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High Court of Australia Transcripts |
2002] HCATrans 111 
(13 March 2002)
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 WEDNESDAY, 13 MARCH 2002, AT 10.16 AM
(Continued from 12/3/02)
Copyright in the High Court of Australia
GLEESON CJ: Yes, Mr Tobin.
MR TOBIN: As your Honours please. May I deal briefly with the pleading issue that is raised against us by the State.
KIRBY J: Was it raised in the Full Court or not?
MR TOBIN: It was raised in the Full Court but not, as it were, successfully. I think I can explain to your Honours what lies behind that. At page 111 of the first appeal book - and your Honours have been taken to this - in paragraph 49 Mr Ryan's case was to plead that the EPA owed duties of care to him and the represented persons:
(a) to take steps to ensure that the -
Council -
did not pollute the Wallis Lakes region by its sewerage treatment and depot facilities;
(b) to take steps to ensure that private land owners or users of the waters of the Wallis Lakes region did not pollute the Wallis Lakes region;
(c) to monitor in conjunction with the First Respondent -
the Council -
the quality of the water and the environment in the Wallis Lakes region.
The "Particulars" in (a), (b) and (c) relate to general and not to specific instances of pollution in the Wallis Lake area. On page 113, your Honours, the pleading of breach in paragraph 50 mirrors the allegation I have just read, that is, that "the EPA neglected and refused" to take those steps, and section 52 pleads that:
But for the acts of negligence pleaded in paragraph 50 hereof the EPA would have exercised its statutory powers under the said Acts -
that is the Clean Waters Act 1895 -
to ensure that such contamination ceased.
KIRBY J: But all of this is against the EPA and Justice Wilcox held that the applicant fails against the EPA.
MR TOBIN: Well, your Honour, that is not strictly accurate for this reason. If your Honour goes to the judgment of his Honour below, your Honours will see that at 4593 of Mr Justice Wilcox's judgment in volume 19, paragraph 330 - - -
KIRBY J: I was looking at 4589, paragraph 317. This is where - I am sorry, that is the applicants' submissions.
CALLINAN J: I think page 4595, paragraph 334, seems to be the nub of his Honour's finding, that and the next paragraph. But it certainly looks to me, Mr Tobin, like a somewhat different case from that which was pleaded, but you were going to explain to us why it is not.
MR TOBIN: The holding by his Honour, we submit, is within our pleading. In paragraph 330 his Honour said, at 4593:
I do not find it necessary to decide whether EPA was negligent in relation to the caravan parks.
So, that is two of the specified sources of pollution that his Honour did not find for us.
CALLINAN J: I am looking at the last sentence in paragraph 334, page 4595. In sum total, through various agencies, the government exercised substantial managerial control. Now, it says:
Through various agencies . . . It exercised that control by day-to-day operational decisions.
Then his Honour talks about committees and a program and then in the next paragraph:
It seems to me that the State's involvement in the management of the Wallis Lake oyster fishery was so extensive -
That is the finding of the duty of care.
MR TOBIN: Yes.
CALLINAN J: Where do I find paragraph 336 pleaded? Where is the paragraph that really pleads that?
MR TOBIN: It does not plead it in those terms, your Honour, but the origin of the duty is separate from, of course, the breach and dealing with the breach issue his Honour did not determine negligence against the EPA with regard to the two caravan parks in issue but he did find for us on a failure, as he called it, to carry out a sanitary survey, which is the monitoring of the water and the remedial action against the owners of the properties that is pleaded in the paragraphs, including 51, on breach that I have taken the Court to.
CALLINAN J: The specific finding seems to be at 340, page 4597:
Long before November 1996, the stage had been reached by which the State, as the ultimate manager of the fishery, should either have ensured the making of a comprehensive sanitary survey or closed the fishery.
That seems to be the finding.
MR TOBIN: Yes, and I would adopt what your Honour puts because importantly that finding is in the alternative. In other words, we can make the case, as I would perceive the pleadings, by establishing either the negligence of failing to have carried out a competent sanitary survey or close the fishery. Rather like, your Honours, a situation you either render safe the unsafe machinery or you do not use it.
CALLINAN J: The survey would not have done that. There would have been action which would have had to have been taken at expense and in the assessment of priorities following upon the making of a survey.
MR TOBIN: Your Honour, the point implicit in his Honour's judgment at first instance is that if you carry out a sanitary survey, you are identifying points of pollution for the purpose of remediating them. I draw attention, with respect, your Honours, to the notice of contention that we have filed and it leads on to the holdings in the Full Court of the Federal Court, 4906 and 4907 of the last volume of the appeal books. This is a notice of contention in the case relating to the State. Relevantly paragraph 2 says:
The Court below ought to have held that the State of New South Wales breached its duty of care to the first respondents by neither:
i) taking steps to have sanitary surveys of oyster-growing waters undertaken and sources of pollution or potential pollution identified and rectified - - -
HAYNE J: That notice of contention highlights the obscurity of the pleading. The obscurity of the pleading which is, if I may so with respect to the drafter of it, exceedingly clever, because the pleading is in terms always of a duty of care to do something and it is there the elision of two very separate ideas. The notion that someone had a duty of care to determine a program, et cetera.
MR TOBIN: Or to monitor the water.
HAYNE J: Where do I find that? Where do I find that in the pleading? Not at all. I find a duty of care to determine a program, to determine something else, to supervise administration, the duty of care to do things. It is not a duty of care.
MR TOBIN: Well, your Honour, with deep respect, paragraph 49, which I read to your Honours, page 111, postulates a duty of care, among others, to take steps to ensure private landowners did not pollute the lake and to monitor in conjunction with the Council the quality of the water and the environment. With respect, your Honour, the argument has gone off on a wrong footing on a pleading point. His Honour below was entitled to hold, as he did, that the duty of care involved the need to exercise powers to ensure that the environment of the lake in which the oysters were grown was not polluted with viruses inimical to human health. His Honour's finding is in the alternative that they should have conducted a sanitary survey. His Honour makes it clear that the concept of a sanitary survey includes remediation, that is why we have put it in the notice of contention, failing which the lake should have been closed, that is, render the machinery safe or do not use it.
Now the important point that your Honours would not have perceived from the State's case against us is that when it came to close the fishery in 1997, that was done under the auspices of an officer of the Department of Fisheries, Dr Jackson, but voluntarily. It was not an invocation of the ministerial powers under the statute, Fisheries Management Act, that my learned friend took the Court to.
Our case has avoided - and your Honour Justice Hayne referred to "cleverness". It was not a desire for cleverness. We avoided a case based upon a claim of negligence against the Minister for failing to exercise statutory powers in circumstances where it involved the Minister's satisfaction about certain matters. We avoided that case but we do not avoid the case that is short of the exercise of ministerial powers. The State had available to it an armoury which it used, indeed, in February, March 1997 to both carry out a sanitary survey to identify the points of pollution, to remediate them and on the way through to close the fishery and - - -
GAUDRON J: You said "voluntarily". I do not understand that.
MR TOBIN: Voluntarily? Could I take your Honours to the appeal book, volume 14 your Honours. It is only a short reference. Page 3478.
KIRBY J: What is the point you are trying to get out of the "voluntary" character?
MR TOBIN: We do not bring an action - - -
KIRBY J: You say what they subsequently secured voluntarily they ought earlier to have secured out of the considerable armoury of powers which they had.
MR TOBIN: But they did not need, as the events show, to exercise ministerial closure. If I could explain to your Honours by reference to volume 14: 3478 is Dr Jackson's letter of 14 February 1997. She was the State co-ordinator of the New South Wales Shellfish Quality Assurance Program and she was an official at the Department of Fisheries working as the co-ordinator of this program. She says:
Due to recent events in the Wallis Lake area the Wallis Lake Quality Assurance Program in consultation with the New South Wales Shellfish Quality Assurance Program (NSW SQAP) has undertaken that all growers will immediately cease the harvest of any shellfish from leases located within the confines of Wallis Lake.
GUMMOW J: What does that mean? What does it mean to say, "has undertaken that"?
MR TOBIN: It was a voluntary closure of the fishery.
GAUDRON J: The permit holders agreed to it.
MR TOBIN: Yes, on the initiative of the State. Now, your Honours, if you would go to 3355, to evidence, again, of Dr Jackson's activities, but of direct operation and managerial involvement in the supervision of the industry at the lake; 3355 is a diary note by Dr Jackson of 18 December 1996. I will not read it all, but it begins with a note that at 11 am, she had received a call, an anonymous call from a grower at Wallis Lake reporting three growers who were said not to be purifying their product. The president, Mr Moran, confirmed that more bags of oysters were going out than could go through the purification plant in the designated time.
Then she discusses her involvement in the dot points. She has discussed it with a Mr Warner, who has admitted harvesting during a fresh and shipping off the product to Melbourne and Gosford. She says, at the end of the first dot point:
I contacted the processors on 2 December 1996 and verified that the product had been recalled.
Then the second dot point involves a second grower - the third line down. He said, it was going out: "not for human consumption" but for what I would understand to be relaying - taking them from one oyster lease and sending to another area where the conditions were safer:
I contacted the south coast grower (Brian Coxon) to confirm this and was told that the product was indeed purchased for human consumption and that he regularly bought in oysters from other estuaries and purified it himself, to make sure it was purified correctly. I informed Mr Coxon that the oysters had been harvested during a fresh and that they were not to be purified but be returned to the water. Mr Coxon was in full agreement with this action.
So the State direct co-ordinator effects an agreement by the purchaser not to sell the oysters. Then, at the bottom of the page, she said:
I called NSW Fisheries Tuncurry and asked if a staff member would perhaps make an appearance at the sheds. I fully understood that NSW Fisheries had no authority over purification -
that is a Department of Health function -
but felt that an appearance from an official may have made the growers think twice about flouting purification requirements. I spoke to Jason at the Tuncurry office -
that is the Health Department -
and was told he would have to get in contact with his supervisor.
Then a Mr Angle phoned back and said that he did not think there would be much point in that. So she then says at 2.30, she contacted Mr Bell, the Health Inspector at the Tamworth Public Health Unit:
informed him of the problem, and named the transport companies that were freighting the product to Sydney and Queensland. Mr Bell was concerned but would be unable to visit Wallis Lake until Monday 23 December 1996 -
which was roughly a week away - five days away.
At this time the NSW QAP had exhausted all options in regard to purification compliance and left the matter with NSW Health.
Your Honours, that is a glimpse of the evidence before his Honour at first instance which led to the conclusion that your Honour Justice Callinan put to me about the idea and extent of managerial control. There is further evidence, and I do not want to - - -
HAYNE J: Before you pass from that, assuming there to be a considerable body of evidence of acts done in persuasion of growers, or even acts done pursuant to compulsory powers, does the argument for the duty now asserted at 4906, namely "a duty . . . to take reasonable care to protect them from reasonably foreseeable risks of injury", arise from the combination of, one, the existence of statutory power and, two, the fact that from time to time State officers sometimes exercised persuasion or power in relation to the industry?
MR TOBIN: Not just that, of course, your Honour. With regard to the second point, we submit that the evidence and the finding of his Honour Justice Wilcox as to substantial managerial control as a finding of- - -
HAYNE J: You see, that is an expression that masks much more than it reveals. Substantial managerial control is, at best, opaque.
MR TOBIN: Your Honours, I will take the Court shortly to a Canadian decision of the Federal Court of Appeal in Canada to do with an air safety case. It was Justice Linden at that stage on an appeal bench. The court there dealt with this sort of question along the old operational policy distinction line and held that there was a duty of care in that the activities of the inspectors who were charged with supervising the permit for the operation of an airline, their activities founded a duty of care in the Crown - the Canadian Government - with regard to the way in which they performed those duties. There was an air crash and fatalities resulted.
We would draw the parallel here, your Honours, we have a situation where the concept of managerial control used by the learned trial judge reflects not just, as it were, the granting of permits but it reflects the actual supervision, more or less, and on a regular basis of the conduct of these oyster fisheries by officers of the State. The further evidence - and I will take your Honours briefly to it - is illuminating with respect, for example, to Mr Bird's conduct, Mr Bird being the Department of Health official in charge of the oyster program.
I will give your Honours the references. Volume 7 at 1555 is the statement of Mr Brooker, and if I could read three paragraphs from it about the testing program that was conducted by the Council from 1989 to 1993. Paragraph 39 of Mr Brooker's statement said:
Establishing the testing program had been suggested by Mr Bird. I recall that at one point he said to me words to the following effect:
"I am investigating whether we can use salinity as a measure of whether it is safe to harvest oysters. If you test for salinity and send us the results we can use them to establish whether there is a link between salinity and faecal coliforms in the Lake."
40. Mr Bird brought me some computer software in which to enter the results of the tests. I would do so and send him a disk containing the results . . .
41. Some time later (probably about 1992) Mr Bird visited me at the Council Chambers and said to me . . .
"The testing that you have been doing does indicate that there is a link between salinity and the level of faecal coliforms. I have discussed this with the growers and they will be incorporating this in their monitoring for the future. So far as we are concerned, we don't need you to keep doing the testing, although you might want to do so for general environmental purposes".
And they did for a while. Now, from the growers point of view, both Mr Barclay and Mr Ellery, who were in charge, in effect, of the depuration and supervision of the plants from which the oysters were sent out at Graham Barclay companies, they give evidence in volume 4 and there are three or four references that I will give your Honours in that volume. At 897 - - -
GUMMOW J: Sorry, what page, Mr Tobin?
MR TOBIN: Page 897, your Honour, of the fourth volume, which is Mr Barclay's evidence at 10 to 15, he says - that is in the left-hand numbering:
I always believed from Philip Bird, who is an expert, that testing the meat is more positive and more condensed because an oyster drinks three gallons of water an hour and if there is going to be any E-coli anything in that water the oysters is going to be in the oyster. So he believed, he told us that testing the meat is more positive than testing the water and we've gone along with his guidelines from the very start.
I see. So, is that why you say that you have not undertaken tests yourself?---Correct.
As to the quality of the water, is that correct?---That's correct, yes.
Now, that evidence was not contested by calling Mr Bird to challenge what Mr Barclay said and yet what Mr Bird says there seems to be contrary to what I said in opening yesterday, your Honours, that an essential pre-condition for successful depuration was the testing of the water and ensuring that it was not so polluted that depuration could not work.
HAYNE J: Why is it legally significant, Mr Tobin, in assessing the existence or the content of a duty owed by the State to a consumer of oysters to know how the State has, in fact, acted vis-à-vis growers?
MR TOBIN: The first issue is that of knowledge of the State authority, or the authority, of the risk and in this case there is, on the evidence, I think, incontestable knowledge of the risk. Secondly, your Honours, it goes, in a sense, as an element of vulnerability, that is to say that if there is knowledge of a grave risk of serious injury, perhaps of any injury, but serious injury in the case of an HAV infection, what the State has done with regard to its actual activity for the control of that risk may reflect on whether or not there should be a duty of care.
HAYNE J: How? I can understand it being very relevant to questions of breach but how does it affect existence or content of duty to know, for example, whether the State has relied on persuasion, relied on power, been diligent, not been diligent?
MR TOBIN: Your Honour, what I had in mind was the decision of the Court in Burnie Port Authority, for example, which is a little bit of a tangent because it dealt with a non-delegable duty of care.
KIRBY J: You have moved away from the Canadian authority of Justice Linden.
MR TOBIN: I am sorry, your Honour, I meant to - - -
KIRBY J: You did not put that on the record and I do not know - - -
MR TOBIN: I meant to dwell on it but if I do not have time to take your Honours to it - - -
KIRBY J: Would you just put the citation on the record at some stage?
MR TOBIN: We have provided a copy and I would like to be able to take the Court to it if I have time, your Honour. Now, your Honours, in that decision at 552 - - -
GUMMOW J: We have to know the name of it.
MR TOBIN: Burnie Port Authority, sorry, your Honour, I am moving between the dominions, I am afraid. Burnie Port Authority at 552 says this in the first paragraph:
It follows that the relationship of proximity which exists in the category of case into which Rylands v Fletcher circumstances fall contains the central element of control which generates, in other categories of case, a special "personal" or "non-delegable" duty of care under the ordinary law of negligence. Reasoning by analogy suggests, but does not compel, a conclusion that that common element gives rise to such a duty of care in the first-mentioned category of case. There are considerations of fairness which support that conclusion, namely, that it is the person in control who has authorized or allowed the situation of foreseeable potential danger to be imposed on the other person by authorizing or allowing the dangerous use of the premises and who is likely to be in a position to insist upon the exercise of reasonable care. It is also supported by considerations of utility: "the practical advantage of being conveniently workable, of supplying a spur to effective care in the choice of contractors, and in pointing the victim to a defendant who is easily discoverable and probably financially responsible". The weight of authority confirms that the duty in that category of case is a non-delegable one.
Now, in answer to your Honour Justice Hayne, I concede that there is an element of identifying whether the duty which is posited is personal or non-delegable, but some of the elements in the reasoning in the Burnie Port Authority Case may be of relevance to answer your Honour's question because the touchstone of a duty of care will be the assumption of responsibility. The touchstone of it is not to be found solely in the statute. The touchstone, we would submit, is to be understood by the assumption of responsibility.
GUMMOW J: To whom? Assumption of responsibility to whom?
MR TOBIN: In this case, to the ultimate consumer because the responsibility which is being discharged is directed to the ensuring of safe oysters.
GLEESON CJ: This is like some kind of theory of intermeddling, is it? If you keep out of it, you have no duty but - - -
MR TOBIN: No, I do not put it that way, your Honour, because the State certainly did not keep out of it and - - -
HAYNE J: But the consequence is that if the State or a government authority introduces any form of inspection, any form of regulation supported by compulsion, the State then is taking a responsibility, perhaps on one view the prime responsibility, for ensuring safety of product. That is a large step to take, but it seems one inevitably that your submission would require.
KIRBY J: I did not take you to be saying that. I took you to be saying it all depends on the circumstances. You have to look at the extent of the risk. You have to look at the armoury of the powers. You have to look at what they could have done and what they did in fact do, what they did formally and what they did informally. If you put all those together, you can build a case of a duty of care and a breach.
MR TOBIN: Yes.
HAYNE J: Why should assiduous performance by the State put it in a worse position than complete neglect of the area?
MR TOBIN: With regard to the first question, your Honour, in this case there was no assiduous performance of the duty.
HAYNE J: I understand that. That is breach territory. But we are in duty territory. Why does the State owe a duty to the consumer? I would understand if they take on responsibility that they might owe some obligation to the grower, but why to the consumer?
MR TOBIN: Well, your Honour, if an obligation is owed to the grower with respect to the safe growing of oysters, such a duty has no content if it does not entitle the grower, as it were, to have the benefit of it. I mean the safe oysters are not eaten by Mr Barclay on his wharf. They are sold on his wharf and consumed by people who purchase them. So the notion, your Honour, of a duty of care to the grower, we would submit, is too narrow.
