Dovuro Pty Ltd v Wilkins & Ors

[2003] HCATrans 605

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S357 of 2002

B e t w e e n -

DOVURO PTY LIMITED

Appellant

and

ROBERT JOHN WILKINS, EILEEN JOYCE WILKINS, TREVOR IAN WILKINS, SUSAN CAROLINE WILKINS and LOCHIEL NOMINEES PTY LIMITED AS TRUSTEE FOR THE R & E WILKINS FAMILY TRUST ALL TRADING AS R & E WILKINS

First Respondents

CROP MARKETING NEW ZEALAND SOCIETY LIMITED

Second Respondent

QBE INSURANCE (INTERNATIONAL) LIMITED

Third Respondent

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 13 MARCH 2003, AT 10.04 AM

(Continued from 12/3/03)

Copyright in the High Court of Australia

__________________

GLEESON CJ:   Yes, Mr Barry.

MR BARRY:   I was dealing yesterday afternoon, your Honours, with Dovuro’s state of knowledge.  I had put to your Honours during the course of argument yesterday that in relation to the knowledge of that company that they knew that if the content of the seeds, and in particular the undesirable weeds, were specified, that they knew that they would not have been able to sell them to the farmers.  There is in fact a question directed specifically to that topic in the evidence of Mr Rath.  It is in volume 2 at page 235 line 55.

HAYNE J:   Is this in support of a proposition that Dovuro intentionally refrained from asking?

MR BARRY:   No, intentionally refrained from disclosing.

HAYNE J:   Yes.  There is a finding by the trial judge against you on the proposition that Dovuro intentionally refrained from inquiring, is there not?

MR BARRY:   There is on the question that the trial judge was asked to decide - that is the question of breach of duty.  One of the difficulties of this appeal is that there are no findings by the trial judge on the question of duty of care because, as formulated, the question did not arise, nor are there any findings on the question of damage, for the same reason.  Your Honours will see at the bottom of page 235 line 55 the question:

What chance do you think you would have had of selling a seed that had an exotic weed in it to farmers who did not have that weed on their paddocks?---If they knew about it, yes.

If they knew about it?---Probably not.

Again, one would think, common sense.

KIRBY J:   Understatement; the farmer’s understatement.

MR BARRY:   Of course, your Honours will recall that Mr Wilkins - and I will just give your Honours the reference to it again:  volume 2 page 392 line 31 - and Mr Piper, who was another farmer - volume 2 page 407 line 34 - both said that if they had known that these undesirable weeds were in the canola seed they were buying they would not have purchased it.  Could I then go back to another matter, again dealing with the knowledge of Dovuro.  One matter that was argued yesterday related to knowledge that Dovuro could reasonably foresee that the agriculture department in Western Australia would take the response that it did in fact take once it became aware of the presence of these seeds.

Your Honours will recall that Mr Carmody gave evidence at trial and Mr Carmody was a witness that his Honour made some favourable observations about.  In volume 3 at page 515 Mr Carmody gave evidence which related to – I withdraw that, it was not Mr Carmody, it was Mr Nicholas, the author of the letter that I took your Honours to.

KIRBY J:   Is this 515?

MR BARRY:   This is volume 3 page 515 line 35:

As a major supplier of Canola seed over a number of years, Dovuro had had close contact with the Canola industry and relevant government departments such as the Department of Agriculture of Western Australia.

My concerns over the risks of importing seed from outside Western Australia that contain not only prohibited weeds but also undesirable weeds had been communicated to Bill Tapp and other representatives of Dovuro on several previous occasions in general discussion regarding the preference for locally produced certified Canola seed.

Now, true enough it does not go as far as demonstrating ‑ ‑ ‑

GUMMOW J:   How was that admitted, paragraph 10?

MR BARRY:   It was admitted without objection.  It was evidence of the truth of what is there contained.  But if there is some doubt about the weight that one would attach to it, your Honours will recall the reference that I gave your Honours yesterday to the previous episode involving Paterson’s curse and, indeed, that matter was itself the subject of, if not some findings, at least some observations by the trial judge, volume 6 page 1255.

GLEESON CJ:   Just before you go on to that, did the trial judge make any finding of fact based on or related to what appears on page 515 paragraph 10?

MR BARRY:   No.  Again, for the reason the question did not arise because duty of care was admitted.

McHUGH J:   But it went to breach.

GLEESON CJ:   I would have been interested to know what the trial judge actually made of that evidence.

