4,000 septic systems in the entire area, but when they actually had to carry out, as a matter of urgency, a sanitary survey, if you want to call it that, or a pollution audit, in fact, they knew exactly where to go and where to go quickly. They went to the places near the edge, or close to the water, they used a limit of a kilometre, and it is all set out in the judgment at first instance.

McHUGH J: They took samples every few weeks at 10 locations on the lakes, did they not, and at five stormwater outlets.

MR HOEBEN: But, your Honour, after the outbreak, for five days, 14 people went around - it only took five days - and they identified something like 300-odd breaches and places where this - that there were sewage problems and they were all given notices. It was dramatic in what was discovered in such a short exercise.

GLEESON CJ: Was there evidence as to whether people still swim in the Wallis Lake?

MR HOEBEN: Yes, and in fact, one of the points that Mr Grohmann makes is that it is not just oysters, you can get this virus by swallowing the water but, of course, the problem is it is much more concentrated in an oyster.

McHUGH J: But the Council stopped the testing that was doing.

MR HOEBEN: It did.

McHUGH J: There was a recommendation, was there not, from Brooker, that they should extend it. Far from extending it, they actually stopped it.

MR HOEBEN: Indeed. There was a case sought to be made against the Council, which was rejected by the trial judge, to test and warn, and the basis of rejection was, "Well, what sort of warning could you give?", and this picks up my earlier argument, everyone knew that after heavy rain, yes, you would get certain pollution events occurring with run-off from land.

McHUGH J: Mr Brooker noted in one of his reports - - -

MR HOEBEN: Yes, and we do not back away from what he said. He was saying, "The only way we are going to effectively identify the points of pollution is to go out and look for them and the best way of doing that is to test the water". So you have your stormwater outlets, you do your testing there; if you are getting E. colis and you know human effluence is getting in there, so you then know to check up that stormwater to try and find what they call "grey water", that kind of stuff.

CALLINAN J: The recommendation was that they not respond to complaints because that would be discriminatory.

MR HOEBEN: Yes, that was much later down the track. That was in May of 96, some eight months or so before the actual outbreak occurred.

CALLINAN J: It would be discriminatory because there were a lot of others that were not the subject of complaint but which were just as bad.

MR HOEBEN: Yes, that was not the high point, I think was Mr Brooker's evidence and he was certainly disbelieved on that by the trial judge. But, your Honours, I will not then trouble you with the legislation any further other than to say, as we say in the submissions, there was ample power to enter upon premises to correct malfunctioning sewage installations and to either close them down or give people notices to fix them. In fact, after the event, not only, as I say, did this emergency sanitary survey take place and, in a sense, your Honours, when people ask, "Well, what could we have done?", well, the best indication is what they did do, and it appears to have worked because the number of malfunctioning sewage systems which were identified was extraordinary given the relatively short period of time and the modest resources involved, 14 people.

His Honour, at first instance, works out how many person days that involved and the rough cost, and things of that kind, and it was well within the financial capabilities of the Council. The Council said it was not uncommon for them if they needed money to ask the State government for it and they frequently got these grants. But I am jumping considerably ahead, your Honours. Our argument is basically set out in the submission. What I propose to do is to simply amplify that, where appropriate, to try to deal with, if you like, or to pick up, in part - I do not want to buy into a fight that is not my own - but the debate which took place in relation to the State.

I am not suggesting anything I say applies to the State, that is an entirely different consideration. But we are now dealing with a different local authority, we are dealing with a Council. This Court has now considered, recently, three cases which impact directly - or more, but certainly, recently, three cases which directly impact on the obligations of Councils, Pyrenees, Crimmins and Brodie. So, if we follow the analogy approach we certainly have, if you like, a blueprint of duties. It is a question of whether this legislation goes far enough and whether the particular circumstances go far enough to establish the duty.