That was a basis upon which Justice Kiefel found against us in the Council case as to the extent of the duty but if your Honour would go, for example, to the Fisheries Management Act, there are two sections of that Act that I should refer to. Section 156(1), your Honours - Mr Walker I think referred the Court to it - says:
A permit holder must, if the regulations so require, pay to the Minister an annual contribution towards any of the following costs:
and (b) is:
the cost of monitoring the quality of the environment in which aquaculture is undertaken and of testing the quality of the fish or marine vegetation cultivated;
Sub-section (3):
The payment required by this section is taken to be a condition of every aquaculture permit.
That would suggest on our case, your Honours, that it was in the contemplation of the legislature that as part of the State's activity would be the monitoring of the quality of the environment of aquaculture and that that cost of monitoring would be borne under the permit system by the growers themselves. We would submit that because of the public health aspects in the legislation, and they appear clearly in the Clean Waters Act to prevent pollution of the waters and they appear in parts of the Fisheries Management Act, although not expressly in the objects of it, implicit in these two pieces of legislation is the safety of consumers of oysters. In the Fisheries Management Act and with regard to the Clean Waters Act it is not simply the cleanliness of the water as an aesthetic proposition, it is clearly enough the sanitary and hygienic ramifications of polluted water.
Your Honour Justice Hayne has put to me why the duty would be owed to the consumer and it is for those reasons, that is, those parts of the legislation which have in contemplation the health of the public, either expressly or impliedly. If I could put the inevitable object of legislation to regulate the oyster industry among other objects, including commercial viability of the fisheries, will be the safety of the product consumed by the public otherwise the fisheries will go out of business and in a sense this case and any before it or after it may well decide the issue as to whether you can conduct safe oyster fisheries in waters prone to pollution in which the State officials and the local councils do not exercise their powers to exercise those waters.
Your Honours, I will read out the references if I may to the evidence relating to Mr Bird and the State's involvement. They are at volume 4, pages 897, 902, 913, 921 and 985, and Mr Ellery's evidence is at pages 970 and 976.
KIRBY J: I do not just have it clear in my mind - you tried to build your case against the States by reference to the activities or lack of activities by the EPA.
MR TOBIN: Yes.
KIRBY J: You pleaded your case against the EPA in certain respects and it appears that in some respects his Honour has rejected that case but he does not deal with some other aspects, so is it your contention that they remained alive and informed his Honour's decision on the existence of the duty and the breach of the duty, or not? It is not entirely clear.
MR TOBIN: We do, your Honour because ultimately, as his Honour found at first instance, it was the failure to conduct a sanitary survey, and it is clear from his Honour's judgment that he contemplated the remedial action that would follow from it. It is that failure which is one of the alternatives in the finding of negligence against the State, at 340 of the judgment.
KIRBY J: That is a failure by its agent.
MR TOBIN: Yes.
KIRBY J: Or with power, the EPA.
MR TOBIN: Yes. As pleaded the EPA, but of course, your Honour, as the case developed and the sanitary survey was conducted, it was actually managed by the Department of Fisheries as it happened, but that may just be a form of - within the bureaucratic patch, who was responsible for supervising the sanitary survey in February 1997, but the EPA and the Council conducted the sanitary survey. There is some short reference to it in his Honour's judgment.
In the judgment itself - I will give your Honour the paragraph numbers; they have been referred to before: 332(e) where his Honour sets out some of the factual bases that result in his findings. He said:
(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);
and at 334, in a passage that Justice Callinan referred me to, about halfway down, it says:
The EPA was involved in inspections and directions in relation to premises in the Wallis Lake catchment area. 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. In sum total, through various agencies, the New South Wales government exercised substantial managerial control over the Wallis Lake oyster industry.
In Pyreness, as your Honours would recall, one of the significant elements in the holding of a duty of care, and the judgment of Justice Gummow, involved whether the Council in that case had embarked upon the use of its powers with respect to the risk in question. It seems to us, your Honours, that - - -
KIRBY J: That is a much different factual case because it is a small council. Indeed so small that it was soon afterwards abolished with a very small line of command and particular officers, and specific statutory powers.
MR TOBIN: Yes.
KIRBY J: Now, you are building a case which, as it were, has a hydra-headed monster, the State, which has various agencies, some of whose tentacles get lopped off by his Honour, but you say enough remains.
MR TOBIN: Your Honour, it is a simple enough process in a modern State, in a modern community, to ensure the purity of waters in which potentially dangerous shellfish are grown commercially.
KIRBY J: Yes, but it is one into which the State Parliament has intruded with a network of laws which provide a number of different agencies, powers to do things.
MR TOBIN: But, your Honour, we, in a sense, do not have to disentangle the role of the different agencies. In that passage from Dr Jackson's diary note it was very instructive that she as the co-ordinator of the State Quality Assurance Program spoke to the Department of Fisheries to do something about the purification plant and the oysters leaving it improperly purified. That was a Department of Health area, so the Fisheries people would not - - -
KIRBY J: And Mr Bird is an officer of Fisheries?
MR TOBIN: Mr Bird is Health.
KIRBY J: Health, I see.
MR TOBIN: Dr Jackson was the State co-ordinator, so she worked out of the Fisheries Department but when she asked the Fisheries officers to do something about the purification plant, they say, "Well, this is a Health Department problem" and then when she goes to the Health Department about the trucks or truck transporting oysters from Wallis Lake to Sydney and Brisbane, he cannot do anything for five days, so obviously the truck is going to be gone. So, then she says, "Well, the Quality Assurance Program has done all that it may do - all that it can do".
In such a circumstance, your Honours, we would submit that it was a correct course for his Honour to pursue to take the agencies of the State as under the State's then Crown Proceedings Act. The agencies of the State, whether the Minister or government or instrumentalities of the State, in right of the Crown, as the State of New South Wales and the State of New South Wales is sued in the name of the State of New South Wales pursuant to the then existing legislation.
So, in a sense, where his Honour had before him the conduct of various agencies of State, he has said, "I do not need to hold negligence with regard to the conduct of any of the particular agencies that you have referred to" - the EPA in point - "You would have difficulty on the Bendix principle that his Honour referred to of establishing causation." That does raise a significant question about the appropriateness of finding a duty of care and imposing it on the State and it is this: as in the Burnie Port Authority Case in which the Court recognised the difficulty that a plaintiff may have in identifying the appropriate defendant and the circumstances of fairness which the Court referred to in deciding upon the defendant as the authority rather than the contractor.
So, in these circumstances, your Honours, it would be the common fate of the plaintiff who had eaten oysters somewhere around the country to be unable to trace the grower of the oyster. There was not extensive evidence given on this point but it would be, your Honours, realistically very difficult for a plaintiff to find the right defendant who was the grower against whom the Trade Practices Act could be invoked.
GAUDRON J: Could we just stop there on the Trade Practices Act for a moment, Mr Tobin?
MR TOBIN: Yes.
GAUDRON J: I have raised this in other contexts, but why is it that in the face of the provisions of the Trade Practices Act there remains in this area any common law liability on the part of the growers? Why is it that you even get a finding of negligence against the growers once you have a finding?
MR TOBIN: Because, your Honour, the way the case came to the Federal Court - - -
GAUDRON J: I know how the case came.
MR TOBIN: It was under the Trade Practices Act with - - -
GAUDRON J: I am asking you why does not the Trade Practices Act in the case of product liability, as it were, cover the field to the exclusion of the common law of negligence?
MR TOBIN: In the reading of the Trade Practices Act and the holdings of the court as to the availability of common law causes of action in suits pursuant to the Trade Practices Act, there is nothing in the Act itself which is inconsistent with either State legislation or State common law so as to exclude it.
GAUDRON J: There is no such thing as State common law. Let us start with that. There is - - -
MR TOBIN: Well, the common law as applied by - - -
GAUDRON J: Assuming, as is the case, that you get a judgment under the Trade Practices Act, if other causes of action survive, why are they not merged in that judgment?
MR TOBIN: The Barclays companies raise the issue of negligence - - -
GAUDRON J: I know - - -
MR TOBIN: - - - because upon that determination will depend whether they bear the whole burden of the damages or not.
GAUDRON J: Well, that is not necessarily right. I should have thought it was tolerably clear that the Barclay companies could maintain third party proceedings against the Council and the State, and that their prospects of success in such actions on the basis of a duty to care to them were considerably greater than on the basis of a duty of care owed to the consumers. But what I am really asking you: why should the judgment against the Barclay companies in negligence stand?
MR TOBIN: I raised earlier, your Honour, the difficulty of identification of the grower or the distributor who might be responsible under the Trade Practices Act.
GAUDRON J: I know they - - -
MR TOBIN: And the Trade Practices Act finding - - -
GAUDRON J: But you seem not to have had any insuperable difficulty in locating the Barclay companies.
MR TOBIN: Well, in this case, that is so, but only one of them is subject to the holding under the Trade Practices Act - not Barclay Distributors, your Honour. Barclay Distributors is not the subject of the determination below, in favour of Ryan, for breach of the Trade Practices Act.
GLEESON CJ: Is there an agreement between counsel on the provision of time for today?
MR TOBIN: There is, your Honour. I am to pass on rapidly to the Council case. Could I deal with Swanson Estate v Canada (1991), 80 DLR (4th) 741 very briefly.
GUMMOW J: Has this been referred to in this Court before?
MR TOBIN: I do not know that, your Honour. We have not put it in our written submissions. Page 743, at about line c, identifies the statutory power that the - - -
KIRBY J: Justice Linden wrote the standard Canadian text on the law of torts, I think.
MR TOBIN: Yes.
KIRBY J: Or he is one of the authors.
MR TOBIN: Justice Linden, yes. I think Justice Linden may be now in the Supreme Court - no. The legislation said that:
"no air carrier shall operate a commercial air service unless he holds a valid and subsisting certificate issued to him by the Minister, certifying that the holder is adequately equipped and able to conduct a safe operation".
Between d and f, there is set out the regulatory powers. I will not dwell on those, your Honours. Page 744, f to h, refers to violations of the Air Navigation Orders by the company which lost its plane and lives were lost. The analysis is in terms of the reports that were made; a finding at the bottom of the page of:
"total disregard for regulations, rights of others and safety of passengers."
And, at the top right, 745, a, the decision: "to keep a closer watch on Wapiti and collect more evidence". The duty question is dealt with from e/f, on page 745 and, if I could go to 751 c, the holding was that:
Their task was to enforce the regulations and the ANOs as far as safety was concerned to the best of their ability with the resources at their disposal. This function was clearly operational. Hence, a civil duty of care was owed to the plaintiffs to exercise reasonable care in the circumstances.
Then over the page at 752, a and b, his Honour separates out the policy question from the operational question by saying - - -
GUMMOW J: This case was referred to by Justice Toohey in Pyrenees [1998] HCA 3; 192 CLR 330 at 360, paragraph 71, and by Justice Kirby in the same case, 480, paragraph 129.
MR TOBIN: Thank you, your Honour. Your Honours, can I summarise our answer to the State's case. There is one piece of legislation that I will preface my closing comments by reference to, section 152(e) of the Fisheries Management Act, relating to:
conditions requiring the permit holder to maintain public liability insurance and to indemnify the State and its agents in connection with the undertaking of the aquaculture;
That would suggest, 152(e), that the legislature was not closing the door on the existence of common law rights with regard to the activities of officials of the State relevant to the aquaculture permits. That, of course, does not necessarily extend to the EPA and to other authorities, however, it does indicate that, contrary to the State's argument, it can hardly be suggested that this is a closed statutory scheme which would not permit the common law to intrude, as it were.
GAUDRON J: What section, Mr Tobin, I am sorry?
MR TOBIN: That is 152(2)(e).
GAUDRON J: Thank you.
MR TOBIN: Your Honours, what we submit is that applying various elements of test that this Court has applied in the last three or four years, in regard to the State of New South Wales v Ryan, there was a foreseeable risk of physical injury. The State had power to control the risk through either direct statutory powers or, indirectly, through its supervision of permits and conditions. That the risk in question was a serious risk and a present risk. It was not a remote or unlikely risk. A purpose of the statutory power, impliedly, was to control the risk to obviate illness from consumption of oysters. The risk was known by the relevant State officials and the nature of the risk and the gravity of the risk.
GAUDRON J: All of that may or may not be correct, but there is, is there not, another question of principle which requires consideration similar to that which I raised with you before? But for many, many years, and not just under the Trade Practices Act but to the old Sale of Goods Act, there was something approaching strict liability for failure of merchantable quality of vendors, manufacturers and so forth. In that area where you have something approaching strict liability, why do you go, as a matter of general legal principle, searching for a further duty to the public or to the consumers on the part of people like the State or the Council?
MR TOBIN: Well, the short answer, your Honour, and I hope it is an informed answer, is that in circumstances where the injury is caused by a generalised risk in the environment, the carrying of hepatitis virus in the waters, and the identification of the appropriate defendant is likely in those circumstances to be difficult. The Trade Practices Act is an inadequate weapon, as it were, to protect the rights of the injured consumer, although, of course, it is - - -
GAUDRON J: But even if it may be inadequate in some respects, it is not ordinarily the case that the law goes around imposing duties of care on multiple persons when the primary responsibility is assigned by statute to someone else, for example, the old Factories, Shops and Industries Act, responsibility under the regulations on employers. No one thought that in addition there was a duty of care on the part of the government to send inspectors out at all times to check on it.
MR TOBIN: Your Honour, the distinction that we would draw is this, that this is not the type of consumer transaction where the relationship between the purchaser and the consumer is likely to be that which one finds in a shop purchase. By way of illustration, I do not know the percentages, but a large proportion of oysters consumed will be consumed in restaurants, not by direct purchase of the consumer from the purification plant, for example, at Wallis Lake. So that this is a category of case, your Honour, where once the distribution process starts to operate, the Trade Practices Act will not protect the interest of the consumer because of the impossibility of identification of the source of the statutory breach.
McHUGH J: But it has nothing to do with that problem, has it? The consumer in the restaurant has his cause of action, or her cause of action, against the restaurant proprietor. If you buy it at David Jones, you have your cause of action against David Jones under the Sale of Goods Act. It may help you, but my recollection is that Grant v Australian Knitting Mills which extended the law of negligence, Dr Grant also succeeded on a claim under the Sale of Goods Act.
MR TOBIN: Yes. But, your Honour, if one can take the parallels from the Burnie Port decision, the Trade Practices Act is unlikely to be a sufficient answer where you have the widespread dissemination of foodstuffs in circumstances where the defect in the food cannot be identified and, on one argument before the court below, would be unable to be identified, that is, it would not be capable of maintaining the oyster because you would destroy it by the process of testing whether it had a defect in it. It seems, in our submission, your Honours, that the Trade Practices Act does not operate as a sufficient remedy by - - -
GAUDRON J: No, but there is other legislation.
McHUGH J: But under the Sale of Goods Act, if they are goods bought by description - and that is what oysters are - there is an implied condition of merchantable quality. If the plaintiff in a particular case relies on the skill or judgment of the seller, there is an implied warranty that they are fit for the purpose for which they are acquired, but the old section 14 of the Sale of Goods Act with its implied condition of merchantable quality will get most consumers home. In fact, I would be surprised if there are any that would not get home. So why should you invent a new cause of action?
MR TOBIN: It may be for this reason, your Honour, that if you have a serious outbreak of HAV from the diners at a restaurant, as the Burnie Port Authority postulated, it is a relevant factor as to who is the appropriate defendant as to who may be able to bear the cost of that remedy. That is to say that 20 people suing the local oyster bar is going to send the local oyster bar out of business.
McHUGH J: No, then it is the local oyster bar's rights against its supplier. You go along the chain. I know that in California the Californian Supreme Court held in the 1940s in the Coca Cola Bottler Case that this was a reason to allow the consumer to sue the manufacturer direct. That was their equivalent of Donoghue v Stevenson. I think the name of the case is Escobedo or some name like that. Roger Traynor was the judge who wrote the leading judgment. Why should we not take a different approach and say they are rights in contract? Particularly in the case of consumers, why should we impose these duties of care, particularly having regard to the indeterminacy of negligence laws and the burden on the courts? Look at this case, volumes of materials when you have simple remedies under the Trade Practices Act and Sale of Goods Act.
MR TOBIN: Why those remedies do not seem to us to be appropriate, your Honour, is the identification of the chain. Ryan is not perhaps a good case because he bought it at the Barclay store, but the difficulty when the 400-odd sufferers from HAV were traced was to find out who was the ultimate supplier.
HAYNE J: I take it each of them knew the immediate supplier?
MR TOBIN: I do not believe - - -
HAYNE J: Each of them would have had a simple Donoghue v Stevenson or Goods Act claim against them, would they not?
MR TOBIN: That would then generate, as it were, a chain reaction of litigation and the Court would need to determine whether six negligence suits up the chain - - -
McHUGH J: No, you have six quick Sale of Goods Act up the chain, nice and simple, no problem at all. If it is of merchantable quality, end of story.
MR TOBIN: Well, your Honour, there is a problem.
GAUDRON J: And if at the end of the day there is a duty of care up the chain, it may well be a very different duty from that which you assert is owed to consumers generally. You see, at the end of the day it might well be in a case such as this that you would find a duty of care on the Council to warn the growers, a very different duty of care from what you assert, and it is a duty of care which does not really involve any consideration of the Council's resources.
MR TOBIN: I say with regard to that, your Honour - I am not going to have much time to deal with the Council - both the State legislation and the powers of the Council under the Local Government Act allowed those governments, State and local, to claw back the cost of remedial work from either the householder or the polluter, in the case of the State legislation. So the cost issue was one which his Honour was entitled to find in favour of - - -
GAUDRON J: Yes, but we are talking as a general principle. Unless there is something peculiar about this industry, one has really got to look at it in terms of the generality of cases in which there is asserted a duty of care against public bodies, public statutory bodies, who really are in a somewhat different position, vis-à-vis the consumer, than the immediate supplier or indeed the ultimate manufacturer.
MR TOBIN: Could I refer to the Council's position in that respect. One of the obvious functions of councils is to do with hygiene and sewerage, it is one of its main functions. Roads is another, of course, and drains, but sewerage is a primary function of the Council and in the case of the Wallis Lake area is was not simply that there was an industry within the Council's boundaries that carried on a profitable enterprise to the indirect benefit of the Council, not doubt, through rates, but in the position of the Wallis Lake oyster growers the Council had a rather different relationship. The Council health surveyor was the secretary of the quality assurance program for the oyster industry over a period of time and the Council had active involvement in the activities of the Wallis Lake oyster growers. So a distinction may be drawn between whether there are obligations attaching to the Council to exercise its public health powers to do with sewage in the case of the oyster industry at Wallis Lake, as against a large manufacturer in any municipality which does not have any particular relationship, other than geographic, with that site. The relationship with the Council emerges in this way, that the very thing which is likely to cause injury to consumers of the oysters was the sewage which it was charged with under the legislation to prevent entering the waters and to ensure, thereby, public health. In other words - - -
McHUGH J: It did not have a duty though, to do it, it had power to do it.
MR TOBIN: It had a power but - - -
McHUGH J: You have to argue for an affirmative duty and the common law has always set its face against affirmative duties. When the Pharisee passed by on the other side, the common law would not have held him negligent for not going to the aid of the injured man.
MR TOBIN: Things have changed.
McHUGH J: You can still walk past an injured person.
