Regent Holdings v State of Victoria

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

MAJOR TORTS LIST

S CI 2010 6132

REGENT HOLDINGS PTY LTD (ACN 009 561 433) as trustee for V.L. HALLIDAY INVESTMENT TRUST	Plaintiff
v
STATE OF VICTORIA SOUTHERN OCEAN MARICULTURE PTY LTD (ACN 072 939 210)	Firstnamed Defendant Secondnamed Defendant

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JUDGE:	BEACH JA
WHERE HELD:	Melbourne
DATE OF HEARING:	23-27, 30 September, 1-2, 4, 7-10, 14, 16-18 and 21-22 October 2013
DATE OF JUDGMENT:	7 November 2013
CASE MAY BE CITED AS:	Regent Holdings v State of Victoria
MEDIUM NEUTRAL CITATION:	[2013] VSC 601	Revised 7 November 2013.

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NEGLIGENCE – Duty of care – Breach of duty – Crown – Failure by servants or agents of State government to exercise statutory powers – Position of control over industry – Public duty – Fisheries Act 1995, ss 7, 9, 10, 11A, 28, 34, 42, 49, 51, 53, 142, 148, 150, 151 and 152 – Livestock Disease Control Act 1994, ss 7, 8, 13, 15, 21, 24, 26, 27, 110, 113, 115 and 135 – Wrongs Act 1958, ss 48, 49, 51, 52, 83 and 85.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D.E. Curtain QC with Mr R.H.M. Attiwill and Mr D.B. Bongiorno	Maurice Blackburn
For the First Defendant	Mr M.F. Wheelahan SC with Mr A.T. Broadfoot and Dr T.J.F. McEvoy	Victorian Government Solicitor’s Office
For the Second Defendant	No appearance	Norris Coates

HIS HONOUR:

Introduction

In and about May 2006, abalone and abalone habitats along the western and central parts of the Victorian coast were infected with an infectious herpes-like virus. The virus caused a disease, Abalone Viral Ganglioneuritis (“the disease”). As a result of the contraction of the disease, abalone in affected habitats died or otherwise became unavailable for commercial harvesting by the commercial abalone industry.

In this proceeding, the plaintiff claims damages for loss of income suffered by it by reason of the diminished availability of wild abalone for commercial harvesting, and the loss of value of the plaintiff’s Abalone Fishery Access Licence (“AFAL”) suffered by reason of the diminished availability of wild abalone for commercial harvesting.[1] Pursuant to Part 4A of the Supreme Court Act1986, the plaintiff brings this proceeding on its own behalf and on behalf of group members (individuals and companies) who are or were, in May 2006, involved in the commercial abalone industry and/or connected with it, and who have been affected by the outbreak of the disease. The class (group members) upon whose behalf the proceeding is brought is a closed class, all group members being identified by name in a schedule to the plaintiff’s further amended statement of claim.
[1]Plaintiff’s second further amended statement of claim, paragraph [58].

The plaintiff’s case is that the outbreak of the disease was caused by various breaches of duty committed by the Minister for Agriculture (“the Minister”),[2] the Secretary (“the Secretary”) to the Department of Primary Industries (“the DPI”),[3] the Chief Veterinary Officer of the State of Victoria (Dr Millar) and the Executive Director, Fisheries Victoria (Dr Appleford). The Minister is the minister in charge of the DPI. From late 2002, pursuant to an Administrative Arrangements Order,[4] the DPI has been the department responsible for abalone fisheries under the Fisheries Act 1995.[5] Further, the DPI is also responsible for the exercise of powers under the Livestock Diseases Control Act 1994 (“the LDC Act”).[6] In addition to being the Chief Veterinary Officer of the State of Victoria at the relevant time, Dr Millar was also a livestock inspector under the LDC Act. In addition to these roles, Dr Millar was also a delegate of various of the Secretary’s powers, and various of the Minister’s powers, under the LDC Act.[7] Likewise, Dr Appleford was a delegate of various of the Minister’s powers under the Fisheries Act (including the power to issue a fisheries notice under s 152 of that Act).[8]
[2]At the relevant time, the Minister was the Hon Robert Cameron, MLA.
[3]At the relevant time, the Secretary was Mr Peter Harris.
[4](No 182) 2002.
[5]See also, the definition of “Department” inserted into s 4 of the Fisheries Act by s 3 of the Fisheries (Further Amendment) Act 2003.
[6]Administrative Arrangements Order (No 183) 2002.
[7]See the Instrument of Delegation dated 23 August 2004 in respect of the Secretary and the Instrument of Delegation dated 24 November 2004 in respect of the Minister.
[8]See the Instrument of Delegation dated 28 August 2005.

The plaintiff sues the first defendant (the State of Victoria) on the basis that it is vicariously liable for the actions of the Minister, the Secretary, Dr Millar and Dr Appleford pursuant to s 23(1)(b) of the Crown Proceedings Act 1958. Section 23(1)(b) of the Crown Proceedings Act relevantly provides:

Subject to this Part … the Crown shall be liable for the torts of any servant or agent of the Crown or independent contractor employed by the Crown as nearly as possible in the same manner as a subject is liable for the torts of his servant or agent or of an independent contractor employed by him.

Additionally, the plaintiff brings this proceeding pursuant to s 142 of the Fisheries Act1995. Section 142 of the Fisheries Act provides:

(1)The Minister, the Secretary, a delegate or deputy of the Minister or the Secretary, an officer of the Department, an authorised officer, a member of the Commercial Fisheries Licensing Panel, a member or deputy of the Licensing Appeals Tribunal, a member or deputy of the Compensation Assessment Panel (established under Part 10) or a member or deputy of the Compensation Appeals Tribunal (established under Part 10) is not personally liable for anything done or omitted to be done in good faith-
(a)in the performance of a function or the exercise of a power under this Act; or
(b)in the reasonable belief that the act or omission was in the performance of a function under this Act.

(2)Any liability that would but for subsection (1) attach to the persons specified in subsection (1) attaches instead to the Crown.

In bringing this proceeding, the plaintiff did not attempt to place any reliance upon s 64 of the Judiciary Act 1903 (Cth).[9] At trial, the plaintiff’s claim against the State was, subject to the additional operation of s 142 of the Fisheries Act, limited to the claim that the State was vicariously liable for the acts and omissions of the Minister, the Secretary, Dr Millar and Dr Appleford (described collectively by the plaintiff as “the State tortfeasors”).[10]
[9]See further, Commonwealth v Mewett (1997) 191 CLR 471, 502 (Dawson J).
[10]Originally, livestock inspectors in addition to Dr Millar were also alleged to have breached duties for which the State was vicariously liable, but these allegations were withdrawn at trial (see T196).

Originally, in addition to suing the State (as first defendant), the plaintiff sued Southern Ocean Mariculture Pty Ltd (the second defendant), contending that the outbreak and spread of the virus and the disease were caused by the negligence of the second defendant in the operation of a farm from which it conducted an abalone aquaculture business, and from which farm the virus and the disease are alleged to have spread. However, the plaintiff and the second defendant compromised the dispute between themselves on terms approved by the Court pursuant to s 33V of the Supreme Court Act1986. The compromise was approved on 18 September 2013. Paragraph 4 of the orders approving the compromise provided:

Notwithstanding the approval of the settlement [between the plaintiff and the second defendant], [the second defendant] will remain a party in these proceedings for the purposes of section 24AI of the Wrongs Act 1958.

Background

At all relevant times, the second defendant (“SOM”) carried on a business of abalone aquaculture at a farm (“the SOM farm”) located on land adjacent to Taylors Bay and Drain Bay, near Port Fairy. SOM held large concentrations of abalone in tanks and ponds on the farm. The tanks were open to the air and in open plan sheds.

From time to time, SOM brought onto the SOM farm abalone sourced from wild populations and commercial suppliers within and outside Victoria (“translocated abalone”). On occasions, translocated abalone were placed in brood stock tanks with, or sharing a water supply with, other abalone. Additionally, from time to time, abalone were moved between tanks. Abalone were also caused or permitted to come into contact with people, animals, vehicles and other equipment.

SOM maintained the abalone in its tanks by pumping seawater from Taylors Bay (“the SOM farm seawater”) into and through the tanks. SOM also flushed the SOM farm seawater and other material in the tanks, including feed matter, abalone secretions and excreta, and abalone offal (“abalone product”) into settling ponds on the farm, and then into a channel or drain discharging from the farm into Drain Bay.

From time to time, SOM cleaned its seawater intake systems by reversing the direction of water flow and using the SOM farm seawater to force a scraping device (“pig”) back through the intake pipes, discharging into Taylors Bay. Additionally, from time to time, SOM cleaned the pipe system on the SOM farm by forcing a pig through the pipes on the farm.

At all relevant times, there were populations of wild abalone living in their natural habitats in Taylors Bay and Drain Bay. The habitats in Taylors Bay and Drain Bay were part of a complex of abalone habitats extending along the Victorian coast from near the South Australian border eastward to the New South Wales border. The complex of habitats along the Victorian coast was subject to significant coastal current from west to east. Additionally, the complex of habitats was subject to commercial and recreational boating, fishing and diving activity.

Wild abalone in the habitats in Victorian waters were owned by the State, but became the property of people holding the licences or permits described in s 10(2) of the Fisheries Act when taken by those people in accordance with the relevant licence or permit. However, the taking of wild abalone from the habitats for commercial sale was permitted to be undertaken only:

(a)by divers nominated under Abalone Fishery Access Licences (“AFALs”) issued by the Secretary pursuant to the Fisheries Act and the Fisheries Regulations 1998 (“AFAL divers”);
(b)by AFAL divers to harvest abalone quotas for the holders of units in AFALs (“AFAL holders”) nominated in respect of each AFAL diver.[11]

[11]Plaintiff’s second further amended statement of claim, paragraph [6(f)].

Further, wild abalone were permitted to be received or stored only by persons holding Fish Receivers (Abalone) Licences or Fish Receivers (Abalone Storer) Licences issued by the Secretary pursuant to the Fisheries Act and the Fisheries Regulations (“abalone receivers”).

At all relevant times there was an abalone fishery (“the abalone fishery”) which was the subject of a management plan within the meaning of s 28 of the Fisheries Act. The management plan for the abalone fishery was the Victorian Abalone Fishery Management Plan 2002 (“the management plan”). The management plan dealt with abalone in Victorian marine waters, including wild abalone and abalone in in-sea aquaculture facilities (“ranches”), and abalone that were on land in which abalone aquaculture activity was conducted (“aquaculture abalone”). This abalone included the abalone on the SOM farm.

The tanks on the SOM farm

There were 184 tanks on the SOM farm. The tanks included nursery tanks (located in “Nursery A” and “Nursery B”); weaning tanks (described as “W1” to “W8” and “W11”); brood stock tanks (“BS1” to “BS12”); family line tanks (“FL12.1” to “FL12.9”, “FL13.1” to “FL13.9”, “FL14.1” to “FL14.9” and “FL15.1” to “FL15.9”); and grow out tanks (located in the “1-45 shed”, “AB shed” and “Double Tiers”).

The outbreak

On about 29 December 2005, SOM observed that some abalone had died in tanks BS2 and BS3. About 95% of the abalone in tank BS2 had died, and about 50% of the abalone in tank BS3 had died. On about 7 January 2006, SOM observed that some abalone in tank FL12.9 had died. On 10 January 2006, SOM observed that a number of abalone in tanks BS8 and BS9 had died.