What we would like to stress, your Honours, is this. In relation to this Council - and we deal with it in paragraph 18 of our submission - unlike the other players - to pick up what Justice McHugh was saying, that the way we are going everyone is passing the buck and there is no guilty party and the plaintiff is going to lose - unlike the other players, this Council knew and had considerable knowledge about a deteriorating situation of gradually breaking down sewerage infrastructure, that the complaints were coming in which were not being responded to, that - I will not go into detail, it is all fairly ghastly, but it is set out in the findings of fact of the trial judge, but the village of Nabiac there were 300 septic systems in that. Many of them were malfunctioning and the Council noted that in its State of the Environment Report in May 1996. The school septic system was described in rather ghastly terms about it popping up every time there was rain. So there was a whole host of - - -

McHUGH J: They had a letter from the headmaster, did they not, from - - -

MR HOEBEN: They did, and from residents of Nabiac. One fellow was fobbed off apparently by being told, "If you keep on complaining, everyone will be told their rates are going up because of you." There was all that kind of evidence. Specifically, your Honours, if I could refer you to the passages - these are all in the trial judge - a Mr Powell, who was the senior sewage officer, his Honour deals with Mr Powell's knowledge and recommendations at appeal book 19, 4530. There was a Mr Tuxworth, who was another building person who made fairly far-reaching recommendations at appeal book 19, 4557 and 8. There are other references I think from Mr Brooker at 19, 4555 and 4556.

So all of those references, and the ones we have set out in paragraph 18, make it clear that this particular Council had actual knowledge, not just of pollution, but of human pollution and of a sanitary system which was breaking down, and they formed the view - they had a lot of committees who were collecting data, but when it came to going into the field and actually doing something, they did nothing. In one of the earlier exchanges they even reached a stage, extraordinary as it may seem, in May 1996 of not responding to complaints about sewerage systems because to do so would be discriminatory. The implication being there were so many rotten sewerage systems out there, "Why respond to some when there are others not being dealt with? So we won't do anything." With respect, your Honours, an extraordinary situation.

GLEESON CJ: What exactly was the finding of negligence against the Council?

MR HOEBEN: The finding was, your Honour, that they did not exercise their powers to go out and identify sources of pollution and remedy them. So it is twofold: identify and remedy. That was in the context, your Honour, of a sanitary survey or, if you want to call it another thing, a pollution audit, to get around and find the points of pollution around this particular littoral around the lake.

Your Honours, the point we want to make, and why I have stressed this question of knowledge, is that in looking at the recent cases on these issues, one of the matters which the court appears to have regarded as of considerable importance is actual knowledge as distinct from constructive knowledge. Here we have, with respect, the clearest indication of actual knowledge. I am mindful, your Honour the Chief Justice, of what you said in Perre v Apand about there can be degrees of foreseeability which can impact on the question of duty.

GAUDRON J: But you are asserting a duty here to the consumers of oysters. Now, there might well be a different case about a duty to inform the oyster growers of what they knew. One can understand a fairly close sort of relationship with the oyster growers - - -

MR HOEBEN: Indeed.

GAUDRON J: - - - that might give rise to a duty of that kind. You have to go further. You are talking about a duty to the oyster consumers who may have been anywhere along the east coast of Australia. It may have been - - -

MR HOEBEN: Your Honour, we accept that. They did not even have to physically be there.

GAUDRON J: No.

MR HOEBEN: They could have bought them from De Costi Brothers at the fishmarkets and - - -

GAUDRON J: Or they may even have bought them overseas.

MR HOEBEN: I accept that, your Honour. What we say in answer to that is we are dealing with personal injury - - -

GAUDRON J: And they may not even have been the buyers. They may have gone - - -

MR HOEBEN: It is a consumer. The highest we can put it is a consumer of Wallis Lake oysters - - -

GAUDRON J: It could have been anywhere.

MR HOEBEN: What we say in answer to that, your Honour - and that was put against this proposition by the majority in the Full Court - what we say is we are not dealing with an indeterminate liability here because of, firstly, the personal injury aspect - - -

GAUDRON J: No, it does not matter whether you are dealing with an indeterminate liability.

MR HOEBEN: I am sorry, your Honour.

GAUDRON J: That is not really the question at this stage, is it? The question is one of relationship, if you like, to bring about the duty of care.