MR TOBIN: The individual can, the aviation regulator cannot, in Canada at least. Your Honours, the connection between the Council and the growers in this case, is this, that the Council is fitted with all the knowledge of the need for pristine waters to protect consumers. That is what is knows because a large oyster industry is conducted in its jurisdiction, and it has not just powers with regard to public health but on the admissions of the Council on the pleadings an acceptance of a duty of care with regard to discharge of effluent from its own properties.
McHUGH J: I know, but you have to argue in effect for a duty to the public and the risk of loss from a person who is just a member of the public is not ordinarily - and I doubt if there is any case which holds that there is a duty of care in such a situation. I mean why stop at consumers? Why is it any - - -
MR TOBIN: That is this case. One would not necessarily stop there. The issue to be posed is this. If the Council, with full knowledge of the risks involved, does not exercise its powers with regard to sanitation and even reaches the stage where it says that it will not investigate any complaints about sewage flowing out of septic tanks and the like, will not even investigate them, the question is raised as to the nature of that act by the Council. Omission or commission does not, as it were, capture it. It is an element, but it does not capture the real nature of the act. The real nature of the act is, as we would characterise it, a wilful disregard for the rights, that is - - -
McHUGH J: Maybe you should have sued for misfeasance of office, if you are going to use the term - - -
CALLINAN J: Mr Tobin, do you have to go as far as that? Could I draw your attention to what Chief Justice Gibbs said in Sutherland Shire Council 157 CLR at 445. Justice Wilson agreed with that, and I do not think it was disapproved in Pyrenees, but his Honour said, at about point 6:
Once it is accepted, as it must be, that the ordinary principles of the law of negligence apply to public authorities, it follows that they are liable for damage caused by a negligent failure to act when they are under a duty to act -
and these words -
or for a negligent failure to consider whether to exercise a power conferred on them with the intention that it should be exercised if and when the public interest requires it.
Now, is that your case?
MR TOBIN: It is.
CALLINAN J: Against both the State and the Council?
MR TOBIN: It is not misfeasance, as Justice McHugh put to me. It is a failure - - -
CALLINAN J: No, it is negligence and Justice Wilson referred to it. Now, there is a passage, as I understand it, in Justice Mason's judgment in Sutherland that was subsequently disapproved by three Justices of this Court in Pyrenees, but there does not seem to have been any disapproval or otherwise of this passage, a very far-reaching passage, but Justice Wilson agreed in it, and it would seem to me, at first sight anyway, to embrace everything that you are saying. You do not even have to go as far as you are going if that is right and it is to be understood literally.
MR TOBIN: Yes. Your Honour, could I go beyond that and say that on the case that we have made against the Council there is an element that the courts have considered in dealing with allowing a duty of care in the case of statutory entities or government entities, in particular, your Honours, there is an element of prophylaxis, if I can put it that way. In other words, the very harsh concluding paragraph from Justice Linden that I read reflects what may need to be the intervention of the courts if there is arguably a case for a duty of care by introducing elements of that kind, namely, the ensuring, as best the law of negligence can do, that the standards of sanitation or health or hygiene are maintained.
CALLINAN J: Accepting all of that, but it seems to me, at least arguably, and very clearly arguably, that you may fall literally within that passage that I have read. Do you not want to adopt it?
MR TOBIN: I did, your Honour. I embraced it, I thought, with passion.
GAUDRON J: First find your duty though.
McHUGH J: Yes, and first bring yourself within the facts of the case. There was no negligent failure to consider whether to exercise a power here. The Council considered it and said they would not exercise it.
MR TOBIN: Not quite that, your Honour. I mean, there is a notice of contention being brewed as we speak in which the Council contests his Honour's finding that they adopted an approach of not doing anything about complaints on the septic tank front and, in evidence, the Council officer, Mr Brooker, said that it would be ridiculous, he thought, on reflection, to pursue such a course and his Honour did not believe that and found against him on that credit issue.
Now, it seems that that raises pretty squarely the fact that it can hardly satisfactorily fall within a policy ground that the man who has said, "We will not investigate any more complaints" then says that such a policy would be so ridiculous that he would not carry it out.
CALLINAN J: That was only in an official report to go up the line.
MR TOBIN: Yes.
CALLINAN J: It was not his decision. It was ultimately the Council which had to make the decision whether to act upon that report or as to how it would act upon it.
MR TOBIN: I think, your Honour, it was the Council bureaucrats.
CALLINAN J: Exactly. But, they cannot bind the Council so far as a Council's decision is concerned.
MR TOBIN: No, but what they do is they carry out the executive functions of the Council and they did it, I can say, your Honour, confidently, without, as it were, having to get the imprimatur of a session of the Council. Now, your Honours, I am - - -
CALLINAN J: Just before you go, the words, "if and when the public interest requires it" would rather suggest that if that is negligent - it would suggest to me that the duty may be owed very, very broadly, indeed. There may be a duty of care owed perhaps as widely to any member of the public who may be affected by the exercise or non exercise.
MR TOBIN: Yes. In the case before your Honours, as I have said, both the State and the Council had available to them recourse to the growers to recoup the cost of the sanitary survey that his Honour found was a sine qua non. Beyond that, of course, is that that sanitary survey was not carried out in circumstances where the area around the lake was overflowing, in a sense, during heavy rain.
CALLINAN J: Except we do not know how long, of course, it might have taken not only to carry out the survey but also to give effect to any recommendations or to enforce the powers or - - -
MR TOBIN: Perhaps I will give this reference with a note, but Justice Wilcox dealt with that when he analysed the carrying out of the survey immediately after the HAV outbreak. So, just two or three months after the events of Dr Jackson going to Wallis Lake. The fishery was closed and at 244 in Mr Justice Wilcox's judgment he tells us really what a sanitary survey amounted to and it was this:
The Health Department organised a sanitary survey, using personnel supplied by various agencies, chiefly the Council and EPA. According to Mr Brooker, 14 people participated in a five-day survey. Over the following months, 10 people carried out follow-up inspections. There were inspects of 319 residences (including at Nabiac), 61 boatsheds and oyster depuration sheds, 31 watercraft and the islands and foreshore reserves - - -
CALLINAN J: I have read that passage.
MR TOBIN: His Honour then analyses the fact that this would amount to the work, even if it was done quickly in this circumstance. If you doubled the time one officer could get through this sort of work in five or six months. We are talking about a period of years leading up to the HAV outbreak in the late '96 year. So, the actual burden on the Council was in fact minuscule.
Again, your Honours, what are councils for if they are not, among other things, to ensure the safety of the locale and its waters from sewage? This is an issue which, of course, has the colour of a pollution case, and that is an element that your Honours might consider in the issue of the duty of care point. In a pollution case, with the contesting issues of Chappel v Hart and Bendix, for example, you have real problems of proof with regard to, ultimately, negligence if a duty of care is found.
It is our submission that in cases of that kind it may well be appropriate for the Court to consider the duty of care owed by the State or the Council as a resolution of what otherwise might be a pretty impossible problem at common law of identifying the particular source of the pollution. If I could put it this way. We could no more identify a resident of Nabiac or at a caravan park as having been responsible for the effluent that caused the HAV infection. What his Honour found - and this is a finding of fact that we say could not be disturbed - is that the sources of the pollution with the HAV in it came from multiple sources all within the control of the Council under the sewage powers and of the State under the EPA powers.
Now, that seems to us to be a relevant factor in considering whether there is a duty of care, to say, in a pollution case of this kind with the problem of identification of the source, if there is an authority which has relevant control of the area and relevant statutory powers and relevant involvement, it may be that a duty of care placed upon those authorities is the only remedy at common law in environmental pollution cases that will really count.
McHUGH J: This really means a massive extension of duties of care and liabilities of public authorities. It seems to be a plea that when powers are not exercised for the benefit of the community, there is a duty of care imposed by the common law.
MR TOBIN: I would put it more narrowly, your Honour, not as a general - - -
McHUGH J: I know you would seek to, but that seems to me the substance of it. I thought the imperial march of negligence has just about come to an end and it was rather in retreat, but you seem to be wanting to push it even further.
MR TOBIN: Your Honour, I would simply commend the approach of Justice Linden in the Canadian Federal Court of Appeal, which was to look at the actual conduct of the officials - - -
McHUGH J: Yes, but there was a duty specifically imposed on Transport Canada. The section said it was their duty, did it not, from recollection?
MR TOBIN: It said, in the passage I read, that they were to issue the certificates with regard to safety issues.
McHUGH J: The Aeronautics Act as amended declares that it is, among other things, the "duty of the Minister to supervise all matters connected with aeronautics". So there was a precise duty imposed. There is no duty imposed by this statute.
MR TOBIN: It is not an express duty but the statute has no sense unless it covers as one of its objects the protection of the consumers of oysters.
McHUGH J: Yes, but they are decisions to be made at a local government level by the Council and its officers.
MR TOBIN: Under the Fisheries Management Act, the State have a direct involvement quite apart from the local government.
GLEESON CJ: Thank you, Mr Tobin. Yes, Mr Beach.
MR BEACH: Could I just begin by just addressing the additional point in response to Justice Gaudron about the existence of sale of goods type remedies. The evidence before his Honour in this case was that HAV has an incubation period of 15 to 50 days. That is at paragraph 18 of Justice Wilcox's decision. If an oyster eater eats oysters once a week for three weeks at three different locations, there is going to be all sorts of difficulties in trying to establish a case against a particular restaurant because there may be a one-third probability that a particular restaurant was the particular source of the contaminated oyster. So this is unlike a case where you can identify the defective product and the defective product supplier.
You may not be able to work that out at all and that is one of the forensic difficulties that exist even in relation to suing restaurants. Presumably somebody who likes oysters may eat a dozen once a week and it is not difficult to see how that person - - -
McHUGH J: But if you cannot identify the restaurant, how can you be sure you could identify where the oysters came from. They may have come from the Georges River in Sydney or they may have come from the Tweed, or they may have come from somewhere else.
MR BEACH: That would require you to investigate forensically the chain of supply in this case and to work out who the suppliers of oysters are to the particular restaurant in each case and go back down the chain. If your three restaurants have the same supplier who is then sourced to Wallis Lake, then you are able to identify the source of the contaminated oyster comes from Wallis Lake, but you may not be able to identify which of, say, three or four restaurants is the supplier of your defective oyster. So you would not have a sale of goods-type claim, or if you did, it would be very difficult to prove against a particular restaurant. It would be unlike the situation of the defective underpants where you can identify the immediate supplier of that product to you and identify whether the product is defective. As your Honour pointed out in Grant v Australian Knitting Mills, the judgment was based both under section 14 of the South Australia Sale of Goods Act as well as well as in negligence, so - - -
KIRBY J: It is not at all uncommon, indeed, it is usual in just inter partes litigation for a party to sue on several counts and in a group proceeding or representative proceeding as you had here, I think it would be prudent for those who plead the case to endeavour to bring the case in various heads against various parties.
MR BEACH: But you cannot say that merely because there are a sale of goods-type strict liability provisions, that you necessarily have a claim against the immediate supplier because he may not be able to identify that immediate supplier of the defective product in a case such as at present if that person has bought oysters at a market or eaten oysters over a period of three to four weeks, given the long incubation time for hepatitis A virus. So it just would not work and it may not work in this case.
Now, can I just briefly address the issues raised on the Barclay appeal. We see the essential issue in that appeal as being one of fact and really one of whether or not there has been a breach of duty by the Barclay entities. Barclays, in their submissions, seek to distinguish two concepts: one, the content of the duty; and the second, which is a question of breach. We see there to be only one issue, namely breach and, of course, that is how this Court last Thursday dealt with the matter in Woods v Multi-Sport Holdings. So we do not see that there is any relevant legal issue involved here in terms of what has been described as the content of duty. It is really a question of whether or not there has been a breach, that is, a factual assessment and we say, on the facts, his Honour was quite entitled to come to the conclusion that he ultimately reached.
Now, in the Full Court Justice Kiefel held there to be a breach in that Graham Barclays should not have supplied the oysters at all. At first instance, one of the breaches held by Justice Wilcox that there was a supply without a warning. We - - -
GLEESON CJ: But that is a bit odd. I am not sure what kind of warning of contamination would be practical as a commercial matter in relation to an oyster?
MR BEACH: We accept that. In fact, we accept what Justice Kiefel has said, that, really, to find a breach because there was a supply without a warning is tantamount to finding a breach because there was a supply per se. So we accept what her Honour has said about that matter. The essential criticism made by Graham Barclays is that her Honour identified the matter in terms of saying that there should be a suspension or cessation of supply for a sufficient period until the risk was acceptable. It was put that her Honour had not identified, and could not identify, what that sufficient period was.
The evidence, and the findings before of Justice Wilcox, were to the effect that there should have been a cessation of supply until a sanitary survey had been carried out, points of pollution identified, points of pollution addressed, and then the usual type of testing, the E. coli testing and perhaps water testing for faecal coliform, before supply recommenced. We would say that is what is meant by the expression, "sufficient period", in paragraph 163 of her Honour's reasons. The findings of Justice Wilcox on the point appear at paragraph 132 of his decision, where he refers to the evidence of Professor Brown. The primary evidence supporting that finding appears at appeal book pages 472, 483 and 484.
There were also similar findings made by Justice Wilcox at paragraph 88 of his decision, in relation to Dr Burke's evidence, and the primary evidence underlying that is to be found at appeal book pages 876 and 878. There was also similar evidence from Mr Ray Brown, the person who had knowledge of the Tasmanian position, and his Honour deals with that evidence at paragraph 74, where Mr Brown expressed the view that a prudent person would not permit the recommencement of harvesting until a sanitary survey had been carried out. It is fair to say, though, that Mr Brown was talking about the matter more in terms of the relevant State and local authorities, as much as being directed towards the brothers, particularly.
The second criticism made by Graham Barclays is, "Well, there were no tests that could have demonstrated safety, so the business would have had to shut". Now, we see that as really being a misinterpretation of what Justice Kiefel was referring to. Her Honour found that there should have been a cessation of supply until the risk of contamination could be regarded as acceptable. That risk would be regarded as acceptable, on the evidence in the findings, if a sanitary survey had been carried out with the pollution point sources identified, because, at that stage, you would then have a level of satisfaction as to the state or quality of the water, so you would not then be perhaps so much dependant upon your E. coli flesh test and your faecal coliform water testing. That is what she was embracing when she was talking about identifying the period of time when the risk of contamination could be regarded as acceptable.
The tests that we say she would be referring to would be testing of the water, which would be part of the sanitary survey, to ensure the cleanliness of the water and then the other types of tests that were then available. It is a misstatement, we would say, of the evidence to say that there was no sensible test that could be done of the oysters to determine the presence of hepatitis A virus. There was a lot of scientific evidence about deficiencies in the polymerised chain reaction test which was performed by Dr Grohmann. Graham Barclay has submitted that Dr Grohmann said that one problem with that test was not only false negatives but false positives, but in fact he was quite happy to rely upon false positives. His Honour refers to that evidence at paragraph 40 of his decision.
There are also other tests that could be done for enteroviruses which could be used as a surrogate for hepatitis A virus and there was also some expert evidence of Professor Ashbolt which suggested that you could identify other surrogates such as bacteriophages, and I will not spend any time explaining what that means. The witness statement of Professor Ashbolt explains what those surrogates involve and that evidence appears in the appeal book at pages 1094 to 1095.
Another matter raised by Graham Barclay is that they say something along the lines, that the prior practice has always been to stop harvesting for several days after a fresh; it has worked in the past; why was that not the course open to the reasonably prudent grower in the present circumstance? We would adopt what has been said in Woods and in particular by your Honour Justice McHugh at paragraph 73 of Woods that past practice is really no answer to breach of duty, particularly where the effect of the injury is likely to be serious. In this case - - -
McHUGH J: That is a dissenting judgment.
MR BEACH: Dissenting on the ultimate factual issue, but we do not understand that there was any other contradictory statement of principle in that respect. None of the judgments said that it was definitive in terms of the breach case that there had been some prior practice which was being adopted in the present case.
CALLINAN J: Is that right? I thought the Chief Justice and I both referred to the fact that the rules which reflected previous practice did not require the wearing of a helmet.
MR BEACH: Yes, but your Honours did not say that that therefore entailed that there was no breach. What your Honours did was take that into account as a factual circumstance to address the factual issues rather than saying that that foreclosed the question of whether or not there had been a breach.
CALLINAN J: The rules provide a fairly clear indication of what past practice was.
MR BEACH: Yes.
McHUGH J: I think you would be better off relying on Rogers v Whitaker rather than my dissenting judgment in Woods.
KIRBY J: But there was an earlier sporting case where the Court said that you cannot foreclose the duty of care in the law to what the rules of the sport were. I think it was in the 1950s and I think everyone referred to that case.
MR BEACH: Yes, and that is all I am really citing the case as authority for, that general - - -
McHUGH J: Rootes v Shelton.
CALLINAN J: There might have been something different said again though in Agar v Hyde, I think, about rule-making and previous practice in sports.
MR BEACH: But the general principle is that the prior practice does not determine the factual question of whether or not the breach of duty has been found.
CALLINAN J: It may not determine it; it may be relevant to it.
MR BEACH: Yes. What would need to be looked at then is what circumstances existed in November 1996, not what was done over previous years that may have had lucky or by chance consequences where there was no outbreak. One needs to look at the position in November 1996. By that time you had a situation on any view where there was a serious potential hazard. His Honour Justice Wilcox at various parts of his decision refers to the possibility or likelihood of risk. At paragraph 88 of his decision he refers to Dr Burke's evidence that it was a serious possibility that you would have to be worried about.
Paragraph 90 and 94 refers to the New South Wales Quality Assurance Program, produced by the State in 1992, where he quotes the passage:
"To date no hepatitis cases have been reported from shellfish in New South Wales, but it must be considered a serious potential hazard."
Then at paragraph 339 he finds on the facts of the present case that the viral epidemic was extremely likely, extremely likely because hepatitis A was a serious potential hazard in shellfish and, in particular, oysters, combined with the fact that this particular lake where the oysters were being grown and harvested was contaminated with faecal pollution.
So, as at November 1996, you had more than some remote or speculative possibility of a viral outbreak. You had, what his Honour described as, an extreme likelihood. Whether it was identified as Norwalk virus, some other enterovirus or hepatitis A virus, it did not really matter. The relevant risk was a viral epidemic.
Now, in that context Graham Barclay knew that E. coli tests would not necessarily show viruses. He knew of potential problems of pollution of the lake. His Honour refers to the problems with the "Little Street toilet" and Graham Barclay had knowledge of those problems over many months in the latter part of 1996. His Honour refers to that at paragraphs 194 and 198 of his judgment, and Graham Barclay was cross-examined on his knowledge of those matters, and that appears at appeal book pages 952 to 953. It is fair to say that that might not have been identified as the precise pollution that caused this epidemic, but one can say that Graham Barclay knew of potential pollution problems around this particular time.
There was also evidence that Graham Barclay knew of stormwater pipes running into the Breckenridge Channel. The Breckenridge Channel is where the Barclay purification plant draws its water from. The appeal book references of his evidence are 891, 895, 897. Mr Ellery, his offsider, was also aware that that was a source of pollution after rainfall. His evidence can be found at appeal book page 967.