On 10 January 2006, SOM informed the DPI of the mortalities that had been observed. On 11 January 2006, the DPI began investigating. The outbreak observed in late December 2005 and early January 2006 has been described by the parties as “the first outbreak”.

At about this time (mid January 2006), abalone tissue was collected from some of the abalone at the SOM farm and provided to Primary Industries Research Victoria (“PIRVic”). PIRVic is part of the DPI. Shortly thereafter, PIRVic reported to the DPI that the tissue collected tested positive for the disease.

On 9 February 2006, by Order-in-Council, “Herpes-like virus of Abalone” was gazetted as an exotic disease under s 6 of the LDC Act.

On 1 March 2006, abalone were collected from near the inlet and outlet pipes of the SOM farm and from tanks on the SOM farm. These abalone were provided to PIRVic. PIRVic tested these abalone, finding them negative for the disease.

On 17 March 2006, the virus re-emerged at the SOM farm. This outbreak is described by the parties as “the second outbreak”. Between about mid-January 2006 and 17 March 2006, there had been no unusual mortalities, or mortalities attributed to the disease, on the SOM farm.

By 23 March 2006, abalone in nine of the 184 tanks at the SOM farm were found to have been infected. By 27 March, this number had grown to 18 of the 184 tanks. By 6 April, 41 tanks were found to have been infected; and by 15 April 2006, abalone in 81 of the 184 tanks at the SOM farm had been found to be infected. By 20 April 2006, SOM believed that every tank on the SOM farm was infected; and by 21 April 2006, abalone in 165 of the 184 tanks had been found to be infected. As Dr Millar described it, the second outbreak was “explosive”.

The first recorded observation of the virus and/or the disease in the wild by a diver called in this proceeding was made by Mr Peter Riddle. On 25 May 2006, Mr Riddle dived in Watertower Bay (an area of water immediately to the east of the SOM farm) and “found it full of infected abalone”. On the same day, Mr Riddle dived in Drain Bay and found it “in the same state”.

The plaintiff’s case

Essentially, the plaintiff’s case against the State is that the State tortfeasors, by their negligence or breach of duty, permitted the virus and the disease to escape into Drain Bay (and perhaps also Taylors Bay) from where it spread east and west along the Victorian coast. The plaintiff pleads a duty of care against each of the Minister, the Secretary, Dr Millar and Dr Appleford in the following terms:

At all material times on and from about 10 January 2006, alternatively not later than 22 March 2006, [the Secretary and/or Dr Millar and/or the Minister and/or Dr Appleford] owed to [the plaintiff] a duty to take reasonable care to protect it from economic losses caused by an escape of the virus and [the] disease from the [SOM] farm.[12]

[12]See paragraphs 29B, 30A and 51 of the plaintiff’s second further amended statement of claim.

Each of the Minister, the Secretary, Dr Millar and Dr Appleford are alleged by the plaintiff to have known or ought to have known:

(a)by no later than 16 January 2006, it was probable that a herpes-like virus was the cause of the abalone mortalities on the SOM farm;
(b)by no later than 22 March 2006, it was probable that the virus was causing abalone mortalities at the SOM farm; and
(c)by no later than 28 March 2006, the virus was causing further abalone mortalities at the farm.[13]

[13]See paragraphs 29A, 29AA, 29C and 29CC of the plaintiff’s second further amended statement of claim.

As a livestock inspector, the plaintiff alleges that Dr Millar had powers under ss 13, 15, 110, 113 and 115 of the LDC Act. It was submitted that the proper exercise of one or more of these powers would, as a probability, have prevented the virus and the disease from escaping into the wild. Section 13 of the LDC Act relevantly provided:

(1) An inspector may, in writing, order the owner of-
(a)livestock suffering from or suspected of suffering from disease;[14] or
(b)livestock which the inspector believes to have been in contact with diseased livestock-

to ensure that the livestock are kept in isolation from other livestock until the livestock have received proper treatment or been found by an inspector not to be suffering from disease.
(2)An inspector may, in writing, order the person in charge or having the custody or control of livestock referred to in sub-section (1) to ensure that the livestock are kept in isolation from other livestock for so long as they are in the person’s charge, custody or control.
(3)A person must not fail or refuse to comply with an order under this section.
Penalty: 60 penalty units.

[14]The expression “disease” is defined in s 3 of the LDC Act to mean:

“(a)any contagious or infectious disease, or any condition to which any livestock is subject, that the Governor-in-Council declares from time to time to be a disease; or

(b) an exotic disease.”

“Exotic disease” is defined in s 3 of the LDC Act to mean:

“(a)foot and mouth disease or rabies; or

(b)any other contagious or infectious disease, or any condition to which any livestock is subject, that the Governor-in-Council declares to be an exotic disease.”

Section 15(1) of the LDC Act relevantly provided:

(1) If an inspector knows or reasonably suspects that-
(a)any livestock or livestock product is diseased or infected with a disease; or
(b)any livestock or a livestock product has been in contact with diseased livestock-

the inspector may-
(c)dispose of, or order to be disposed of, the livestock or livestock product; or
(d)destroy, or order to be destroyed, the livestock or livestock product.

Section 110(1) of the LDC Act relevantly provided:

(1)An inspector who believes on reasonable grounds that, in order to prevent the spread of disease, it is necessary to do so, may by notice in writing order that any premises, place or vehicle be quarantined and kept secure so as to prohibit or restrict the movement of any livestock, livestock product, fodder or fitting onto or out of the premises, place or vehicle affected by the notice.

Section 113(1) of the LDC Act relevantly provided:

(1)An inspector who believes on reasonable grounds that a vehicle or any premises or place where-
(a)livestock or livestock products are commonly exposed for sale;
(b)livestock are commonly exposed for exhibition, parade, racing or any other form of recreation or competition;
(c)livestock or livestock products are processed for human or animal consumption-

is infected with a disease may, by notice in writing to the owner or person in charge or apparent control of the premises, place or vehicle affected by the notice, require that person to disinfect-
(d)the place, premises or vehicle specified in the notice;
(e)any fodder, fitting or any other article within the premises, place or vehicle;
(f)any vehicle within the premises or place.

Section 115(1) of the LDC Act relevantly provided:

(1)An inspector who believes on reasonable grounds that any livestock is infected with a disease or that the livestock may become infected with a disease may by notice in writing to the owner or person in charge of the livestock require that person to submit them for any examination, biological test, vaccination, inoculation, or other treatment which the inspector considers necessary to prevent the introduction or spread of disease.

As to criminal sanctions for contravening notices issued under ss 110, 113 and 115, s 112 of the LDC Act made it an offence to contravene any provision of a quarantine notice issued under s 110;[15] s 114 of the LDC Act made it an offence to contravene any provision of a disinfection notice issued under s 113;[16] and s 115(2) of the LDC Act made it an offence to contravene any provision of a treatment notice issued under s 115(1).[17]
[15]In the case of a quarantine notice issued in respect of an exotic disease, 240 penalty units or 24 months’ imprisonment or both; in any other case, 60 penalty units.
[16]240 penalty units or 24 months’ imprisonment or both in the case of a notice with respect to an exotic disease; in any other case, 60 penalty units.
[17]In the case of a notice with respect to an exotic disease, 120 penalty units; in any other case, 60 penalty units.

In addition to basing part of its case on ss 13, 15, 110, 113 and 115 of the LDC Act, the plaintiff also relies upon ss 21, 24, 26 and 27 of the LDC Act. Section 21 of the LDC Act gave a power to the Secretary where the Secretary reasonably suspected a place to be infected with an exotic disease. Section 21 relevantly provided:

If the Secretary reasonably suspects any land premises, place or area within Victoria to be infected with an exotic disease, the Secretary may, by order in writing declare it to be an infected place.

Section 24 of the LDC Act then prohibited entering or leaving any place declared to be an infected place unless the person entering or leaving was authorised to do so under a permit issued by an inspector, and was complying with any conditions set out in the permit. Further, s 24 provided for criminal sanctions if a person entered or left a place declared to be an infected place without authority under a permit issued by an inspector (or if such a person failed to comply with any conditions set out in an applicable permit).[18]
[18]360 penalty units or 36 months imprisonment or both.

Section 26(1) of the LDC Act gave a power to the Minister where the Minister believed or suspected there was a possibility that an exotic disease was present or may be introduced into any premises. Section 26(1) relevantly provided:

(1)If the Minister believes or suspects that there is a possibility that an exotic disease is present on or in or may be introduced into any land, premises, place or area, the Minister may by order-
(a)declare the land, premises, place or area to be a restricted area; and
(b)specify any prohibitions, restrictions and requirements which are to operate in the restricted area.

Section 27 of the LDC Act then prohibited a person who knows, or has reason to believe, that any place has been declared to be a restricted area, from causing or permitting the moving of livestock or any livestock product from the restricted area (unless authorised to do so under a permit, the conditions of which were being complied with). Further, s 27 of the LDC Act prohibited the contravention of any prohibition, restriction or requirement specified in an order made under s 26. Like s 24(1), s 27(1) contained a criminal sanction.[19]
[19]360 penalty units or 36 months imprisonment or both.

Finally, so far as statutory powers are concerned, the plaintiff relied upon the powers given to the Minister under s 152 of the Fisheries Act. Section 152 of the Fisheries Act relevantly provided:

(1)The Minister, after consultation with the relevant consultative bodies, may by a fisheries notice in relation to any fishery-
(a)fix and enforce catch limits for any species of fish specified in the notice;
(aa)fix and enforce minimum or maximum size limits for any species of fish specified in the notice;
(b)fix periods during which any specified fishing activity in relation to fish is prohibited or allowed;
(c)provide for the management of a specified area of inland waters;
(d)close to harvesting for the period of time specified in the notice any shellfish beds or shellfish farms, where necessary in response to adverse environmental conditions;
(f)specify measures for the protection of any fishery, species, ecosystem or habitat;
(g)provide for any matter or thing relating to protected aquatic biota and noxious aquatic species in accordance with this Act;
(h)provide for any other matter or thing which this Act requires or permits to be done by a fisheries notice.

(2)Despite sub-section (1), the Minister need not consult with the relevant consultative bodes before making a fisheries notice if, in the opinion of the Minister, to consult those bodies would result in a delay that would significantly reduce the effectiveness of the notice.
(2A)…
(3)If a provision of a fisheries notice is inconsistent with any regulations, management plan, Ministerial direction, licence or permit, the fisheries notice prevails to the extent of the inconsistency.
(4)…
(5)A fisheries notice-
(a)must be published in the Government Gazette;
(b)must be sent to the relevant recognised peak bodies;
(c)if there are no relevant recognised peak bodies, must be published in a newspaper circulating in the area affected by the notice;
(d)comes into operation on the date it is published or on such later date as is specified in the fisheries notice;
(e)unless sooner revoked, is revoked by virtue of this section on the day which is 12 months after the date on which it came into operation.

(5A)…
(6)A fisheries notice is a subordinate instrument for the purposes of the Interpretation of Legislation Act 1984.
(7)A fisheries notice-
(a)may be of general or limited application; and
(b)may make different provision according to differences in times, places, localities, circumstances, boats, persons, classes of persons or fish, whether or not any times, places, circumstances, boats, persons or fish are determined or ascertainable before, at or after the making of the notice; and
(c)may impose penalties not exceeding 50 penalty units for a contravention of or an offence under the notice; and
(d)…
(e)may confer powers or impose duties in connection with the notice on any person or body; and
(f)may provide for the exemption of persons or things or a class of persons or things from any of the provisions of the fisheries notice, whether unconditionally or on specified conditions and either wholly or to such an extent as is specified.