MR HOEBEN: I see, your Honour, I was taking it on the - - -

GAUDRON J: Certainly, one can see a much closer relationship with the growers and one may find that the duty with respect to the growers is one that was really easily discharged, whereas the duty you assert for the customers is a much heavier duty than you might assert than with respect to the growers.

MR HOEBEN: I understand what your Honour is saying and the reason I raise the indeterminate liability was because that is the way it was expressed by the majority in the Full Court. They were talking in terms of you owed an obligation to the whole world, in a sense, if they might consume a Wallis Lake oyster. The answer to that is this, your Honour: we are dealing with a personal injury situation so it is a class of persons who are capable of being identified and that, we say, is a crucial test. It has certainly been articulated by members of this Court because - - -

GAUDRON J: Except it is being identified post - - -

MR HOEBEN: Yes, ex post facto, but what I am saying, your Honour, is you can then identify the class that you are dealing with. In relation to the duty, it then becomes a question of how, and I appreciate it is very much, in a sense, a policy decision - - -

GAUDRON J: Yes, because the duty you have to assert once you go to assert a duty to the consumers is a duty to fix.

MR HOEBEN: Yes, well, to diminish.

GAUDRON J: Which may involve all sorts of considerations and may not have been capable - one does not know, there are not findings - may not have been capable of being carried out within time constraints that arose.

MR HOEBEN: Just to pick one matter up. We do not put the obligation to fix because one of the problems here is you cannot fix it because of the very nature of the problem, the viral contamination. You cannot prevent it happening but you can diminish it, you can substantially reduce it and that is really what we are - - -

GAUDRON J: All right, so your duty is to identify sources - - -

MR HOEBEN: And to fix those that you identify so as to diminish the pollution - - -

GAUDRON J: Fix the identified sources.

MR HOEBEN: - - - of the lake.

GAUDRON J: It is a big duty.

MR HOEBEN: Your Honours, as I say, if we could perhaps start with the first principles and just see how far it goes out. There would be no difficulty, with respect, if somebody was swimming in the lake and they developed this. We would say that they are, at least, physically within the environs of the - - -

GAUDRON J: Yes, but even then one might not think that the duty was any greater, assuming knowledge.

MR HOEBEN: Yes, indeed.

GAUDRON J: One might not think that the duty was any greater than to put up a sign as one frequently sees, for example, in Centennial Park, "This lake is polluted with what have you, keep your dogs and humans away".

MR HOEBEN: Sorry, I am just thinking of the effect on the Wallis Lake tourist industry.

GAUDRON J: Yes, well there may be big duty but one may understand a duty to warn.

MR HOEBEN: Quite.

GAUDRON J: You go much further and you go - a duty to people who may never of even been physically present in the city or municipality.

MR HOEBEN: Indeed. Your Honour, what we say is that we really are dealing in the modern age now where, in fact, breaches of that kind can have repercussions physically, as you have indicated, a considerable distance away. We would say, as a matter of principle, putting together the various indicia to establish the duty, that is, capacity to do something, forseebility and special features, and there are a number of them - - -

GAUDRON J: Beyond knowledge?

MR HOEBEN: Certainly, your Honour, beyond knowledge and we will come to them in due course but - - -

GLEESON CJ: In due course, how long do you expect to require?

MR HOEBEN: Your Honour, a lot of what I say, no doubt, will be said by Mr Tobin. We both have a similar interest. I was only going to raise a couple - I thought I was on safe ground with "knowledge" but obviously I have to deal with this particular issue. Your Honour, I would probably be another 10 or 15 minutes I would think.

GLEESON CJ: Yes, thank you.

MR HOEBEN: What we would say, your Honour, is that keeping in mind that approach and the fact that we are dealing with personal injury here, it is not unreasonable to include in those people that are envisaged by a council, somebody who may consume the produce of the particular lake even though that person may not be physically there. If the particular class of consumer can be without undue difficulty identified - and in this case it can be because there is class actions and they have been identified - that ought not of itself stand in the way of a duty being found. It is a difficulty, but it ought not be a show-stopper in so far as that is concerned, I appreciate the difficulty, your Honour.