So with knowledge of potential pollution sources, with knowledge of the deficiencies in depuration, with knowledge that the Council had stopped water testing in 1993, and with there being a serious potential hazard in harvesting oysters from polluted waters, to say the least, in fact, his Honour said "an extreme likelihood", it is not good enough for Graham Barclay to point to his practice over previous years. That is not to the point at all. One looks at the particular risk in November, 1996 and asks oneself, "What was the prudent practice for those oyster growers who adopt at that time whatever had been the position previously?" We say that his Honour considered all relevant evidence in great detail in relation to those matters, and properly weighed up and balanced any of the sorts of factors referred to in Wyong Shire Council v Shirt and appropriately answered the question that there had been a breach of duty.
Now, we do not, as an alternative case, depart from the position that if this ultimately had the consequence that there had to be a cessation of oyster harvesting at Wallis Lake permanently, well so be it. When one considers the serious health risk - in fact there was one death in this case, out of this epidemic, I should say - matched up against allowing a manufacturer to supply a defective product with known risk, even if the manufacturer did not know of the precise pollution sources coming into the lake, we say there is just no contest. The breach would involve supplying such a product, whatever commercial consequences that might have had for the manufacturer.
There is only one other issue and that is this: his Honour's findings on breach also referred to the possibility of Barclay being involved in doing no sanitary survey and we have a notice of contention that seeks to address and pick up his Honour's finding of breach in that respect. We say the evidence demonstrates that a sanitary survey ought to have been a collective activity on the part of the growers, the local Council and the State of New South Wales, and the evidence which refers to such a co-ordinated approach appears at appeal book pages 473 and 478.
More importantly, in this case, Barclay had the capacity to do certain types of work in terms of performing a sanitary survey because you will recall that the evidence is that he actually took Mr Brooker around in his boat and assisted him in collecting him water samples between 1989 and 1993. The evidence where he assisted Mr Brooker of the Council appears at appeal book pages 902, 928, 955 to 956. The thrust of his evidence was that he was able to take Mr Brooker to 12 sites around the lake in the space of one hour. So, it does not take much to expand that to 100 sites within the space of a day or two. Those water samples would then be taken away and analysed and then follow-up action would be taken. We say his Honour, on the evidence, was entitled, on the facts, to find the alternative breach case referred to in paragraph 352 although we accept that the grower would not necessarily have the resources or the powers to take the necessary follow-up action, nevertheless, the grower could have been part of such a co-ordinated activity.
We put our breach case both in terms of the findings of Justice Kiefel and also in terms of the findings of Justice Wilcox.
CALLINAN J: Did you plead that, a failure to participate in a survey?
MR BEACH: No. We pleaded the type of duty that Graham Barclay conceded and we said it was a breach to supply oysters with the contamination or the hepatitis A virus. Our evidence led at trial was that wrapped up in that breach of supply was the concept that sanitary surveys should have been done and that was not something necessarily for any one particular authority, it should have been a co-ordinated and collective action from all participants; the Council that really monitored the water supply, or ought to have, the grower that relied upon the cleanliness of the water supply and the State that we say assumed responsibility for the oyster industry, generally.
GAUDRON J: I am sorry, Mr Beach, before you leave I think this is your part of the argument. Assuming you are correct thus far, I take it that you say that the orders with respect to Barclays should be as made, at first instance, by Justice Wilcox and lately in the Full Court? I refer you to pages 4614 in volume 19 for Justice Wilcox, page 4872 for the Full Court. What I am concerned about is order 3 and order 4 in page 4872 - that is ordinary 3 and 4 - and (ii) and (iii) in the order of Justice Wilcox.
Why, in this case, is there a declaration of entitlement to succeed in negligence and a reserving of the breaches of sections 74B and 74D of the Trade Practices Act 1996 , when there have been findings against Barclays under those two sections? I really think there is a big problem here about the Federal Court making a finding of negligence, if it also makes a finding under 74B and 74D, and equally I think there is a difficulty about not making a finding under 74B and 74D and then going on to making the finding of negligence. I think it raises a real question about the proper exercise of judicial power when there is a claim under the Trade Practices Act joined with a negligence claim. It is the issue I raised with Mr Tobin but, for my part, I find great difficulty with those orders.
MR BEACH: It may be that what his Honour intended by the expression "the applicant's representative claim" in relation to the 74B and 74D issues be reserved, not his personal claim but the claim of the other group members where there was no evidence of the chain of supply.
GAUDRON J: How could this trial judge have failed to find on 74B and 74D on the representative claim and at the same time have found on the negligence claim in the representative capacity?
MR BEACH: If the individual negligence claim of Mr Ryan is within the Court's accrued jurisdiction as - - -
GAUDRON J: Do not worry about accrued jurisdiction. It is within the Court's jurisdiction. There is no doubt it is within the Court's jurisdiction. We are not talking jurisdiction. We are talking about the interaction of statute law and common law in product liability cases and I think that issue just has to be addressed at some stage.
MR BEACH: Yes. We do not put the position that he did not make a finding on the Trade Practices claim of Mr Ryan, personally, so, whatever the law is about whether you can have concurrent liability or not or a duty of care owed where - - -
GAUDRON J: Yes. That seems to be covered in order 2 at 4871 and order (i) at 4613 and 4614. There is no difficulty about judgment in the sum. What I have difficulty about are the subsequent declarations and their proper interaction in relation to the representative proceedings.
MR BEACH: In relation to item (iii) at 4614 he has not made any decision on the other Trade Practices claims of the group members.
GAUDRON J: But how can he make a decision on negligence without making a decision on that? That is to say, why is it not the case if the Barclay companies - I will just use the expression Barclay companies. I know that is not exactly right in this case - but if the Barclay companies are liable under the Trade Practices Act for X amount, why would not that extinguish their common law liability for exactly the same acts and omissions or the same set of circumstances?
MR BEACH: Your Honour is putting the point more in terms of whether that negates the existence of a duty of care rather than whether one judgment merges with the TPA judgment.
GAUDRON J: It seems to me one has at some stage people who make claims of the kind that I assume your clients initiated - well, they did initiate in the pleadings - have to come to grips with, if not the exact relationship of statutory and common law liability, the form in which judgment is required or - I mean, what would happen here? Are the actions true alternatives? I would have thought they were. You would not get judgments both under the Trade Practices Act and at common law, would you?
MR BEACH: You would have one judgment but it would be on two causes of action, that is all his Honour - - -
GAUDRON J: Well, would you?
HAYNE J: Are you in the similar case to United Australia Ltd v Barclays Bank [1941] AC 1 at 19,where you have the same set of facts entitling the plaintiff to claim alternative forms of redress but the plaintiff having to elect which remedy the plaintiff will have? Is that the relevant field of discourse or is the relevant field of discourse that the logically prior question of whether you truly have alternative claims?
MR BEACH: We would say, for the reasons given by Mr Tobin, and added to, that you do have two claims. One claim does not foreclose the other. In terms of the judgment, we do not see there as being two alternative remedies that require us to make an election.
HAYNE J: Well, there is a whole different raft of remedies under the TPA and do you - - -
GAUDRON J: And it is reserved.
HAYNE J: - - - not, thereby, have to elect at the point of judgment what you are getting?
MR BEACH: For the group members, they only have a judgment in negligence, so if this is a good point, if we ever try to pursue the Trade Practices Act claimed for, then somebody will argue that we cannot do so. So for them no issue of election arises.
GAUDRON J: It is not simply a question of what will happen later on. It is the court record that, to me, looks inconsistent or looks - - -
MR BEACH: We would say there is no inconsistency for group members for the reasons that I explained. His Honour was not dealing with the group members Trade Practices Act claims, so the only potential inconsistency - - -
GAUDRON J: So, "otherwise the . . . representative claim . . . be dismissed" - I am sorry, yes, he has represented:
the portion of the applicant's representative claim . . . under 74B and 74D of the Trade Practices Act be reserved -
What that order looks to me to be saying is, "You can have your negligence claim and, at some stage, you can have a second bite of the cherry."
HAYNE J: The answer may be that the point for election for group members comes later.
MR BEACH: Yes, that is what we would say - - -
GAUDRON J: But the election has been made by his Honour.
MR BEACH: No, no, he has just reserved - he has not said anything.
GAUDRON J: Well, "entitled to succeed" - he says they are "entitled to succeed".
MR BEACH: Not on the Trade Practices claims, so it is only - - -
GAUDRON J: Well, he says they are "entitled to succeed" in negligence.
MR BEACH: That is right. So he has not said anything about their Trade Practices Act - - -
GAUDRON J: He is reserving them.
MR BEACH: He has not said anything about the group members' Trade Practices claims, so the time for election - - -
GUMMOW J: What about the group members' negligence claim?
MR BEACH: Well, if the election point is good, we have made an election with that judgment and we are quite happy to live with it.
KIRBY J: Mr Beach, you will remember yesterday Justice McHugh asked about the Avonhouse decision, I think, Justice Priestley's observations. Now, I think this is not so much your territory as Mr Tobin's, but at some stage, maybe later, with a note, I would be grateful if you could assist the Court on your submissions on that question because we ought to struggle to try, in my opinion, to find a simple coherent principle that trial judges and lawyers in their offices can use to advise one way or the other whether there is a duty of care.
MR BEACH: We did look at that but the question of the closeness of the relationship almost sounds like it is in the realm of proximity. We can do a note as to how we say there is such a closeness of relationship between the Shire Council and the oyster consumer and the State and the consumer. That would fall within that formulation if that was the appropriate - - -
KIRBY J: I was not asking for you to make a submission now, but Justice Priestley really picked up on what Professor Fleming had said in 1998 and I think it is something which ought to be the subject of some consideration.
MR BEACH: We will do a note, but we would say what Professor Fleming said there about value judgments, we would say, yes, leave it to the trial judge, and in this case the trial judge has made an appropriate value judgment.
KIRBY J: That may be the problem in the suggested principle.
MR BEACH: Yes.
GLEESON CJ: Thank you, Mr Beach.
GUMMOW J: Well, Mr Beach, just before you go, it seems to me the vice with order 2 by the primary judge is that it is an interlocutory declaration. That is the problem with it, is it not? It is not declaring any rights at all. It is saying, "As far as we've gone, this is the way it looks".
MR BEACH: It has to be that, damage being the gist of the action. That has not yet been assessed for the individuals.
GUMMOW J: That has a significance for the Barclays Bank point.
MR BEACH: We could perfect it by making the election to have damages assessed.
GLEESON CJ: Thank you, Mr Beach. Mr Nicholas.
MR NICHOLAS: If the Court pleases. Can I indicate that before you came onto the Bench, we had distributed a copy of the Local Government Act, particular provisions of which I want to come to in a moment. We also have had distributed some supplementary submissions, the substance of which really records factual matters and references to the evidence. I do not propose to take the Court to that detail.
KIRBY J: Now, that Act has been repealed, has it not?
MR NICHOLAS: The provisions of the Act that we are concerned with as far as this case is concerned, your Honour, are the ones that we have copied and provided for you.
KIRBY J: What is the date of the operation of the Act that you are relying on?
MR NICHOLAS: , I think, your Honour.
KIRBY J: Was there a print number?
MR NICHOLAS: The relevant Act, your Honour, was No 30 of 1993. There was an August 1994 reprint, and we checked to see that the provisions were up to date, in so far as matters as at November 1996 were concerned.
KIRBY J: The old 1919 Act, and the one in 1993.
MR NICHOLAS: I am sorry, I did not understand your question. Yes, the 1919 Act is gone, your Honour. Your Honours, before I go to the detail of the statute, can I first ask you to turn to the maps which are attached to our submissions. I do so in order to assist the Court in getting to the realities of some of the matters that have been the subject of submission heretofore. There are two maps. At the top right-hand corner is the first to which I wish to refer - Figure 1. Your Honours will see it depicts the area administered by the Great Lakes Council and, as the legend shows, it is the pink line which is - - -
GAUDRON J: Which one are we really looking at?
MR NICHOLAS: The figure 1, top right-hand corner.
GAUDRON J: It says "Wallis Lake Catchment Map".
MR NICHOLAS: That is the one, your Honour. Now, I want to point out if I can some of the locations which we referred to in the evidence. The yellow areas are what can be loosely described as built-up areas. If you come to almost the centre top of the area depicted in blue - the catchment area - you will see the town of Nabiac. Nabiac was referred to quite a number of times. Your Honours see the reference to the Shalimar Caravan Park and the Wallamba Ski Lodge, near the town of Failford. Then, if you come further down the coastline, as it were, you see the townships of Tuncurry and Forster, and your Honours see the islands in the lake and the general lake area. While I have that map, your Honours see the township of Coolongolook, which is about the centre of the map.
The second map is the one which perhaps depicts in greater detail the townships of Tuncurry and Forster and if your Honours look at it, you will see the locations of various islands that were referred to in the evidence: Cockatoo Island, Goodwin Island. If you turn to the legend in the left-hand corner, you will see how the oyster leases are delineated with the little thin pink lines and that that brings you back, for example, to the areas near Cockatoo Island and the Goodwin Island, you will see the various areas of oyster leases.
What I want to particularly draw your Honours' attention to is those series of little arrows that you see along the various parts of the foreshore. As the legend shows, they are stormwater outlets and one of the matters that we will be putting to your Honours, of course, is that it is fair to regard the various stormwater outlets as having, as it were, their own mini-catchment areas.
Your Honours, finally the reference, because it is a site which has had some discussion in the material, is to the Little Street public toilets and your Honours see that is identified on the edge of the foreshore just near the Miles Island. Your Honours also see obviously enough, a number of islands within the lake's waterways, islands which attracted reference because of what was described as the presence upon them of "pit toilets" and other facilities to which swimmers, boat users and others resorted when they needed to.
Your Honours, can I now come to the statutes. There is a convenient reference to them attached to the submissions of the appellant Ryan and if I could take you to that source first. It is annexure A to Mr Ryan's submissions. Your Honours, the first section, of course, is section 7. It is on page 22 of our numbering, top right-hand corner of the submissions. What are the purposes of the Act?
The purposes of the Act are as follows -
and we come down to subparagraph (d):
to give councils:
* the ability to provide goods, services and facilities, and to carry out activities, appropriate to the current and future needs of local communities and of the wider public
* the responsibility for administering some regulatory systems under this Act
* a role in the management, improvement and development of the resources of their areas -
and reference was made at volume 19, page 4553, by Mr Justice Wilcox to portions of that section and to others to which I will come in a moment.
KIRBY J: Is "responsibility" a stronger word than "duty" or is it the same?
MR NICHOLAS: Your Honour, I would say that one would read responsibility as duty. That is part of the purpose of the Act and then one obviously has to come to look at what it is that they are required to do and I am about to come to that.
Your Honour, the next parcel of provisions set out on the following page of the annexure begins at section 124 and this is the provision upon which a great deal of reliance is being placed about the power of the councils to make orders, and your Honour sees the prefatory material:
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.
The failure to comply are guilty of an offence.
Your Honours, as has already been indicated to you, there are some particular items of relevance to this case and, for example, two pages on, paragraph 15, an order:
Not to conduct, or to cease conducting, an activity on premises -
The circumstances where:
The activity constitutes or is likely to constitute:
(a) a life threatening hazard; or
(b) a threat to public health or public safety and is not regulated or controlled under any other Act by a public authority -
Then over on the next page - - -
KIRBY J: Can I just ask you to pause there. Does HAV come within (a), a life threatening hazard?
MR NICHOLAS: We would not accept that is was, your Honour, no.
KIRBY J: There is no finding?
MR NICHOLAS: There is no finding that it was.
GLEESON CJ: We were told a moment ago that somebody died.
MR NICHOLAS: Yes, your Honour, but as a general statement one would not readily accept that HAV or the presence of HAV was necessarily a life-threatening hazard.
McHUGH J: In Shanghai did not quite a number of people die? Did the evidence not establish that?
MR NICHOLAS: It did, your Honour, yes. What obviously it is going to require before an order under 15 may be made is some assessment.
GAUDRON J: Yes, but you have to look at what is the activity.
MR NICHOLAS: Exactly.
GAUDRON J: The activity of - - -
MR NICHOLAS: On the premises.
GAUDRON J: Yes.
McHUGH J: In any event, even if it not a life threatening hazard it is a threat to public health, is it not?
MR NICHOLAS: Yes, your Honour, of course it is.
GAUDRON J: What is the activity that would there be enjoyed? That might be the activity of oyster farming?
MR NICHOLAS: Your Honour, the matter directed against the Council is making orders in respect of the owners of premises.
GAUDRON J: Yes, what is their activity, going to the toilet?
MR NICHOLAS: Exactly, and I want to take your Honour through some of the other provisions - - -
GAUDRON J: Or using particular premises or - - -
MR NICHOLAS: That is right, your Honour. So when it has been put against us as the foundation of the duty by both Barclays and Mr Ryan that section 124 is the power which we have failed to act, failed to exercise - - -
GAUDRON J: Certainly, column 1, item 25, would give you plenty of power, would it not?
MR NICHOLAS: Yes, your Honour, but a few things have to happen before an order might be made. Your Honour, what I want to take you to are the provisions of the Act which are in the material that we have handed up to you to indicate the circumstances in which orders may or may not be made. It does not follow, as night follows day, that because under section 124 there is a table which provides for a set of circumstances in which orders may be made, that orders either may be made or may be made which will have any real effect.
The procedure for making orders, your Honours - if I could ask you to turn to the collection of the Act that we distributed to you, and we have put some tabs in it. The first tab takes you to section 124, the whole of which is set out there.
GLEESON CJ: This is the new catechism-style of legislation.
MR NICHOLAS: Yes, your Honour.
GLEESON CJ: What are a council's functions?
MR NICHOLAS: Yes, your Honour has it. Then there are tables and charts of questions. It is the new approach, your Honour. The second tab that we would ask you to go to, now, is Division 2 which deals with the procedures before giving orders and section 129 requires that:
Before giving an order, a counsel must comply with this Division.
I should, of course point out, 129(2)(a), order 15 which was the public health one, does not require compliance with the division. Then, your Honours, if you travelled through it you will see from the various headings of the sections various matters that a council is required to consider before giving an order and the process of giving an order which brings us to section 135. On the assumption that representations are made by the recipient of the order then the Council may or may not adhere to its order, as it were; 135(1)(b) modify it, (c) decide "not to give an order".
Then the next division, Division 3, is applicable to orders generally and a scheme is set out there about the giving of orders and what might happen once an order has been given. It includes, amongst other things, a right to appeal to the Land and Environment Court if an order is given.
HAYNE J: What is the ultimate submission? Are you telling us that Council did not have power to say to an owner or occupier of premises on which there was a defective overflowing septic system, "Fix it, now." Is that the end we are getting to?
MR NICHOLAS: Your Honour, it did not have absolute power to do that. It certainly could do all of those things and get to a doorway and say, "We want you to fix the system." It could do that.
HAYNE J: "Now. Fix it now."
