Colbran t/a Tablelands Coffee v. State of Queensland ; Hatmill P/L & Ors v State of Queensland; Maloberti & Ors v State of Queensland
[2008] QSC 132
•12 June 2008
SUPREME COURT OF QUEENSLAND
CITATION:
Colbran v State of Queensland [2008] QSC 132
PARTIES:
BENJAMIN COLBRAN and NORMA VIOLET COLBRAN Trading as Tablelands Coffee
(Plaintiff)
v
STATE OF QUEENSLAND
(Defendant)HATMILL PTY LTD & ORS
(Plaintiffs)
v
STATE OF QUEENSLAND
(Defendant)MARIA MALOBERTI, BRUNO MALOBERTI and LUISA MALOBERTI & ORS
(Plaintiffs)
v
STATE OF QUEENSLAND
(Defendant)FILE NO/S:
S441 of 2002; S437 of 2002; S458 of 2002
DIVISION:
Trial
PROCEEDING:
Claim
ORIGINATING COURT:
Supreme Court at Cairns
DELIVERED ON:
12 June 2008
DELIVERED AT:
Cairns
HEARING DATE:
10 July 2007 – 27 July 2007, 20 August 2007, 10 September – 14 September 2007, 15 October 2007
JUDGE:
Jones J
ORDER:
1. In action No S 441 of 2002 judgment against the defendant in favour of Benjamin Colbran and Norma Violet Colbran in the sum of $1,066,400.00.
2. In action No. S 437 of 2002 judgment against the defendant in favour of Jaques Australian Coffee Pty Ltd in the sum of $6,256,575.00.
3. In action No S 458 of 2002 judgment against the defendant in favour of Maria Maloberti, Bruno Maloberti and Luisa Maloberti in the sum of $1,840,000.00 plus interest, the assessment of which is reserved.
4. Direct that the parties prepare submissions on costs, such submissions to be exchanged and delivered to the Court within 28 days.CATCHWORDS:
TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – Government and public authorities – Whether the public authority was acting in the public interest –Whether a duty of care existed to ensure a product used for spraying on coffee by the defendant was safe for such use – Whether the defendant owed a duty to ensure the spraying was conducted in a safe manner - Whether the defendant owed a duty of care to adequately train and supervise staff conducting spraying – Whether the spraying of coffee was a policy decision –Where the spraying was a part of the program to eradicate papaya fruit fly
TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – STANDARD OF CARE – Emergencies – Whether the papaya fruit fly outbreak constituted an emergency – Whether the standard of care owed was lower because of the public interest in eradicating papaya fruit fly
TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DAMAGE – Causation –– Whether the evidence established a causal connection between the spraying of coffee by the defendant and subsequent poor harvests - Where the rate and concentration of spray was higher than the off label permit
EVIDENCE – ADMISSIBILITY AND RELEVANCY – OPINION EVIDENCE – EXPERT OPINION – In general – Whether the expert witnesses were qualified to give evidence about the effect of Maldison 500 – Whether the expert witnesses were qualified to give evidence about the most suitable program to eradicate papaya fruit fly
DAMAGES - MEASURE AND REMOTNESS OF DAMAGES IN ACTIONS FOR TORT – Measure of damages – damage to land and buildings – Loss of profits – Whether the plaintiffs had mitigated their loss – Whether impecuniosity barred plaintiffs from claiming further loss – where impecuniosity attributable to defendant’s act
Agriculture and Vetinary Chemicals Act 1988 (Cth)
Plant Protection Act 1989 (Qld)Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653 applied
Chappel v Hart (1998) 195 CLR 232 applied
Evans v Balog [1976] 1 NSWLR 36 applied
Haines v Bendall (1991) 172 CLR 60
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 consideredJohnson v Perez (1988) 166 CLR 351 applied
Jones v Gooday [1841] 8 M W 146 applied
Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353
Schneider v Hoerscht Schering Agrevo Pty Ltd [2001] FCA 102 considered
Sullivan v Moody (2001) 207 CLR 562 considered
Sutherland Shire Council v Heyman (1985) 157 CLR 424 applied
COUNSEL:
Mr M Stewart SC with Mr A Collins for the plaintiffs
Mr Freeburn SC with D Grigg for the defendantSOLICITORS:
Williams Graham & Carman for the plaintiffs
The Crown Solicitor for the defendant
The plaintiffs in each of these proceedings are commercial coffee growers with plantations located on the Atherton Tableland in Queensland. Between September – December 1996, the defendant, acting through its Department of Primary Industries (DPI), applied a protein bait spray to coffee plants growing on the respective lands owned by the three plaintiffs. The defendant did so as part of its programme to eradicate the Papaya Fruit Fly (“PFF”) from northern Queensland. The plaintiffs claim that in so doing, the defendant acted negligently, causing damage to their coffee plants resulting in substantial and continuing losses to each of them. By these proceedings they claim damages in respect of those losses.
The parties have agreed that the three actions be heard together and that the evidence be admissible in each case. Two of the plaintiffs conduct their respective businesses on a trust arrangement under the name of corporate trustees. For convenience I will refer to each grower by the family name.
The discovery of PFF in Cairns in October 1995 caused grave concern. The threat caused by an infestation of PFF had ramifications for the agricultural industries across the whole of Australia. The measures undertaken by the defendant to meet that threat are at the heart of this dispute. The evidence adduced on both sides requires an understanding of technical matters and of the administrative arrangements the defendant put in place to deal with the threat. As a result there has been a resort to the use of a large number of acronyms and technical terms.
Many witnesses have given evidence and produced documents of varying degrees of relevance and weight. I have not felt it necessary to refer to each of them in these reasons. The case in my view turns upon a few critical decisions and the circumstances in which those decisions were made. The evidence in respect of these matters has been fully canvassed in written submissions and oral address and it is to that evidence that I have had particular regard. It will, however, be necessary to refer in some detail to the background evidence against which the decisions were made. An application by the plaintiffs to tender further documents at the close of the case was opposed by the defendant. I have determined that the evidence is only of marginal relevance and should not be received.
The Papaya Fruit Fly (Bactrocera Papayae)
There are a large number of fruit flies which infest various areas of Australia. Many of them are endemic to Australia. Most common amongst them are species known as Queensland Fruit Fly and Mediterranean Fruit Fly. The infestation of fruit flies is controlled by a variety of procedures which vary from State to State. This is because species differ in the level of their impact and their tolerance to dis-infestation treatments. The PFF however is recognised worldwide as a major quarantine pest. Its presence in an area results in the imposition of trade barriers and a requirement that authorities undertake long-term monitoring and suppression procedures. As well, the horticultural commodities for export would have to undergo expensive dis-infestation treatments. Professor Richard Drew who, together with Dr Hancock, identified and scientifically named the Papaya Fruit Fly in the 1980’s, described it as “the most severe pest species I know in the whole of the tropical region of the world”.[1] PFF has the widest host range of any fruit fly species in the world. As well, the females have a very long ovipositor so that it can push the eggs deeper into the fruit and avoid the zones of risk for the eggs, such as glands in the skin of citrus fruit and the oily glandular tissue on the surface of bananas.[2]
[1]Transcript 649/50
[2]Transcript 649/40
The effect the PFF infestation in Queensland had on export markets was felt immediately. Japan suspended trade in mangos in October 1995, New Zealand withdrew approval for the export of Australian bananas and New Caledonia suspended trade in fruit and vegetables.[3] Such trade restrictions would be overcome by demonstrating that area had become pest free or that post harvest dis-infestation had been undertaken. One of the other characteristics of PFF which make it such a pest is, unlike other species, it will attack fruit which is immature. Consequently, if its presence became established, more extensive field control measures would be necessary resulting in higher expense for growers.
[3]Evidence Ken Priestly ex Annexures KP34, 22, 31
There was the further danger that if the PFF became established in the largely inaccessible rainforest areas of North Queensland it would be difficult to control and perhaps impossible to eradicate because of the availability of host plants in that environment. Hence, there was considerable urgency in the response to this discovery of PFF in North Queensland.