MR BARRY:   Yes.

HAYNE J:   The nearest it comes is paragraph 107 of the trial judge’s judgment, is it not, where he expressly rejects the proposition that the evidence justified a finding that Dovuro intentionally refrained?

MR BARRY:   That is so, but that, of course, is on a different question.  The difficulty with this appeal is that had the question of duty of care not been admitted, then of course the process of reasoning that the trial judge would have had to go through to decide whether or not certain matters were foreseeable, whether there was the necessary nexus between the parties, examination and reasoning on that may well have led to different conclusions in relation to the issue of breach of duty.  But once you close one issue off and decide the case on the basis of breach of duty alone, which is all the parties invited the trial judge to do, then there are, in our respectful submission, difficulties then using the reasoning in relation to the hived‑off issue to analyse what might otherwise have been found in relation to the issue that was not decided. 

We make the same observation in relation to what happened in the Full Federal Court because what happened in the Full Federal Court is that findings of fact which did not relate to the issue of duty of care were then used to analyse what findings should correctly be made on appeal in relation to the duty of care.  In our respectful submission, that process is inherently flawed.

KIRBY J:   Could you just clarify for me, please, when you say the issue of the duty of care existing was conceded, at what point in the trial?

MR BARRY:   After the evidence had closed and before there was argument on the question.

KIRBY J:   Now, is not that against you in the sense that you did not know until after the evidence had closed that this issue would be conceded?  Therefore, it is pretty hard for you to contend, is it not, that you would have called your evidence in a different way, the issue being alive at the time you called your evidence?

MR BARRY:   In part, yes, but the question would become ‑ ‑ ‑

KIRBY J:   What is the “in part, no” because it seems ‑ ‑ ‑

MR BARRY:   The “in part, no” is how was the matter going to be analysed, what were the findings that the trial judge was going to make which could or could not give rise to an appeal, and what is the process of reasoning in relation to those?  They are the matters ‑ ‑ ‑

KIRBY J:   Is what you are saying that, although still in contest on the pleadings, in the manner in which the case was presented and fought, that it was not really a live issue and the formal admission of it came after the close of evidence?  Is that how you contend the case was run, because that is different to what Mr Rayment told us yesterday.

MR BARRY:   Yes, that is ‑ ‑ ‑

KIRBY J:   It is pretty important for the Coulton v Holcombe point.

MR BARRY:   Yes.

KIRBY J:   I would like to be very clear on this, and if you cannot clear it up today, I would like a note from both sides because I am now in a state of confusion and it is very relevant to my determination of whether Mr Rayment should be given leave to reopen a matter which was conceded at trial.

MR BARRY:   Your Honours, it is not clear from the appeal books and Mr Rayment, of course, has the benefit of the submissions and I think – he was certainly in the matter in the Full Court, yes ‑ ‑ ‑

GUMMOW J:   He was not at the trial.

MR BARRY:   I will try to identify and see if we can reach agreement on procedurally what precisely happened and when.

KIRBY J:   I think if you can reach agreement as far as you can, for my own part that would be helpful, and then we have to sort out what follows from there, but it is a completely different beast than the one that was presented to the Court yesterday.

MR BARRY:   This is the problem, with respect, with this appeal is that ‑ ‑ ‑

KIRBY J:   It is quite an important issue, at least in my approach to the appeal – it is quite important.

MR BARRY:   We also submit it is important in terms of when one looks at what happened in the Federal Court.  The Federal Court was not considering an appeal in relation to the question of duty of care.  There was no issue of that nature being litigated, but what happened is in the course of dismissing the appeal their Honours made certain findings based upon matters which the trial judge was not required to consider on the issue of duty of care.  Our submission is that that produced a result in effect that the ordinary process of findings at first instance then appeal to the Federal Court in substance miscarried, which makes it very difficult to determine those questions afresh, that is the question of duty of care and the questions that relate to it, at this level of examination.

KIRBY J:   What is the correct principle, if the court is in doubt and the transcript does not clarify exactly what happens but there is a formal concession of this issue?  How does an appellate court approach the matter if there is uncertainty on the record?

MR BARRY:   The court does not interfere.  The appeal is dismissed because unless there are grounds upon which the court could be satisfied that it should interfere, it ought not to do so.  If the way in which the case comes to the court is such that such a conclusion cannot be reached, then the appropriate course is the appeal should be dismissed.