The plaintiff’s case is that the State tortfeasors (the Minister, the Secretary, Dr Millar and Dr Appleford) owed the plaintiff a duty of care because “[they] knew of the risk of harm to specific individuals, [they] had power to take particular steps to eliminate that risk and importantly, at an earlier stage, had given directions to eliminate the risk”.[20] In making this submission, the plaintiff relied upon what it described as McHugh J’s characterisation of Pyrenees Shire Council v Day[21] in Graham Barclay Oysters Pty Ltd v Ryan.[22]
[20]Plaintiff’s written opening [96].
[21](1998) 192 CLR 330.
[22](2002) 211 CLR 540, 581-2 [94].

The plaintiff’s case as pleaded is that Dr Millar and the Secretary breached the duties of care owed by them:

(a)by not later than 23 March 2006 (alternatively 28 March 2006) declaring the grow-out sheds on the SOM farm to be an infected place under s 21 of the LDC Act;
(b)by not later than 23 March 2006 not requesting and/or advising SOM to immediately:
(i)cull and dispose of abalone in affected tanks (and in drains or ponds) in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;
(ii)decontaminate the affected tanks in the grow-out sheds on the SOM farm;

(c)by not later than 28 March 2006 requesting or advising SOM to immediately cease the flow of effluent discharge from the grow-out sheds on the SOM farm.[23]

[23]Plaintiff’s second further amended statement of claim, paragraph [31].

Additional allegations of breach of duty made against Dr Millar, as a livestock inspector, included by not later than 23 March 2006 (or in some cases 28 March 2006), not taking various steps open to him pursuant to the provisions of the LDC Act to which I have already referred (including failing to impose conditions of culling and disposing of stock and/or decontaminating affected tanks).[24]
[24]Plaintiff’s second further amended statement of claim, paragraph [52].

Against the Minister and Dr Appleford, the plaintiff pleaded that they each breached the duty of care owed by them:

(a)by not later than 16 January 2006, issuing a Fisheries Notice under s 152 of the Fisheries Act directing SOM to immediately:
(i)cull and dispose of abalone in the weaning/brood stock shed and any abalone in drains or ponds on the farm in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;
(ii)decontaminate the weaning/brood stock shed on the farm;
(iii)cease the flow of effluent discharge from the weaning/brood stock shed on the farm;

(b)alternatively to (a), by not later than 16 January 2006, requesting and/or advising SOM to immediately undertake the actions referred to in (a);
(c)by not later than 23 March 2006, issuing a Fisheries Notice under s 152 of the Fisheries Act directing SOM to immediately:
(i)cull and dispose of all abalone in the affected tanks in the grow-out sheds, and any abalone in drains or ponds on the SOM farm in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;
(ii)decontaminate the affected tanks in the grow-out sheds on the SOM farm;

(d)further and alternatively to (c), by not later than 28 March 2006, issuing a Fisheries Notice directing SOM to immediately cease the flow of effluent discharge from the grow-out sheds on the SOM farm;
(e)by not later than 23 March 2006, declaring the grow-out sheds on the farm a restricted area under s 26(1)(a) of the LDC Act and further specifying prohibitions, restrictions and requirements which were to operate in the restricted area under s 26(1)(b) of the LDC Act, namely directing SOM to immediately:
(i)cull and dispose of all abalone in affected tanks in the grow-out sheds, and any abalone in drains or ponds, on the farm in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;
(ii)decontaminate the affected tanks in the grow-out sheds on the farm;

(f)further and alternatively to (e), by not later than 28 March 2006, not directing SOM to immediately cease the flow of effluent discharge from the grow-out sheds on the farm;
(g)alternatively to (e) and (f), by not later than 23 March 2006, not requesting and/or advising SOM to immediately undertake the actions referred to in paragraphs (e)(i) and (e)(ii) above;
(h)further and alternatively, by not later than 28 March 2006, not requesting and/or advising SOM to immediately cease the flow of effluent discharge from the grow-out sheds on the SOM farm.[25]

[25]Plaintiff’s second further amended statement of claim, paragraph [34].

So far as common questions of law or fact are concerned in relation to group members, the plaintiff posited the following questions:[26]
[26]As reformulated by the plaintiff on the second last day of the trial.

(1)With respect to:
(a)the Minister and/or Dr Appleford, was there a foreseeable and not insignificant risk on or after 16 January 2006,[27] and/or on or after 23 March 2006;
[27]On the last day of the trial, the plaintiff deleted the words “16 January 2006, and/or on or after” from this question. As to the significance of this deletion for the plaintiff’s case, see the exchange between the Court and counsel for the plaintiff after final addresses at T1344.29 – T1347.7.
(b)the Secretary and/or Dr Miller, was there a foreseeable and not insignificant risk on or after 23 March 2006 –

that the virus would escape from the SOM farm into Drain Bay and cause the disease in wild abalone?
(2)With respect to each of the State tortfeasors, in the circumstances, would a reasonable person in each of their positions have taken the various precautions the plaintiff alleges that each of them should have taken, and which are described above?
(3)Did, and if so how and when, the virus:
(a)escape from the SOM farm into Drain Bay?
(b)cause the disease in wild abalone in Drain Bay?
(c)cause the disease in wild abalone along the Victorian coast?

While the State accepts that questions (1) and (3) are common questions that fall to be answered in this proceeding, it contends that question (2) is not a common question of law or fact among all group members. The State submits that whatever the outcome of this proceeding, question (2) should not be answered because different answers would or might be given in respect of different group members, depending upon the circumstances specific to those group members. For example, it was said that there are relevant differences between a licence holder who operates in the area of Drain Bay and a diver operating many miles to the east of Drain Bay.

Before turning to the State’s case, I should mention two documents upon which the plaintiff places significant reliance: the first is the management plan (to which I have already referred); and the second is “2002/652 Victoria’s Arrangements for the Management of Aquatic Animal Disease Emergencies” (“VAMAADE”). While not obliged to do so,[28] in 2002, the Minister implemented, pursuant to s 28 of the Fisheries Act, the management plan. In the foreword to the management plan, it was stated:

Abalone is Victoria’s most valuable commercial fishery with a current annual landed catch value of around $70 million, an established processing industry and an emerging aquaculture sector. Australia produces almost two thirds of the world’s reported wild catch harvest, and Victoria is the second largest abalone producing State with around 10% of the annual world harvest.

[28]Section 28(1) of the Fisheries Act.

The management plan contained a section that dealt with its objectives.[29] Under the heading “Ecologically sustainable development”, the management plan provided:

The prime objective of this plan is to formalise management of the abalone fishery firmly within a framework of ecologically sustainable development (ESD). To this end, the plan specifies fishery objectives, performance indicators, reference points and trigger responses. In association there are formal processes for monitoring the effectiveness of management, and deciding on appropriate actions in the event of adverse outcomes.[30]

[29]See pp 4-5 of the management plan. See further, pp 11-16 of the management plan.

[30]See p 4 of the Management Plan.

Under the heading “Abalone health”, the management plan provided:

The transfer of disease or unwanted genetic material to the wild must be prevented. Notifiable diseases are specified in the Disease and Livestock Control Act 1968[31] and carry mandatory reporting requirements with powers of confiscation or eradication in the event of a significant disease outbreak. This legislation is also supported by the Fisheries Act 1995 but with additional powers relating to inspection and compliance. The EPA also requires notification of fish kills. The Victorian Fish Health Accreditation Scheme currently provides fish health monitoring and extension to the aquaculture industry, and may be extended to cover abalone grown in aquaculture.
To prevent the possible transfer of disease and genetic material to the wild, all coastal abalone aquaculture facilities (as well as commercial processing facilities holding live abalone but not necessarily associated with an aquaculture venture) with waste water outflows to the sea, are required to manage the possible transfer of disease and genetic material to the wild. Those facilities holding abalone received from another broodstock management collection zone must develop a code of practice that aims to prevent the possible transfer of disease and genetic material to the wild.[32]

[31]Cf the Livestock Disease Control Act 1994 (referred to above as the LDC Act).

[32]See the management plan at p 30. See further, pp 31-45 of the management plan.

VAMAADE was a document written by, amongst others, Dr Appleford and Mr Peter Lawson (Senior Fisheries Management Officer of Fisheries Victoria (DPI)). VAMAADE commences (in Part 1, under the heading “The background to management arrangements) with:

The objective of these arrangements is to ensure the detection, monitoring, control and/or eradication of aquatic animal diseases in Victoria.

On page 13 of VAMAADE, the following appears:

During an aquatic animal disease emergency involving a declared exotic disease, areas may be declared under the [LDC] Act for disease control/eradication purposes:
·Infected Place (section 21);
·Restricted Area (section 26); and
·Control Area (section 29).

Under the heading “Initiating a response”, VAMAADE provides:

The initial notification of a suspected aquatic animal disease emergency is likely to be received by district staff, who collect as much information as possible for the Senior Veterinary Officer (SVO) at regional level. The SVO, if necessary, notifies the CVO and the relevant Police District Emergency Response Coordinator (DERC), Regional Fisheries Manager, local government authority and relevant aquaculture, service and catchment management industries and authorities.
…
Subsequent action including the possible location and opening of a Local Disease Control Centre (LDCC) and activation of the State Disease Control Headquarters (SDCHQ), is determined by the CVO.

Under the heading “Activating the arrangements”,[33] three phases of activation are described. Under the heading “Phase 1 – Investigation”, the following appears:

As soon as the CVO considers there is a high probability an aquatic animal disease emergency is present, but before diagnosis has confirmed its existence …, key personnel in the Agriculture Division (as the designated control agency for managing of aquatic animal disease emergencies) and Fisheries Victoria (as the leading support agency), plus other relevant coordination and support agencies must be advised an emergency is imminent or may exist.

[33]Page 18 of VAMAADE.

Under the heading “Phase 2 – Operations”, the following appears:

The operational phase exists when the existence of an aquatic animal disease emergency is confirmed, and continues until the disease and its related risks are controlled or eradicated, or it is determined control or eradication is no longer feasible.
During this phase the SDCHQ is established, and one or more LDCCs may be established … .
The SDCHQ evolves from the incident management team appointed by the CVO in the investigation phase, which forms the core of the SDCHQ and manages the response strategy. An LDCC controls response activities in a designated [restricted area].

VAMAADE also sets out actions to be taken by, and responsibilities of, the Chief Veterinary Officer and key staff during the various phases of activation in managing aquatic animal disease emergencies. For example, one of the Chief Veterinary Officer’s roles and responsibilities is to “oversee the planning and management of the eradication or control campaign in accordance with the relevant legislation, policies, emergency-management arrangements and OIE/AQUAVETPLAN strategies and procedures, with due consideration of the economic, commercial and social implications of all actions taken”.[34] VAMAADE went on to provide that Field staff (which includes the District Animal Health Staff, Fisheries Field Staff and Aquaculture Extension Officers), where there are grounds for suspecting a risk of an animal aquatic disease emergency, must:

Initiate steps to limit the potential spread of disease by quarantine, to stop the movement of animals, people, animal product, water and other fomites into and out of a [suspect area] or premises … .[35]

[34]See p 50 of VAMAADE.

[35]See p 67 of VAMAADE.

The plaintiff’s case in relation to the management plan and VAMAADE is that these documents or protocols were not implemented by the State tortfeasors (or at all). Had they been implemented “in the manner intended”, it is asserted by the plaintiff that the virus would not exist in Victorian wild abalone. I turn now to briefly identify the State’s case.