MR NICHOLAS: And it could say, "Now." Assume it gave an order to that effect, then it could anticipate, no doubt, the various matters provided for in the Act by way of resistance to or seeking a variation of or postponement with compliance, et cetera. The way it is presented against us, your Honour, is that the power is there, that orders will be given, and that will bring about pretty well forthwith the eradication of the source of the pollution.
Your Honour, in this context some weight was given to the powers of entry which are provided for in section 191 and 192, and that is the third of the tabs that we have put in the collection. Section 191 gives power of entry. Section 192 gives power to inspect and investigate. Section 200, however, we would suggest, has some relevance when it comes to the question of Council exercising its powers. Under section 200:
The powers of entry and inspection conferred by this Part are not exercisable in relation to that part of any premises being used for residential purposes except:
(a) with the permission of the occupier of that part of the premises,
(b) if entry is necessary for the purpose of inspecting work being carried out under an approval -
and that seems to be something distinguished from a septic tank in situ for some years, or -
(c) under the authority conferred by a search warrant.
Then, of course, the next provision deals with obtaining search warrants, and finally in the scheme of legislation - and reference has already been made to it and I do not read it to your Honours now - section 672 deals with enforcement. Section 674 deals with proceedings in the L and E Court to seek compliance, and section 678, in circumstances where ultimately there has been failure to comply with the order, a council itself may carry out the work and seek to recover the cost of doing so. Your Honour, finally in relation to - - -
KIRBY J: Were not the predecessors of these discussed in Lutz v Parramatta City Council? That was a case of a house which was damaged by fire and the question was whether the Council ought to have exercised powers similar to these to - - -
MR NICHOLAS: I will have a look at that over the lunch hour, your Honour. I do not know the extent to which substantially similar powers - - -
KIRBY J: I have a dim recollection it was the 1919 Act, but similar powers were referred to.
MR NICHOLAS: I will look at that over lunch, your Honour. I should, on the way through, remind your Honours that under section151 there is a statutory regime specifically in relation to fire hazards.
HAYNE J: No doubt the complexity of the process is well illustrated by the chart appearing at page 99 of the print that you give us.
MR NICHOLAS: Well, we hope that will be of assistance to your Honour. Your Honours, the last reference to statutes that I want to give to the Court also is to be found in the annexure to Mr Ryan's submissions and it is to the Clean Waters Act. Section 27 and section 29 has been relied upon. It seems to us, with the greatest respect, that it would have little or nothing to do with providing a foundation for the basis of the duty that has been contended for here. Section 27, it is on page 28 of Mr Ryan's submissions, annexure A, and is directed to the removal of pollutants, and section 27(1) provides that:
Where any waters . . . are polluted by any person, any statutory authority or local authority may and shall, if directed to do so by the Under Secretary, take such action as is necessary to remove, disperse, destroy or mitigate the pollution and may recover all costs -
et cetera, in relation to the removal of the pollution from the person who polluted.
KIRBY J: Does not your power to recover costs take away one of the themes that comes through these cases, the operational policy question that here you do have the power to recoup yourself and, therefore, you cannot, as it were, cry poor?
MR NICHOLAS: Well, yes and no to that, your Honour. Ultimately, one can attempt to recoup. Initially, of course, before one embarks upon that exercise - assume, for the moment, having exhausted the procedures to which I have referred - obviously, the Council has to incur the cost, and allocate - - -
KIRBY J: Immediately, but presumably, there are powers to burden the premises and ultimately take action against the premises of the ratepayer.
MR NICHOLAS: In theory, yes, your Honour. That is certainly a power that is - - -
KIRBY J: I think, in Lutz, it was an ultimate power to sell up the property. It may have changed in the new Act, but there was a range of powers, I dimly recall.
MR NICHOLAS: I will look at that, your Honour, over the lunch hour. Section 197 of this Local Government Act deals with the recovery of cost of entry and inspection. Under the power, under 197, where:
the council requires any work to be carried out on or in the premises, the council may recover the reasonable costs of the entry and inspection from the owner or occupier of the premises.
Now, that suggests to us something different from, perhaps, undertaking the work itself and doing that, although I think section 678 may give it, ultimately, that power, if there has been a failure to comply with the order. But there is a prospect of recovery of at least some of the outlay, yes, your Honour.
I was completing the reference to the Clean Waters Act. Section 29 empowers an officer to enter premises and to inspect and investigate and report on what he sees. It takes it no further than that. So it is in the context of that statutory framework which we want to take the Court to the reasoning process of his Honour to see how he came to ultimately formulate the duty which he - - -
GUMMOW J: Is that the right way to go about it? You want to rely on what was said by Justice Lindgren and Justice Kiefel, do you not?
MR NICHOLAS: I do indeed, your Honour.
GUMMOW J: Yes.
MR NICHOLAS: Well, your Honour, the way the case has been put before this Court has been to take the Court through what his Honour said at first instance and to derive support for his conclusions on that exercise and what I was seeking to do, your Honour, was to demonstrate that the basis for his Honour's finding that there was a common law duty imposed upon us was really as a result of coming to a conclusion that Council had some responsibility for the control and management of the land and of the waterways and we wanted to make good the contention that there is simply no foundation for that proposition whatsoever. The statutory powers that are being relied upon against us, namely, the ones that I have taken the Court to, provide no basis for that. That is where I was coming to, your Honour.
GLEESON CJ: Mr Nicholas, we will adjourn now, if that is a convenient time.
MR NICHOLAS: Yes, your Honour.
GLEESON CJ: What time have you undertaken to finish by?
MR NICHOLAS: I would undertake to finish by 3 o'clock, your Honour, if - - -
GLEESON CJ: Does that give the people - - -
MR NICHOLAS: We have discussed this before and we feel confident about time.
GLEESON CJ: All right, we will adjourn until 2.15 pm.
AT 12.45 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.21 PM:
GLEESON CJ: Yes, Mr Nicholas.
MR NICHOLAS: If your Honours please. Your Honour Mr Justice Kirby, I dealt with the Lutz matter at lunchtime. I do not think it covers - - -
KIRBY J: Was I right or is my memory playing tricks?
MR NICHOLAS: I do not think it was the case that perhaps your Honour had in mind.
KIRBY J: It was not in Lutz v Parramatta City Council?
MR NICHOLAS: No. In Lutz there was an order made under 317(b) of the Local Government Act for the demolition and repair of a dilapidated house and there was power to enter and execute that order and, in fact, an order had been issued and the subsequent history of delay in that case in the execution of the demolition order resulted in the property's destruction by fire and, your Honour, I think the council was found liable in circumstances where the owner had relied on council's representations and assurances that it would, in fact, exercise the power and the case, neither your Honour's judgment nor the other judges, including Mr Justice McHugh, did not undertake an analysis of perhaps the various powers that your Honour might have had in mind.
Your Honours, I want to take you to the judgment of Mr Justice Wilcox in volume 19 at page 4577, paragraph 280, to indicate how ultimately the appellant Ryan put the case against us as regards to duty and how his Honour dealt with that submission. At paragraph 280 on page 4577 his Honour notes that:
In summary, counsel for the applicant submit the Council had duties:
(a) to test water quality for faecal contamination by testing for faecal coliforms or E-Coli;
(b) to warn oyster farmers and relevant State government agencies when the test revealed contamination; and
(c) to prevent contamination from all or any of the "significant contributing causes" itemised by counsel.
And those significant contributing causes, your Honours will see, are the several sites set out immediately above at line 15 and following. As you see at line 14, the submission of the appellant's counsel was the:
significant contributing causes to the pollution which was responsible for the outbreak -
and then those various sites are identified and your Honours will pick them up on the map when convenient. Can I bring the Court to page 4581, paragraph 288, his Honour's conclusions:
I accept Council's submissions in relation to the applicant's "test and warn" case, if that case is considered in isolation. I do not think the evidence establishes that a water testing program along 1989-93 lines "would have imposed a significant cost" on Council, as suggested in para 11.1 of the submission quoted above. Mr Brooker said the testing program undertaken between 1989 and 1993 involved the labour of one person (usually a trainee) -
I think I can move down to about line 10, your Honours:
But I agree that a 1989-93 type water testing program conducted in 1996 would have told growers only what they already knew: that faecal coliform levels increased quickly and dramatically after rain and dropped within days. Such a testing program would not have identified the sources of the faecal coliforms or given growers any information about the presence of viruses.
This does not mean water testing is valueless. Although a negative coliform test does not establish the absence of viruses, the expert evidence indicates it is an essential feature of an acceptable oyster management regime. Water testing can be used for the purpose of detecting points of pollution. It follows, I think, that the question whether the Council had a duty to test water samples is related to the question whether the Council had any obligation in relation to minimising pollution of the lake.
Pausing there, for what it is worth, this was the point at which the pleaded case against us, namely, a duty to exercise powers to prevent pollution, becomes translated into a duty to exercise powers to minimise pollution of the lake and, ultimately, as it will be seen, and the discharge of that duty required a sanitary survey hopefully to lead to the identification of the sources which might in turn then lead to the type of activity contemplated by section 124 orders and the like. The next reference, your Honours, is at paragraph 292 on the next page:
I accept the submission that Council was not under an absolute duty to prevent pollution of the lake; prevention could never be guaranteed. Any duty must be confined to a duty to take those steps that were reasonably open to the Council in order to minimise human faecal contamination of the lake. But I do not accept Council did not have even that duty. Having regard to the facts listed above - none of which is a matter of dispute in this case - the Council knew, or should have known, that oyster consumers were likely to be adversely affected by any failure by it to take reasonable steps to minimise human faecal contamination of the lake; in particular by the emission of faecal effluent from any of the facilities mention in (ii) above. That being so, it seems to me Council came under an obligation to oyster consumers to take those steps.
Can I bring the Court to line 10 on this page, the facilities referred to are:
within the lake catchment area, there were numerous facilities (septic tanks, pit toilets, pumping stations, watercraft and the like) that constituted potential sources of human faecal contamination -
and (vii) at line 25, the finding that his Honour made that:
Council had extensive statutory powers to control pollution from the facilities mentioned in (ii).
And I have taken your Honour to the powers to which he was referring. Paragraph 293, your Honours:
I do not think anything in Pyrenees points to a different conclusion. The language adopted in that case by each of the Justices may readily be applied to the present case. It will be remembered that Brennan CJ spoke of the purpose of conferring fire-prevention powers on a council being to protect neighbouring persons and their property, so that "a council that knows of a risk by fire to persons or property cannot refuse to exercise [those] powers . . . unless the council has some good reason for not exercising those powers so far as they are needed to prevent the risk eventuating". The same may be said about the purpose of arming councils with pollution-prevention powers.
We would, rhetorically, ask - we have not identified any. Paragraph 295:
If one adopts the "control" approach favoured by Gummow J, a similar result emerges. Although it would go too far to say that the Council was in a position totally to prevent any possibility of viral contamination of the lake, it was certainly in a position to prevent deposition into the lake of significant quantities of human waste, even from boats. It therefore had a large measure of control of the problem. Having regard to the purposes for which it was given its control powers and the foreseeable consequences to oyster consumers of any failure to take reasonable steps to exercise those powers, the Gummow approach supports the imposition upon the Council of a duty of care to oyster consumers.
Can I bring the Court down to paragraph 297:
The applicant need not prove the particular source or sources of the HAV contamination. The HAV oyster contamination came from human faecal pollution of the lake. The expert evidence establishes the probability that this pollution came from multiple points, predominantly land-based. All of those points were subject to Council control. The pollution occurred because the Council did not exercise its powers in a responsible manner; although it knew there was a problem, the Council allowed the continuation of pollution from those points. It does not matter that it is impossible to say which of those pollution points introduced the HAV contaminated faeces into the lake.
At 298:
It is not necessary to determine whether the Council owed a duty of care to the oyster growers. It was certainly not obliged to undertake general quality control of the oysters harvested from the lake. However, if the content of the supposed duty of care is defined merely as being an obligation to exercise the Council's statutory powers in such a manner as to minimise pollution of the lake, I see no reason for rejecting such a duty; like Mr and Mrs Day in Pyrenees, the growers were entitled to expect the Council to exercise its powers in such a manner as to avoid a nuisance that would damage their property (the oysters) and cause them consequential loss.
Finally, on this line, your Honours, at page 4588, paragraph 310 - - -
KIRBY J: That means you are passing on without reading "My approach".
MR NICHOLAS: Your Honour, I am going to come back to it. I have not - - -
KIRBY J: I am glad you do not overlook it. It is, after all, the approach of Canada, New Zealand and the United Kingdom,
MR NICHOLAS: I appreciate it, your Honour.
KIRBY J: But do not trouble too long on it.
MR NICHOLAS: At page 4588, paragraph 310:
In any event, counsel for the applicant do not argue Council was the only party concerned with oyster safety, or was obliged to act as insurer of the safety of oysters harvested from the lake. The applicant's case is that the Council was under a duty to take reasonable steps, in the exercise of its statutory powers, to minimise pollution of the lake.
Well, your Honours, it seems to us that when his Honour finally formulated the duty that we were, in effect, required and, indeed, were managing and controlling the catchment - and he puts us, we would suggest, quite clearly, in the role of manager and controller of the catchment, and to do that has regard to the powers and provisions of the Act to which I have taken your Honours, they being, of course, the provisions of the Act relied upon against us in the case made against us.
His Honour then goes on to make plain that the discharge of that duty required the Council to undertake a sanitary survey and then consequential action upon that. In relation to the evolution of that, the duty expressed in that way, that I want to take your Honours to some passages in the judgment.
Could I bring you back to page 4495, which is paragraph 42. At 4491, I am sorry, your Honours, it is paragraph 42. It comes under the heading of:
GROWING AREA MANAGEMENT
(i) Sanitary survey
Having regard to these problems -
and his Honour has reviewed the expert evidence -
it is not surprising there was widespread agreement between the expert witnesses that the sensible course is to prevent contamination arising in the first place. They agreed this can be done only by proper management of growing areas. One suggested component of a proper management regime is a sanitary survey. 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 and determine their effect on the quality of the water in the growing area. The shoreline inspection should be supplemented by a program of water testing designed to detect, and trace the source of, any faecal pollution of the waterway.
Although the parties agreed about the importance of proper management, there were differences between them as to what constitutes an acceptable regime.
Could I ask your Honours now to come to page 4510, paragraph 89 and following, under the heading of "Conclusions about growing area management standards". His Honour says:
The material set out above justifies the following findings about the proper management of oyster production -
and there are a series of items. I do not read it all out to your Honours except:
(ii) that being so, it is good practice to manage oyster growing areas in such a way as to minimise the risk of viral contamination of the waters in which the oysters are grown; and
(iii) whether or not growing areas are classified and differing harvesting regimes formally adopted, as in the United States, Europe and Tasmania, a management regime that complies with proposition (ii) requires, at the least -
and I think this is where he gets his duty against us from:
(a) an initial sanitary survey to identify possible sources of pollution of the growing waters;
(b) regular update surveys to detect any change in the pollution situation; and
(c) regular monitoring of faecal coliform or E. coli levels of the growing area water, by testing samples of the water itself or oyster flesh. This must be done in a systematic manner -
et cetera.
Propositions (i) and (ii) are accepted by all the experts who gave evidence in this case -
and paragraph 91:
In relation to proposition (iii), the only dissentient appears to be Mr Bird.
Paragraph 92:
The State's failure to recognise the need for items (a), (b) and (c) in proposition (iii) is not only at odds with practice widely accepted outside New South Wales, it leaves oyster consumers exposed to an unnecessary risk of viral disease - from pollution sources that are capable of being detected and rectified. There being no evidence of facts suggesting it is reasonable for those controlling oyster growing areas in New South Wales to adopt a lesser standard of protection to consumers than is required in comparable communities elsewhere, the State's position must be regarded as failing to ensure an adequate standard of management of oyster growing areas. At this stage, I state this merely as a factual finding, postponing consideration of the State's legal duty to consumers.
Then to paragraph 291 at page 4582. I will read to your Honours the prefatory part of the paragraph that I read a moment ago:
In applying that precept to the present case, it is important to bear in mind that although the oyster industry is a major contributor to the economy of the Great Lakes Shire, the Council has no direct responsibility for the operation of the industry or the quality or safety of Wallis Lake oysters.
Then one gets a contrast, we would suggest, with the finding as his Honour expressed it concerning the State as manager, to which the Court's attention has already been drawn at, for example, paragraph 336 at page 4596. I simply give your Honours the reference. At page 4584 in this context, again at the risk of repetition:
It is not necessary to determine whether the Council owed a duty of care to the oyster growers. It was certainly not obliged to undertake general quality control of the oysters harvested from the lake.
Then over to page 4585 at paragraph 299 his Honour says this:
If there was a duty of care to oyster consumers, as I hold, there can be little doubt it was breached. Prior to the HAV epidemic, the Council took no steps to identify point pollution sources. Although the 1989-93 water tests showed high faecal coliform levels after rain, including in stormwater drains, Council took no steps to ascertain - for example, by E. coli tests of that water - whether human sewage effluent contributed to those high levels. Given that the drains served the towns of Forster and Tuncurry, this was at least a distinct possibility. If tests had revealed significant E. coli levels, this would have indicated a problem of discharge from sewerage pumping stations or septic tanks. Armed with that information, the Council could have taken samples from various locations along the stormwater drains -
and your Honours have seen the locations of these in various places on the maps -
to trace the source of the pollution and then taken whatever steps were necessary to ensure the problem was fixed. All this would have been no more than good housekeeping for a local government authority that took its responsibilities seriously. It is the Shoalhaven Council approach, according to Mr Papworth.
However, it is not necessary for the applicant to depend upon Council's failure to trace effluent emissions. The evidence establishes Council was aware of serious sewage effluent problems in the villages (Nabiac and Cooloongolook) draining to the lake's tributaries. Anybody who gave the matter thought would have realised there was a possibility that viruses in that effluent might reach the lake and contaminate the oysters. That suspicion would have been heightened (at least in relation to Nabiac) if the person read the Laxton report, a copy of which was in Council's possession.
Closer to home, numerous sites were contributors, or potential contributors, to estuarine pollution; for example, the two caravan parks, the Little Street public toilet, the toilet pits on the islands and the houseboats on the lake. If Council did not know about these problems, that was because it chose not to look. Until May 1996, Council's policy was merely to respond to complaints; and this despite the fact that Council's officers knew the complaints they received represented only the tip of the iceberg, that pollution from septic tanks was a widespread problem. The responsible reaction to such knowledge would have been to institute a sanitary survey, especially of premises -
and we would add there, apparently not limited to -
that drained to estuarine waters. Astonishingly, in May 1996 Council's officers took the opposite course, determining not even to respond to complaints.
And, your Honours, at paragraph 392 on page 4613, his Honour concluded, having considered questions of apportionment in this way:
Although I have given the matter considerable thought, I cannot distinguish between the degrees of culpability of the Council, the State and the Barclay companies. The case I have found established is not unlike the type of case that would be described, in an industrial context, as a "system of work" case; that is, the injury stemmed from the failure of management to ensure the safety of the working conditions to which employees were exposed. In their different ways, all three sets of the present respondents had management responsibilities in relation to Wallis Lake and the production of oysters grown in it. All three knew of the risk of viral contamination of the oysters and its likely consequences for consumers. None of them took any action to deal with that risk. They are all equally culpable. Further, there is an equality in the causal relationship between their negligence and the hepatitis A outbreak. If any one of these three sets of respondents had fulfilled the duty of care they owed to consumers, the HAV outbreak would not have occurred.