CALLINAN J:   Mr Barry, can you tell me where the actual concession is formulated in the Full Court?  Is it in the judgment of Justice Branson?  I am just interested in the terms in which the majority in the Full Court thought it had been made.

HAYNE J:   Paragraph 85 perhaps?

CALLINAN J:   Is it expressed anywhere in any of the judgments in the Full Court at a different level of generality from the level at which it is expressed in the paragraph to which Justice Hayne has referred?  Does it ever get more precise than that?  Is there any attempt to articulate the content of the duty of care?

MR BARRY:   In terms of what was in fact being admitted, whether there was a broad‑brush admission or a specific admission?

CALLINAN J:   That looks fairly broad‑brush to me I have to say.  It does not really tell me the respects in which the duty was to be formulated.

KIRBY J:   Mr Barry, we are entitled to look to you to help us on this because these are five or six volumes of appeal papers and we just have to depend on you.  You just have to make it clear.

MR BARRY:   Justice Hayne says paragraph 85, which is on page 1315, identifies the way in which that matter was dealt with.

HAYNE J:   That, together with paragraph 180, which seems to detail the way in which it emerged on the appeal to the Full Court, where counsel for Dovuro following counsel for Cropmark, who had made submissions about duty of care, sought to raise the matter at that point of the appeal.

MR BARRY:   Yes.  In the end it becomes a question of what “duty of care” relevantly means.

CALLINAN J:   There could not have been any doubt, could there, that a duty of care was owed?  There is nothing novel or startling about accepting that a duty of care was owed.

KIRBY J:   Except that it is the terms in which it is expressed that is quite important because, as Justice McHugh explained yesterday, depending on the concrete character of what is conceded, you may solve the issue of breach, whereas if you have it at a level of abstraction, you will not.

MR BARRY:   In general terms there could be no doubt that the producer or the organiser of the production, if one wants to be technical about it, the organiser of the production of seeds for sale to farmers owes a duty of care not to include harmful seeds in the products that are being produced for sale directly to the farmers.  There could be no doubt ‑ ‑ ‑

GUMMOW J:   Well, that is not how it was pleaded, Mr Barry.  If you go to paragraph 173 in the Full Court, it sets out the pleadings, the amended statement of claim, paragraphs 12 to 13.

MR BARRY:   That is so.  Your Honour, what I was seeking to formulate was, as it were, the general duty, that if duty has a narrow or, as Justice McHugh put it yesterday, on one interpretation a concrete content, then if you admit breach of duty, then you admit the duty that is alleged against you in the statement of claim.

GUMMOW J:   All I am putting to you is, on one view, what was admitted was paragraph 12.

MR BARRY:   That is so.  That is, as it were, on the narrow view of what a duty of care involves.  If once you have admitted, in effect, either formally admitted on the pleadings or otherwise admitted on a narrow view of duty of care, then that solves the problem of breach as well, at least in part.

CALLINAN J:   Leaving aside the question of the pleadings and whether a concession or admission should relate to the pleadings, in its general form the concession really does not mean any more than this, does it, “We agree that in some circumstances as a producer we might be liable to our consumers”, or, “As a distributor, we might be liable to our consumers”?

MR BARRY:   I would agree with your Honour, except that the way in which it was formulated by Mr Justice Wilcox it is much narrower than that.  It says, “In relation to the quality of what was being produced”.

CALLINAN J:   Yes.

MR BARRY:   Therein lies the difficulty.  It is not a concession that in general terms a producer owes to farmers that consume the product a duty of care.  The concession was more than that.

CALLINAN J:   All right.  Well, let us accept it in those terms in relation to quality.  Nobody could possibly dispute that, could they?  Quality is critical to any consumer.

MR BARRY:   That is so.  Then one then turns from that to the particular facts of the case, and you then say, “To what extent was quality a relevant matter in the nature of the litigation?”  In our case, the answer is it was everything because it was because of the particular qualities of these seeds, being resistant to chemicals, and the particular nature of the production being undertaken, that is for a competitive, as it were, quality market, that loss and damage was incurred.

CALLINAN J:   I understand that.  In terms was 16.5 admitted?  That is paragraph 16.5 of the pleading, which is repeated at page 526 of the Federal Court Reports, that is paragraph 177.  No, they are the findings, I am sorry.  The pleading which Justice Gummow drew your attention.

MR BARRY:   Is your Honour looking at volume 1 page 3, “Particulars Of Negligence”?

CALLINAN J:   I was actually looking for them in the report, but I will look at volume 1, Mr Barry.