The State’s case

The State denies that the State tortfeasors owed the duties of care alleged by the plaintiff. It submitted that each of the statutory powers the plaintiff alleged ought to have been exercised by one or more of the State tortfeasors is quasi legislative in that each of the powers alleged by the plaintiff creates an offence. The State then submitted that for this reason, the exercise of each of the statutory powers cannot be compelled or constrained by a common law duty of care. In support of this proposition, reliance was placed upon the judgment of Gummow J in Vairy v Wyong Shire Council.[36]
[36](2005) 223 CLR 422, 449-450 [81]-[84].

As to the allegations made that the State tortfeasors should have persuaded SOM to take the various precautionary steps outlined by the plaintiff, the State relied upon the joint judgment of Gummow and Hayne JJ in Graham Barclay Oysters Pty Ltd v Ryan,[37] where their Honours said:

But the exercise or potential exercise of powers of supervision or persuasion of this type provides an insecure basis for a duty of care enforceable by the common law. … That the practical content of any such duty would be elusive supports the conclusion that it does not exist. As counsel for the State asked rhetorically during argument, is such a duty to be described as a duty to be persuasive, especially persuasive or successfully persuasive?[38]

[37](2002) 211 CLR 540, 610 [185].

[38]Ibid, (citation omitted).

As a further basis for denying the existence of a duty of care, the State relied upon the High Court’s decision in Sullivan v Moody.[39] The State contended that there could be no duty of care in the present case because there would be conflicting duties imposed upon the State tortfeasors. It was submitted that if a duty was owed to the plaintiff, then it was also owed to SOM – and these duties were, by their very nature, in conflict in the same way the alleged duties described in Sullivan v Moody[40] were in conflict.
[39](2001) 207 CLR 562.
[40]Ibid.

Additionally, in denying the existence of a duty of care, the State asserted that “this is a case of indeterminacy”. As put in opening by Senior Counsel for the State:

Dr Appleford and Dr Millar will accept that it was reasonably foreseeable that the virus might escape from the farm and might affect wild abalone but what was not foreseeable in our submission and what could not be determined was the consequences of the escape, the extent to which it might affect the stocks of wild abalone. We will submit that engages the idea of indeterminacy.[41]

[41]T77.26 – T78.2.

In addition to denying the existence of a relevant duty of care, the State in any event denied that there was any breach of duty by any of the State tortfeasors. The State’s case was that when the Court came to look at what reasonable care required, the State tortfeasors were to be looked at as public officers who were required to discharge their statutory functions in the public interest. It was submitted that the plaintiff’s case amounted to an assertion that the State tortfeasors were required to choose the plaintiff’s interests over the interests of the owner of the SOM farm, given the state of knowledge which existed at the time. It was then submitted that it was not unreasonable for any of the State tortfeasors to take the actions they took having regard to the developing state of knowledge between January and May 2006.

In relation to causation, it was submitted by the State that there was no direct evidence as to when the virus first escaped from the SOM farm. The possibilities were said to include the fact that the virus may have escaped at the time of the first outbreak in January 2006. It was said that there were circumstantial facts which would support such a conclusion. These facts were said to include the lack of any explanation as to where the virus was between January and March 2006. Additionally, it was submitted that, as we now know the virus is capable of being transmitted through water, the increasing numbers of infections in different tanks and different sheds at the SOM farm during the second outbreak suggests that the virus came back through the intake pipe at the SOM farm – rather than being undetected within the farm between January 2006 and 17 March 2006. This was said to be a second circumstantial fact supporting the idea that the virus (came in from the wild) some time between the first outbreak and the second outbreak.

Alternatively, it was suggested that it could not be said at what time after 17 March 2006 the virus escaped from the SOM farm. In those circumstances, it was submitted by the State that it cannot be established on the balance of probabilities that reasonable care by the State tortfeasors would have prevented the virus escaping. Reasonable care, it was submitted, did not involve making a decision on 23 March 2006 to shut down an abalone farm with more than a million live abalone sitting in tanks on the farm.

Finally, in defence of the plaintiff’s claim, the State relied upon the proportionate liability provisions in the Wrongs Act, submitting:

On the question of proportionate liability, our submission in a nutshell is, we will adopt and perhaps adapt the plaintiff’s case against SOM and our submission will be that if the State tortfeasors were able to exercise control, so was SOM and SOM wasn’t hampered by any public duties to other people. SOM was able to act autonomously.[42]
[42]T84.12 – T84.18.

Initial observations of disease in the wild

The plaintiff called a number of divers who gave evidence of their observations of abalone habitats before the outbreak of the virus and once the disease was observed in the wild. The tenor of this evidence was that at no time prior to 2006 had any serious disease or other problem affected the abalone in the western zone.

David Forbes is a career diver. He gave evidence that he has been diving commercially for abalone since 1999. Since 1990, he has also conducted fishery independent abalone abundance surveys on behalf of the DPI. His contact there has been Dr Harry Gorfine. Mr Forbes gave evidence that, in addition to his commercial diving, the surveys he did for the DPI were aimed at providing population information, including size distribution, in the commercially important reefs in Victoria. These surveys were generally done in January to the end of March every year (the abalone season commencing on 1 April of each year).

Mr Forbes gave evidence, and I accept, that over 23 years of diving he has obtained a very good knowledge of the reefs in the western and central zones. Mr Forbes said that in this time, he had explored just about every reef in the area that was in less than 18 metres of water.

On 20 January 2006, Mr Forbes dived reef code 3.07 (Water Tower).[43] Within each reef code there may be many individual reefs with suitable habitats for abalone. Some reef codes will have almost continuous good habitat and others will have patchy suitable habitat. In cross-examination, Mr Forbes agreed with the proposition that the two reef codes outside the SOM farm (Burnet’s and Water Tower), by and large, were continuously good abalone habitat. He also agreed that within each reef there might be many pockets where you will find abalone: under ledges; in crevices; and even under rocks for very small ones.
[43]Broadly speaking, reef codes are an area of water identified for regulatory purpose to manage abalone fishing. Each reef code has a name and number. Typically, each reef code is usually several kilometres of coast. Abalone are found throughout each reef code, albeit in different quantities. Generally speaking, the reef codes run in ascending number order from west to east. The relevant reef codes in the western zone for the purpose of this proceeding are 1.01, Discovery Bay; 1.02, Whites; 1.03, Water Springs; 1.04, Blowholes; 1.05, The Tits; 1.06, South Bridgewater/Bully Cove; 1.07 and 1.08, Seal Caves and Horseshoe; 2.01, Murrels; 2.02, Jones Bay; 2.03, Outside Nelson; 2.04, Devils Kitchen; 2.05, Inside Nelson; 2.06 and 2.07, Killer Waves and Yellow Rock; 2.08, Cape Grant; 2.09 and 2.10, Passage and Lawrence Rocks; 2.11, Blacknose; 2.12, Hospital Reef (adjacent to Portland); 2.13, Dutton Way; 2.14, Julia Bank; 2.15, Yambuk; to the south of 2.14, Julia Percy Island, containing reef codes 3.01 to 3.04, Julia Percy North, Julia Percy North-east Reef, Julia Percy East Side and Julia Percy Prop Bay respectively; going further east again, 3.05, Crags; 3.06, Burnet’s; 3.07, Water Tower (the SOM farm is on the border of Burnet’s and Water Tower); 3.08, Light House Reef (just to the east of Port Fairy); 3.09, Mills; 3.10, Killarney; 3.11, The Cutting; 3.14, Levys Point; 3.12, Thunder Point; and 3.13, Lady Bay (outside Warrnambool).

On 20 January 2006, Mr Forbes collected 778.15 kilograms of abalone at reef code 3.07 (Water Tower). This took some four hours and ten minutes, indicating that abalone in the area where Mr Forbes dived were abundant on this day. In fact, Mr Forbes’ abalone docket book shows that on the same day, at Water Tower, he dived for another hour and collected another 31.35 kilograms of abalone.

Asked about the abundance of abalone in Taylors Bay and Drain Bay prior to the virus outbreak in 2006, Mr Forbes said, “The abundances in Taylors Bay were very, very good”, and that Drain Bay was one of his favourite locations as there were “fantastic numbers [of abalone] and they were quite fast growing”.[44] Mr Forbes said there was a spot in Drain Bay that was very productive. On a first visit to it for the season, Mr Forbes said you could expect a tonne of abalone at that location. Mr Forbes gave evidence that that particular reef was approximately 300 to 400 metres from Drain Bay, and approximately a kilometre from SOM’s outlet on Drain Bay.
[44]T128.

On 19 February 2006, Mr Forbes dived reef codes 3.07 (Water Tower), 3.09 (Mills) and 3.11 (The Cutting). On that day, he dived for a total of four hours and collected 350.8 kilograms of abalone, 193.7 kilograms of which was caught at Water Tower. Again, this was said to show a relative abundance of abalone.

Asked to examine his abalone docket book and a spreadsheet showing his dives and catches during the months of January, February, March and April of 2006, Mr Forbes said that these records accorded with his recollection that he did not have any difficulty satisfying his quota during these months.

On 26 April 2006, Mr Forbes dived reef codes 3.04 (Julia Percy Propeller Bay), 3.05 (Crags) and 3.06 (Burnet’s). On that day, he dived for four hours and collected 776.75 kilograms of abalone, 31.40 kilograms of which was collected at Burnet’s. Again, this was a good day’s fishing with no hint of any disease or significant health issue associated with the abalone in the areas where Mr Forbes dived.

Similarly, on 27 April 2006, Mr Forbes collected 538.65 kilograms of abalone at Lawrence Rocks (reef code 2.10) and 694.1 kilograms of abalone on 16 May 2006 at reef codes 1.06, 1.05 and 2.01 (South Bridgewater Bully Cove, The Tits and Murrels – all to the west of Portland). Significant and similar sized catches were also made by Mr Forbes on 17, 24, 25, 27 and 28 May 2006, 21 and 22 June 2006 and 25, 26 and 27 July 2006 at various reef codes from reef code 1.02 to reef code 2.05 (Whites through to Inside Nelson) – all to the west of Portland.

In addition to the dives I have just described, Mr Forbes dived at a number of reef codes in the western zone between 4 and 27 February 2006 in order to complete the abalone abundance surveys on behalf of the DPI. For example, on 26 February 2006, Mr Forbes dived at dive sites 129, 131 and 133 inside reef code 3.05 (Crags). On each of these occasions, nothing of concern was seen in relation to the abalone or their habitats.

Mr Forbes’s evidence of failing to observe any problem with abalone in late January and into early February 2006 is given more weight by the fact that on 19 January 2006, he was sent an email containing a circular about the then unexplained mortality found in farmed abalone. The circular provided:

Two abalone farms located in the south-west of Victoria have reported unusual levels of mortality over this summer period. The mortalities were first noticed in early December and have been the subject of investigation by a private veterinarian and, more recently, by the Department of Primary Industries. One farm has experienced significant mortality in farmed green lip abalone over the past few weeks.
The investigations have focused on the possible cause of the mortality and have considered issues such as environmental stress, farming practices and infectious agents (endemic and exotic). As a precautionary response, all affected farms have agreed to a voluntary quarantine on movement of live abalone and equipment between farms and the wild. All affected farms have demonstrated a high degree of willingness to cooperate with DPI in its investigation.
…
Abalone divers and processors are asked to report to Fisheries Victoria, unusual behaviour in abalone, signs of disease, or evidence of unusual mortality in wild and pre-processed abalone as soon as possible. DPI is willing to test samples of abalone associated with mortality events at no charge.