The real test, we say, in these situations where you would exclude a duty is when you simply cannot identify the particular person to who the duty is owed. In a sense, Brodie grappled with this because in one sense you had a particular user of a particular road over a particular bridge but in the general discussion of the duty it was road users per se. Now, I appreciate it would be road users using roads within the boundaries of the Council but it was still a very broad and indeterminate class. In a sense, though, it was no less broad than the particular class we are talking about here, that is the consumers of oysters, and, in particular, those who developed ill effects that could be readily identified.

Your Honours, in dealing with the duty I did indicate that I proposed to rearticulate it in terms of Brodie and, given the time, perhaps if I could do that. What we say about this is this is a much stronger case than Brodie's Case because we do not have the problem here that they had in Brodie's Case and Ghantous of a whole series of decided cases which had looked at the particular local government provisions. We have relatively little law, if any, on these particular provisions. At paragraph [150], your Honours, the content as set out in Brodie was this:

The duty which arises under the common law of Australia may now be considered. Authorities having statutory powers of the nature of those conferred by the LG Act upon the present respondents to design or construct roads -

We do not have that here but what we do have is to:

carry out works or repairs upon them -

in this case it is to carry out works or repairs upon sewerage installations -

are obliged to take reasonable care that their exercise of or failure to exercise those powers does not create a foreseeable risk of harm to a class of persons (road users) - - -

in this case we would say consumers of produce from the lake or consumers of oysters, if you wanted to put a more narrow interpretation -

which includes the plaintiff.

GAUDRON J: But what really does the Council have to do with the oyster farms apart from having powers to make people improve their septic systems or all go - - -

MR HOEBEN: They are the ones with the power, your Honour.

GAUDRON J: They may have power but when you are talking about a council who is designing and constructing roads, carrying out works on the roads or repairs upon them, you are talking about a body that really is in a position of total control over the road. Now, the Council was never in a position of total control over the oysters.

MR HOEBEN: With respect, this was the point Justice Kiefel made and we would say, with respect, it is an incorrect point. What she said is because these statutory provisions are not aimed at the oysters but are aimed at public health generally, therefore they are not appropriate to establishing a duty of care owed by the Council to oyster consumers. What we say to that is we say firstly, that is a far too narrow interpretation of the provisions. They are dealing with public health, and even using public health is a misnomer because we are talking about members of the public. We are talking about individuals, so public health is really those individuals out there who may or may not be affected by the actions of the Council.

The other interesting thing about these statutory provisions, your Honours, is this. Unlike the provisions in Brodie, these are provisions which actually require work to be done or actions on the part of third parties. They are powers which require the people who own and operate the septic systems who are given the certificates or the notices or are told to pull them down or fix them up, they are the third parties; they are required to do something for the benefit of public health. One assumes that there are individual members of the public who are otherwise likely to be affected by their actions.

GAUDRON J: But do you say they have a duty of care to the consumers of oysters?

MR HOEBEN: We say the Council in that circumstance does because, if they do not do their job of identifying and fixing these point sources - and they may not be able to identify every one and fix every one but, if you have 60 and they get 50, that is not a bad start and we would say that is sufficient, on our diminish argument, because of its very nature, given the nature of viruses and given the nature that there will be some secret polluters, you will not get everyone but it is no answer, with respect, we would say, to throw your hands up and say, "Because we can't get 100 per cent we won't try".

We say, your Honour, because there is a specific public health purpose to this legislation, it ought not be restricted, if you like, to swimmers, to people who actually use the lake, but should go further to people who use the produce of the lake, in this case, oysters.

HAYNE J: Thus, is the contention anything more than that there is a combination of power to act and foresight of harm and those two matters, of themselves, lead to imposition of a duty?

MR HOEBEN: No, your Honour, we would not put that proposition because we say that certainly does not go far enough. We say what you have to inject into that is knowledge and knowledge of a serious problem, a public health problem, which was not only serious but getting worse. That comes from the references which have been set out. But I appreciate the distinction, your Honour, between actually controlling. They did not own the sewerage system except for those systems which they owned - - -

GAUDRON J: Not just that they did not own the sewerage system. They did not own the oysters and they did not own the lake. They were not in any position to demand action of the oyster growers. They were a side player, in essence.