KIRBY J:   Well, the pleading of the duty of care is – there is the expression in the earlier paragraphs of the relationship and then the pleader says:

the Respondents owed a duty to the Applicants and represented parties to exercise reasonable care to avoid injury to them.

Then the breach is alleged in paragraph 13.

MR BARRY:   Could I also draw your Honours’ attention, on page 2 line 50, to paragraph 5C:

At all material times the First Respondent knew or ought to have known that the imported canola seed contained or may contain undesirable weed seeds including cleavers, red shank and field madder.

Again, a matter which, in our submission, was critical.

CALLINAN J:   How did the appellant plead to that?

MR BARRY:   Denial, I think, was the response.  It is page 13.

CALLINAN J:   That denial was never withdrawn except to the extent that the concession was made.

MR BARRY:   That is so, and there was no amendment to the pleadings, but it really is a matter of general denial, and there is a reference to the Seeds Act 1981 again which was, in effect, the way in which the matter was defended. There is a general denial on page 15 paragraph 20.

KIRBY J:   Well, unless you can put before the Court by reference to the record, this being a pure appeal, some material that indicates that notwithstanding what appears on the record, namely the statement of claim and the defence, which was unaffected on the record until the end of the evidence, I think you are in difficulties in meeting Mr Rayment’s point that on the record to the end of the presentation of the evidence your client had to put its best foot forward and prove everything on the basis that the duty of care was denied and the fact that thereafter, after the evidence was conceded, does not excuse any omissions in the evidence on that point or, indeed, on the face of the record, affect the way in which you presented the evidence on that point.

MR BARRY:   With respect, I would agree with what your Honour says as at first instance, but it does affect what happens when you have an appeal to the Full Court of the Federal Court and then this Court because the question then becomes what is it that the Federal Court is reviewing.  It cannot be reviewing findings of fact made by a trial judge on the issue of duty of care, because there were no such findings.  That is the problem as to where the process appears to miscarry and what then happens is that you get what tends to happen – what seems to have happened in this case is that there then are other findings made on other questions which are used as a means of sniping at what perhaps should have been found on the question of duty of care which was not the subject of appeal.

GLEESON CJ:   Mr Barry, was that word “undesirable” deliberately chosen to avoid having to use words like “prohibited” or “harmful”?

MR BARRY:   The inference would be yes.

GUMMOW J:   We were referred yesterday afternoon to some of the documents which used that term.

MR BARRY:   Yes.

GUMMOW J:   In departmental-speak.

MR BARRY:   Yes, and there are, of course, degrees of undesirability.  It depends upon where the product is to be planted and what the consequences are probably going to be of pursuing a particular course of conduct.

KIRBY J:   I suppose you are entitled to say that if it had not been conceded, the trial judge might well have approached the fact‑finding process that was incumbent on him in a different way, written his judgment in a different way and that the review of the matter in the Full Federal Court, which is the proper place for a Warren v Coombes‑type review of facts, not in this Court, would have been performed in a different way and that it is just too late once you get to this Court to be asking this Court to be doing, in effect, a first instance factual review of the evidence in a six‑volume appeal.

MR BARRY:   With respect, your Honour has put more eloquently what I tried to put in our first lot of written submissions.

GUMMOW J:   Yes, but you have to face up to breach, Mr Barry.

MR BARRY:   Yes, the breach has certainly remained an issue in the Full Federal Court and that is also a matter which is a live issue here.

GUMMOW J:   Well, we heard your submissions on it.  We do not want to hear them again.

MR BARRY:   However, in relation to breach, that, of course, is coloured by what findings might or might not otherwise have been made in relation to the duty of care.  The duty of care could be framed in such a way that breach is a small step, or it could be ‑ ‑ ‑

GUMMOW J:   That is why I took you to the pleadings.

MR BARRY:   That is so, your Honour, failure, well, yes.  The case was ‑ ‑ ‑

GUMMOW J:   In accordance with the approach Justice McHugh was indicating yesterday, and that is a problem for you.

MR BARRY:   That is right, failure to warn and failure to inform were the specific issues, as it were, that were pleaded.  That was the particular or the particulars of negligence upon which the case turned.  That, of course, then raised the question of what did Dovuro know or what ought reasonably should that company have known in relation to what the consequences might foreseeably be if they failed to warn or failed to inform.  That was the question that that issue would raise.