Mr Forbes gave evidence that on the night he received that email, he also received telephone calls from other divers. Mr Forbes said:

Basically we were all on high alert. We were looking for anything unusual on the bottom. Yes, basically looking just for anything out of the ordinary, anything that we have never seen before.[45]

[45]T139.24 – T139.28.

On 26 May 2006, Mr Forbes received an email from Harry Peeters. The email commenced:

All members,
Yesterday Peter Riddle dived in Water Tower Bay and found it full of infected Abs. Drain Bay was also in the same state. Samples were taken and given to Fisheries for analysis. I immediately notified Peter Appleford and the Minister’s advisor of the extreme seriousness of the situation.
Last night a meeting was held in Port Fairy with Graeme Hanel. Many concerns were expressed to him. It was arranged that the director and chief vet would be coming to Port Fairy for a briefing early in the week. However following our calls to the Minister and action taken by the central and eastern zones actions to be taken by Fisheries have ramped up considerably. [The email then set out steps that were to occur].

In fact, it was not until September 2006 that Mr Forbes first observed the effects of the virus. On 12 September 2006, following a request from Dr Gorfine of the DPI, Mr Forbes undertook some dives, starting “at the Warrnambool end” as far away from SOM as he could get. Mr Forbes said that he dived every monitoring site back towards Port Fairy on that day. The following morning, they went to the most westerly site past SOM and surveyed back towards the farm. Mr Forbes described what he saw at 8.30am on 13 September in the following terms:

Half way to the bottom, which is about 14 metres from the surface on a great day, all I could see all over the bottom was shining abalone shells looking up at me.[46]

[46]T146.2.

As Mr Forbes said, shiny shells means there is no meat and that the abalone are “very, very recently dead”. This dive was outside Crags (reef code 3.05). Mr Forbes estimated that the percentage of dead, dying or otherwise not healthy abalone was between 35% to 40%. On 22 December 2006, Mr Forbes reported his observations to Dr Gorfine in the following terms:

Dear Harry,
The first of our surveys on the Abalone populations at the virus affected sites was conducted on the 12^th, 13^th and 14^th of September.
I would like to make the following comments on my observations in order that they may shed some light on the current situation. They are however my observations, comments and assumptions and obviously not scientifically proven fact.
Lady Julia Percy Island (4 sites)
All sites surveyed were healthy, with no sign of the virus observed. The populations look very good with high numbers of all sizes ranges of abalone visible.
Light House Reef (2 sites)
Both sites surveyed were healthy, with no sign of the virus observed.
Mills Reef (2 sites)
Both sites surveyed were healthy, with no sign of the virus observed. The usual high numbers of abalone were encountered, growth up to and beyond the increased size limit still appears very slow.
Killarney (2 sites)
Both sites surveyed were healthy, with no sign of the virus observed.
The Cutting (1 site)
This site was very healthy with the population density and in particular the size of the abalone being the best I have seen it. No signs of the virus were observed.
Leavy’s Beach (2 sites)
Both sites surveyed were very healthy, with no sign of the virus observed. The size and numbers of abalone seen at these two sites would be the best I have seen them.
The Craggs (5 sites)
The first site we completed was “Outside Craggs”, with good visibility I was half way to the bottom (14 meters) when I first saw dead and dying fish all over the bottom. This was my first encounter with the effects of the virus and it literally left me feeling sick in the stomach. The situation at all five sites was the same and therefore the following general comments apply to all.
·There was evidence of the virus encountered on every transect at every site.
·There were dead and dying abalone in all stages ranging from,
oindividuals that were “acting strangely” that is they had moved away from their home site and were sitting in strange places on the reef, almost “trying to run away from something”.
oindividuals that were sliding off their home site and down the reef, (loosing (sic) muscle function)
oindividuals that were living underneath ledges had fallen off and were lying on there (sic) shell on the bottom, some still moving their foot awkwardly
ogroups of dead and dying abalone clustered together at the bottom of gutters and in between rocks.
oindividuals that still had sand sticking to the mucous on their foot as they laid on their shell on the bottom
oindividuals that had began decomposing, some to the stage that only the white foot was left, with the gut having decomposed or been eaten.
oAnd finally very freshly dead shell that were very shiny and showing no signs of aging.

·Dead shell and remaining live abalone were of all size classes, although the larger ones were more obvious, no dead juvenile shells were found.
·Surveys underneath boulders and rocks did yield normal numbers of juvenile abalone.
·The Wrasse and other fin fish that are normally prevalent at this site were absent. There were no species found scavenging the dead and dying abalone.
·There was a large amount of “mucous” in the water column, clear and sticky in appearance with gas bubbles contained in it.

My best guess would be that around 30% of the emergent populations was effected by the virus at this stage.
Of interest, there was another group also surveying on the same days that apparently found no or very little sign of the virus at The Craggs.

Peter Riddle is also a commercial diver. He gave evidence that he had been a commercial diver for 18 years, 15 years of which involved abalone diving. Mr Riddle said he was very familiar with the reefs in the western zone, and that he had dived all the reefs close to the SOM farm. He said the abundancy of abalone in the reefs around the SOM farm in the period before December 2005 was very good. Drain Bay and Taylors Bay were very good for abalone. Prior to May 2006, in the western zone he had never seen abalone with unusual health symptoms.[47]
[47]T231.15.

Mr Riddle’s abalone docket books show that he dived reef code 3.05 (Crags) on 12 January 2006 for 6½ hours and collected 552.55 kilograms of abalone. On 20 January 2006, he dived Water Tower for seven hours and collected 1,027.45 kilograms. On 25 February 2006, he dived Burnet’s for 6½ hours, collecting 611.8 kilograms. On 12 March 2006, he dived Water Tower (reef code 3.07) for five hours, collecting 454 kilograms of abalone. All of these were good catches. Mr Riddle said that between January and April 2006, he never saw any sign of illness around Taylors Bay or Drain Bay – this notwithstanding the fact that he also received the bulletin about unusual mortalities in January 2006.

On 25 May 2006, Mr Riddle dived in reef codes 3.07 and 3.08 (Water Tower and Light House Reef). He dived for two hours in Water Tower and collected only 73.25 kilograms of abalone. Describing this dive, Mr Riddle said:

I hopped in the water at Drain Bay near the pipe in front of SOM and there was nothing but dead abalone laying everywhere. I swam east, keeping off the bottom, to see what was going on and as I swam quickly with the current to the east, I got to the end of Drain Bay and the whole place was infected with some sort of disease. … I then got in the boat, went about a kilometre in front of Water Tower, the actual Water Tower itself, got in the water at the eastern end and swam west, collecting abalone until I found virus infected abalone again or infected abalone. As I swam into them I knew it was sort of the front of whatever it was so I took samples … .[48]

[48]T236.7 – T236.21.

On 31 May 2006, Mr Riddle dived Crags for five hours, collecting 511.25 kilograms of abalone. On 1 June 2006, he dived Crags again for four hours, collecting 192.4 kilograms of abalone. He was asked when he did that, whether he saw any sign of the virus in that area. He said, “I don’t think so, I can’t remember”.[49]
[49]T238.6.

Maurice Dalton used to be an abalone diver. He was an abalone diver from 1995 through to 2006. He dived in the western zone from Crags (reef code 3.05) to The Cutting (reef code 3.11). Mr Dalton was taken to his dive records. In relation to his dives from 2002 to 2003, he was asked about the abundance of abalone in the areas where he dived. His response was, “Very, very good, a lot of big stuff and a lot of stuff, smaller stuff that we call coming through which means all different sizes”.[50]
[50]T254.6.

Mr Dalton’s dive records disclosed that on 7 January 2006, he dived Crags/Water Tower Bay and collected 387.05 kilograms of abalone. On 20 January 2006, he dived Taylors Bay (although Mr Dalton’s reference to Taylors Bay is a reference to a bay a little to the west of the actual Taylors Bay – but still inside reef code 3.06). On that day, he collected 658.47 kilograms of abalone. Like the other diver witnesses, on that day he noticed nothing unusual. Similarly, he noticed nothing unusual in respect of his dives on 25 March 2006 at Blue Nose (the western end of reef code 3.06) and his dives on 17, 26 and 27 April at Crags (reef code 3.05) when he collected 533.4, 623.5 and 538.5 kilograms of abalone respectively.[51]
[51]These dives were towards the eastern end of Crags.

While in the relevant period Mr Dalton did not dive in and around the SOM farm, he gave evidence that in mid February 2005 he went snorkelling in Taylors Bay directly behind the SOM farm. On that occasion he said he snorkelled in five to eight feet of water, showing abalone in the wild to a Mr Kanazawa. Mr Dalton described it in the following terms:

Basically, my job was just to show abalone in the wild. I had a bit of a look around and I think he [Mr Kanazawa] ended up taking three or four abalone which I sort of pointed out and I sort of remember everything was normal as far as I could tell. The rock was a little bit different but, yes, I can remember it quite well. [There was nothing unusual in terms of abalone health] … . [T]here was probably 100 abs just sitting there of different sizes.[52]

[52]T258.28 – T259.6.

Peter Ronald was a commercial abalone diver between 1992 and December 2006. He dived the western zone. He said his career tally in the western zone was just under 307 tonnes of abalone, or approximately 1 million abalone.

On 18 November 2005, Mr Ronald dived Crags (reef code 3.05) and Water Tower (reef code 3.07). His total catch on that day was 498.95 kilograms of abalone. Mr Ronald was taken to records of his dives and catches between that time and the time he retired in December 2006. He was asked and answered the following question:

What do you say about the quantities of abalone that you were taking during that period of time?---All good catches, good healthy daily catches.[53]

[53]T270.15 – T270.17.

Between November 2005 and December 2006, Mr Ronald’s dive records show that he dived most often in reef codes 3.12 and 3.13 - although on various days he dived reef codes 3.01, 3.02, 3.03, 3.04, 3.05, 3.06, 3.07, 3.08 and 3.14. On 31 May 2006, Mr Ronald dived reef code 3.05 (Crags) and collected 518.5 kilograms of abalone. On 22 June 2006, Mr Ronald dived reef codes 3.05 and 3.06 (Crags and Burnet’s) and collected 602.55 kilograms of abalone.

Notwithstanding that Mr Ronald also received the email of 19 January 2006 and was thus alerted to the unusual levels of mortality at two abalone farms located in the south-west of Victoria, he too did not observe anything of note prior to the 26 May 2006 email reporting Mr Riddle’s dive.

In May 2006, Mr Ronald was appointed to the Abalone Fishery Committee. This was a committee that gave advice to the Minister through the Fisheries Co-management Council. Mr Ronald served on this committee between May and December 2006. On 2 November 2006, Mr Ronald sent an email to the Abalone Fishery Committee, copied to Dr Appleford and Harry Peeters. Mr Ronald’s email described his observation of the virus in the following terms:

Hi All
Major virus impact was detected today approximately 3 km further east than previously detected. The Cutting reef code gets its name from a “cutting” made to provide an alternate mouth for the Merri river south of Tower Hill. Today’s discovery was directly off this cutting. This was my first opportunity to see the virus in an early active state (rather than empty shells after an event), and it is really quite shocking to see. Swimming into the abalone habitat from the south, my first sighting was under a small ledge with approximately 6 large and healthy abalone in residence. Under these healthy abs lay 2 much smaller ones, upside down, meat exposed. They were intact and looked perfectly normal, but were dead. Swimming north further into the more obviously affected area, there were a just (sic) few fresh empty shells but again of the smaller size (approx 80-90mm). Only 1 piece of decaying white meat in shell was seen and I believe I was observing a very recent outbreak. Many abalone could be seen having slid to the bottom of their crevices, looking perfectly normal except that they had no adhesion to the rock. The full range of size classes seemed effected (sic) but my feeling is that the impact was more evident on the smaller ones.
After 30 min in the water I abandoned fishing for the day and transferred what I had to the virus dive contractors for disposal.