PFF is discovered in North Queensland
In September 1995 a pawpaw grower near Cairns became concerned about the early attack by fruit flies in his orchard.[4] On 2 October 1995 DPI received from the grower a sample of fruit from which the PFF was identified by scientists on 17 October. The property was immediately placed in quarantine pursuant to s 13 of the Plant Protection Act 1989 (“the Act”).
[4]Statement Dr Fay [11] – ex 122
On 19 October 1995 a PFF outbreak committee was established to coordinate the defendant’s response to this discovery. The committee consisted of officers of the DPI with expertise in entomology, plant sciences, horticulture, agriculture, administration, chemical standards and public affairs. The immediate action included the declaring of a quarantine area to prevent the movement of fruit outside its borders, the setting up of laboratories for the identification of PFF, establishing a monitoring and control regime as well as a number of other regulatory actions.[5] This committee supervised the immediate response to control and suppress the infestation. In the main it was led by Dr Keith Jorgensen, Professor Drew and Dr Harry Fay and included other experts from the Fruit Fly Research Centre at Indooroopilly, Brisbane. On 2 November 1995 this committee was reconstituted, with virtually the same personnel as the PFF Management Team.
[5]Ex 122 Statement Harry Fay paras [11]-[19] attachments HF6 et seq; ex 64 Statement of Neil Sing
At this time there was a standing national committee called the Plant Health Committee (“PHC”) with experts from all governments in Australia. This committee provides technical and policy advice on national plant health policy and programmes and in particular approves the funding arrangements for those programmes. The PHC arranged for the formation of the PFF Consultative committee (“PFFCC”), a national body that represented the interests of Commonwealth and State Governments who ultimately would combine to fund the eradication programme. This committee reported to PHC and was comprised of some members of PHC, core members of the two Queensland committees and other relevant experts.
The first phase of the emergency campaign lasted until mid-December 1995. Attention then turned to appropriate arrangements for the long term response. By 13 March 2006 a new management structure[6] had been put in place to facilitate the inputs of national and scientific opinion and to arrange for the shared funding of the programme between the States and Commonwealth.
[6]Ibid Annexure HF9
The original PFF Management Team was replaced by the State Pest Control Headquarters (“SPCHQ”) which was led by Mr Kevin Dunn, Deputy Director-General and was comprised of senior DPI officers including Professor Drew, Dr Hancock, and Mr Sing as Operations Manager. The SPCHQ was based in Brisbane and had regular meetings with various stakeholders and authorised the public information releases. The national interests were overseen by the PFFCC which met twice a year and made recommendations to other national groups about funding and to the State groups about strategic directions.
One of the key scientific advisory groups was the Scientific Advisory Panel (“SAP”) which carried out an overview of the operations and made recommendations for future efforts. This panel included experts from all Australian States, some with departmental experience and others with university research backgrounds. Other persons with expert qualifications also attended meetings and were identified as associate members. Mr Sing was an associate member.
SPCHQ was the executive manager of the programme but the operations were undertaken by the Local Pest Control Centre (“LPCC”). Its role was “to establish and maintain communication and consultation with local community and primary producer groups affected by the programme and to manage the implementation of the programme”.[7] In addition, the LPCC were involved in monitoring activities, eradication activities, regulatory functions and discussion with industry and community groups. The LPCC was led by Mr Neil Sing as Operations Manager. As has been seen he was a member or associate member of each of the groups which made a contribution to the eradication programme. He held degrees in agricultural science and in economics and worked in the DPI in North Queensland as a Regional Manager of Agribusiness. He did not have any scientific qualifications relating to the monitoring or eradication of fruit flies.
[7]Ex 64 Statement of Mr Sing at [5] and [19]
Techniques available for the control of PFF
The discovery of PFF in the Cairns region was the first outbreak of this pest in mainland Australia. It had previously been discovered in the Torres Strait Islands in 1993 and an eradication programme was undertaken then, led by Professor Drew and Dr Hancock. Their efforts were successful in the eradication of PFF in the Torres Strait and their methodologies were set out in published papers.[8] This experience had established that the male PFF was strongly attracted to a chemical lure, methyl eugenol. The attractant was combined with a pesticide and used to annihilate the male flies and, with the impact on the breeding cycle, the species in that area.
[8]Ex 43 - Statement of Dr Drew [6] Transcript 608
The first step in the programme was to establish the whereabouts of the PFF, to monitor its movements and to anticipate the areas where outbreaks of infestation might occur. The monitoring in the main involved two procedures, the placing of traps at various recorded points and the collection of fruit samples to determine whether PFF was breeding in that host plant. The effectiveness of the monitoring thus depended on placing a sufficient number of traps in appropriate areas to identify the presence and movement of the PFF. The collection of fruit samples was important because it identified the actual breeding sites of the PFF. However, there was a delay in the emergence of the fly from infected fruit. There are over 30 species of fruit fly in North Queensland, many of which are extremely difficult to identify and some that look similar to PFF. The monitoring effort required expertise in the identification of PFF and correct analysis of data gained from those two sources.
The traps used cotton wicks steeped in methyl eugenol and an insecticide placed in the trap. The traps were cleared of dead insects at regular intervals. These and the collected fruit were dealt with at laboratories established at the Kamerunga Research Station and later at premises in Spence Street, Cairns. One of the early tasks in the programme was the setting up of these laboratories and the training technicians to identify PFF so as to distinguish them from other fruit flies. Given the number of samples that were collected throughout the quarantine area, this was a difficult and painstaking job which understandably did not proceed without some hiccups.[9]
[9]See Ex 110 letter from Annice Lloyd to Ken Priestly 25/10/1996
At the later stages of the programme the monitoring analysis using trap data was in some degree compromised by the fact that the eradication technique, using the same chemical attractant, was reducing the number of PFF in any particular area.
The magnitude of the task can be gauged by the size of the quarantine area and the eradication zone depicted in Map 1 to the report of SAP meeting May 1996.[10] As well as the quarantine area, various outlying treatment areas are also identified in that map, stretching between Cardwell and Mossman.
[10]Ex 44 – Statement of Dr Alan Meats Attachment “AM-6”
The techniques for the control/eradication of PFF were three in number:-
1. Male annihilation technique (MAT); Methyl eugenol is a powerful attractant to male PFF. The distance over which it is effective depends on the weather conditions, wind strength, etc but it is generally regarded as being able to attract over a distance of at least a kilometre. By infusing any absorbent material with the attractant methyl eugenol together with an insecticide is a proven means of suppression and eradication. The absorbent material used will vary depending on the location of the fruit flies. One method is the impregnation of cotton cords (cordalittos) which can be dropped from aircraft into uninhabited thickly forested areas where the cordalitto will be caught up in the tree foliage. In populated areas the medium of choice is a piece of fibrous material, such as a canite block, which can be nailed to or hung from a tree. This process is called “blocking”. This is the term I will use to refer to this technique. The chemical lure and the insecticide in tropical areas need to be resistant to being leached out of the block by rainfall.[11] Also the blocks need to be replaced at regular intervals.
[11]Transcript p1314/1
2. Protein bait spraying: This method requires a measured dose of a combination of chemical lure and insecticide being sprayed onto a tree or plant, such that the fruit flies visiting the tree will be attracted to the bait and will be killed by contact with the insecticide. The bait used in these circumstances is either a protein or yeast autolysate which is an attractant to both the male and female of the species. Its range of attraction however is approximately 10 metres. Its effectiveness therefore depends upon the fruit fly being in the vicinity of the plant targeted by the spray. The spray in this environment needed to be reapplied every week during periods of PFF activity in the target plant.
3. Sterile insect technology (SIT); also known as “sterile insect release method” (SIRM). Sterile insect technology is regarded as the most effective method of eradication of a particular species. It involves the breeding of a large number of sterile male flies and releasing them to breed with females who then fail to produce larvae. Its drawback is the time it takes to establish a sufficient colony of sterile male insects and the considerable expense associated with the programme. Whilst this method was advocated by a number of scientists consulted to give eradication advice, it became clear early in the programme that the expense of setting up the necessary laboratories and infrastructure was not warranted in North Queensland because of the success of the other methods. Whilst the various scientific papers contain this recommendation it is of no relevance to the choices made in dealing with the infestation with which these proceedings are concerned.