MR HOEBEN: Well, with respect, your Honour, what would they ask the oyster growers to do?

GAUDRON J: Exactly, you see, exactly.

MR HOEBEN: But what they did do, your Honour, they controlled the coast, if you like, the littoral around the lake, which was essentially - - -

GAUDRON J: Well, again, that may not be a strictly accurate way of saying it. It may not be a complete analogy with what is said in Brodie. They may have had the means to control it, over time. That is not to say that they controlled it in the way that you can control a road.

MR HOEBEN: But, your Honour, there were reports from Mr Brooker, who was a senior health official with the Council, from as early as 1991, to which Justice McHugh referred, saying, "This has to be done. We have to identify these point sources." So we are not talking about a particular failure, even in 1996. We are talking about a long term failure. That is what his Honour found, certainly a failure extending over a number of years. Your Honour, could I just deal with two matters and then perhaps I will let Mr Tobin take the baton?

There were two issues raised, and they are still raised by the Council in their response, and that is that because no specific site for the contamination of the lake could be identified, therefore, that impacted on the existence of a duty. We would say, with respect, that involves a false logic. What the experts were united on was that there were multiple points of pollution. It did not come from one person. It came from multiple points. They worked that out - the evidence is all there - because of the spread within the lake. So what we were looking at was not just a single source, or even one or two, but multiple land-based sources of human faecal pollution.

Just because you cannot identify a specific site, such as in Brodie's Case, the bridge, we would say does not negate a duty, particularly if you know the fundamental cause. The fundamental cause here was a breakdown of the sewerage system, not only the individual septic tanks, but the sewerage system dealing with the caravan parks, and there are a number of other examples. There was a particular village, Cooloongolook, which had this massive - one of the readings outside that in late 1995 was "massively polluted", I think was the way it was described - those kinds of situations.

You know what is happening. You know what the cause is. There are multiple causes. The fact that you cannot put your finger on a particular cause such as something wrong with a bridge, we say, ought not negate the existence of a duty if the other problems can be overcome. So we say that is a false proposition. I think I have already made the other point, but another matter which the Council relies very heavily upon is the proposition that minimisation, if you cannot eliminate it entirely, you can only, at best, minimise it; that is too vague and they ought not be required to do that.

Followed through to its logical conclusion, unless you can eliminate a problem 100 per cent, if you can only achieve 80 or 90 per cent, then you do not even try. With respect, we say that just cannot be right. There are a number of statements in this Court not only in Brodie but also in Crimmins and other cases where the actual duty is talked of in terms of diminishing the risk rather than eliminating it because, of its very nature, some risks, particularly this one, cannot be eliminated. At most they can be diminished and made less likely. Your Honours, they are our submissions.

GLEESON CJ: Thank you, Mr Hoeben. Yes, Mr Tobin.

MR TOBIN: Your Honours, in presenting the case for Mr Ryan, I would propose to deal briefly with two evidentiary matters which are a context for the duty of care case that we contend for against the State. I will embark upon a reply to Mr Walker's submissions during the balance of the time this afternoon and tomorrow deal with the substantial appeal against the Council. Mr Beach will address your Honours in reply to Mr Hoeben's submissions on the Barclay appeal.

Your Honours, the two evidentiary matters which I wish to put before the Court and which are a context in which the duty of care issue would be determined as against the State and as against the Council are these. The first is something that has been addressed but not in detail about the operation of oysters and the particular danger represented by oysters in the presence of the HAV virus. The second deals with that which the State embarked upon to deal with pollution in oyster-growing waters, and what it did not embark upon.

The first issue, your Honours, can be called the problem of virulence in oyster-growing areas, and the problem is this: if it is assumed that HAV, Hepatitis A virus, enters the waterways solely - and this is the scientific evidence - through human faecal contamination, certain consequences flow where the intermediary is an oyster. Your Honours have raised a question, for example, of swimmers in the Wallis Lake estuary. The scientific evidence is that it would be very rare indeed for a swimmer to swallow sufficient water to ingest a sufficient viral load to become infected with Hepatitis A.

GLEESON CJ: That is just as well, bearing in mind the Sydney sewage goes east.