Your Honours, we make the submission that the way that his Honour seems to have broken it up was that from the powers to which reference has been made there may be taken the basis to impose upon the Council a common law duty, firstly, to undertake an inspection of the waterways. The purpose of that would be to assist, if could be, into ascertaining whether or not some of the waterways were polluted. That, of course, then would lead to whether or not some further action needed to be taken. That then takes one on the step of identifying where the pollution source is to be found.
Take, for example, the exploration of a stormwater drain. It may be found that in a time of rain some pollution came from the stormwater drain into the waterway. That then sets the people in the gumboots up that stormwater drain. Then it may or may not reveal a pathway, ultimately say, to somebody's house.
That, in turn, then, leads, no doubt, to an exercise of identification of that person's house and as it is put against us, armed with that information seeking entry to that site for the purpose of inspecting and determining whether or not the septic tank in that person's house was faulty and was it faulty in such a way as to overflow, leading into a pathway, leading into a stormwater drain, ultimately into the waterway.
That series of exercises his Honour holds represents a duty that may be taken from the powers that we have under section 124 and following to give orders in certain circumstances where a particular site or property has been identified as creating a problem in relation to overflowing effluent in a particular case. Now, your Honours, all of that seems to be predicated on the basis that these powers afford the Council control and management over the private premises, over the stormwater drains, over the villages and so on in the way that the evidence summarised and in the way in which the case was run against us.
CALLINAN J: Mr Nicholas, you referred to Modbury Triangle, I think, in your written submissions.
MR NICHOLAS: Yes, your Honour.
CALLINAN J: Do you have a submission that these people would all have been acting illegally or contrary to the law - - -
MR NICHOLAS: We do, indeed, your Honour, and I was going to come to deal with the question of the notion of control and relationship, certainly, because we would - - -
KIRBY J: That was not a local authority case. Indeed, it was not a statutory authority at all, it was just a private shopping centre.
MR NICHOLAS: It was indeed, your Honour. The case involved consideration of the duties of an occupier and the extent to which a person having control and management of his land and the extent to which it could be said that he could control the activities of third parties and, particularly in Modbury, a criminal. We say that the discussion in Modbury on that subject matter is entirely in point, with respect. Given the time, your Honour, can I simply move on to the question of control and the factor of control that his Honour found existed in this case in a way which enabled him to find the duty.
McHUGH J: Before you do that, you criticised the formulation of the duty in so far as it is expressed in terms of minimisation but why is not the duty, if one applies to you, a duty simply to take reasonable care to prevent harm from the faecal contamination of the waters of Wallis Lake and then the question is, has there been a breach of that duty to take reasonable care, and the particulars of the breach, the matters, by failing to have proper testing procedures, investigation procedures to find out where the contamination was coming from and so on.
MR NICHOLAS: First of all, as your Honour appreciates, his Honour did not find we had a duty in those terms unless you equate prevention of harm with minimisation of harm. That is not the way we saw it because his Honour recognised that you simply could not prevent - - -
McHUGH J: It is a duty to take reasonable care to prevent harm. It does not mean an absolute duty to prevent harm.
MR NICHOLAS: Then that, your Honour, has to be found, we would say if it is going to be imposed upon us, in the legislation which - - -
McHUGH J: Why? It is the common law.
MR NICHOLAS: Well, your Honour, that can only - - -
McHUGH J: One of the purposes of the Act is to require councils to have regard to the protection of the environment in carrying out their duty. Section 7 specifically says so and so that is part of the purposes of the Act and part of your responsibilities, I would have thought.
MR NICHOLAS: Your Honour, to put it that way would suggest that we have a positive duty to do something.
McHUGH J: Yes, an affirmative duty to take reasonable care to prevent harm by the faecal contamination of the waters of Wallis Lake.
MR NICHOLAS: Your Honour, in response to that we would simply that if one came at it from the negative, in other words, that we had a duty not to - to exercise our powers in such a way so as not to pollute, one would have no difficulty. But when one is looking for a basis upon which to impose a duty of the kind that your Honour is postulating, we would simply put to you there is no foundation for it and the common law will not, absent more, seek to impose such a duty.
McHUGH J: People are vulnerable. You have these powers and notion of general reliances are no longer a relevant criterion, but these powers, it has been said in a number of cases, are given so that they will be exercised and exercised responsibly. They are expected to be exercised.
MR NICHOLAS: Certainly, your Honour, but in a particular set of circumstances and I want to deal with the situation where a public authority does have control and where the courts recognise that in circumstances where that can be clearly found - and Brodie is the most recent example - then duties of the kind that your Honour is suggesting may certainly be imposed, but that is not this case with this Council, we would say. Can I take you to Brodie and see how the Court dealt with it?
HAYNE J: Just before you do that, is it significant or is it not that the harm that has ensued in this case comes from the pursuit by a third party, namely, the grower, of a commercial enterprise?
MR NICHOLAS: Not as far as the Council is concerned, your Honour.
McHUGH J: I thought you would have been grabbing that.
HAYNE J: I am surprised by your answer, Mr Nicholas, but so be it.
McHUGH J: That is Modbury territory.
MR NICHOLAS: No, at the end of the day it is the consumer taking from the grower. There is no complaint against us. There is no duty found by us in relation to the grower.
HAYNE J: Just so.
MR NICHOLAS: The duty postulated against us was against the consumer.
HAYNE J: The duty asserted is a duty to take reasonable care to protect the consumer of oysters from harm consequent on faecal contamination of the lake. But that comes about with an intervening step - whether legally significant is what I want to understand - that somebody has chosen to grow oysters there, has chosen to grow oysters in a particular way, harvesting them at particular times and then selling them, and they are doing it for profit. Maybe none of that has any legal significance. If it does not, or if you say it does not, let me at least understand that that is the submission.
McHUGH J: The test, as I formulated it, throws up some very important causation questions in the context of this case.
MR NICHOLAS: It is certainly that, your Honour.
McHUGH J: One of those issues on causation may be the fact that it is a third party.
GLEESON CJ: Or there has been an intervening tortious act.
CALLINAN J: Or two third parties, perhaps. Not only the commercial third party, but also the householders and others whose septic tanks are the original source of pollution.
MR NICHOLAS: Your Honour, I must say I was looking at that in the context of duty rather than causation - - -
HAYNE J: But these issues may, they may not, reflect on questions of duty. I mean, Professor Stapleton has written endlessly about this subject and I think, in some of her writings, a possible point of view that emerges from them is that organisations in the position of the Council are truly to be regarded as peripheral parties. Now, what I want to know is where you stand on this?
MR NICHOLAS: We stand just there, your Honour. We would say the Council is truly a side player. In our submissions, in paragraph 36 - - -
HAYNE J: That is the result, what I need to know is, why? What is it that supports that point to which you want to get? Why do you say that is the result?
MR NICHOLAS: Because there is no power vested in Council which enables it to prevent the growing, or the harvesting, or the sale of oysters.
HAYNE J: But there is lots of power in Council, is there not, to say to a householder, "You have a rotten septic tank, stop it now", and that is the nub of the case against you; you did not.
McHUGH J: And made no real effort to. Made no testing, no plan, no testing of various points, which would have put you on the scent as to where the - - -
HAYNE J: That is an unfortunate expression.
McHUGH J: Deliberately chosen - as to where this faecal contamination was coming from.
MR NICHOLAS: Well, I suppose the questions all that raises, your Honour, may come up on questions of breach and causation. But, really, what that case against us comes down to is we were aware generally of the problem, no one escapes that, and assume against us for the moment that at a point of time, and I think it was in about August 1996, a recommendation was made that we do not react to complaints about septic tanks.
We have addressed that we have an issue about that on the facts and we have put up some submissions to you in our supplementary submissions about that. Assume against me for the moment that that holds. Why, rhetorically, does that put the Council in any different position from a person who knows of the problem, who can foresee the risk and does not do anything about it?
McHUGH J: Because you are a public authority given extreme powers, including powers of entry in a person's premises and it is your responsibility under the Act to have regard to the protection of the environment.
MR NICHOLAS: But, your Honour, we would say that when you read those powers and you read the circumstances in which a particular order might be made, it is simply, with greatest respect, incorrect to categorise them as extreme powers. They certainly do not have the specificity, nor the focus, for example, that powers in relation to fire prevention, the type of provision that the Court dealt with in Lutz and, indeed, in Pyrenees. We would say that it is simply erroneous to categorise the parcel of powers relied upon against us in this case in that way.
McHUGH J: Under section 27 of the Clean Waters Act you have power to - where polluted waters exist, a local authority has power to remove pollution and recover the costs from the polluter.
MR NICHOLAS: But, your Honour, that presupposes - it is dealing with pollution and identifying it and it presupposes that one can identify it. Now, there may be outrage at the fact that we apparently did nothing in response to - or had a policy about doing nothing in response to complaints halfway through - - -
McHUGH J: No, but you say, "We did not have the expertise to do these sanitary surveys", and that is hardly an answer. Local authorities are expected to obtain advice about these things. I mean, it is what is reasonable.
I mean, it is an extraordinary result here. Mr Hoeben comes along and says, "Well, true it is, I put these poisonous oysters on the market, but I am not liable." The State says, "We are not liable." You say you are not liable.
MR NICHOLAS: We say, we are not liable because, mindful of what this Court had to say in, for example, Brodie, in order to establish a duty of the kind that is being put against us, one looks very carefully at the extent of the authority vested in the Council, which enables it to be said that there are armouries of powers - one step back - that it does have, in fact, the control and management, so that it can be said to be responsible for what goes into the stormwater drains and what, ultimately, goes from a private house into a waterway. I want to take the Court to Brodie, where it points to - I think the phrase was, the significant and special circumstances of - - -
GLEESON CJ: Why do you not just give the references?
MR NICHOLAS: Yes, I will. Your Honours, Brodie, paragraphs [102] and [103] referred to the significant and special provisions of the legislation, which imposed upon a traffic authority - or vested, I should say, in a traffic authority the necessary control over the source of the risk of harm. In paragraph [140] of Brodie was a description of in what respects the Local Government Act powers gave to the Council the necessary measure of control over the safety of the persons or the property, which was described as being "significant and exclusive". The statutes which were considered and summed up in [140] were set out at paragraph [62] and following. They are markedly different from the ones that we are dealing with in this case. Then, examples of control were considered in that judgment in Brodie; for example, Romeo was dealt with at paragraph [147], Aiken in paragraph - - -
McHUGH J: But Romeo is a breach case.
MR NICHOLAS: Yes, but it was an example of what needed to be shown in order to found the duty. Aiken is another illustration. That is, as we would say it, take the Court to Modbury. Perhaps it would be sufficient if I give your Honours the references to the paragraphs in Modbury in this context that we would rely upon. Modbury, paragraphs [18] to [21], paragraph [43], paragraphs [108], [109] and [113]. Before leaving it, we would say that in a number of footnotes in the judgment on this question of the importance of control reference is made to Burnie Port Authority v General Jones [1994] HCA 13; 179 CLR 520, particularly the pages at 550 and 552.
We would submit that a careful reading of those passages makes it very plain that our situation is starkly different from that which led to the imposition of a common law duty in the other cases. We would also say, of course, that the situation confronting our Council is markedly different from that in Pyrenees. It is plain from what Justice McHugh had to say in Pyrenees at paragraph 120 and Justice Gummow at paragraph 168 that the very unusual circumstances - and I think that was Justice McHugh's expression - the very unusual circumstances of the case were such that significant and special measure of control could be found. Indeed, your Honour Justice McHugh in Crimmins, in paragraphs 101 and 102, reinforced the exceptional situation in Pyrenees.
Your Honours, the remaining matter that I wanted to deal with is the question of the special relationship or class. Upon what basis can it be said that we owed a duty to oyster consumers? We have dealt with that substantially in our written submissions. If it is sufficient, your Honour the Chief Justice, to give paragraph references to authorities, then I will not elaborate. We rely on what his Honour Justice McHugh in Crimmins at paragraphs 91 and 93 had to say particularly, to the effect that one has to look to see whether it is said that the duty is owed to the public at large or not. Justice Kirby in the same case at paragraph 233 made the distinction very plain between a specific and identifiable person or persons as opposed to a wider range, an indeterminate class.
We would suggest that the Court will find that useful looking at the Privy Council's advice in Yuen v Attorney-General of Hong Kong [1988] 1 AC 175, particularly at pages - - -
McHUGH J: It is an economic loss case though - failure to protect investors.
MR NICHOLAS: Let me complete the reference: pages 194 and 195. What it did say usefully is that there was no duty owed to the public at large and that there was simply no question of a relationship between the inspector, I think he was, and the investor. The potential investors were simply a few among the general public who might choose to invest. We would say with Mr Ryan and other oyster eaters, there was simply no relationship whatsoever between him and the Council at any time.
McHUGH J: Yes, but in the terms of the case against you, you just cannot be looking at oyster eaters. The tramp who comes along one of the rivers and puts his billy can in and takes out a billy can full of water for drinking purposes, why is he not owed a duty of care, or residents?
MR NICHOLAS: Because, your Honour, all of the people, whether they are the fishermen or the swimmers or the fish eaters or the tramp, are indistinguishable from the general public, we would say, and that brings you back to what your Honour had to say in Crimmins, we would say. To the same effect in Modbury at paragraph 35, your Honour Justice Callinan in paragraphs 137, 140, 141 and 147, your Honour the Chief Justice in paragraphs 20 and 35, and Justice Callinan at the references I have given gave consideration to what Mr Justice Dixon had to say in Smith v Leurs and the looking for and the necessity to find a special relationship. We would say if Modbury is useful as an example, there is no special relationship with Mr Ryan and the Council and we would say Mr Ryan was in exactly the same position as the large number of members of the public who might use the car park which was the subject matter of the - - -
McHUGH J: A case like Smith v Leurs and Modbury, they give effect to the common law view that one person has not got power to control another, and there should not be imposed on them the duty to take steps to prevent one party from injuring another party. The very purpose of your existence is to confer on you powers to control others, among other things. They are given public powers.
MR NICHOLAS: Yes, your Honour.
McHUGH J: Each of which can result in prosecution.
MR NICHOLAS: I suppose the irony of all this is, your Honour, that where his Honour holds that what was required to discharge our duty was the conduct of a sanitary survey, what really is happening is that one does not identify - assuming one possibly can, that a reasonable exercise of surveying and then leading into the stormwater drain and then leading up eventually to find streets from which a particular house leaking effluent might be found, it all presupposes of course that not only can the polluter be identified, but he can only be identified after the event. A survey can only act on the information that may be detected from the waters surveyed from time to time. So one is never - in a sense we may have powers once we exhaust all the things it is said that we are required to do to find No 47, march in there and shut them down, we might do that, but that will be long after any polluting activity that has emanated from No 47, and that may lead into issues of course of breach and causation - - -
McHUGH J: It leads to questions of causation. It is not unlike what often happens say in parking stations. The question that arises is whether, if they had a proper system of inspection, would they have spotted the greasy oil and removed it before it harmed the plaintiff. It is a question of causation. You have to make a valued judgment about it, likewise here. If you had a proper system of survey, investigation in, would it have been likely to have eliminated this injury. Certainly it is a contestable proposition, but that is the sort of issue that is raised, but are you denying any duty at all?
MR NICHOLAS: We do. Those are our submissions, your Honour.
GLEESON CJ: Thank you, Mr Nicholas. Mr Hoeben.
MR HOEBEN: Thank you, your Honours. I have undertaken to my learned friends to be extremely brief, and I will be. I only propose to respond to the submissions made by Mr Beach. Most of my response is set out in our reply to their submissions. All I wish to do now, your Honours, very briefly is to deal with some of the additional matters which were raised by Mr Beach in his submissions today.
Your Honours, the issue between us is essentially that of breach. That is a factual issue, yes. It also involves a valued judgment. Our challenge to the decisions at first instance and of the majority in the Full Court is that they did not carry out the balancing process required by Shirt v Wyong Council. Justice Lindgren did, and his analysis, which we adopt, is set out at appeal book 20, 4843 to 4850.
Essentially, what are at issue are the two sides of that balancing process, that is the extent of the risk on the one hand and the adequacy or reasonableness of the response. In relation to response, what my learned friend, Mr Beach, put to the Court today was this. That really we were not required to cease trading altogether, as a response. All that we were required to do was to cease supply until after a sanitary survey was carried out. With respect, your Honours, that is the same thing because it is quite obvious from the other evidence that no sanitary survey would ever have been carried out unless a hepatitis A outbreak had occurred. So it is the same thing as the "failure to warn" approach, that is the response which is being put against us here and, in essence, below was our reasonable response should have been to cease trading and to cease trading indefinitely. We say, your Honours, a proper analysis of the risk would not have required that response.
GAUDRON J: And did the evidence in your case show that you did any tests after the fresh?
MR HOEBEN: Yes.
GAUDRON J: Water tests?
MR HOEBEN: No, they are flesh tests.
GAUDRON J: Only flesh tests.
MR HOEBEN: Only flesh tests, your Honour, and Mr Barclay explained why he considered on the advice of Mr Bird why flesh tests were better. They did a salinity test, I am sorry. That was a water test, I am reminded by my learned junior. But they are all set out in our submissions, the tests and why they were carried out.
Just looking at the other part of the equation, your Honours, that risk element - and I appreciate what Justice McHugh said - this is a question of balance and value judgment, but in essence, the trial judge was very, very careful in his findings against us; he did not find knowledge of actual pollution; he spoke in terms vis-à-vis the growers of knowledge of potential points of pollution and at the end of the day the only evidence was, yes, we knew of septic tank systems in the region. We did not know, of course, that many of them were malfunctioning; we merely knew of their existence. We knew of stormwater drains and channels and that they brought down rubbish when it rained heavily. Yes, we did, but so did everyone else, you might think. On one occasion Mr Barclay himself had seen a public toilet overflow, but had also seen somebody use a shovel to block it. That was the extent of our knowledge and, with respect, your Honours, balancing the risk, the likelihood of the occurrence against a response which involved the cessation of trading and basically the cessation of the sale of oysters in Wallis Lake, we say that balancing process just does not work out.
Your Honours, the only other matters I want to raise which were raised by my learned friend: he put up the proposition that we had wrongly stated the evidence when we said there was no adequate test to detect a virus, in particular HAV. That was the finding below, that was the finding at appeal book 19 page 4490 paragraph 40, and again at appeal book 19 page 4608 paragraph 377. That was the 75AK finding under the Trade Practices Act. That was challenged on appeal and 3:0 in the Federal Court they upheld that finding of fact as to scientific knowledge at the time and really, with respect, it is not open to my learned friend to raise that issue before your Honours again. The fact below was there was no adequate testing for viruses then operating or, for that matter, now.