The most powerful attractant to a fruit fly is of course the presence of ripening fruit in a host plant. There is a hierarchy of hosts which differs between fruit flies, for example with the PFF the most significant hosts are sea almond (terminalia), guava, mango etc.[12]
[12]Ex 44 Statement of Mr A Meats “AM-6” at 8
Against this background it is necessary to look at how the programme was in fact undertaken.
The choice of chemicals
One of the early tasks was to determine what various chemicals would be used for traps, blocks and sprays. The choice of chemicals for traps and canite blocks were not so critical as those to be used as sprays. The traps were enclosed and the chemical components were thus not a threat to the environment. In terms of environmental impact, chemically infused canite blocks were regarded as relatively benign.
The size of the quarantine area and the fact that it included populated areas as well as unattended parks and gardens, commercial plantations and a wide variety of host plants made the choice of the chemical pesticide a difficult consideration yet one that had to be undertaken urgently. The scientists involved in the Outbreak Committee had to determine what pesticide would be used for each of the various methods used to attack the infestation. A pesticide, which would be sprayed widely, particularly in areas to which the public had access, would have the highest environmental impact. Because of the large areas to be covered and the urgency of controlling the infestation, consideration as to the adequacy of pesticides already available on the market had to be made. Higher volumes of the pesticide might be needed and coverage of a wider range of plants was necessary. The use of available pesticides outside the restrictions detailed on the product’s label would have been illegal. For such use to be allowed it was necessary for the defendant to obtain an off-label permit for the increased application of the pesticide.
The use of pesticides is controlled by the provisions of the Agriculture and Vetinary Chemicals Act 1988 (Cwth). Such permits are issued by the National Registration Authority (“NRA”), a Commonwealth government agency which, since September 1995, has been responsible for the evaluation of applications for the registration of agricultural and vetinary chemical products. Prior to this, each State government determined its own registrations but by the time of these events it was necessary to pursue permits through the Commonwealth authority. The task of obtaining the relevant permit was assigned to Ms Cassie Wright, a scientific technologist within the defendant’s agricultural standards section of DPI. It was necessary for Ms Wright to collate the information necessary to found an application for a permit. To do this she consulted with various experts including Dr Annice Lloyd, entomologist, and Mr Denis Hamilton, agricultural chemist, and as well she read reports prepared at the behest of the Outbreak Committee.[13] This question of needing special permits was first raised at the initial meeting of the outbreak team on 19 October 1995 and again at the next meeting on 23 October 1995.
[13]Ex 121
Off-label permits were sought in respect of a number of chemicals but the only one relevant to these proceedings is that related to the product, Maldison 500. In this product the active pesticide ingredient is malathion. Often times in the evidence and, indeed, in the literature, the terms “maldison” and “malithion” are used interchangeably. But for the purpose of these proceedings the distinction between the pesticide malithion and the product Maldison 500 must be maintained. The varied forms in which malithion and Maldison may be found is illustrated in ex 121.[14]
[14]See Annexure “CW-11”
Maldison 500 was only registered for use on certain crops against PFF. The off-label permit was necessary for it to be used as a bait spray.[15] Maldison 500 had not previously been registered for use on coffee.
[15]Per Dr Lloyd Transcript 1305/1 and statement ex 106[211]
Maldison 500 is produced by two manufacturers, Nu-Farm and Rhone-Poulenc. The respective formulations are listed as follows:-
NUFARM RHÖNE Ingredient Proportion (g/kg) Ingredient Proportion (g/L) Technical Maldison (950 g/kg purity) sufficient to give 500 g/L Maldison 527 g/kg Technical Maldison (Typically 96% purity) sufficient to give 500 g/L Maldison 526 g/L Teric 200 23 Blend of non-ionic emulsifiers (For example Teric 200 or antarox 724P) 42 Dobenz HF 29 Calcium dodecylbenzene sulphonate (For example Kemmat HF60 or Dobenz CA or Rhodocal 60BE) 38 Solvesso 150 493 Hydrocarbon solvent to 1L (For example Solvesso 150 or Pegasol R150 or Certrex 47) 441 Total 1072 Total 1047[16] [16]Exs 91 and 92
What is to be noted is the use in the Nu-Farm product of a solvent, Solvesso 150 and in the Rhöne-Poulenc product the reference to the hydrocarbon solvent for which there is indicated other choices.
The defendant sought to use this product in a spray to which was added a PFF attractant. In this instance the attractant was initially a protein autolysate which was later changed to a yeast autolysate.[17] The application to the NRA was lodged on 3 November 1995 having been hurriedly prepared. The permit was granted on 6 November 1995 but amended two days later.[18] In the end result the permit conditions were as follows:-
[17]Ex 121 Annexures “CW-30” and “CW-31”
[18]Ex 121 paras 26-33 Annexure “CW-20”
Situation Pest Rate Critical Comments Fruit trees, ornamental trees, and heavy foliage trees in urban areas including recreation areas, public parks, gardens, backyards, forests, horticultural and agricultural production areas. Papaya fruit fly
(Bactrocera papayae)Preparing Bait: Prepare 100 Lbait by mixing either:
8970 mLs of product (with 1150 g/L maldison); or
1L of product (with 1000 g/L maldison); or
2 L of product (with 500 g/L maldison)with 5L of protein autolysate, with sufficient quantity of water to make 100 litres.
Applying Bait:
Rate of 100-200 mL of prepared bait per tree.Apply the bait to the vegetation as a foliage spray.
Apply bait using powered sprayers in utilities or backpack sprayers. Use large spray droplets (course spray) as these are more effective.
Avoid contact of the bait with the fruit.
Apply at weekly intervals as required.
Withholding period: Do not harvest fruit for 3 days after application[19][19]Ibid annexure “CW-20”
This application rate has to be compared with the suggestion in the application itself that the application would be by way of 100 ml spots.[20] Even there, there was a suggestion attributed to Dr Annice Lloyd that this level constituted an “over-kill”.[21] This suggestion was not put to Dr Lloyd who had given evidence at an earlier time.[22]
[20]Ex 121 Annexure “CW-9” at p 6
[21]Transcript 1441/10
[22]Transcript 1307/40
Dr Lloyd said she did not recommend Maldison 500 and does not know who did.[23] However, malithion was the most appropriate pesticide in the circumstances.[24] Malithion was the pesticide which was effective against the Torres Strait outbreak in 1993. She left the choice of the chemicals to be used to the regulatory team.
[23]Transcript 1295/60-1296/5
[24]Transcript 1295/50
Mr Denis Hamilton, who was in charge of the agricultural standards section of DPI, said he did not make the choice of Maldison 500. He acknowledged that he reviewed the application for off-label permit but his effort was limited to investigating the likely residues occurring on fruit.[25] In November 1995, in compliance with protocol, Mr Hamilton requested a literature search for published papers on the effects of the various chemicals for which off-label permits had been obtained from the NRA. The relevant part of the search for the purpose of these proceedings related to malithion. As no suggestion is made that malithion was the source of damage to the plaintiff’s crops the results of this search do not appear to have relevance. The scientific papers were not referred to in submissions and have not been read by me. These articles appear in exhibit 98, annexures “DJH-2” –“DJH-4” and “DJH-6” – “DJH-26”.
[25]Ex 98 3rd statement at para [127]
Significantly, however, it seems that no check was made at this time of any of the other constituents of Maldison 500.
After the plaintiffs delivered their Third Further Amended Statement of Claim, Mr Hamilton reviewed relevant data sheets with respect to the solvent Solvesso 150.[26] He expressed the opinion that Solvesso is immiscible in water and insoluble in water and that damage to the coffee crop would not be predicted.[27] He also opined that the main pathway for dissipation of Solvesso would be evaporation into the air after application in a pesticide spray onto foliage.[28] These opinions will be further considered when dealing with the issues of breach of duty and causation.