MR TOBIN: Yes, your Honour. The effect of the oyster, however, is remarkable, because it will increase 50-fold, through its process of filtration of the water, the amount of viral load from the surrounding water into the oyster's flesh. The relevance of this we will develop perhaps tomorrow, but it does seem to us an important factor that, on Crown land or public waters, the oyster industry operates by the feeding of the oysters in the waters, subject to an aquaculture lease, which permits the use of particular parts of the estuary waters, and subject to an aquaculture permit, which sets out conditions for the growing of oysters.

However, from the point of view of the existence of a duty of care, it may be of some significance that the process of growing oysters - and we have referred to it in our submissions using the term "manufacture", which comes from the Trade Practices Act - that the growing or manufacture of oysters will necessarily involve, in the presence of viral contamination, an exponential increase in the risk. The risk, in other words, is not the risk that attends the surrounding waters and the swimmer or the paddler in those waters. The risk is potentiated by reason of the fact that the oyster processes - this is from his Honour Mr Justice Wilcox's judgment at paragraph 20 - I will just give your Honours the outline. They process 10 to 20 litres of water per hour, filtering through the gills of the oyster, and they extract from it particles of matter to feed the oyster and, as well, accumulating viruses or other unsavoury particles on the way through.

Now, the relevance of this is against the case that both the State and my learned friend, Mr Hoeben, made concerning, as it were, the past record in the Wallis Lake, that there had not been an outbreak of HAV in the previous decades that was recorded; and secondly, the depuration process that was established, roughly, in 1981 by the State government as an answer to the 1970 St George's River outbreak in New South Wales. The context, then, is this, your Honours, that from 1981, there was in place in the State of New South Wales for oyster growers, compulsory depuration as an attempt to purify the oysters prior to sale. There is one qualification to that, namely, that the Department settled upon a 36-hour depuration process, which was, on some of the scientific evidence, thought to be too short - 48 being preferred - but, for commercial reasons, they adopted 36 hours.

However, your Honours, the nub of the issue - and it was a matter raised by Justice Hayne - is this. It is where you choose to grow the oysters that will answer the question whether depuration is effective or not. It is where you choose to grow the oysters. This seems to us to be the heart of the case that the State avoids and, perhaps naturally, Mr Hoeben does not really answer. These findings are set out in Mr Justice Wilcox's judgment. If I could take your Honours briefly to them because they are an important context to what we want to say about ultimately the question of duty. At 4486 of volume 19, paragraph 45, the evidence of the virologist, Mr Murphy, is set out. At the bottom of that page:

Mr Murphy said that the effectiveness of depuration as a mechanism for eliminating HAV from oysters depends on the oyster excreting all particles of virus while in the depuration tank and the viruses then being destroyed by ultra-violet light.

So the depuration system included tanks where the oysters are held, and clear pipes which are radiated by ultra-violet light which operate to destroy the viruses that come into direct contact. Then Mr Murphy said this:

"If the surrounding water is heavily contaminated and an oyster takes up a large number of HAV particles, it is unlikely to excrete all these particles during a 36 hour of depuration. In my opinion, 36 hours is an inadequate period of time for depuration. The longer an oyster is depurated for the more likely it is that it will excrete more particles. It therefore follows that the longer the period of depuration, the more HAV is likely to be excreted. However depuration has been shown to be not entirely effective in ensuring the safety of shellfish.

This is, your Honours, where the second element in the program that this State has embarked upon since the 1980s enters the picture. Mr Murphy said:

While oysters depurated in tanks functioning properly will most likely reduce their viral and bacterial load, they will not necessarily excrete all viruses from their system. In 1981 a study was published by the Institute -

that was Dr Murphy's institute -

Health Commission of New South Wales and the New South Wales State Fisheries which found that oysters still contained Norwalk virus even after seven days of depuration.