There were the references I gave your Honour this morning.  They are also what I have called the admissions.  I had not completely yesterday afternoon taken your Honours to the rest of them but I do want to take your Honours to one particular matter which relates, in our submission, to that question and it goes directly to the issue of breach.  Your Honours will find it in the evidence of Mr Tapp, volume 3 at page 672.  Your Honours will see this is a letter from the general manager to the West Australian distributors and at line 40 Mr Tapp says a number of things which, in our submission, are important on this question of knowledge and the related issue of breach.  Mr Tapp says:

It is unfortunate that the weeds were not detected during crop inspections in New Zealand by company personnel, and that the certified seed passed through our internal quality control procedures, as well as those of quarantine inspection authorities.  This situation occurred partly because of the urgency to process and distribute the certified seed of Karoo.  We apologise for this, and Dovuro is implementing further procedures to ensure such a situation does not happen again in the future.

When one compares what is said by Mr Tapp there ‑ putting aside for one moment the apology aspect of it ‑ with what was said by Mr Rath who was the West Australian manager of the company, a much clearer picture emerges in relation to what they knew and what ‑ ‑ ‑

GUMMOW J:   To what submission is this going?  Why are we taken to this page 672 at this stage of the case?

MR BARRY:   Because it goes to the breach.  The breach was found ‑ ‑ ‑

GUMMOW J:   What do you mean it goes to the breach?  In what way?

MR BARRY:   Failure to inform, failure to warn.  Could I take your Honours to Mr Rath at volume 2 page 226.

GUMMOW J:   We have been taken there before.

MR BARRY:   Your Honours will find at line 20:

Were you then aware of the quality assurance program that had been introduced by your company?---We were in the process of developing one.

The reason they did not warn and the reason they did not inform is they did not themselves know what was in the product other than what they found out when they got the New Zealand certificates in April that it had these undesirable weeds in it.  In our respectful submission, those facts, together with the admissions - and his Honour the learned trial judge placed some store on those, as indeed did Mr Justice Gyles in the Federal Court.

GUMMOW J:   I am not going to.

MR BARRY:   I am sorry, your Honour?

GUMMOW J:   I am not going to for the moment.

KIRBY J:   Well, I might.  I mean, these are admissions by the general manager and ‑ ‑ ‑

GUMMOW J:   They are not admissions of fact.

MR BARRY:   No, but if anybody knows the canola industry in Western Australia and if ‑ ‑ ‑

GUMMOW J:   They are not admissions on pleadings.

MR BARRY:   No, but they do contain evidence which is available for use by the trial judge and, to the extent that the Full Federal Court may use it, by the Full Federal Court on that question of fact.  Did they know that if they did not have proper procedures in place for determining the quality of their product, did they know that if they did not inform the farmers that these weeds were contained, that the result would be economic loss of the kind that was sustained?  Their answer is – the trial judge can say, “Yes, they did”.  And that is precisely what has happened.

GLEESON CJ:   Was that one of the particulars of breach, the failure to have proper quality assurance procedures internally?

GUMMOW J:   It is not, is it?

MR BARRY:   No, it is not.  It is the explanation as to why the information was not conveyed but it was not, of itself, a specific particular of the breach.  But it hardly excuses or justifies the fact that the breach occurred, that there was a failure to warn or a failure to inform, that by their own conduct they put themselves in a position that it was not until they got the New Zealand certificates that they actually had the necessary information to warn or inform ultimate consumers of the product as to what it was going to contain.

KIRBY J:   This is pretty standard stuff, is it not, in the proof of negligence on the part of a product manufacturer to go into their own records and go into their own minutes and go into their knowledge at the time and what they knew and what they did not know and what they did and what they did not do?  I mean, this is how you prove cases.

MR BARRY:   They are routine questions of fact.

McHUGH J:   Yes, but the difficulty that you face, Mr Barry, it seems to me, is that the negligence found against them in paragraph 106 of Justice Wilcox’s judgment was that they ought to have known what the department might do.  That is the problem that you have, that it might turn out to be a threat to Western Australian agriculture.

MR BARRY:   I do in fact have a finding which goes beyond that.  It is a little hard to track it down.  Can I tell your Honours how it arises.  Could I take your Honours to 1257 of Justice Wilcox’s judgment.

KIRBY J:   Which paragraph of his Honour’s reasons?

MR BARRY:   Paragraph 104.

KIRBY J:   I am still not hearing you.  You are dropping your voice.