[26]Ex 98 3rd statement at para [117]
[27]Ex 98 3rd statement at para [117]
[28]Ibid at para [123]
Having received the relevant off-label permits, the programmes for trapping and for eradication by male annihilation blocking and protein bait spraying were undertaken. Initially the activity was centred in and around the urban populations of Cairns, Mossman and Mareeba. But the monitoring was progressively extended throughout the quarantine area. Some activity was necessary in isolated places outside the quarantine area where it was thought that infected fruit carried through the quarantine boundaries had caused localised infestations.
Eradication programme
The initial efforts were supervised by Professor Drew and Dr Hancock who had prior experience with the eradication of PFF. As well, they were the pre-eminent scientists in the Fruit Fly Research Centre at Indooroopilly. Other scientists from the centre as well as DPI scientists based in Cairns and the Atherton Tableland were involved. The scientists from Indooroopilly visited Cairns on a two weekly roster - Dr Drew leading one team, Dr Hancock the other – to set up laboratories and to train staff. The initial response was to identify the area of the PFF incursion and to limit its spread.
By 4 November 1995 Professor Drew’s thoughts had turned to strategies for the overall eradication of PFF. He wrote to Mr Ken Priestly who was conscious of the magnitude of the task, he said:-
“This will be the second largest eradication attempt ever undertaken worldwide. It will be extremely difficult to co-ordinate and execute and has only a small chance of success.”[29]
He then enclosed a proposed schematic management structure with himself in charge of the eradication team.[30]
[29]Letter to Mr Ken Priestly – 4 November 1995 attachment “RD2” to ex 42
[30]Ex 42 Annexure “RD2”
Professor Drew wrote again on 9 November 1995 to Mr Priestly with an eradication strategy prepared by himself and Dr Harry Fay, the entomologist with responsibility for North Queensland area. His concern was to ensure that an entomologist would be actively involved in the eradication programme.
In the up-shot the recommendations of Professor Drew concerning the management of the eradication programme were not adopted. The reason given by Mr Kevin Dunn was that the restructure was to fit a national model for this type of activity.[31] This would not have been of much moment had scientific input been acted upon as intended. But, as will be seen, this did not always happen.
[31]Transcript pp 835-8
Male annihilation technique and protein baiting did commence on 13 November 1995 concentrating particularly around the urban areas of Cairns and its northern beaches and Mossman. The results of these efforts were reported to the PFFCC meeting on 14/15 December 1995. That meeting authorised the development of an action plan by a group of experienced entomologists which was duly presented.[32] A summary of the estimated costs of the eradication campaign was also revised at that meeting suggesting a need for a budget of $55,000,000. By this time Professor Drew had spoken to Dr Roy Cunningham, a leading world authority on fruit fly eradication strategies, based in Hawaii. Dr Cunningham was engaged by the defendant at a later time to advise on the eradication programme and to this end visited Queensland in May 1996 to interact with the Australian scientists involved in the undertaking.
[32]See Annexure D to “HF-10” the statement of Harry Fay ex 122
Eradication of a pest species has to be distinguished from control where a pest threat is reduced to protect commercial orchards and from suppression where measures are aimed at an entire breeding population with a view to reducing a threat below the economic threshold. Eradication is aimed at the destruction of every individual breeding population.[33] When eradication is required, flies have to be treated where they are found, regardless of whether they are regarded to be an economic pest or not. Even low numbers trigger eradication action.[34]
[33]Ex 35 per V Bateman “Economic Fruit Flies of the South Pacific Region” p 115
[34]Ex 146 per Dr Broughton
The initial eradication phase was an outstanding success. By early 1996 the PFF population had been reduced by 96% but there was a general understanding that eradication of the last vestiges of the PFF incursion would be both difficult and time consuming. Opinions differed about the methods to be used. Professor Drew expressed his concerns in letters dated 8 January 1996 and 23 February 1996.[35] The initial success continued through the first half of 1996. Trapping levels reported to the PFFCC meeting in June 1998 showed very significant reductions in PFF infestation.[36] These factors underpinned confidence the eradication could be achieved using MAT alone. This was the view of Professors Drew and Meats and of Dr Cunningham.
[35]See Annexures “RD-5” and “RD-6” to statement of Professor Drew ex 42
[36]Ex 54; Transcript 832/35
The SAP met on 7/8 May 1996, 10 October 1996 and 14/13 January 1997. The minutes of the May 1996 meeting reveal that in the preceding three months there were no detections of PFF in a 4,500 square kilometre area as a result of some 360,000 blocks being in place. However, in the Mareeba area the blocking density was only about half that applied in the Cairns region. The committee concluded that eradication of PFF was achievable because of the success to that date, and also because of the evidence of there being no breeding populations in the rainforest.[37] The panel recommended that male annihilation blocking should continue with particular attention to problem areas. Protein bait spraying was obviously an item of discussion and its continuance a matter of contemplation since revised budgets were sought in which allowance was to be made for protein bait spraying.
[37]Annexure “HF14” to statement of Harry Fay ex 122
The next meeting of importance was that held between the principal scientists and Dr Roy Cunningham. He furnished a report to the defendant following his visit in which he opined “there is a very high probability that you can achieve complete eradication of the Papaya Fruit Fly by Male Annihilation alone”.[38] He went on to make a number of recommendations about where the cannite blocks should be located and the “coverage” to be achieved. On this latter aspect he said:-
“The number and thoroughness of the distribution of (blocks) per unit area is an important facet of the MA programmes. This is the make or break of success. Less than sufficient coverage will result in small pockets of surviving populations which may re-infest the area if host and food conditions are favourable in the niche. The current “blocking” programme is on the right track but needs some expansion and very much needs a quality control element added to it. I suspect that there are areas in which blocks can and should be distributed which are not being addressed. An “entomological eye” needs to evaluate the block distribution pattern in each of the blocking routes and correct deficiencies and/or identify problem situations.”[39]
[38]Annexure “RD4” to statement of Richard Drew ex 42
[39]Ibid Annexure “RD4”
That “entomological eye” would have best been provided by Professor Drew and/or Dr Hancock. Professor Drew felt strongly about the need for this specialised expertise. So much so that he felt even his esteemed colleague Dr Fay was not sufficiently experienced in this area.[40]
[40]Transcript 595/35
Although Dr Cunningham’s report made no mention of protein bait spraying, Dr Annice Lloyd, who was present at the discussion and took handwritten notes during its course. She recalled Dr Cunningham using words to the effect that he had great faith in male annihilation but she recalled that not everyone agreed with this view. Dr Cunningham did not say that he was expressly against protein bait spraying. Her personal view was that if you wanted to get results quickly, protein bait spraying, which targets female flies as well, should be used in conjunction with male annihilation but that such baiting should be “aimed at sites identified as breeding hotspots for PFF by either trap catches or rearing from fruit”.[41]
[41]Ex 106 statement of Dr Lloyd at [183.2]
What is understood by a “breeding hotspot” is a plant or location where there is present ripening fruit. This was explained by Professor Drew in the following terms:-
“…well, protein bait is a very – what we call a weak attractant, attracting over short areas – small areas and it only works when it is sprayed onto what we call the host fruit trees, the trees of which have fruit that the fly breeds in and it only works when it is applied to those host trees when they’ve got ripe – ripening fruit…the best fruit fly attractant in the world is a host tree with ripe fruit on it. And so the flies are attracted into the host tree with ripe fruit, then you can attack it with protein bait.
Q: Host trees with ripening fruit? – Yes, and that’s what we would – in an eradication programme, that’s what we would call a hotspot. Where flies are breeding in fruit. Not where you’re trapping them, where they are breeding in fruit.”[42]
Because the protein bait was an effective attractant only over a distance of approximately one metre it was necessary that it be applied to the fruiting host tree itself.