In relation to the notice of contention point, that is that a further breach involved a failure on the part of Barclay employees to be wandering over public lands looking for pollution points and reporting same, that was correctly rejected by the Full Court, both by Justice Kiefel at appeal book 20 page 4661 at line 10 and by Justice Lindgren appeal book 20 page 4849 at paragraphs 500 and 501. Also, your Honours, it raises a rather new point, that is the causation issue. Could it seriously be said that wanderings of these particular persons, somewhat aimless as they would have been, would have stopped this outbreak and would have prevented Mr Ryan taking the infected oyster? With respect, we would say not. So that notice of contention, we say, does not really assist the situation.
The last point we would like to make your Honours is this. We do adopt what Justice Gaudron said that in essence, from the way this case was conducted, the breaches of sections 74B and 74D of the Trade Practices Act which have been found against us in essence subsume the negligence case. They are much broader in scope. What has to be proved to establish them is significantly limited and the damages are the same. So to the extent that the Court is prepared, if you like, to go into that area of policy, we would certainly support that approach.
Your Honours, if I could finish on a positive note, and there may be some of your Honours that do consume oysters - - -
GAUDRON J: Not any more.
MR HOEBEN: Well, I now have Mr Barclay's interest at heart. At appeal book 19 at page 4482 there is the interesting fact that at age 40, 40 per cent of the population are immune and at age 60, 95 per cent are immune from hepatitis A virus.
GLEESON CJ: I do not know what makes you think that submission is particularly attractive to us. Thank you, Mr Hoeben. Yes, Mr Tobin.
MR TOBIN: Your Honours, Mr Nicholas demurred from the fixing of his client with a duty of care. It should be noted, and I made this point earlier, that at 178 and 179 of the appeal book there is a concession on the pleading by the Council that it did owe a duty of care to oyster consumers with regard to effluent escaping from the Council's premises and causing injury to consumers of such oysters. That is 179 line 25.
I raise that for this reason, your Honours, when one comes ultimately to the question of causation in this case, what Mr Justice Wilcox found was that it was not possible to identify the particular source of the pollution, whether it be a caravan park or the Nabiac village up the river or camping grounds without toilet facilities close to the leaseholds or the Little Street public toilet. Some of those were Council properties, others were not. The Council concedes, if I can put it this way, that were we able to trace the HAV to its premises it would concede a duty of care.
What our case advances is the proposition that in all the circumstances, including those which I have just dealt with, the Council owed not just a duty of care with regard to its premises but a more general duty, that is, extending from its premises to those premises until its direct supervision and the capacity of the Council to control effluent.
GLEESON CJ: Did the owners of the houses with the defective septic tanks owe a duty of care to oyster consumers?
MR TOBIN: At the end of the day they would, your Honour, but if one analyses the difficulty of that as a problem in negligence, it is the inability, realistically, to trace the HAV source to a particular pollution point in the facts of this case. So, in the facts of this case it was not possible to sue, for example, a manager or proprietor of a caravan park from which effluent escaped in the river and which could be identified as a source of HAV. Whatever attempts, forensically, were made to do that were unsuccessful.
So, there is a very real question to do with the issue of fairness, and I use that in the sense used in the Burnie Port Case, in dealing with the availability of remedies to the consumers at the end of the chain as to who is to be identified as holding the liability. I have dealt with the State and I will not trespass on that territory again, but with regard to the Council, it seems, in our submission, that there is a very significant factor that what councils do, inter alia, but largely is manage and supervise the sewerage in the municipality or the shire and in country areas, a fortiori, where there are septic tanks susceptible, as history has shown, to causing outbreaks of enteric illness, enteric viruses in oyster growing areas.
The task that we have to convince your Honours is to close the circle and say, is it a proper outcome that in addition to the duty of care which the Council admits with regard to its own premises and in the absence of any available knowledge in a case of this kind of being able to identify any premises, or premises in the plural, as being the actual sources of the contamination, is it a proper outcome to say that the duty of care extended, vis-à-vis the Council, to those other areas which it controlled.
There is an argument advanced and I will not dwell on it, as to the capacity, as it were, of the Council to exercise that control. At page 4153 of the appeal books, your Honours, there is a notice issued to a Nabiac resident in 1995 requiring that resident to fix up the septic system and after the events in question - your Honours will recall the passages from Justice Wilcox's judgment - a sanitary survey was in fact conducted and the scale and extent of it and the cost of it is set out in that judgment. If I could give your Honours the references to Mr Justice Wilcox's judgment. They are paragraphs 42 and 43, the activities post the outbreak are discussed at paragraphs 244 and 245 and an analysis of the cost question is discussed at paragraphs 282 and 283.
Your Honours, the second issue that we would wish to deal with is that of the third party manufacturer, as it were, intervening in a causal sense between the consumer and the Council and its role with regard to the sources of pollution. As I said yesterday, your Honours, in opening, what, in our submission, is a very important aspect - and it is purely a factual question to do with the matters in this case - is the function of oysters in increasing the viral load so, as the medical evidence found, the oyster consumer is going to be ingesting 50 times that of the casual swimmer and the virulence, the viral load ingested by the oyster consumer, will determine the seriousness of the illness.
The seriousness of the illness, in other words, will increase as the oyster in the depuration process is less able to expel the virus from its system. That takes us, your Honours, to the issue in framing the duty of care, to the questions of vulnerability and that of control or capacity to control. It has been put against us that when one comes to look at the Council and its relationship with the oyster consumer, there are not those special indicia of a relationship sufficient to found a duty of care.
The answer that we make to that, your Honours, is to emphasise the issues of the seriousness and likelihood of the risk, the vulnerability of the consumer at the end of the chain in being, in absolute terms, incapable of protecting herself or himself, and the issues of control, or as Justice Gaudron reminds me, perhaps the better description, the capacity residing in the authority to deal with the risk. We have added, of course, whether it is consonant with the statutory purposes for that duty of care to be found, and we submit that it is, and we are conscious, your Honours, of the fact that issues of policy would be separated, immune, as it were, from the fixing of the duty of care, but there is no evidence that such is relevant in this case.
At the end of the day the striking fact about the case is that among the defendants, each points to the other and protests an incapacity to deal with the risk. Now, that may be something that at the end of the day the Court upholds on the issue of negligence - I leave aside the Trade Practices Act issue. We would submit that on the common law of negligence it is an odd result, indeed, so odd that your Honours would not embrace it, that the arguments advanced as to the inscrutability of this virus in the oyster somehow operates to exculpate the individual respondents in the court below.
CALLINAN J: Is there any difference between a council and, say, an aviation authority or a fire prevention authority or, indeed, any authority at all, that has coercive powers to minimise risks to the public?
MR TOBIN: In the category, your Honour, of personal injury - and we would accept that that is a governing factor as it were, a control test here, but in the area of personal injury if the fixing of a duty of care is consonant with the purposes of the statute, we would say yes to that. That is to say - - -
CALLINAN J: You really have to, do you not?
MR TOBIN: Yes, but each case, of course, will, in fact, depend upon its own facts.
CALLINAN J: Crimmins for example, I thought, was a very special case. It was a unique industry with all sorts of special features that I could not think of applying to any other industry, but this case is not. It is very easy to think of parallel examples in many, many other areas, which gives rise to a policy question of the kind that you mentioned.
MR TOBIN: Yes, I accept that, your Honour. It seems, in our submission, though that if one scrutinises the activity in issue here, it is actually a narrow ambit which we would say required the Council to do what it ought to be doing in any event. In other words, there seems to us to be a gap between the arguments that somehow this is an intrusion upon the powers of the Council and its freedom or immunity from common law liability, when what we say the Council ought to have done in a common law sense to satisfy the postulated duty of care is what it should do in any event.
Perhaps I should not speak as if your Honours were a jury, but it is deeply disturbing to read the facts of the case and to contemplate that close to the largest city in the country, the day-to-day activities with regard to sewage control are at a standard of the fourth world.
CALLINAN J: You say they should not be allowed to fall into the cracks between the floorboards?
MR TOBIN: Yes, we do say that, your Honour, and we say also that if your Honours hesitate and say, "This is to create, as it were, an area of remedy for identifiable classes within the public against the local government authorities - - -
HAYNE J: I am sorry, you said "identifiable classes"?
MR TOBIN: Yes.
HAYNE J: What is the class you identify, Mr Tobin?
MR TOBIN: That part of the public which consumes oysters from Wallis Lake. I embrace your Honour - - -
HAYNE J: The duty you postulate is a duty to the world, because the duty you say is one which is owed to anyone who uses the waters, who comes near the waters, who eats product from the waters.
MR TOBIN: No, that is not our case. Our case is to - - -
HAYNE J: Where lies the line, Mr Tobin?
MR TOBIN: Our case is to the oyster consumers.
HAYNE J: I can understand your relationship posited with the oyster grower, but it is the oyster grower who sells this product. It is the oyster grower who chooses where to grow the product. The Council controls the waters. You say it has lots of power. I need little persuasion of the fact that it has lots of power directed to making the water pure, or at least not obviously harmful. But it is the oyster grower who chooses to grow there. Why does the Council owe any obligation to someone who has an ultimately commercially-based relationship with an enterprise carried on for profit in this water?
MR TOBIN: Mr Ryan was a volunteer, as it were. He received the oysters as a present, such as it was, on Christmas Day, so he ate those oysters without that relationship with the growers. Additionally, your Honour, what seems important, in our submission, is that to the knowledge of the Council and with the assistance of the Council, this industry carried on its business of growing oysters which fed in the waters which were the subject ultimately of obligations on the Council to keep pure.
It seems to us that although the parallels with the manufacturing cases are, perhaps I should say a little scratchy, there are parallels. The oysters, a form of manufacture under the Trade Practices Act definition grow, develop, through ingesting the waters, feeding off the waters, which are under the jurisdiction of the Council. That, in our submission, creates this nexus between the consumer and the Council. But at the end of the day, if one could trace it, that HAV virus or viruses ingested by Mr Ryan would, on the findings of his Honour, be found to have come from one or other of the sites either owned or under the management or control of the Council from which effluent escaped into the waters, that effluent being infected with HAV.
The duty to the world at large that your Honour postulates, we would submit, is not an appropriate test. We would adopt, with respect, what Justice McHugh said, where issues of personal injury are involved, there is a sense in which the specified class of the public is self-defining. That is, that it does not create the problems of a control mechanism that arise in financial loss cases.
CALLINAN J: Mr Tobin, is there any evidence whether the oyster leaseholders paid Council rates or any fees at all to the Council?
MR TOBIN: I know, your Honour, that some of the premises - I am leaving outside the leases, but the land-based premises would obviously be subject to Council rates. My learned friends say that there was not evidence with regard to the oyster leases and I did not suggest otherwise, but my understanding would be that the purification plants, which are little factories, as it were, on the water's edge, would be likely to be subject to Council rating. We could check that, your Honours.
Your Honours, in the course of Mr Nicholas' address, he referred to an eight-page document which I understand was submitted to your Honours. I have not had the opportunity to read it and I would seek leave for our side to answer it in, perhaps, seven days or something like that, your Honour.
GLEESON CJ: Yes, you have that leave.
MR TOBIN: Thank you. Your Honours there is one last issue - the oyster leases are excluded. I think I have clarified that. Your Honours, there is one last issue with regard to the Trade Practices Act. Your Honours, excuse me for a second.
GUMMOW J: Would you just tell me that page Mr Nicholas showed you?
MR TOBIN: Yes, it is page 1492 - - -
GUMMOW J: Thank you.
MR TOBIN: And it says, in paragraph 15:
From 1 July 1994 onwards, Council ceased to collect rates from oyster leases. The shortfall was approximately $70,000. This was made up by increasing the rates charged to other properties.
Such is the system, the principles of equality, Your Honour.
CALLINAN J: It sounds like some protection there. Does the ACCC know about this?
MR TOBIN: Your Honour, Justice Callinan raised the question of rates, At paragraph 3 of Justice Wilcox's judgment he refers to the fact that there are 48 aquaculture permit holders in this lake area. Your Honours would have no doubt seen that. It employs 350 people and makes a substantial contribution to the economy of the shire, but that is only part of it.
I am conscious of the time, your Honours, with my learned friend's help. There is a reference at page 3499 to a fatality and I will not do other than refer your Honours to that page.
With regard to the question that Justice Gaudron raised with me before lunch about the Trade Practices Act and whether the operation of that statute militates against the recognition of a duty of care. Justice Wilcox dealt with the trade practices count at the end of his judgment, I will not take your Honours to it at this stage. I have not been able to do a technical analysis of the Sale of Goods Act at the State level and the operation of the Trade Practices Act with regard to this particular proceeding. But it would seem to us that with regard to the Sale of Good Act, if the oysters are purchased are not of merchantable quality and are consumed by members of the family who themselves have not purchased it, they becoming ill, they would not have the contractual relationship that would give them a remedy under the sale of goods legislation.
By way of parallel, section 71 of the Trade Practices Act mirrors the old-style Sale of Goods, and we were unable, on behalf of Mr Ryan, to mount a case because of that fact; he was not a purchaser. The second aspect is this, your Honours, and it goes to the difficulty of tracing the chain. If one postulates the guests who consume oysters and contract HAV, themselves not having purchased it, they may have a remedy against the supplier. The supplier can, if a notice is served, avoid liability by identifying the source of supply - that seems to be the effect of 75AJ.
As Mr Beach put to your Honours, there will be inevitable difficulties if oyster eaters are like grape eaters or stone fruit eaters, that is, they tend to eat a lot of them. The difficulty will be if the supplier identifies three sources of supply, there is no way, because of the nature of the HAV virus, that the guests, who might otherwise have a remedy against the supplier, would be able to identify which of the three designated manufacturers who sent the product to the supplier might be liable for the provision of the HAV-infected oyster.
GLEESON CJ: Now, I think we have heard this argument from Mr Beach.
MR TOBIN: Yes. I raise it again in answer to Mr Hoeben, because it is our submission that the effect of the Trade Practices Act and the Sale of Goods Act does not provide the ready remedy which would, as it were, displace the availability or the desirability of fixing the government authorities with liability in tort by defining at least at the beginning of a duty of care. They are our submissions, your Honour.
GLEESON CJ: Thank you, Mr Tobin. Yes, Mr Walker.
MR WALKER: May it please your Honours. May I start with the question of the case concerning the EPA, the Environment Protection Authority. It is clear, by evolution traced in the papers before your Honours, that it was by no means as general as it might once have been thought to have been pleaded, by the time it reached decision at first instance.
Your Honours have already seen the pleading, volume 1, pages 111 to 113. May I simply draw to attention, without going to them, that among the copious particulars in relation to the EPA and failures to inspect included two references to caravan parks - a ski park and a caravan park - among many others. However, by the time the case came to be run and argued before Mr Justice Wilcox, the matter fell to be recorded by his Honour and dealt with by his Honour in a manner not protested, either in the Full Court below or in this Court, as reflecting an inaccuracy on his Honour's part as to the history of the forensic course.
Paragraphs 317, especially 323 and the decision at 326, 329 and 330, all of which your Honours have already seen, record beyond any doubt that it was the caravan parks and the inspection thereof which was the EPA case under that title advanced by the applicant by the time the matter came to decision. The notice of contention in the Full Court of the Federal Court which your Honours will find in volume 19 - - -
KIRBY J: It is not expressed that way in the pleading, is it?
MR WALKER: No. In the pleading there are many particulars, for example, of failure to inspect and of matters concerning sites of ingress of possible contamination beyond the two caravan parks but the course of the hearing, the way in which the applicant pressed the case, reduced it and his Honour records what counsel argued, what counsel argued. That means my learned friend Mr Tobin. What counsel argued concerned the caravan parks. It was narrowed.
KIRBY J: Did his Honour put it like that? I did not have that impression myself that he had reduced it to the caravan park.
MR WALKER: Yes. At 323, in particular, your Honour will find that.
KIRBY J: That is the paragraph, is it?
MR WALKER: Yes. The notice of contention in the Full Court of the Federal Court, your Honours, which will be found in volume 19 page 4628, referred to by Justice Lindgren in his reasons, particularly at the passage found in volume 24, 708, line 35 makes it crystal clear that what the protest was concerning the EPA case, so-called, at the instance of the disappointed applicant, Mr Ryan, had to do again with the caravan parks. There was no protest where there should otherwise have been protest that his Honour had unaccountably failed to decide what they sought to be decided.
Then when one comes, for example, to the trace of that in the Full Court, Mr Justice Lindgren's decision, paragraph 479 again makes it plain that it was the caravan parks in question. It is too late. There is nothing left to go beyond the caravan parks with respect to the EPA and a failure to inspect in this Court. The attempt to do so which was introduced in my learned friend's addresses should be resisted.
KIRBY J: But if you look at 332 where his Honour refers to a series of facts which I take are sort of facts he is finding, At (e) he says:
through the EPA, the State had powers under the Clean Waters Act to remove, disperse . . . and to carry out inspections and investigations of premises -
It is not - - -
MR WALKER: Yes, your Honour anticipates my next point which is what I referred to in-chief and which is not dealt with by the comment which I am now replying to. The EPA definitely came into the case the way that Justice Wilcox decided it not with respect to a failure to inspect any particular site but because it was the body through whom - that is, the agency of the State, to put it at its most generous to the applicant - which had through its officers powers of compulsory entry by which a sanitary survey which would be otherwise than serendipitous could be carried out.
KIRBY J: He says also - I am referring to 334, on the following page. He said:
The EPA was involved in inspections and directions in relation to premises in the Wallis Lake catchment area.
MR WALKER: Your Honour, there is no finding of any shortcoming in any of those inspections. The findings to which I have already drawn your attention - - -
KIRBY J: These are all conducive to his final statement in 334:
It exercised that control by day-to-day operational decisions.
MR WALKER: No, your Honour. That is how it ends up, but there is nothing day-to-day about EPA inspections.
KIRBY J: He says - the preceding sentence:
Decisions by EPA regarding the necessity to inspect premises - - -
MR WALKER: There is no evidence of day-to-day inspections, your Honour.
KIRBY J: He is not confining it to the caravan park.
MR WALKER: No. There is no finding of any case, none sought, that any inspections were carried out negligently, your Honour, except for the - - -
KIRBY J: Inspections are only to help understand evidence. They are not part of the evidence themselves, at least as I understand the law.
MR WALKER: Except for the caravan parks. Only the caravan parks were pressed to showing negligent inspection, notwithstanding the breadth of the pleading. The EPA thereafter comes into the case simply and solely as the means by which the State could have contributed to or conducted a sanitary survey, so called, by reason of its compulsory powers of entry onto private property, and that is it. That of course has already been dealt with by my address in-chief. I do not wish to repeat myself.
There were no facts found of a kind that would find reflection in the approach taken in Pyrenees, Lutz or the Canadian case, Swanson, which can be said to have excited the EPA's power of compulsory entry under section 29 of the Clean Waters Act of any particular premises draining into Wallis Lake as opposed to all the other premises draining into all other aquacultural waters in New South Wales. There was no singling out evidence of the kind one would expect from Pyrenees. Constructive knowledge is of dubious and circular quality, circular in this case because the power in question is a power to acquire knowledge, to inspect premises and find out something by tests. One cannot have constructive knowledge leading to that. Because you should have known the fact, you should have used the power to find out the fact. That is circular. In any event, it is a dubious quality, as your Honour Justice McHugh pointed out in Crimmins [1999] HCA 59; 200 CLR 1 at paragraph 102.