MR BARRY:   I am sorry, your Honour.  This is the process that leads to the final paragraph which your Honour Justice McHugh refers to.  If your Honours go to paragraph 104, your Honours will see that his Honour says:

In para 96 above I set out the submissions of Mr Rowe in respect of his clients’ negligence claims.  Confining myself for the moment to the case against Dovuro I accept what is contained in para 16.1 to 16.5 inclusive.

They, of course, are on page 1251 at line 50.

KIRBY J:   And 16.5 is failure to exercise adequate quality control to detect weeds.

MR BARRY:   That is so.  To the extent that it is relevant, there is in fact a finding of breach of duty in relation to that which we rely upon.  Your Honour Justice McHugh refers to paragraph 106.  The way in which the trial judge reasoned the breach of duty issue was that there was not adequate control over the quality of what was being produced.  There are the findings, for what they are worth, in relation to knowledge, but then the final process of the reasoning one finds in paragraph 107 where his Honour says at line 25:

I think it failed to do so because of an attitude that came from Mr Tapp, at the top of the company, that Dovuro was bound to do no more than comply with the relevant quarantine regulations.  It was an attitude that sloughed off responsibility for quality control onto regulatory authorities.  It plainly was insufficient to discharge Dovuro’s duty of care to users of the seed.

That is the reasoning on breach and, in our respectful submission, it is reasoning which is, on the facts of this case, unassailable.

CALLINAN J:   I must say I have some difficulty with that.  I would have thought regulatory authorities in relation to agriculture in this country would have a much more strict view.

KIRBY J:   Well, they may or they may not in particular States that might differ but it cannot forfeit the obligation of the individual to their own duty of care.  That is what Rogers v Whitaker was about.

CALLINAN J:   It is not a bad yardstick though, and also there is a lot of evidence in this case about how concerned the authority was.  It was because the authority was so concerned, even perhaps to the point of starting at shadows, that it immediately proscribed these in circumstances in which proscription might not have been justified.

MR BARRY:   Can I identify one distinction which, in our submission, is critical.  There are relevantly two authorities.  There is the agriculture department, who was the department that pressed the panic button, and there is the quarantine authority.  The quarantine officers, of course, would see thousands of things.  They would see the Chief Justice’s fruit fly, they would see all sorts of things.  They would simply have a list of things that they would go through and you either get a tick or a cross in terms of what you want to bring in and so be it.  If it is not prohibited, in it goes.  What his Honour says is that simply relying upon the fact that they were able to get it through quarantine does not establish a sufficient answer to the breach of the duty of care that was put against them.  That is the way in which the case was decided.

CALLINAN J:   But the next step - it was not declared by the Western Australian authority at that stage, was it?

MR BARRY:   No.

CALLINAN J:   All I am saying is that it might be that on all of the evidence in this case, which shows the very, very strict view that the regulatory authority takes, that it is not unreasonable for an importer to be guided by the fact that the regulatory authority has not declared the seeds or the ‑ ‑ ‑

MR BARRY:   With respect, I agree with your Honour.  That is a question of fact.  The trial judge sits and listens to what Mr Tapp says, forms a view about him, listens to what Mr Carmody says from the department, forms a view about him, and then based upon the hearing and seeing the witnesses, his Honour then makes an assessment of whether or not the conduct was reasonable, that is, was it reasonable for Dovuro to take the course of conduct it did?  Obviously enough, the alternative view would be open, but as a finding of fact his Honour came to the conclusion set out at paragraphs 104 to 107.

CALLINAN J:   I do not know whether hearing that evidence puts you in any better position than reading it, that sort of evidence.  I am not saying it does or does not but I am not sure at the moment.

MR BARRY:   But it does when you – there was some criticism by my learned friend of the trial judge’s asking a series of questions of a witness.  As one commonly sees in the course of experience, witnesses sometimes come to court and they have, as it were, a particular message that they wish to communicate, they do not answer the questions, the judge then decides to use, as Mr Rayment correctly identified, the judge’s authority to try and draw out an issue.

CALLINAN J:   Mr Barry, I have to say that that was about as adversarial a questioning by a trial judge as I have seen in a long time.  It is hardly an attempt to gain information.  It struck me as much more than that – very, very adversarial.

MR BARRY:   If your Honour reads through the cross‑examination that precedes it and there was – it would be too high to say it was an admonishment of Mr Tapp, but it was obvious in terms of the way in which the case was proceeding and the way in which he was answering the questions that the trial judge found that he was not getting the kind of frank and honest answers that he expected to get.