[42]Transcript 588/15-35
Although frequent references were made to coffee plants being a host to PFF and to coffee generally as a “hotspot”, I am not aware of there being any challenge to Professor Drew’s statement of what in fact constituted a “breeding hotspot”. That it seems to me is the appropriate test for determining when the response of protein bait spraying was necessary. An exception was made for treating some urban settings and high risk trees.[43]
[43]Per Dr Fay ex 122 at para [42]
Professor Drew’s opinion was the same as Dr Cunningham’s.[44]
[44]Statement of Dr Drew at [21] (d)
What conditions caused the defendant to spray coffee plants?
The scientific opinion available in May 1996 to the defendant, and in particular to the managers of the eradication programme, was that MAT was an effective eradication technique but needed to be intensified by more dense and more strategic blocking in the Mareeba area. Protein bait spraying would be effective in treating plants bearing ripening – ripe fruit. For PFF, this time frame should, in my view, be extended by including a pre-ripening period. Whether the PFF was active would be determined by trap catches and fruit sampling. The immediate response would be to undertake and/or to intensify blocking in the area.
The presence of PFF in the coffee plantations was in fact established by trapping results and then confirmed by PFF emerging from coffee fruit samples. The full details of these results are found in Annexure “HF23” and in exhibits 125 and 126. This material discloses that the first discovery of PFF in coffee fruit was from a sample provided by Mr Colbran in March 1996. Three male PFF were found in the 60 coffee berries sampled. At that time Dr Fay, as advisor to the eradication team, recommended looking at “more effective distribution of blocks through that area – bikes through bush, dropped from helicopter maybe. It would be worth putting an extra effort into improving the coverage.”[45] Whilst no reference was made to bait spraying in the affected coffee plantation in that contemporaneous note, Dr Fay in his statement (at para [61]) mentioned that the team only intensified protein bait spraying “if we could identify a breeding source or suspected one”. This is consistent with my understanding of the circumstances for attacking “hotspots”. In fact no blocking was undertaken at the Colbran property or indeed any of the other coffee plantations prior to the commencement of protein bait spraying in September 1996.[46] Nor had traps been placed directly within the plantations.[47]
[45]Attachment “HT25” to ex 122
[46]Per Dr Fay Transcript 1470/1
[47]Per Mr McDonald Transcript 1551/10
The trapping data identified in Annexure “HF23” referring to traps within one kilometre of a coffee plantation, provides only equivocal information about the potential presence of PFF in coffee plants. The identification of PFF in fruit samples confirmed that coffee berries do act as a host to PFF in the right conditions (ripening – ripe fruit). Coffee therefore had the potential to be a “hotspot”. The fruit sampling shows that coffee fruit collected from the Jaques property on four separate days in July and August had been stung by PFF. Similarly, on one day in August stung fruit was collected from the Maloberti property. The actual attack by PFF would have occurred some time before the date of the collection. To determine whether these finds indicated any of these sites as an ongoing “hotspot” in September 1996 so as to indicate a need for protein bait spraying one needs to look at the production cycle of a coffee plant.
Dr Fay agreed that if there was no fruit on the trees there would be no point bait spraying.[48] Dr Lloyd expressed a similar view.[49] It is necessary therefore to understand the cycle for the production of coffee.
[48]Transcript 1480/50
[49]Transcript 1323/50
Growth cycle for coffee production
The evidence on this topic was provided by a number of witnesses and it is largely uncontroversial. The most convenient independent source is found in the report of Dr David Evans, entomologist, with direct experience in coffee growing. In 1998 he, together with David Peasley, was retained by the defendant to provide a report on the damage claims made by the plaintiffs.
The advent of mechanical harvesting in the 1980s led to the establishment of commercial coffee plantations in North Queensland. The success of mechanical harvesting depends upon coffee berries ripening at the same time, otherwise the coffee flavour is tainted by having immature beans mixed with mature ones. In those parts of the world where harvesting is done by hand there is no concern because the pickers simply take the ripe fruit as they pass along each row.
In a coffee plant, bud initiation occurs in late winter or early spring. Ordinarily, the flowering, triggered by spring rain, would occur randomly over a period of four to six weeks. Since the onset of flowering determines the timing of the fruit set, manipulation of flowering so as to happen in all plants simultaneously leads to maturing of fruit at approximately the same time. Simultaneous flowering is achieved by the practice of depriving the plants of water for a period of time. This is called “water stressing”. Watering the plant after the period of stress triggers both flowering and flushes of new shoot growth. This practice of water stressing does not alter the underlying cycle within the plant but simply modifies its timing. After watering, flowering is followed by fruit set and a period of rapid growth aided by fertilising. The flowering occurs from September to November and the berries start maturing from April to July in the following year. Harvesting would typically occur in June or July. There are some plant varieties which are late maturing e.g. dwarf catui, and are harvested after the winter season. Such was the situation with some of Mr Colbran’s plants. He was still undertaking the harvest whilst the defendant was conducting spraying operations on his property in September 1996.[50]
[50]Ex 15 at [8] Transcript 262 [1]
The coffee plant in its natural state flowers in spring and produces a berry fruit (also known as ‘the cherry’) in the summer. This berry grows and ripens changing colour as it does so. The berry is a very deep green until autumn when it starts to change slightly and becomes a paler green and eventually develops into a really pale green and then yellow, then it deepens to a little bit of pink and then goes to a deeper pink and red and finally crimson when it is harvested.[51] If the flowering occurs over an extended period so does the ripening of the berries. It is a matter for the judgment of the grower to know when the water stressing is to cease in order not to damage the plant. Once water is supplied to a plant in this stressed condition the flowering occurs soon after and because that process has been delayed it happens vigorously and over a short period of time. The result is that the fruit set and the ripening of the berries in like vein occur over a short period of time.
[51]Transcript 349/10
The weight of berry harvested depends on a number of factors such as climate and weather conditions, the condition of soil and the tending of the bushes. On well cared for bushes the branches at harvest time should be covered with cherries. Typical of a bush in good condition at harvest time is the photo illustration in ex 24.[52]
[52]Ex 24 “ACJ-4”
The berry, as harvested, is essentially dried fruit around a bean which has the commercial value. The coffee bean is surrounded by a husk which takes on the colour of, and is indeed called, parchment. Whilst the bean remains inside the parchment it does not deteriorate provided it is stored in a dry environment. The fact that the bean can be stored means that one year’s production may not be reflected in that year’s sale returns. This husk is removed by a process of pulping, fermenting and washing and the bean which is now separated from the husk is called “green bean”, and is ready for roasting. Growers may sell the bean in a green state to commercial roasters or may roast and package the bean for themselves. The latter course attracts a much higher price but the quantities that can be sold in this way are relatively small. That is why some growers (Jaques and Maloberti included) develop a tourist facility to attract larger numbers of customers who will buy these smaller quantities but for higher prices. There is a significant variation between the price paid for farm roasted coffee and the price a grower will receive by selling green beans to a commercial roaster.
It is against that background that justification for, and the effectiveness of, protein bait spraying of the plaintiff’s respective plantations has to be considered.
Use of protein bait spray in orchards
The success of the eradication initiatives surprised many of the experts, particularly as it was achieved during the summer period when many of the fruits which play host to PFF were ripening. The only adverse note was sounded by a mango grower, Mr Bonel. On a day early in 1996 and when they were heavily in fruit, Mr Bonel’s trees were sprayed with protein bait by the defendant’s employees. The employees, one of whom he identified as Mr Emberg, were using ATV’s fitted with motorised spray equipment. Mr Bonel observed these men apply this spray to the whole of his trees, including the fruit.[53] What he saw was consistent with the method of spraying later adopted on coffee plants by Mr Emberg who said this was done on instruction from the managers.[54]
[53]Ex 12 paras [1]-[6]
[54]Transcript 52-53
When Mr Bonel harvested the fruit he noticed that the skin had a stained appearance. He complained to the DPI by letter dated 13 February 1996 and received a response dated 16 February 1996.[55] Mr Bonel stated that he suffered reduced yield from his trees in subsequent years but there is no evidence to satisfy me that there was any link between the spraying and that allegation, if it indeed be true. Mr Bonel only clamed for the reduced value of the damaged fruit in the sum of $747.[56] This claim was not admitted and no compensation was paid.