Then, your Honours, at the bottom of that page, paragraph 31 is, we would say, a crucial finding of his Honour:

The truth of these statements is effectively conceded in a 60 page booklet . . . Purification Technology . . . written by Philip D Bird, technical Adviser to the Department's Oyster Program. In the second edition of the booklet, published in 1991 . . . "all micro-organisms are not removed including those organisms which invade the oyster tissue e.g. some types of viruses and vibrio bacteria-

He goes on to say two paragraphs or three paragraphs in:

Purification has been used overseas since the 1920's and extensive research has been conducted throughout the world including New South Wales to determine the optimum system . . . Purification is the only current viable alternative today in New South Wales for the economic production of raw oyster which affords the least risk to public health. It is not a perfect system and will not guarantee the absolute public health safety of raw oysters, however, on a cost-risk basis sit is the only alternative.

It must be supported by regular testing of oyster harvest areas to monitor large and extended periods of sewage pollution which are likely to pollute oysters to a degree which makes them incapable of effective purification."

It is the last sentence that we emphasise, your Honours -

The limitations -

his Honour then said -

of 36 hour depuration were graphically demonstrated in the summer of 1989/90 when some 1,200 people suffered gastro-enteritis -

from -

New South Wales oysters, and again in the Tweed River viral outbreak of . . . 1996.

Now, the effect of what his Honour says there -and this is a finding which is not challenged -is not that depuration is not an effective system for purifying oysters. What the expert, Mr Bird, at the Health Department, said was that:

It must be supported by regular testing of oyster harvest areas -

that is what we have called a sanitary survey -

to monitor large and extended periods of sewage pollution which are likely to pollute oysters to a degree which makes them incapable of effective purification.

GLEESON CJ: Who would have carried out the sanitary surveys here?

MR TOBIN: As his Honour at first instance found, the two entities with the power and the entities which carried it out, in effect, after the outbreak were the EPA of New South Wales and the Council. This procedure was managed by the Department of Health.

GLEESON CJ: Now, there was no finding of negligence against the EPA?

MR TOBIN: There is a finding against the State, which I will explain to your Honours perhaps first thing tomorrow, is in terms of our pleading -your Honours have heard the pleading discussed - that the EPA was negligent with regard to the monitoring of the waters, a failure to monitor the waters, which is the failure that is expressed in that last sentence I have read from Mr Bird from the Department of Health. So the case that we made below against the State was a case which, clearly enough, changed as the evidence developed, but we maintained a case that it was essential, in the terms of Mr Bird's report, to carry out a sanitary survey if you were going to harvest oysters in areas subject to heavy or increasing urbanisation.

HAYNE J: Is it consistent with the last paragraph of the passage quoted from Mr Bird's statement to effect that monitoring by the individual grower monitoring the state of the water in the individual lease area?

MR TOBIN: Your Honour, on the evidence it would appear that that would not be a sufficient form of monitoring of water quality for this reason: the effluent in the case in issue, the HAV virus, is carried down the river and into the estuary where the oyster leases are maintained and it may come from some many kilometres away, maybe five or ten or more kilometres. So the problem of simply water testing, your Honour, is that although that may monitor large and extended periods of sewage pollution, it is not a sufficient answer because the historical tension that really undercuts the case put on behalf of the State is this, that for 20 or 30 years in this State people have been enduring, the State has been enduring, periodic outbreaks of serious viral or bacterial infection of the oyster leases. That has been an ongoing problem. In some jurisdictions, such as Tasmania, the solution has been to grow the oysters in pristine waters so that there is not the danger of contaminants from human activity entering into the waterway and putting the oysters at risk or putting public health at risk. That is not an option that has been chosen in this State. In this State - - -

KIRBY J: I am sorry to interrupt you, but three times you refer to "this State".

MR TOBIN: New South Wales, that State across the river.

KIRBY J: That is it, yes.

MR TOBIN: Your Honours, importantly in our case is the fact that the State knew and had instituted a system to help protect public health in circumstances where the preconditions of it could not be met. That is to say, a depuration regime was established in circumstances where the waters in which the oysters were being grown were becoming more and more polluted, as a natural consequence of urban development in the coastal fringe and the very attractive tourist estuaries such as Wallis Lake.

GUMMOW J: Now, apart from the Tasmanian option, looking at paragraph 31, the penultimate paragraph that is emphasised by his Honour, what was the other cost risk basis alternative, that might not have been so attractive, cost risk-wise, but might have been more effective. Is there evidence about that?