CALLINAN J:   I must say I did not read it that way, Mr Barry.  I thought the witness was doing the best he could and I thought the trial judge’s intervention was adversarial.

KIRBY J:   Was there a complaint in the Full Court or in this Court, a ground of appeal, complaining that the judge exceeded the bounds of proper questioning?

MR BARRY:   No, your Honour.

KIRBY J:   I did not think so.  I might have missed it but I did not think I heard it.

CALLINAN J:   Counsel are often very reticent about intervention in those circumstances.

KIRBY J:   Properly so.

MR BARRY:   Mr Rowe wants me to take your Honours to the fact that his Honour also accepted what was said in Mr Rowe’s submissions at paragraphs 16.7 and 16.8.

KIRBY J:   Where do we see the acceptance of these?

MR BARRY:   Paragraph 108 on page 1260 line 34, his Honour says:

I accept the contentions contained in para 16.7 to 16.11 of Mr Rowe’s written submissions.

And those paragraphs are on page 1252; 16.7 is the submission that breach of duty was admitted but they:

could have discharged their duty of care by providing a warning . . . 

The warning could have been published by way of documents . . . 

It was foreseeable the State Government would take action to contain, evaluate and deal with the potential threat to the Canola seed and oil market . . . 

and that damage was suffered.  His Honour identifies at paragraph 16.11:

the cost of additional herbicide, loss of grazing, loss of contracting opportunity, interruption to farm plan and associated costs.

But, of course, once the undesirable seed is put into the ground, then by that act alone damage is done to the property, although that is not of itself ‑ ‑ ‑

GLEESON CJ:   That is the problem about the word “undesirable”.  Putting harmful seed into the ground damages the property but does putting “undesirable” seed in damage the property?

MR BARRY:   Yes, because the land is worth less, the crop is worth less, you have to spend money dealing with the undesirable seed, you then have to spend money cleaning your machinery so that when you harvest your crop – this is Mr Wilkins’ evidence – you then have to take great care to ensure that you do not transport the undesirable seeds from one part of your property to another.  It is either very directly or indirectly but closely related to the act of putting the seed into the ground.

McHUGH J:   That leads me to a problem that has been worrying me for some time now.  I wonder whether or not the parties in this case and the courts below have missed the point of the case altogether.  The real point of this case is a question of the reasonable foreseeability of damage, of the kind of damage.  The damage that was suffered was damage as a result of the actions of the department.  If the department had done nothing, then no damage would have been suffered, at least as far as the evidence is concerned.  So, is the real point of the case really that the parties should have reasonably foreseen that the department might take this action?

GLEESON CJ:   Might panic.

McHUGH J:   It is a question of causation - not necessarily causation but remoteness of damage.

MR BARRY:   It is also a question of which, as it were, theoretical analysis one undertakes.  If one starts to analyse the tort of negligence as the basis of let us look at the damage first and then work back from that, you come up with a different result.

McHUGH J:   That is what Sir Owen Dixon used to say.  Sir Owen Dixon thought you should begin with damage.  You see, you allege a particular breach as set out in your particulars, “failing to advise of the presence of seed”, et cetera, and “failing to place any warning on the containers”, but those breaches in effect did not lead to your damage except in the sense that maybe you would not have bought the product in the first place.  What led to your damage was what the department did.  It just seems to me at the moment - I am not clear in my own mind about this issue but maybe the real issue is a question of reasonable foreseeability of the kind of damage that you suffered.  The case might be very different if your client, for instance, discovered this problem himself and then went to the expense himself of doing things, but everything seems to have been done as a result of what the department did.

MR BARRY:   That is so in fact in this case, but that consequence – I agree, with respect, with your Honour that it is a question of what was reasonably foreseeable by Dovuro in the circumstances, but of course it flows from the, as it were, act of supplying and the act of not warning as to the content of the seed.  That then raises the question of where do you draw the line in terms of foreseeability?  That then becomes an examination of questions of fact in relation to the circumstances of the particular parties.

In the passage that I took your Honours to this morning about the frequent discussions with Mr Tapp, and although Justice Gummow wanted to know how that got into evidence, the fact of the matter is Mr Tapp did not say, “I had no ongoing close relationship with the department.  I had no knowledge or expectation that they would react the way that they did”.  It was left, as it were, as an uncontested issue leading to the conclusion that it became part of the case in relation to causation which did not trouble anyone very much.  Maybe it should have, maybe it should not, but that was not the way in which the case proceeded. 