Asked if Mr Ronald had ever seen anything like what he described in his email before, he said:

Never, in 50 years this was just an absolutely extraordinary and shocking event.[54]

[54]T276.16.

The last diver who was to give evidence for the plaintiff was Len McCall. Mr McCall dived the western zone for 30 years, ending in the mid-1990s. Ultimately, however, the plaintiff did not call Mr McCall. The State accepted that Mr McCall never saw any signs of the virus in wild abalone during his 30 year diving career in the western zone.[55]
[55]T289.4.

The plaintiff contended that the effect of the divers’ evidence was that some time shortly prior to 25 May 2006, the virus and the disease escaped from the SOM farm into the wild – or more particularly, into Drain Bay from where it spread both east and west (although more to the east). The plaintiff submits that the proper inference from the evidence is that with ever-increasing amounts of virus being released into Drain Bay after 17 March 2006, the ultimate devastation to the abalone industry can be sourced to discharges from the SOM farm after 23 or 28 March 2006.

On the other hand, the State submits that the evidence is too uncertain to permit of such a conclusion. The State points to a number of possibilities for the outbreak in May 2006. One possibility is that the virus was released into the wild in late December 2005 or early January 2006 before any of the State tortfeasors knew of disease on the SOM farm in mid-January 2006. Another possibility is based on the evidence that the virus, a member of the family malacoherpesviridae, has existed for a long time and has an “early origin and long evolutionary history”.[56] On this scenario, the outbreak of the virus in the wild in May 2006 might be merely coincidental in time with the second outbreak at the SOM farm.
[56]See the cross-examination of Associate Professor Gilkerson at T429.8 – T429.19.

Dr Millar and Dr Appleford

Before coming to the events that occurred between January 2006 and May 2006, it is necessary to say something about Dr Millar and Dr Appleford as witnesses. Dr Millar and Dr Appleford were called by the State to give evidence in relation to the events that occurred between January and May 2006. As I have noted above, they are two of the four people (along with the Minister and the Secretary) in respect of whom the plaintiff alleges breached duties of care owed by them to the plaintiff. As such, their conduct between January and May 2006 came under close scrutiny during cross-examination.

Dr Millar and Dr Appleford, to my observation, each gave their evidence in a straightforward fashion. They each impressed me as thoughtful and professional in the way they gave their evidence – each doing his best to recall particular detail when asked of him. I formed a favourable view of both of them in the witness box, in that I thought at all times they were doing their best to provide me with as accurate and as detailed a response as they could to questions asked of them. I accept both of them as honest and reliable witnesses.

During the course of its final submissions, the plaintiff made an attack on Dr Millar (and to a lesser extent, Dr Appleford). Amongst its submissions in respect of Dr Millar, the plaintiff said:

Again, the Court should be careful about accepting Millar was told the virus was spreading [on or after 22 March 2006] without being told the rapidity of that spread (a rapidity observable to Gervis, understood by Appleford and reported by Champness).[57]

[57]Paragraph 78(d) of Tab 5 of the plaintiff’s written closing submissions.

In reply submissions, Senior Counsel for the State made complaint about this attack on Dr Millar – saying that it constituted a breach of the rule in Browne v Dunn.[58] In my view, there was some force in this complaint. While Dr Millar was subjected to close and detailed questioning during cross-examination, I did not think that the attack made upon him in final submissions was justified having regard to what was actually put to Dr Millar in cross-examination. That said, notwithstanding the plaintiff’s submissions in final address as to the care that should be taken when considering Dr Millar’s evidence (and accepting that care should be taken when considering the evidence of all witnesses), I remain of the view that Dr Millar was a witness who was basically doing his best, in difficult circumstances,[59] to give accurate and honest answers to all questions put to him.
[58](1893) 6 R 67 (HL).
[59]To be questioned in detail about what a person said, or was told, or thought more than seven years after the relevant events –and from voluminous and detailed documents –is almost always difficult for any person; the more so if one’s professional competence is being called into question at each step along the way.

While I do not think the attack made on Dr Millar in the plaintiff’s final submissions was entirely justified having regard to what was actually put to Dr Millar in cross-examination, I should say that from time to time during the cross-examination, Dr Millar (and to a lesser extent, Dr Appleford) was challenged with some force about answers to questions put to him in the witness box. However, it seemed to me that more often than not on these occasions the differences between the witness and the cross-examiner were due to the cross-examiner wanting to take a black and white approach to an issue, in circumstances where it was reasonable to properly conclude that the issue was in fact more nuanced. I turn now to the critical period of time so far as this case is concerned.

10 January 2006 to 25 May 2006

The critical period in this proceeding so far as any liability of the State for the acts or omissions of the State tortfeasors is concerned is 10 January 2006 to 25 May 2006. During this period, the existence of the first outbreak became known outside SOM, the second outbreak occurred and the disease was found in the wild. Most of what occurred in this time is recorded in emails and other documents tendered in this proceeding. The documents, and the evidence as a whole, discloses a developing set of circumstances and a developing knowledge of matters.

The evidence discloses that an officer or officers of the DPI first learnt of the first outbreak on 10 January 2006. On that day, Dr Mehdi Doroudi telephoned Dr Millar and advised him that Dr Paul Hardy-Smith, a veterinary consultant to a number of abalone farms, had contacted Dr Doroudi to advise him of a problem involving an unusual level of abalone mortalities.[60]
[60]T566.

On 11 January 2006, Dr Doroudi sent an email to Anthony Forster, the Senior Manager Inland Fisheries and Aquaculture at Fisheries Victoria.[61] The email was copied to Dr Millar and Dr Appleford, and was in the following terms:

I have received phone calls from Paul Hardy-Smith and Mark Gervis that they are experiencing abalone mortalities in a couple of farms from Western Victoria. Samples were sent for diagnosis to both Gribbles and Tasmanian Aquatic Animal Health Lab. No sign of infectious agent as yet. I have asked both of them to report the incidents back to me in writing by tomorrow. I will have a better idea by tomorrow if this is something that we should be worried about.

[61]A division of the DPI.

During the course of 11 January 2006, there were discussions within the DPI as to the steps that should be taken to deal with the issue as it was then known. According to another email from Dr Doroudi to Dr Mike Jeffers (copied to, amongst others, Dr Millar and Dr Appleford), the following steps were considered to be reasonable:

·To contact Paul Hardy-Smith to find out about the history of this incident, he is currently working with abalone farmers on this matter.
·Ask either Paul or affected farms to submit a short report in terms of the background to the incident.
·… [S]end District Veterinary Officers to inspect the affected farms.
·New samples should be submitted to Attwood/Tasmanian Aquatic Health Lab/AHL to examine for the existence of virus through EM (electron microscopy) … Send[ing] the samples to whoever is quicker to respond back to us.
·At this stage a voluntary quarantine would be sufficient until the confirmation of results are clear.
·It would be better to inform Abalone aquaculture industry, … it may be more appropriate for Fisheries Victoria … to do this.

On 12 January 2006, Dr Millar sent an email to Peter Bailey, the Executive Director of Biosecurity Victoria. The email provided:

Just a heads up to inform you that there is currently under way an investigation into significant mortalities of farmed abalone near Portland.
Samples have been sent to Attwood (and AAHL)[62] to determine whether infectious disease may be the cause. Results are not expected until the end of this week at the earliest. While the incident was first handled by a private veterinary consultant, DPI animal health staff in the SW region are now involved in the investigation, which is good.
Dr Doroudi has prepared the attached brief for Fisheries Victoria/Minister.
All the right people are involved/communicating, and the correct actions have been taken. Really just another disease investigation at this point.

[62]Australian Animal Health Laboratory, part of CSIRO.

The briefing note, headed “Minister for Agriculture”, “Week ending 13 January 2006”, “Emerging issue” and “Abalone aquaculture health scare”, provided:

Significant mortality in aquaculture-reared abalone has been reported at Coastal Sea Farms (CSF), a coastal abalone farm near Portland. Approximately 25% of tanks have been affected, with mortality in each tank ranging from 10 to 60%. The one-year age class (F1) appears to be more affected than others. Another coastal abalone farm, Southern Ocean Mariculture, located near Port Fairy has also experienced a slight increase in mortality, with mainly broodstock impacted.
The farms have commissioned Dr Paul Hardy-Smith to investigate the mortalities. Dr Smith is also assisting DPI in its investigations. The Chief Veterinary Office is coordinating DPI’s response.
Initial histological samples indicate evidence of degeneration of abalone nerve cells. A preliminary diagnosis has not yet been made, however, there is some suggestion that the cause may be either an infectious agent, eg. viral pathogen, or nutrition-related, eg. mould feed. Further samples have been taken today for further analysis by the Australian Animal Health Laboratories (AAHL).
The two farms affected have agreed to employ a voluntary closure at least until the outcomes of the fish health investigation are known.
On 15 and 16 December 2005, 10,000 juvenile abalone were moved from CSF to another abalone offshore farm (Abonex P/L) located in Western Port. The operator has, at this stage, not been able to be contacted and it is unclear as to whether that stock is also experiencing unusual mortality.
A preliminary diagnosis of the cause of the mortality is expected either later this week or early next week.

At 5.14pm on 11 January 2006, Mark Gervis, the General Manager of SOM, sent an email to Dr Doroudi attaching a summary of events to date. The summary provided:

SOM is taking a precautionary view to an infection similar although not confirmed to be the same as hat (sic) affecting the stock at Coastal Seafarms (CS).
On the 29^th of December, mortality occurred in 2 of our greenlip broodstock tanks, which are located in our weaning/broodstock shed. The abalone had originated from several locations, including South Australia and Tasmania. Both of these tanks had spawned, so it was initially thought that the problem was due to a build-up of bacteria/poor water quality. However, on the 31^st of December it was noted that the moribund and dead abalone displayed unusual characteristics. The mouths of sick and dead abalone were enlarged, with many abalone displaying a protruded radula. In sick abalone, the foot was often curled, even to the point that both sides of the foot would meet.

(1)A public authority must have regard to any relevant management plan when performing its functions and exercising its powers.
(2)If a public authority proposes to take any action that is inconsistent with a management plan, the public authority must consult the Secretary in writing at least 28 days before the action is to be taken.
(3)… .

The State submits that s 34 of the Fisheries Act has no application to the State tortfeasors. This is because “public authority” is defined in s 4 of the Fisheries Act to mean:

Any Government Department or any body corporate or unincorporate established under any Act for a public purpose.

The State submits that none of the State tortfeasors constitutes a “public authority” within the meaning of s 34 of the Fisheries Act. In further support of this submission, the State points to the absurdity of the Secretary being required to consult himself before taking any action inconsistent with a management plan. This submission must be accepted.

That said, the issue is of no great moment because, in my view, none of the State tortfeasors have been shown to have taken any action inconsistent with the management plan. Merely because the management plan contains a sentence saying that the transfer of diseased or unwanted genetic material to the wild must be prevented, does not mean that if disease was transferred to the wild then one or more of the State tortfeasors took an action that was inconsistent with the management plan. While as a statement, the proposition that the transfer of disease to the wild must be prevented cannot be criticised, the existence of a sentence like that in the management plan cannot (and did not) impose any absolute or other duty on any of the State tortfeasors.