MR TOBIN: There would be a system, your Honour, of what was called "relaying" which means to take the oysters out of the beds in the event of a fresh, not to sell them at around that time and to put them in pristine waters somewhere else along the coast and let the natural processes of the oyster feeding clean out the potential viruses. The real essence of the problem seems to us to be this, your Honours, that the State embarked upon and was active in the management of an oyster industry, not simply by reference to the statute but in very practical terms in both the depuration area and the advice being given to growers.

The State of New South Wales operated in an environment where on the one hand it recognised that there were two complementary preconditions for the safe sale of oysters. One of them was depuration. The other was the monitoring of large and extended periods of sewage pollution because at a point that level of sewage pollution rendered nugatory all the efforts of purification from the depuration system.

Your Honours, it is an argument that we would want to put, and it goes to the existence of the duty of care, that what the State did is embark upon one limb of what was necessarily a two-limb approach to ensure oyster safety. The one limb that had been embarked was upon was the depuration system. It stated and knew that the precondition for that to be effective as a safety measure was sanitary surveying of pollution in the oyster-growing areas.

It did the one by imposing a statutory set of requirements, including oyster purification plant licences, upon the oyster growers. When it came to the area what it had a field of activity control, the EPA's powers under the Clean Waters Act for example, it did nothing. It does seem to us, your Honours, that when one looks at whether there is a duty of care by the State there is a number of elements involved. One of course is, we would submit, is that there was a grave risk of serious injury in the language of Pyrenees - - -

GAUDRON J: Yes, but you have just used the word, "control", when I am sure you meant, "power". In no relevant sense does the State control who goes to the toilet, when or where, and whether they go in a septic tank or not.

MR TOBIN: No, of course - - -

GAUDRON J: It may have power to control some aspects of that process, but you said, "control". It seems to me, one of the problems in this case is that everywhere people are slipping from power to the assertion of control.

MR TOBIN: Yes. Your Honour, we would want to put the case - and perhaps I can do that tomorrow - - -

GLEESON CJ: Well, you also, in your submission, treated legislation requiring depuration as an exercise of State power. That also seems to involve the concept of the State in a different capacity - - -

MR TOBIN: Well, the Department of Health - - -

GLEESON CJ: - - - as though, by the enactment by Parliament of legislation, a State is taking steps in fulfilment of a duty of care.

MR TOBIN: We would not put it that way, your Honour. The legislation that set up a purification regime was an aspect of the State's - we say - control, or management, of the oyster industry - - -

GLEESON CJ: So could an act of negligence on the part of the State consist in the inadequacy of its legislation?

MR TOBIN: No, that is not the case we want to make. We want to make a different case, which is that having embarked upon the management of the oyster industry in the way that it did, and having imposed an element - the depuration process - to assure public health, and in the knowledge that it required the other element, sanitary surveys, to ensure that the depuration process was not made ineffective because of pollution, that, in that context, and with other factors, the duty of care can be discerned.

GLEESON CJ: All right. Now, you are going to be followed by Mr Nicholas, then Mr Hoeben, then Mr Beach, then Mr Walker, is that right?

MR TOBIN: Mr Beach will be after me, your Honour, dealing with Mr Hoeben's address this afternoon.

GLEESON CJ: Then are we going to hear you again after Mr Hoeben?

MR TOBIN: I would propose to ask my learned junior to address the Court in answer to Mr Hoeben's submissions.

GLEESON CJ: So we are going to hear you, then Mr Beach, then Mr Nicholas, then Mr Hoeben, then you again?

MR TOBIN: That is so, your Honour. Then Mr Walker.

GLEESON CJ: Well, now, how are we progressing in terms of time?

MR TOBIN: I think all right, your Honour. As long as Mr Nicholas does not get a run on.

GLEESON CJ: I just wanted to ensure that we will not need to be sitting longer than usual hours tomorrow.

MR TOBIN: I do not think so, your Honour.

GLEESON CJ: Very well, then we will adjourn until 10.15 tomorrow morning.

AT 4.18 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 13 MARCH 2002