I agree, with respect, with what your Honour says, that the expenditure was incurred because of the departmental response but in the facts of this case the departmental response was what was something reasonably foreseeable given the relationship that Dovuro had with the department and with the area where they were selling the seed.

McHUGH J:   That depends on whether one accepts paragraph 106 of Justice Wilcox’s judgment, which Justice Finkelstein criticised and could not accept.  Paragraph 110 of Justice Finkelstein’s judgment is a repudiation of the reasoning in paragraph 106 of Justice Wilcox’s judgment.

MR BARRY:   Yes.  My submission in relation to the Full Federal Court is that the issue in relation to duty of care was not an available issue.  Once the application for leave to withdraw the admission had been refused, then nothing, in our respectful submission, the Full Federal Court says on the issue of duty of care constitutes the judgment of the Full Federal Court.  There is of course a process of reasoning.  I put to your Honours yesterday that if one looks at the process of reasoning, it almost looks as if the judges of the Full Federal Court were undertaking a first instance analysis – and your Honour Justice McHugh criticised me for it – but they cannot have been doing anything else because there was not a finding of fact or a process of reasoning on the issue of duty of care.  So the only thing they could have been doing was determining how that question should have been decided if they themselves were deciding it afresh, which they were not.

McHUGH J:   Yes I know, but you are seeking to get some forensic advantage by keep referring to the duty of care.  I am not sure the whole question of duty of care is just totally misleading in this case.  Now, given the very general way the duty was pleaded, the concession about it, the way Justice Finkelstein understood the concession, the real issue in this case on one view is, is it breach, or, perhaps on another view, questions of remoteness, but certainly not duty.

KIRBY J:   You make the point – and it is either good or bad – that because of the concession at the trial what the trial judge then went on to find was shaped by that concession and that you say it is still enough, but the trial would have taken a different course, the reasons would have taken a different course and maybe the consideration in the proper place, the Full Court, would have taken a different course than it did because of the way in which this issue was conceded at the trial.

MR BARRY:   With respect, I agree with your Honour except I do not need to go as high as “it would have”; “may have” is good enough.

McHUGH J:   I am sorry, would you explain to me, because I just do not follow it at the moment, how does the concession of a duty of care affect the trial judge’s reasoning on breach?

KIRBY J:   I may be wrong, but I thought this got back to what Justice McHugh was saying yesterday, that a fault of the law in this area often discerned, sometimes pointed to in this Court, is that people run together duty and breach.  Different judges make duty more concrete and then the breach is easy.  Others make the duty more theoretical and then the breach is the gist of the success of the plaintiff or failure of the plaintiff.  This is why it was important in this trial to – if it had all been up in the air, the judge would have reasoned in a different way and we might not now be sitting here listening to this case.

MR BARRY:   The question becomes, as I put early this morning, duty of care in a very general sense or duty of care having a content.  If it becomes duty of care having a content – and the way in which the trial judge recorded it seems to suggest that it did have a content because it certainly related to such things as the quality of the product – then the process of reasoning that you would get from an examination of duty of care would lead you into the means by which you would conduct an analysis of the breach in relation to that particular matter.

McHUGH J:   No, but it seems to me those matters must go to breach.  After all, paragraph 12 of your statement of claim is pleaded in typical Donoghue v Stevenson, very general type of duty, and the judges’ discussion about quality control and everything else would have been irrelevant unless it was going to breach because duty was already conceded.

MR BARRY:   With due respect, I have put to your Honour that it was conceded in a particular formula and in a particular way which went beyond just a general concession of the Donoghue v Stevenson obligation.

McHUGH J:   You assert that, but where is there any statement in the transcript to that effect?  Justice Finkelstein certainly did not understand it that way.

MR BARRY:   No, there is nothing that I have seen in the appeal books which indicates that that is the way in which all parties and the trial judge were approaching the matter and, again, it may well be because there are different approaches to what, relevantly, duty of care may mean.  Different minds seem to think differently as to what that concept entails.  They are the only matters that I wish to deal with, your Honours.

GLEESON CJ:   Thank you, Mr Barry.  Mr Rayment, we think it would be convenient to the Court if you could put your submissions in reply in written form.

MR RAYMENT:   Yes, I may do that, your Honour.

GLEESON CJ:   Thank you, Mr Rayment.  Subject to that we will reserve our decision in this matter.  We will adjourn for a couple of minutes to allow people to rearrange the papers.

AT 10.59 AM THE MATTER WAS ADJOURNED