Turning now to VAMAADE, I do not accept the plaintiff’s submission that VAMAADE mandated the taking of steps which, if they had been taken, would have prevented the spread of disease into the wild. As Dr Appleford said, VAMAADE was a framework setting out the arrangements for the allocation of roles and responsibilities so as to ensure that a response could be made “within the framework of policy that existed and the legislation of the day”.[184] The circumstances of this case do not justify any line-by-line examination of VAMAADE being made in an attempt to show that some approach (however well reasoned or thought out) that might have been taken inconsistent with the terms of VAMAADE constituted a breach of duty by one or more of the State tortfeasors. In my view, the question of whether or not any of the State tortfeasors breached any duty owed to the plaintiff depends upon an analysis of what each of the State tortfeasors did from time to time, having regard to what was known or ought to have been known by each of them at the relevant time.
[184]T922.13 – T922.19.

In its closing written submissions, the plaintiff submitted that there were four factors that precipitated the State tortfeasors’ negligence. These four factors were described under the following headings:

(a)Lack of Aquatic Veterinary Expertise;
(b)Misapplied Epidemiological Principles;
(c)Misunderstood Powers and Policies; and
(d)Millar’s Disposition Against Acting.

Under the heading “Lack of Aquatic Veterinary Expertise”, the plaintiff submitted:

First, the State tortfeasors lacked aquatic veterinary expertise. Appleford is not a veterinary scientist. His doctorate in philosophy is in the comparative physiology of fish. However, as he admitted in cross-examination, ‘I really don’t know enough about aquatic animal diseases’ and he had ‘never really looked into the nature of the spread of diseases in aquatic animals’.
Millar is primarily a veterinary scientist, with a subsequent professional qualification in epidemiology. Despite being charged with the responsibility of managing [the disease], Millar lacked expertise in aquatic disease. In cross-examination, he admitted he had ‘no practical experience whatsoever with fish disease before 2006’.[185]

[185]Plaintiff’s closing submissions, Tab 5, paragraphs [122]-[123].

Under the heading “Misapplied Epidemiological Principles”, the plaintiff submitted:

Secondly, the State tortfeasors misapplied principles of epidemiology. On his own account, Millar required a certain level of knowledge before he was prepared to act:
Control and eradication can only be carried out successfully if a disease can be reliably recognized and the causative agent reliably detected. Diagnostic tests are needed to confirm the presence of infection and prove absence of infection.

Despite his qualifications as an epidemiologist, this was misconceived. Thrusfield’s evidence was:
An imperfect state of knowledge is no reason to abstain from disease control. Cattle plague exemplifies disease control using appropriate procedures (isolation, slaughter and quarantine) with only a rudimentary knowledge of disease.
…
I agree with Dr Millar when he states that a disease must be ‘reliably recognised’, because, without such recognition, outbreaks of specific diseases would go undetected, and therefore disease could not be controlled.
Recognition of disease requires a clear case definition. Case definition can be based on criteria other than detection of the causal agent; for example, clinical signs and outbreak profile (e.g., morbidity and mortality). In the context of [the disease], characteristic clinical signs were identified as early as January 2006 and lesions characteristic of a herpes-like virus disease were also identified by pathologists in January 2006. Moreover, the increased levels of mortality associated with [the disease] in both of the outbreaks at SOM are a constituent part of the case definition. I disagree with Dr Millar when he states that the ‘causative agent’ must be ‘reliably detected’, in order for ‘control and eradication’ to be ‘carried out successfully’. Infectious-disease outbreaks can be controlled without identification of the causal agent, although there must be a clear case definition, which was available for [the disease].

Jones’ evidence was that ’this level of knowledge is seldom known at the start of an aquatic disease investigation and yet effective aquatic disease management is still possible.[186]

[186]Plaintiff’s closing submissions, Tab 5, paragraphs [127]-[129] (citations omitted).

Under the heading “Misunderstood Powers and Policy”, the plaintiff made submissions to which I have already referred, before going on to deal with a passage in Dr Millar’s evidence, about which the plaintiff submitted:

This passage reveals two things about Millar’s thinking. First, he had effectively read two requirements into the LDC Act which did not exist:
a.that those subject to the mandatory destruction of livestock be consulted; and
b.that those subject to the mandatory destruction of livestock be compensated.

The LDC Act, on the other hand, does three important things with respect to compensation:
a.under Part 5, provides for compensation with respect to those exotic diseases declared to be compensable (as well as diseases in certain set-out (sic) in the legislation);
b.by section 61, vests the decision as to what exotic disease shall be compensated with the Governor-in-Council; and
c.in light of the matters in (a) and (b) (scil, a. and b.), quite deliberately fails to make compensation a condition of its various disease-prevention powers.

For these reasons, Millar’s concern with compensation was a misreading (scil, misunderstanding) of his own power. This contention is strengthened by Millar’s apparent disregard for the Management Plan which was, under the Fisheries Act, a mandatory consideration.
Secondly, this passage reveals Miller’s unwillingness to exercise powers delegated upon him for the very purpose of their conferral. In contrast to Millar’s need:
a.to obtain the ‘endorsement’ of the Secretary and Minister;
b.to engage in ‘extensive consultation’ with ‘stakeholders’ and ‘industry’;

under VAMAADE, Millar’s various delegations as well as his appointment as a Livestock Inspector, he was the relevant decision maker (sic). Apart from constituting an abrogation of his own power, this thinking also reveals one of Millar’s broader dispositions, which evidently afflicted his scientific assessment of the situation with which he was confronted.[187]

[187]Plaintiff’s closing submissions, Tab 5, paragraphs [135]-[137] (citations omitted).

Under the heading “Millar’s Disposition against Acting”, the plaintiff submitted:

Millar’s expressed views confirm his failure to bring a reasonable mind to the problem he faced. From very early on, what informed Millar’s view that water was required for transmission was that, if this were the case, it would mitigate the prospective risk for the wild fishery. As Millar noted in January 2006 to the Environmental Protection Agency:
Early observations suggest transmission requires direct contact between abalone. If this is so it limits the implications for wild populations.

This view was formed in January 2006 based on what had occurred at Abonex (where Millar had never visited) and CSF (where abalone clump together immersed in water). However, as Millar admitted:
a.He did not know – nor had been told – of any aquatic disease that required direct contact.
b.There was nothing to suggest contact was the exclusive means of transmission. (This is, of course, a very sensible concession: wherever abalone had been observed to touch, there would have also been water.)

Appleford held the same view, based on his own observations and the advice of ‘disease experts’ Millar, Doroudi and Cameron. Notwithstanding these matters, Millar repeated this view throughout 2006.[188]

[188]Plaintiff’s closing submissions, Tab 5, paragraphs [138]-[140] (citations omitted).

It was then submitted under this heading that Dr Millar attempted to move away from the view he had expressed throughout 2006 during the course of cross-examination in this proceeding. It was submitted by the plaintiff that Dr Millar “attempted to put a gloss on the term ‘direct contact’”. In support of this submission, the plaintiff relied upon the following evidence given by Dr Millar in cross-examination:

I will ask the question again: were you of the view that direct contact was required?---Yes.
What was the basis for that view?---The observations to that time and the information available to me.[189]
[189]T714.27 - T714.30.
…
When you say direct contact, do you mean from abalone to abalone or from fomite to abalone?---That’s correct.
The latter?---Both.
So it doesn’t require one abalone to contact another?---Not necessarily.
It needs a fomite to travel, if you like, from one abalone to another?---Correct.
Fomites travel in water in abalone farms?---They may.
They do, don’t they, not all of them but some of them?
HIS HONOUR: That’s the point, he said they may.
MR CURTAIN: Yes, Your Honour. So did you think as at mid-January 2006 that the disease was transferable from ill abalone to healthy abalone via fomites in the water?---I had no view at that stage, no.
Well, you thought it required direct contact?---Yes.
You thought that included contact from fomite to abalone?---Yes.
Fomites can exist in the water?---Yes.
In the abalone farms, they certainly did, didn’t they?---Fomites may exist - the water may be a fomite in its own right but the fomites were actually objects themselves not associated or contained in or dissolved in or part of water.[190]

[190]T715.18 – T716.10.

It is trite that each of the State tortfeasors’ conduct has to be looked at individually in order to determine whether any of them breached any duty of care owed to the plaintiff. While there were times during the trial of this proceeding where the plaintiff appeared to attempt to aggregate the knowledge and/or conduct of the State tortfeasors (and/or to assert that “the State” (rather than an individual State tortfeasor) did or did not perform some act), the question of whether any of the State tortfeasors breached a duty of care owed to the plaintiff has to be looked at by reference to what that State tortfeasor did or did not do (and did or did not know (actually or constructively) at each relevant point in time).

Insofar as the plaintiff’s case involved some assertion that any of the State tortfeasors did not possess relevant veterinary expertise and that this constituted negligence on their part, I reject this submission. Each of the State tortfeasors’ conduct falls to be assessed by reference to what might reasonably be expected of them (holding the position they held) at the relevant time. To this end, it is to be noted for example that a livestock inspector (Dr Millar) was, under the LDC Act, not required to have any particular qualifications, other than being a “person employed under Part 3 of the Public Administration Act2004”.[191]
[191]See s 108(1) of the LDC Act.

During the course of the trial of this proceeding, the plaintiff called, amongst others, Dr John Brian Jones, Professor Michael Thrusfield and Associate Professor James Gilkerson. Dr Jones was a fish pathologist with a PhD which involved the study of the parasites of New Zealand commercial shellfish. Since 2003, he has held a position relating to mollusc diseases. In 2005, prior to the discovery of abalone viral ganglioneuritis, he completed a risk assessment for the translocation of abalone across Australia.

Professor Thrusfield is a specialist veterinary epidemiologist. He has degrees in veterinary medicine and virology. At trial, he gave his occupation as “veterinary surgeon”. Professor Thrusfield is the author of the work “Veterinary Epidemiology (Third Edition)” – about which there was much said during the course of this trial.

Associate Professor Gilkerson is an Associate Professor in Veterinary Microbiology in the Faculty of Veterinary Science at the University of Melbourne. He has worked for 18 years on the epidemiology and pathogenesis of herpes viruses of mammals and birds, and is considered to be an expert in this field. He, like Dr Jones and Professor Thrusfield, was well qualified to express an opinion in relation to disease management in respect of aquatic animals.

Each of Dr Jones, Professor Thrusfield and Associate Professor Gilkerson gave evidence critical of the management of the outbreak of the disease between January and May 2006. Some of their evidence was directly critical of Dr Millar, as well as the general handling of the matter by the State and its relevant employees. While I was assisted by the technical evidence given by these witnesses as to matters that underlay their ultimate opinions, I was not much assisted by their ultimate opinions as to what should or should not have been done at any particular point of time during the relevant period. Indeed, specifically with respect to Dr Jones (and to perhaps lesser extent Associate Professor Gilkerson), I thought that the plaintiff’s expert evidence on the ultimate questions as to what ought or ought not to have been done at particular points in time was not entirely objective.