[55]Ex 13
[56]Transcript 203/10-204/5
The only relevance of Mr Bonel’s evidence was his confirmation of the manner of spraying by Mr Emberg and the fact that the defendant had been made aware of concerns by a commercial fruit grower that bait spraying might be implicated in the damage to the fruit. Whilst the cause of the damage has never been confirmed the yeast autolysate was suspected.[57] This caused Mr Sing to request that no orchard like Bonel’s be sprayed in the future.[58] That request gives some indication of his attitude to his duty of care which will be discussed later in these reasons. It also ought to have raised a concern about the lack of any prior testing of the protein bait spray in the concentration then being used.
[57]Statement of Neil Sing [69] – ex 62
[58]Ex 64 2nd statement para [149.13]
The defendant caused no other commercial plantation or orchard to be protein bait sprayed apart from the spraying of the coffee plantations. Consequently, it is important to look at the justification for singling out the coffee crop.
The response to finding PFF in coffee
Firstly, although the coffee plant is a proven host to a number of species of fruit fly, particularly in other countries, it is not usually regarded as a commercial pest, such as to warrant the expense of pesticide spraying. This was certainly the position of the growers on the Atherton Tableland. By contrast other commercial crops are subjected to a regime of pesticide spraying which has the effect of inhibiting, if not entirely suppressing, infestations of the fruit fly. In some circles it was thought that coffee berries were not a host to fruit flies. This belief, contradicted by the literature in any event, was certainly dispelled by the fact that in April 1996 positive findings of PFF were found in coffee berries on the Colbran property.
PFF was in the first instance found in traps near coffee rather than actually in the coffee plantation. One particularly productive trap near to Gambino’s coffee plantation traced the source of the PFF to a cumquat tree.[59] This raised questions about trap placement and the analysis of trap data. When questioned about what would constitute a high trap catch, Mr Sing was unable to be specific but said as an approximation that 10 trapped flies would provoke an intensified response.[60] Such a find, he said, would trigger an intensive effort to find the source of the flies. In short, the immediate response to finding the presence of PFF in any area was to increase the monitoring and if the increased monitoring finds flies then this would justify additional blocking or bait spraying.[61]
[59]Transcript 1533/30
[60]Per Mr Sing Transcript 920/50
[61]Per Mr Sing Transcript 923/1
Professor Drew, whom I regard as the most qualified local PFF eradication expert, could find no justification for bait spraying. He was asked what technical expertise was required to design an eradication programme. He replied:-
“Yes, you do need experienced fruit-fly scientists, there is no doubt about that. They need to know the species of fruit-fly, they need to know something about its biology, it’s – it’s host fruit range. Many fruit-fly species have different host fruit ranges. You need to know the host fruit range of the species, what it will be breeding in out there. You need to know the geographic area, the terrain, how you’re going to get in there and attack it and one of the important things with papaya fruit-fly is that it responded to methyl eugenol. It’s one of the few pest species that do respond to methyl eugenol. So it is the best – so methyl eugenol male annihilation based on the blocking is the best treatment to knock out papaya fruit-fly.
Were you the person whose proposal it was that protein bait spraying be used in the eradication program in 1996? -- Definitely not.”[62]
[62]Transcript 587/40-588/3
The decision to spray the coffee plantations was made at the level of the LPCC. This body took the responsibility for the day to day operations for the monitoring and eradication of PFF.[63] The members of the team reported to Mr Sing. As the Operations Manager he was connected to all of the other decision making and advisory bodies. He was a member of the State Pest Control Headquarters (“SPCHQ”), the PFF Consultative Committee (“PFFCC”) and he had associate status at the Scientific Advisory Panel (“SAP”). He was therefore in a position to make inputs to those groups and to take information to, and bring recommendations from, each of them. In this connection he was well aware of the concerns expressed by Professor Drew, Professor Meats and Dr Cunningham about the lack of expert entomological input into the eradication programme.[64]
[63]Per Mr Sing Transcript 915/3
[64]Per Mr Sing Transcript 940-946
The personnel of LPCC varied from time to time depending on the business to be discussed and who was available at the time of the meeting. The meetings were held in Cairns. Sometimes an entomologist visiting from Brisbane might attend if that person happened to be in Cairns. Dr Fay, the entomologist residing in North Queensland, attended more frequently. But the absence of any person, even one with specific expertise, did not, it seems, cause a decision to be deferred.
The agenda items discussed at an LPCC meeting were listed on electronic whiteboard together with some comments made during the course of the meetings. Usually this was in Mr Sing’s handwriting. A copy of the writing was taken at the end of the meeting. The available, but incomplete records, of LPCC meetings are found in Annexure 28 to the statement of Mr Sing.[65] Apart from Mr Sing the persons usually at the meeting were the eradication Manager, Mr Bill McDonald and his second in charge Mr John Thompson. The number of entomologists were identified as attending different meetings[66] but the most frequent of these was Dr Harry Fay until he was replaced by Dr Hancock. From early 1997, Ms Sonja Broughton attended but by this time the spraying had ceased. Some entomological input related only to the monitoring side of the activity.[67]
[65]Ex 64
[66]Transcript 915/22
[67]Transcript 915/55
From the contemporaneous meeting notes of the LPCC, the first mention of the spraying of coffee plantations was found on 9 May 1996. There is no clear record of when, or by whom, the decision to spray the coffee plantations was taken. Nor is there any record of specific discussions leading to the decision. As a consequence the grounds upon which the decision was made have to be inferred from the evidence generally.
The general background and the then state of the eradication programme are best gleaned from the minutes of the May 1996 meeting of SAP. These relevantly include:-
“2.1 Technical Assessment of Eradication Program to May 1996
a) The numbers of B. papayae trapped, area wide, have been reduced by approximately 98% which indicates the effectiveness of eradication treatments to date. Trapping levels in the major breeding areas, Cairns, Mareeba and Mossman have been reduced by 99.9%, 97.7% and 100% respectively. Increasing trap catches in some outer areas (e.g. Tully) indicate potential breeding hot spots which are currently being intensively treated.
2.2 Conclusions and Recommendations of the Advisory Panel
1. Based on the success of the suppression program to date, the chances of achieving complete eradication are very high; significantly higher than the critical Cost Benefit analysis cutoff point for $55 million expenditure.
…
4. The Scientific Advisory Panel recommends that Eradication procedures based on a combination of Male Annihilation and the Sterile Inspect Technique should be resourced and introduced as quickly as possible.
…
5. Outside of the eradication zone, any new satellite populations will probably require protein bait spraying in addition to Male Annihilation and SIT treatments.” [68]
[68]Ex 64 annexure “NCS-31”
The very favourable (and unexpected) eradication outcome to this point was the direct consequence of the high level of expertise and the very significant dedication and hard work by DPI staff. The total eradication was achieved by 1999 and all quarantine restrictions were able to be lifted. The remarks which follow criticising particular aspects of the decision making are not to be taken as suggesting any general criticism of the total effort which had such beneficial results.
The coffee plantations were within the eradication zone. The justification for the decision to spray appears to have been the fact that the coffee was identified as a host plant by reason of the positive finding in Colbran fruit collected on 28 March 1996 coupled with the fact that coffee plants were generally not treated with pesticides. Those circumstances would certainly have justified increased blocking and increased monitoring of the plantations but this did not happen. There appears to have been an approach to treat all coffee growers as a group notwithstanding the distances separating their respective plantations. Some plantations were in excess of 30 km from others. The Colbran property was approximately 7 km from the Jaques property and in excess of 15 km from the Maloberti property.[69]
[69]Exs 1 and 123
Mr Sing did not have academic qualifications to advise on eradication methods, nor did Mr McDonald, Mr Thompson or anyone else directly involved with the sprayers. Mr Sing claimed to have been informed by his own experience. He said, “I believe I had experience, but that’s really not to me the issue. I never made decisions by myself in that regard.”[70] He claimed that normally there was one or more entomologists at each LPCC meetings. But at the meeting most proximate to the commencement of protein bait spraying (16 August 1996) he was unable to recall whether an entomologist was in actual fact present but concluded that the person most likely to be there was Dr Fay.[71] Mr Sing gave the following evidence:-
“You accept that you shouldn’t have made any decision about spraying coffee with the protein bait spray without first consulting an entomologist about it, don’t you?” – “I accept that I would not have made the decision about spraying the coffee without contacting an entomologist about it”.