The next point we wish to make was the submission concerning the non-monitoring by the EPA, by the Department of Health - it was not clear in the submission - of the waters used for depuration.
That is a case not available in this Court either. One sees its rejection by the trial judge at paragraph 321. Nothing is drawn to attention as to why that is either an issue before or successful argument before your Honours. May I, with respect to the pleading matter that your Honour Justice Kirby has raised now and previously with my learned friends, point out that in Justice Kiefel's reasons in the Full Court at paragraph 604 there is an extremely concise dismissal of the State's protest in its appeal before the Full Court about the decision having travelled beyond the pleadings.
But the only reason given by her Honour, in rejecting that attack, was to note simply that the power in question, which we know from other context means the power under sections 189 and 8 of the Clean Waters Act, had been squarely raised. Of course, so it had been, in the passage of the pleadings to which I took your Honours in my opening. But, of course, it had been raised there as part of the factual chain of causal steps between negligence to do with the lack of a program and Mr Ryan's illness.
The next point to which I wish to come relates to the matter raised by your Honour Justice Callinan based upon the statement by Chief Justice Gibbs in Sutherland v Heyman 157 CLR 455. I need hardly remind your Honour Justice Hayne that that is the very passage that your Honour cited in Brodie at paragraph [288]. A similar concept, with respect, though without that citation, might be said to have been revisited by your Honour Justice McHugh in Pyrenees [1998] HCA 3; 192 CLR 330 in the passage, paragraphs 106 to 110. We draw attention, particularly, to paragraph 108 and make two comments about it.
First, your Honour Justice McHugh was referring in particular to the matter of general reliance about which no more need be said. But, your Honour, in particular, with respect to the question of a power to do something, referred to the possibility of a public duty of a kind which is redolent of what Chief Justice Gibbs referred to when talking about the need to consider the exercise of a power. This calls in train, of course, some very important distinctions which your Honours have observed in the previous cases but which, perhaps, have not been observed in the address of my learned friend. A distinction between duties, or public trusts, to use a more political science expression, enforceable, basically, at the ballot box by petition and by complaint. Second, duties enforceable by mandamus, which are the sort that Justice Brennan has particularly referred to and which your Honour Justice McHugh referred to in the passage in question. Finally, a common law duty, actionable in negligence, for the kind which is in question in this case.
CALLINAN J: Mr Walker, what concerns me is this. Pyrenees does not immediately make clear to me what the status of that statement by Chief Justice Gibbs was. It was agreed in by Justice Wilson - - -
MR WALKER: Can I suggest this to your Honour, that it does not find reflection, that it is not really consistent to the extent that it is probably inconsistent with the following three approaches: Justice Mason at pages 459 to 460 of 157 CLR speaks in terms, as your Honours will recall, of the difficulty of converting a power into a common law duty - - -
CALLINAN J: But Justice Mason, in fact, says something very similar, I notice, and not in that passage that was subsequently disapproved by three Judges in Pyrenees.
MR WALKER: The first passage is one which is really not consistent with a reading in isolation of Chief Justice Gibb's passage, because if all one had to do was to say, "But there is always a duty to consider exercise of power", it would not follow that you could simply say, "There is no common law duty for failure if there is only a statutory power." Then one moves to Justice Brennan, in particular the passages are 479 point 9, 481 point 9, 483 and 485, especially 486, and Justice Deane at 498, 500, 501 to 502 especially. In those passages, if I may attempt a summary, their Honours referred to a quite distinct concept, factually based, prescient perhaps of the particular decision in Pyrenees, where their Honours contemplated that where there was a statutory power, circumstances which demonstrated real actual, not the so-called doctrine of general reliance, but real or actual reliance, might lead to an expectation from previous dealings that there would be the exercise of a power by reason of it having been exercised, for example, in the past.
Highly special facts are called up, such as one finds in Lutz, where In our submission, the Chief Justice, it is not elaborated, it is not ratio, it is all obiter. In our submission, the words do not fall to be interpreted in that fashion and, with great respect, they do not appear to have been used as if they did by your Honour Justice Hayne in Brodie.
CALLINAN J: Is this the position - and this is what I really want to know - do you say that Pyrenees can be reconciled with Sutherland?
MR WALKER: It depends on which bits of Sutherland, your Honour.
CALLINAN J: The bit of Sutherland that I quoted of Chief Justice Gibbs.
MR WALKER: No. If that is taken as it were as a statement of the law good for all purposes, that is, regardless of circumstances - and, with great respect, it should not be - then no, it is not reconcilable because it leaves out any explanation - - -
CALLINAN J: It seems to have been rejected, you are quite right, by Justice Mason at page 465, I think, as a test. Is that your impression?
MR WALKER: Yes, your Honour.
CALLINAN J: So, there are only two Justices saying it in Sutherland and statements that are really inconsistent with it in Pyrenees.
MR WALKER: Your Honour, taken in isolation it seems to say that without more, look at a statutory power and if you cannot sue for its negligent exercise, then you can, from the same set of facts, sue for a negligent failure to consider its exercise. With great respect to the Chief Justice, when one looks at the body of his reasons, where a great deal of thought and juristic analysis is applied to the problem of the difference between action and inaction by statutory authorities, it does not follow that that passage should be read as if without more, without attention to relationship with special circumstances such as Pyrenees or Crimmins would suggest, that it gives rise to an actionable common law duty.
GUMMOW J: You have to remember the plaintiff failed - - -
MR WALKER: Yes, a fact that is little remarked when people talk about what it is supposed to hold.
GUMMOW J: Yes, that is right.
CALLINAN J: It is a very far-reaching proposition, I must say.
MR WALKER: I am sorry, your Honour.
CALLINAN J: It strikes me as a very, very far-reaching proposition, if it is right, with all sorts of ramifications.
MR WALKER: I shrink from saying Chief Justice Gibbs was wrong because it needs to be read in a full context, but taken in isolation it would not be a complete nor wholly reliable guide to what the common law is, in our submission. There is another answer at much lower level, namely, that none of that was pleaded, argued or decided below and it is not open now.
CALLINAN J: It was really found, though, was it not?
MR WALKER: No, your Honour.
CALLINAN J: I thought Justice Wilcox's finding - - -
MR WALKER: One reason why it was not found is one considers the comment that we had breached our duty or our duty had devolved upon us so as to call for us to act some time long before November 1996. When? By dint of what circumstances? Or, worse still, was there meant to be an officer of the State thinking about Clean Waters Act compulsory entry powers continuously - I do not mean from time to time, I mean continuously - for this particular estuary?
That is absurd, so there needs to be something to call in aid to make reasonable in any sense, be it public law or private law, giving advertent thought to the need to exercise that power. The State has a panoply of powers which require to be exercised, and thought to be given to their possible exercise, only according to circumstances and those circumstances surely include not thinking in the abstract about all the possible multifarious and infinitely various manners in which they might be exercised.
your Honour Justice Kirby will recall from your Honour's reasons at 12 NSWLR 299D, the findings there were able to extend so far as a reassurance held out by the relevant officer to the aggrieved citizen that things would be looked after, in effect. Now, that is doctrinally, or conceptually I should say, quite a different concept from simply saying where there is a statutory power it can be enforceable at common law for failure to exercise it by dint of the intermediate reasoning that there must have been a failure to consider its exercise.
It is never to be forgotten, of course, with respect to compulsory entry and what might happen after you have compulsorily entered and suspected that somebody's septic tank could do with some work. There can be no guarantee, not least because mechanical breakdowns happen from time to time, and perhaps even gradually. When one compares the comments by Justice Wilcox at trial, in paragraphs 337 and 338, which are pregnant with his Honour's acceptance of the possibility - the continuous, that is, the constant possibility - of failure, it is, in our submission, all the more to be rejected that there was some continuing obligation always to be thinking about exercising compulsory entry powers under the Clean Waters Act in the catchment area of Wallis Lake, and presumably everywhere else in New South Wales, so as to render us liable for breach of a common law duty.
May I next come to the question of the Canadian authority relied upon by my learned friend, Swanson v Canada (1991) 80 DLR (4th) 741. The passage, already quoted, from 744 to 745, containing what can only be described as pure gold for plaintiffs' counsel by way of the facts available, fit, in our submission, entirely into the mould set by Pyrenees, and earlier in the Court of Appeal in New South Wales in Lutz. They are highly special.
After all, following actual face-to-face encounter with the aviators in question, with the aviation company in question, within the inspection service with its statutory mandate, duty or responsibility, the warning was made, "People are going to be killed". It did not require branding as post hoc propter hoc for the later connection to be drawn. In our submission, that is Pyrenees. In our submission, that is Lutz.
But there is nothing here, your Honours have not been shown any facts apart from that which was known, general - not only to New South Wales but to the world, namely, that if you have humans who defecate, as they do, in catchment areas where rain may wash into an estuary, which it does, and oysters grow in an estuary, then there is a risk. No one has ever said, you can eliminate the risk, but what is said against us, that that puts a common law duty on the State which, the more one reflects, must be operating as we speak now, and must be operating not merely for Wallis Lake but for every place where there is aquaculture - and we go further. It must be operating - when one thinks about the breadth of the Clean Waters Act, which goes far beyond ensuring the cleanliness of water for aquaculture or for swimming - it must be extending to all waters of New South Wales, because one does not have to be a scientist to know that contamination washed from a catchment into a reservoir, creek, river, sea, is liable to hurt people. In our submission, simply to state that proposition is to reject it.
Can we exemplify that by reference yet again to the Fisheries Management Act. As our learned friends spoke about the problems of oysters, the threat of death and the possibility of complete closure of fishery, what springs to mind is section 190 of that Act. Section 190 starts as if it were declaring oysters to be royal fish. There are exceptions then created. Firstly, oysters covered by aquaculture permits are the property of the person farming them. Secondly, under section 190(3) all of us, the public, have the right to take oysters, that is, outside oyster leases, from public waters.
That is obviously a matter of which New South Wales is aware in the most solemn fashion. Parliament has enacted the liberty. Now, section 189 closure powers will not apply to that. They are restricted to aquaculture permit oysters which are owned by the permit holders. So, for all of those oysters that one sees at low tide, if they are maritime, or sees in estuaries, and which you are tempted to take and you are permitted to take, what is the common law duty?
We hear, for example, that Mr Ryan is a volunteer, for whatever relevance that is, so one can leave out commerciality as any part of Mr Ryan's argument here. What about the person who exercises the statutory right under 190(3) of the Act to take oysters? We know - that is the State knows - that waters - and these are now all the public waters of New South Wales - are liable to pollution. It is in the nature of the water and it long precedes human habitation and human habitation is just a form of pollution.
Is there a duty because of the capacity under section 8 which simply becomes available directly for the Minister to forbid the taking of the oysters? Could there be a common law case in which a plaintiff says, in effect, "You should have criminalised that which I did which caused me injury". In our submission, again simply to state the proposition is to reject it, not least because no line appears in any of the argument offered by Mr Ryan in this Court between that position and the position for which he contends in his particular case.
May I then move to the question which gave rise to some of these concerns, namely the possibility of permanently closing the fishery because the risk cannot be eliminated.
We call in aid, of course, already the proposition clear from the facts in the case and the findings in the case not challenged that the risk cannot be eliminated. We note particularly what Justice Wilcox found, not only at the passages I have already cited, but also paragraph 49. Paragraph 58 in his quotation of evidence he plainly accepted, appeal book 19, 4498 lines 20 to 25 and, similarly for Europe paragraph 63 at appeal book 19, 4500 line 10. Justice Lindgren was able, without challenge in this Court, to describe as common ground in his paragraph 392 the fact that you cannot eliminate risk.
In our submission, there is nothing in any of the judgments below that suggest that that was sufficient to render the State liable because we could have prohibited, by an administrative act which is plainly quasi-legislative, the taking or fishing of oysters in New South Wales, the kind of conduct which you would normally expect, your Honours, to be accomplished by a statute. Yet of course we are not sued for not legislating. Rather, we are apparently sued for not carrying out the quasi-legislative act, which appears very legislative when one considers the means by which, and the result with which, it was supposed to have been exercised.
We also had this factual matter, in answer to what my learned friend says about permanent closure: we did have the long experience of no such reported problem at this estuary, as opposed, for example, to the Tweed estuary. Now, that demonstrates at least two things. First, you cannot equate one estuary with another, and all the science and evidence would suggest that must be right otherwise why have sanitary surveys at particular places.
Second, the risk must have been small, no one can quantify, and suggestions to the contrary are plainly wrong and without evidentiary substantiation, what that risk was. But it must have been small because whether it is 50 years or 100 years there is no reported outbreak. Now, one would reject, as a matter of commonsense, that that means that there has been stunningly good luck for 50 or 100 years - that would be contrary to such statistical information as your Honours would take as judicial notice.
GAUDRON J: You are assuming a static situation though.
MR WALKER: No, your Honour, I am assuming the dynamic situation whereby there are seasonal influxes of people in holiday places; whereby at some times, in earlier times, seasonal influxes would have been perhaps totally unplumbed whereas nowadays much larger people may be plumbed as to their sewerage. In other words, lots of dynamic change, but over all of those varieties of experience, no report. Your Honours will recall in opening I pointed out, no one ever essayed the task which would have been logically evocative of showing that since the last major rainfall and the rainfall which caused Mr Ryan's downfall, there had been some change in what I will call the sewage watershed of this estuary. Now, without that it is difficult to put to one side the past record.
GAUDRON J: But is that not implicit in Justice Wilcox's finding, that it had been deteriorating over time?
MR WALKER: If it is implicit, then it is an elementary judicial error because it is a finding without any evidence. No, his Honour finds facts and they do not support any such inference.
GAUDRON J: There is some evidence, is there not, there was so many complaints about sewerage that the Council decides not to act on them?
MR WALKER: No, your Honour is asking about the Council, I am talking about the State at the level of State agency with respect to an HAV risk for the oyster fishery and, your Honour, the very fact that there had been all those complaints and no HAV outbreak is something which only highlights the rarity of the viral contamination.
McHUGH J: Well, I am not sure that you can say it is rare. As I said to you yesterday, the most you can say is, it has not been identified, but given the - - -
MR WALKER: Well there is evidence that it is rare.
McHUGH J: - - -period 30 to 50 days, I mean, lots of people may have suffered from eating Wallis Lake oysters, but - - -
MR WALKER: That is speculation, your Honour.
McHUGH J: No, of course - - -
MR WALKER: We cannot speculate. The precautionary principles spoken about in, for example, environmental statutes, does not justify us closing down everything because it is risky and certainly does not justify this Court imposing a duty of care on us sounding - - -
McHUGH J: I am not suggesting it is; I am just challenging your statement that it is rare. I am not sure you can make such an absolute statement.
MR WALKER: The word is used in the record, your Honour.
McHUGH J: Well, that does not make it right.
MR WALKER: No. Next may I simply observe that we are in the area of tort, which pivots on the concept of reasonableness, which is not suggestive of an elimination of all risk and it may be contrasted, importantly, with the area of warranties in contract or statutory implied terms, which appear to be contract but are really public law and statutory obligations on suppliers, which build on what might be expected in contract, but are really just general public law. They do require performance with only stipulated exceptions, but the law of tort does not.
The next matter I need to come to is my learned friend Mr Tobin's statement that the applicant Mr Ryan had been careful to avoid in the presentation of his case the proposition the State had breached the duty of care to exercise actual statutory powers. We could be forgiven for thinking that the opposite was the case. My learned friend put that in particular where he drew to your attention the fact of a voluntary closure and there was a suggestion that that was all he was talking about; it needs to be dealt with on several different levels that proposition.
As to the voluntary closure, the facts are found in volume 7, 1670, lines 30 to 35, in Mr Barclay's evidence. He talks about the 14 February meeting, the Valentine's Day meeting, where the closure was determined. Dr Jackson, who was involved with the QAP, the Quality Assurance Program, signed a memo with the difficult syntax that your Honour Justice Kirby drew to attention in volume 14, 3478. That is the state of the evidence. There is no pleading, of course, about the State's duty to effect a voluntary closure.
There is no real case, according to one's trace of how the case was presented at trial in Justice Wilcox's reasons. May I simply list the references - 332 your Honours are already very familiar with. One goes back to 102 and 106. One goes forward to 340. In the Full Court, Justice Lee, 62, Justice Kiefel, 601 to 604. These are the familiar passages where section 189 or section 8 are all called in aid. But, assuming there were an allegation, which is currently properly before this Court, about a failure on our part to effect a voluntary closure, whatever that may mean.
If one thinks of the wedding at Cana, what was the water and what was the wine? What was the duty? What was the power that got converted into what duty by the circumstances of this case? Is it a mere executive power for public servants to talk to people and to encourage them to do the right thing? That has never been pleaded and certainly not been explored in any evidentiary sense. If that is the power, what kind of duty does that get turned into? Is it a duty to be persuasive, especially persuasive or successfully persuasive - - -
GUMMOW J: Or just irritating.
MR WALKER: - - -bearing in mind that the QAP is a matter of policy beyond criticism in this case had been set up with an industry majority. As it turns out, we have been more or less comforted, one would have thought, in the appropriateness as a matter of policy of enlisting co-operation from the industry by reason of what actually did happen in this case, but none of the answers to the questions I have just asked are available either from Mr Ryan's argument here or anywhere below or from any of the findings of fact below.
Finally, we come to the way in which, from Mr Tobin's address, the complaint against us really falls to be measured. It really is a complaint that the State's regulation of the matter was not more stringent. Of course he must draw short of saying that your legislative means were inadequate or your delegated legislative means were inadequate. He does not draw short of saying "Your quasi-legislative means were inadequate", even though he flirted with the voluntary closure point. We have already put our arguments as to why the quasi-legislative means, that is section 189 and section 8, should be rejected. But if it is not that, what else is it?
In our submission, the answers to all of those questions of principle are to be found in the reasons of Justice Lindgren, which for the second time I state we rely upon subject to reading in the light of Brodie. In particular, there are conclusions at paragraphs 460, 463, 466, 469 and 474 of Justice Lindgren's reasons upon which, with great respect, we rely. In conclusion, apropos my learned friend Mr Tobin's reference to paragraph 152(2)(e) of the Fisheries Management Act as some indication of the vigour of the common law at this point, may we make it quite clear what we are not arguing.
We have never argued that the State is not liable at common law for negligence in the discharge of its statutory duties or the exercise of its statutory powers. In other words, we accept what Lord Blackburn said, in its full application, in Geddis v Bann Reservoir. There is no difficulty about this. The difficulty lies in moving from the ordinary case dealt with in Geddis to the case here where we are taxed with not having exercised powers that we possessed.
As to the use of statute, with respect to the imposition of duties and the like, may I simply refer to what your Honours in the majority of the majority of Brodie said in paragraph [132] of Brodie. For those reasons, may it please your Honours, the State should be held not liable.
GLEESON CJ: Thank you, Mr Walker. We will reserve our decision in this matter.
AT 4.17 PM THE MATTER WAS ADJOURNED
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