All of that said, it is to be remembered that the State tortfeasors are to be judged by reference to what a reasonable person in each of their positions would have done – not by reference to what a highly qualified specialist aquatic veterinary scientist might or might not have done. Further, it is as well to remember that while expert evidence can be very useful in explaining matters about which a court has limited (if any) knowledge, once these matters are explained, often the utility of opinions upon ultimate questions, about which a court is then well placed to form its own opinions, are not of great assistance. That is, while the evidence of these opinions might be admissible under the provisions of the Evidence Act, there is much to be said for scrutinising them with care if they are no more than an attempt to put a party’s case “more vividly and cogently” before the court.[192]
[192]Cf Clark v Ryan (1960) 103 CLR 486, 491 (Dixon CJ). See further, HG v R (1999) 197 CLR 414; Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99; Matthews & SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Limited(Ruling No 9) [2012] VSC 340. As to Clark v Ryan, note further the statement by the plurality in Dasreef that the admissibility of opinion evidence is to be determined by the provisions of the Evidence Act, rather than by any attempt to parse and analyse particular statements in decided cases divorced from the context in which those statements were made; Dasreef, (2011) 243 CLR 588, 604 [37].

The emphasis of the plaintiff’s case in relation to alleged breaches of duty by the State tortfeasors was primarily focused upon Dr Millar. Much of the plaintiff’s case has been directed to establishing that by reason of some expressed belief or statement on the part of Dr Millar, Dr Millar could be shown to have held some wrong, improper or inappropriate view about a particular matter. Accepting this premise, it was then submitted by the plaintiff that the wrong, improper or inappropriate view meant that Dr Millar (or by extension one or more of the other State tortfeasors) had breached a duty of care owed by him to the plaintiff when he failed to exercise an available statutory power or take some analogous step.

For example, much was made of statements by Dr Millar as to the relevance of compensation not being payable to SOM in the event that SOM was ordered to destroy stock (or take some other step which would have resulted in the destruction of stock). Similarly, much was made of Dr Millar’s statements from time to time as to whether the disease was transmissible in water. In my view, the plaintiff attempted to make too much of these statements. While Dr Millar did regard the payment of compensation as materially relevant, I do not think it is fair to conclude that he took the view that he would never exercise or countenance the exercise of a relevant statutory power in the absence of compensation. The question of compensation was a matter relevantly capable of being taken into account by Dr Millar and the other State tortfeasors in determining whether or not to take a step which would result in economic loss to some identified person or class of people. The issue was how this matter was to be weighed in determining whether to exercise a particular statutory power or take some other like step at a particular point in time.

Similarly, much of what was said by the plaintiff in submissions concerning Dr Millar’s belief as to the transmissibility of the virus and the disease in the wild, and the need to identify the disease and its characteristics, was, in my opinion, overstated. It was reasonable for Dr Millar to have questions about precisely what was demonstrated by the Chang paper so far as the transmissibility of virus and disease across significant distances of open water. This was not a case where Dr Millar believed in black and white terms that the virus was not transmissible across very short distances of water.[193] A relevant question was what could be extrapolated to the wild from laboratory testing. It was, in my view, not unreasonable to raise and consider these issues in the way that they were in fact raised and considered.
[193]See further, Dr Millar’s evidence at T575.2 – T 576.10.

In dealing with the question of duty, in its final address, the State contended that there were significant considerations that the State tortfeasors were entitled to take into account and weigh in deciding whether or not to exercise the relevant statutory powers. These considerations were said to include:

(a)the novelty of the virus;
(b)the limited scientific knowledge around transmission in a natural environment, including limited knowledge around issues such as shedding, transmissibility through water, survivability and necessary infective dose;
(c)the absence of diagnostic tests;
(d)the known qualities of herpes viruses, including latency, fragility and the fact that they were host-specific;
(e)that a possible source of the virus was wild brood stock;
(f)the reasons for the expression of the virus as a disease on the farms, and in particular the fact that intensive farming of animals was a known environmental factor influencing the spread of infection and disease;
(g)the absence of infection in samples collected from the wild, from the CSF lagoon and from the Abonex sentinel abalone;
(h)the owners of the farms had self-interest in managing the spread of disease on the farms, and were best informed and equipped for that task;
(i)to require the immediate cessation of the flow of effluent water from the farms would result in the death of the abalone stocks at the affected farms, with (at least) economic consequences; and
(j)there was no compensation scheme available.[194]

[194]First defendant’s closing submissions, paragraph [55].

The considerations referred to by the State set out above were well supported by the evidence given at trial in this proceeding. In my view, the State’s submissions in respect of these matters must be accepted. Again, however, the question becomes what was reasonable for each of the State tortfeasors to do from time to time having regard to all of these considerations. While different decisions could undoubtedly have been made from time to time by Dr Millar (or, indeed, any of the other State tortfeasors), I do not see any reason on the evidence to conclude that a relevant different decision should have been made – such that not to make a different decision would constitute a breach of duty on the part of Dr Millar or the other State tortfeasors.

While some of the language in some of the contemporaneous documents is suggestive of considerations being absolute (or in black and white terms), on a considered analysis, one sees that the relevant servants or agents of the State were properly appraised of, and understood, the various risks – and that notwithstanding the use of any such language, issues were usually more nuanced. Further, while the magnitude of the risk of transfer of the disease to the wild was not known (because of the existence of the variables to which I have already referred), in my view, it is only hindsight that now permits criticism to be levelled at the State tortfeasors. It seems to me that at all relevant times the State tortfeasors were doing their best to understand a difficult, novel and changing set of circumstances. Additionally, the State tortfeasors were faced with difficult and competing choices. It is all very well to say that one sector of the industry was calling for the very actions which the plaintiff claims should have been taken in this case – but what else might one expect from a sector properly looking after its own interests. Plainly, the actions being called for by the wild sector of the abalone industry would have detrimentally affected the farming sector. Competing considerations had to be weighed – and this is what was done by the relevant servants and agents of the State.

One can debate at length the weight given by Dr Millar (and to a lesser extent Dr Appleford) to the various considerations relevant to a decision whether or not to exercise one of the relevant statutory powers (or to take some analogous step). But the question is whether, in not exercising a power or taking a step, Dr Millar or one of the other State tortfeasors committed a breach of duty. It is not to the point to say that Dr Millar or one of the other State tortfeasors may have been inappropriately cautious in not taking a step until further information was to hand. All relevant matters must be weighed, without the benefit of hindsight, and by reference to what was reasonable so far as that person was concerned at the relevant time. Taking that approach, I am not persuaded that any of the State tortfeasors committed any breach of duty in or prior to May 2006.

In coming to the conclusion that none of the State tortfeasors committed any breach of duty in or prior to May 2006, I have not overlooked the submission of the plaintiff in relation to the failure by the State to call the Minister, the Secretary, Dr Doroudi, Dr Bruce Kefford (Deputy Secretary Agriculture and Fisheries), Dr Cameron and the epidemiologist referred to by Dr Gorfine in his evidence.[195] In coming to the conclusions I have reached, I have considered the absence of these witnesses and the plaintiff’s Jones v Dunkel[196] submission. While Dr Millar and Dr Appleford were essential witnesses in this case, it seemed (and seems) to me that the Minister and the Secretary were in a different category. The evidence disclosed the extent of their involvement and the updates with which they were provided. In the circumstances, I was not (and am not) prepared to draw any inference adverse to the State in respect of the failure by the State to call the Minister or the Secretary.
[195]T1323.5 – T1326.28.
[196](1959) 101 CLR 298.

I have taken the same approach in respect of Dr Doroudi, Dr Kefford, Dr Cameron and the epidemiologist.[197] The evidence of what occurred between 10 January and 25 May 2006, coupled with the extensive evidence of Dr Millar and Dr Appleford, was voluminous. This did not leave me in a position where I thought it either necessary or reasonable to draw an adverse inference against the State in respect of any failure to call the witnesses to whom the plaintiff referred in its final submissions. The calling of additional witnesses may simply have resulted in cumulative evidence being given. As was said by Gyles and Weinberg JJ in O’Meara v Dominican Fathers,[198] the rule in Jones v Dunkel[199] does not require a party to give merely cumulative evidence.[200]
[197]The epidemiologist being more relevant to quantum issues in any event.
[198](2004) 153 ACTR 1, 17 [69].
[199](1959) 101 CLR 298.
[200]See further, Kuhl v Zurich Financial Services (2011) 243 CLR 361, 384-5 [63]-[64]; Wodonga Regional Health Service v Hopgood [2012] VSCA 326 [64] and [69].

Finally, on the issue of breach, I should also say for completeness that I have not overlooked the debriefing documents tendered by the plaintiff, and in particular, Dr Millar’s own debriefing document.[201] I have not found these documents of great assistance. Largely they represent the hindsight views of their authors as to what could be improved if another outbreak of like dimensions occurred. In my view, the material in them does not form a basis, when taken with all of the other evidence, for reaching a conclusion that there was a breach of duty by any of the State tortfeasors, or for reaching a conclusion that anything done or omitted to be done by a State tortfeasor was not reasonable at the time.
[201]To which Dr Millar was only briefly taken in cross-examination: see T827.31 – T828.2.

Having regard to the conclusions I have reached in respect of duty and breach, I can express my view in relation to causation briefly. In my opinion, the plaintiff’s case also fails at the causation level. At trial, a considerable body of evidence was tendered in order to attempt to show that reducing the viral output from the SOM farm on or shortly after 22 March 2006 (either by culling and disinfecting and/or by ceasing effluent flows) would have prevented the virus and the disease from escaping into the wild. The problem, it seems to me, is that one can only speculate how and when the disease came into the wild.[202] Many possibilities exist. One of which, as likely as not, is that the second outbreak occurred when virus was taken in through the intake pipes in Taylors Bay. Such a scenario would explain the explosive nature of the second outbreak which involved multiple outbreaks in different tanks occurring at SOM on successive days in March and April 2006 (otherwise all that might be said about the second outbreak is that there was massive fomite contamination with the virus being transmitted from tank to tank by human or other activity (remembering that the water on the farm, generally speaking, did not go from tank to tank)).
[202]Equally, it seems to me that one can only speculate where the disease or virus was between late January 2006 and 17 March 2006. Was it latent on SOM as was theorised in some evidence, or was it already in the wild (but not yet detected by anyone), or was it both latent in SOM and in the wild? The inability to do other than guess as to these matters impedes one’s ability to make a conclusion on the balance of probabilities that any particular step or steps would have made a relevant difference to the outcome in this case.

My conclusion about causation does not depend upon the disputed question of whether infected abalone were found in Taylors Bay on 2 May 2006. Even if the first sign of diseased abalone in the wild was in Drain Bay on 25 May 2006, I remain of the view that one cannot say that, but for failing to take some relevant step at SOM on or shortly after 22 March 2006, the disease would not have spread to the wild. The plaintiff having failed to establish factual causation, it is not necessary to consider the question of scope of liability.[203] Further, this was not a case where it was suggested that s 51(2) of the Wrongs Act has any application.[204]
[203]See s 51(1) of the Wrongs Act.
[204]See generally, Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420, 443 - 444 [54] – [57], noting in s 5D(2) of the Civil Liability Act 2002 (NSW) the phrase “in an exceptional case” is used rather than “in an appropriate case”, which is used in s 51(2) of the Wrongs Act.

Conclusion

The plaintiff has failed to establish that any of the four individuals sued as the State tortfeasors owed the plaintiff a duty to take reasonable care to protect the plaintiff from economic losses caused by an escape of the virus and the disease from the SOM farm. The plaintiff has also failed on the issues of breach and causation. Having failed on the issues of duty, breach and causation, the plaintiff’s claim against the State must be dismissed.

[2013] VSC 601

7 November 2013