“And that’s because it would’ve been inappropriate for you to do so without such advice?” – “That’s – it would have been because that was not the way I worked.”[72]
[70]Transcript 927/58
[71]Transcript 930/25
[72]Transcript 930/30-40
Mr Sing did not seek advice from Professor Drew.[73] He did not seek the advice of Dr Hancock but had he done so, it is likely it would have been as it was in January 1997.[74] To the best of his recollection Mr Sing thought he contacted Dr Fay. However, Dr Fay did not recall giving any such advice.[75] At various meetings of the SPCHQ which Mr Sing attended the question of the need for greater scientific input into eradication programme was raised usually by Professor Drew.[76] The handwritten notes of Mr Dunn, who chaired the SPCHQ meetings, makes no reference to any instruction from that body to undertake protein bait spraying of coffee. Had the topic been raised it would most certainly have been opposed by Professor Drew.
[73]Transcript 946/12.
[74]Transcript 967/10
[75]Transcript 1518/22-50
[76]Transcript pp 843-850 and ex 54
Mr Sing attended the SAP meeting in October 1996. By this time there had been the increase in PFF emergence from Jacques’ fruit and spraying had commenced. He was aware of the expert opinion there expressed that bait spraying was unnecessary. In response to questioning about this he said:-
“Well, I can’t explain that – it means it wasn’t my decision whether or not bait spraying was done.”[77]
The continuation of bait spraying after October 1996 seems to me to be directly contrary to the advice of SAP.[78]
[77]Transcript 971/40
[78]Ex 64 Annexure 31
There was no increase in the level of male annihilation blocking in the areas around the coffee plantations. Dr Fay explained because it was still relatively early in the programme, that the crop had not been harvested and it “was heading into winter when the populations generally decline somewhat”.[79] This explanation is unconvincing when the Colbran property had not been subjected to increased trapping or blocking.[80] Dr Fay conceded that there was no “quality control aspect to the programme at that stage”.[81] He said that the decision to protein bait spray all the coffee crops in the Mareeba area was taken during his absence.[82] He nonetheless expressed the opinion that the decision to do so was “sound” given the escalating problem in coffee and the likely disaster that could have occurred if something had not been done before the mango season. When challenged about this opinion, he conceded that the PFF had been significantly reduced during mango fruiting season in 1995 but said that there were still some areas near Mareeba where the fly had not been eradicated. He identified an area near to the Jaques plantation which is known as Emerald End where there are located a number of hobby and organic farms where fruit fly control measures are not normally undertaken. That area also had not been subjected to intensive male annihilation blocking.
[79]Transcript 1471/40; 1473/20
[80]Transcript 1472/1
[81]Transcript 1472/30
[82]Ex 122 Annexure “HF-2”
The plaintiff seeks the assessment of damages under the following headings:-
(a) The difference between the profit which would have been earned from the 20 hectare plantation area (now abandoned) between 1 July 1996 to the present, and the profits and losses in fact generated;
(b) The present value of the difference between the profit that would have been earned from the as yet unplanted 10 hectares between the present and the end of the financial year in which these unplanted trees would come into full production.
(c) The cost of approximately $185,000 in treating and maintaining the original trees damaged by the spray; and
(d) Allowance for the lost opportunity of developing the full area of 60 hectares in accordance with the business plan.
The defendant points to the lack of production records prior to the spraying and to the fact that the business produced losses averaging $27,000 per annum in the years 1993-1996. The defendant relies on this fact and also the history that the plaintiff was involved in a failed coffee growing venture in the 1980s to suggest that the plantation would not be successful and that the Jaques have not suffered any loss at all as a consequence of the spraying.
The coffee growing venture in which Mr Jaques was previously involved was the establishment of the coffee plantation which is now owned by the Skybury organisation, one of the largest plantations on the Atherton Tableland. This fact rather confirms Mr Jaques expertise as a coffee grower. Any prior business failure did not relate to his farming capacity. I am satisfied that the establishment of coffee plants on the original 20 hectare plot was successfully undertaken and that it would have produced economic returns in 1996 and following years had the spray not damaged the plants.
I am satisfied that some 7 tonnes of green bean was lost from the 1996 harvest and the whole of the potential yield for 1997. Thereafter the schedule to the accountants joint report (ex 144) shows sales of coffee from retained stock, though the value ascribed to the stock is not free from doubt. My concern is more with loss of profits from reduced yields. For this reason losses have to be calculated on a notional basis. The question then is at what point did the plaintiffs’ ongoing loss materialise. This area of the plantation was abandoned in 2000 having produced no yield in the previous three seasons.
It seems to me that the claim in respect of this area crystallised at that point. The allowance should be for the pecuniary loss of profits from 7 tonnes of green bean in 1996 and for 3 tonnes of green bean per hectare in each of the next three years. Thereafter I assess the projected loss over a period of 8 years to allow adequate compensation for the damage. I am satisfied that virtually all of the yield would have been disposed of as roasted bean. There may have been occasions when some green bean might have been sold for cash flow reasons but on balance any reduction in revenue would be more than offset by the conservative approach that I have adopted. The sales of smaller packages of roasted beans command a much higher price than the $12 per kilogram which I will adopt.
The quantity of green bean lost for this period would be 187,000 kg. the potential revenue would be –
(187,000 less 15% 158,950 kg at ($12-1.75) $10.25 $1,629.237.50
Less costs of production at $3.50 per kg $ 654.500.00
$ 974,737.50
Between 2000 - 30 June 2008, the sale price for roasted coffee increased to $17 per kg. I shall adopt an average of $15 per kg. For the future period, costs should be reckoned on an “all-in basis” as suggested by Mr Carter I assess potential annual loss of net revenue in the region of $300,000.[244] I will make some allowance for having received some returns from the damaged crop and the need to provide for other general contingencies including the one-off effect of cyclone Larry, and the fact that the plaintiffs’ efforts were directed to other pursuits. The growing conditions over this period are largely known to be favourable and there is evidence of more recent sales of coffee at $20 per kg. For this future period I would allow the sum of $2,000,000 which when added to earlier loss of profits results in a combined rounded off allowance of $3,000,000.
[244]The notional calculation is:-
(60,000 less 15%) 51,000 at ($15-1.75) $13.25 – 675,750
Less costs 60,000 at $6.00 360,000
315,750
The second category of loss is the delay in completing the second half of the planned second stage expansion. It is reasonable to proceed on the basis that the expansion by adding the second 20 hectare parcel to the plantation would have occurred by the year 2000. The hard work of preparing the land and designing the irrigation system had been done. This would have coincided with the generally favourable improving coffee market. The planting of only 10 hectares in 2000 was dictated by necessity of having to establish some new production to replace the abandoned plantation. But it was limited to 10 hectares because of the straitened financial resources of the plaintiffs consequent upon the destruction of the original plants. It would have been within the contemplation of the defendant that interruption to the plaintiffs’ cash flow would impact upon expansion plans which would have been obvious from the earlier preparation and the DPI involvement in developing coffee production on the Atherton Tableland. The plaintiffs’ impecuniosity was a direct result of the defendant’s breach of duty and this limited his capacity to mitigate his loss to any greater extent. Burns v MAN (supra). That consequence was, to my mind, a foreseeable outcome of the defendant’s actions and the losses flowing from it are recoverable.
These losses however would only be realised in the future. Had the missing 10 hectares been planted in year 2000 it would only now have commenced to produce an economic yield. The burden of the expense of planting and nurturing the plants would have been incurred at once. In those circumstances it seems appropriate to make a global assessment of this loss of potential profit. I do so against the background, firstly that the market for high quality Australian coffee remains buoyant. The benefits and risks in this market are identified in the Drinnan and Peasley report (2004)[245] but the outlook remains favourable, particularly for tourist focussed businesses such as that now developed by Jaques. I regard $15 per kg of roasted coffee as the appropriate measure. Secondly, Jaques has a proven level of yield from this newly established plantation in the 2006 harvest and his expectation for the 2008 harvest is of the order of 3 tonnes per hectare. Thirdly, the raw calculations of net revenue from such an undertaking would show a net revenue of approximately $200,000 per annum or of approximately $150,000 if one applied the $6 per kilogram “all in” cost.[246]
[245]Ex 113
[246]Transcript 1784/40
The loss to be assessed is the delay in realising the profit of this magnitude for a period which should be no more than seven years. I would allow $1,000,000 in respect of this loss.
The third item of costs relates to the maintaining and treating of the initial 20 hectare plantation. The claim is for $185,000 thrown away as a direct result of the defendant’s negligence. This level of claim is argued and can be assessed by reference to the start-up costs referred to in the Drinnan and Peasley report (2004). This land could of course be replanted but this is unlikely to happen as part of the area is now used as part of the extended light aircraft runway established on the property. The claim to cover the costs thrown away by the establishment of the plantation and the attempted regeneration of the plants is reasonable and should be allowed in full. I therefore allow the sum of $185,000 on this account.
The final basis of claim is for the loss arising from the delay in the third stage of the development. It is not clear to me when this part of the development was to begin. In his statement Mr Jaques described the programme in these terms:-
“12. The business proposal for the land was initially to plant 50 acres of coffee. From there the intention was to expand into two 50 acre increments provided there was an established cash flow.
13. Initially my wife and I were starting from scratch on a shoestring budget. I was responsible for doing the planting. It was done on a progressive basis throughout 1991 to 1992. 50 acres was planted at that time. The creation of a plantation to be sustainable on a commercial basis can take up to seven years depending on the environment.”[247]
[247]Ex 23 statement 29 May 2006
In the absence of any clearer statement of intent it seems to me, that the starting time for this development could be the present. I am not satisfied that there has been any delay which could be attributed to any impact from the spraying of the plants.
In summary, therefore, I assess the Jaques damages as follows:-
Loss of production 1 July 2006-30 July 2008 $3,000,000.00
Delay in the establishment of 10 ha of the
of the second proposed plantation $ 1,000,000.00
Costs thrown away by establishment and
attempted regeneration $ 185,000.00
$4,185,000.00
I assess damages at $4,185,000 by agreement, interest is allowed on this sum at 4.5% for 11 years (July 1997 – June 2008) which amount to $2,071,575.00.
The Maloberti claim
At the time of the spraying the Malobertis, as has been observed, were highly efficient producers of coffee. The coffee plantation as of 20 hectares and was consistently producing in the region of 32 tonnes of green bean per annum. These plaintiffs have established a successful tourist facility so as to maximise their returns from coffee production. They sold only roasted coffee. This state of affairs had been reached by the physical contributions of the three members of this family partnership. However, Mr and Mrs Maloberti are now in their 80s and Mr Maloberti has health problems. There was no plan to extend the operation apart from developing the tourist facility.
The Malobertis had harvested their 1996 crop prior to the spraying and it yielded 32 tonnes of green bean. As a consequence of the spraying the 1997 harvest fell to approximately 5 tonnes of poor quality bean. In 1998 the yield was 1 tonne of unsaleable coffee. The production details are set out in ex 28.[248] The plantation has never returned to the pre-spraying production levels. Over the nine years of recorded yield since that time some 33,335 kg have been harvested. That is an average of 3,700 kg per annum. In that same time the business sales of roasted coffee has risen from approximately 9,000 kg in 1998 to 16,400 kg in 2005.
[248]Statement July 2007 annexure 1
The sales had been achieved by the Malobertis drawing upon their existing stock at 1996 and thereafter coffee beans have been purchased from outside to make up the shortfall. Apart from the additional expense of this approach there has been a loss also of a marketing advantage of presenting a product which is home grown and pesticide free.
The Maloberti claim is framed as a loss of profits for the period of 1 July 1996 to 30 June 2008 and for a global assessment of the reduced value of trees because of their reduced productivity.
Given the consistency of the reduced yields over nine years, it is safe to conclude that production will not return to the pre-spraying levels. The cause for this cannot be attributed to climate or any other changed circumstances. The Jaques property, for example, with new plants has returned to normal production. The Malobertis were in a different position. Because they did not have the physical capacity to replant they have accepted these reduced yields and this state of affairs will continue. They were entitled to wait in the hope (and in accordance with some advice) that plants would regenerate.
It is appropriate to measure the loss by taking the diminution in the potential yield for three years and notionally determining the loss of net revenue for that period and thereafter by making a global assessment of the continuing loss of revenue from the plants. The pre-spray average yield was 31,900 kg and the post-spray average was 3,700 kg. The difference being 28,200 kg. The primary calculation is as follows:-
(28,200 – 15%) 23,800 kg @ (12-1.75) 10.25 $243,950.00
Less recurring costs of production @ $3.50 $ 83,300.00
$160,150.00
Because the shortfall has incurred the expense and inconvenience of identifying and dealing with suppliers of coffee both in Australian and overseas, I have taken the view that this would more than offset any consideration of applying a capital costs contribution to the expense of production. For the period of four years post spraying, I assess the loss at $640,000.
For the future I accept the fact that the coffee plants are less valuable as a result of the defendant’s negligence. Diminution of value of land as an alternative to reinstatement of damage is a recognised approach to the assessment of damages in circumstances such as this. Jones v Gooday;[249] Evans v Balog.[250] The difficulty however is that there is no evidence of what is the value of coffee plants in good condition nor in their damaged state. I must have regard to the fact that these plants were probably planted in the early 1990s and are more than 15 years old. Some of them, at least, may well have been in need of stumping or of replacement notwithstanding the Malobertis’ approach to regeneration by constant pruning. In normal operation, if this was necessary, it could have been done progressively with minimal impact. The alternative consideration was to do as Mr Jaques did and re-establish a new plantation, that would have had the effect of resulting in a claim for re-establishment costs, loss of profits during the 6-8 period of the plants’ growth and the loss of such yield, as has been achieved with the plants in their present state. On this comparison it cannot be said that the plaintiffs’ claim is greater than it would have been had they pursued that alternative.
[249][1841] 8 M W 146
[250][1976] 1 NSWLR 36 at 39-40 per Samuels JA
The starting point is to note that the yield from these plants has been at 10% of its former level. If the sale of roasted coffee is at the $15 per kg price, the resulting revenue loss is in the range of $150,000-$230,000 per annum depending on the cost structure. The cost of maintaining the damaged plants has presumably been the same. It is a matter of capitalising the annual loss out of the estimated productive life of the plant loss which might go on for a number of years. I will adopt as an average for the purpose of calculation seven years. I must also make some deduction for contingencies which would include, for example, the impact of unseasonal weather and cyclones. Upon this basis I assess the loss at $1,200,000.
In summary then, I would allow the Malobertis’ loss as follows:-
Loss of profits for 4 years $ 640,000.00
Diminution of future profits $1,200,000.00
$1,840,000.00
I assess damages at $1,840,000.00. By agreement the question of interest upon damages is to be reserved.
Orders:
1. In action No S 441 of 2002 I give judgment against the defendant n favour of Benjamin Colbran and Norma Violet Colbran in the sum of $1,066,400.00
2. In action No S 437 of 2002 I give judgment against the defendant in favour of Jaques Australian Coffee Pty Ltd in the sum of $6,256,575.00
3. In action No S 458 of 2002 I give judgment against the defendant in favour of Maria Maloberti, Bruno Maloberti and Luisa Maloberti in the sum of $1, 840,000.00 plus interest, the assessment of which is reserved.
4. I direct that the parties prepare submissions on costs, such submissions to be exchanged and delivered to the Court within 28 days.
1
11
2