Tilba Tilba Stud (WA) (ACN 065 413 747) as trustee for the Tilba Tilba Stud Trust v The Executive Officer of Agriculture Western Australia - [2004] WASC 31

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: TILBA TILBA STUD (WA) (ACN 065 413 747) AS TRUSTEE FOR THE TILBA TILBA STUD TRUST & ORS -v- THE EXECUTIVE OFFICER OF AGRICULTURE WESTERN AUSTRALIA [2004] WASC 31

CORAM: BARKER J

HEARD: 28-31 JANUARY, 3-7 FEBRUARY, 26-28 & 31 MARCH 2003

DELIVERED : 3 MARCH 2004

FILE NO/S: CIV 2344 of 2000

BETWEEN: TILBA TILBA STUD (WA) (ACN 065 413 747) AS TRUSTEE FOR THE TILBA TILBA STUD TRUST
FRANK GORDON TAYLOR
First Plaintiffs
NANCY BROMHAM POWELL AS TRUSTEE FOR THE TILBA TILBA PROPERTY TRUST
NANCY BROMHAM POWELL AS TRUSTEE FOR THE BENCHMARK TRUST
Second Plaintiffs
NANCY BROMHAM POWELL
Third Plaintiff
AND
THE EXECUTIVE OFFICER OF AGRICULTURE WESTERN AUSTRALIA
Defendant

Catchwords:

Tort - Negligence action - Action against statutory officer for acts and omissions of inspectors of stock under Stock Diseases (Regulations) Act 1968 (WA) and Enzootic Diseases Regulations 1970 (WA) and other officers of the Department of Agriculture (WA) - Whether, in exercise of powers to issue quarantine order, to release land or stock from quarantine and to permit movement of stock under quarantine, inspector (or other relevant officer) owed duty of care to owner of land or stock (and related entities) - If so, nature and extent of duty of care - Whether duty of care breached

Legislation:

Agriculture Act 1988 (WA), s 6, s 8, s 9

Enzootic Diseases Regulations 1970 (WA), reg 4, reg 5, reg 7, reg 11, reg 13, reg 15, reg 86, reg 88, reg 115

Stock Diseases (Regulations) Act 1968 (WA), s 6, s 8, s 9, s 10, s 14, s 18

Result:

Plaintiffs' action dismissed

Category: A

Representation:

Counsel:

First Plaintiffs               :     Mr L A Tsaknis
Second Plaintiffs           :     Mr L A Tsaknis
Third Plaintiff               :     Mr L A Tsaknis
Defendant:     Ms C J Thatcher & Mr C S Bydder

Solicitors:

First Plaintiffs               :     Hammond Worthington
Second Plaintiffs           :     Hammond Worthington
Third Plaintiff               :     Hammond Worthington
Defendant:     State Solicitor

Case(s) referred to in judgment(s):

Caparo Industries Plc v Dickman [1990] 2 AC 605
Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1
Northern Territory of Australia v Mengel (1995) 185 CLR 307
Perre v Apand Pty Ltd (1999) 198 CLR 180
Pyrenees Shire Council v Day (1998) 192 CLR 330
Sullivan v Moody (2001) 207 CLR 562
Sutherland Shire Council v Heyman (1985) 157 CLR 424
Tame v New South Wales [2002] HCA 35
Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1

Case(s) also cited:

Alec Finlayson Pty Ltd v Armidale City Council (1994) 51 FCR 378
Avenhouse v Council of the Shire of Hornsby (1998) 44 NSWLR 1
Bailey v Bullock [1950] 2 All ER 1167
Baker v Campbell (1983) 153 CLR 52
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Barrett v State of South Australia (1994) 63 SASR 208
Beavis v Apthorpe [1963] NSWR 1176
Board of Fire Commissioners (NSW) v Ardouin (1961) 109 CLR 105
Brickhill v Cooke [1984] 3 NSWLR 396
Bropho v State of Western Australia (1990) 171 CLR 1
Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520
Butler v Egg & Egg Pulp Marketing Board (1966) 114 CLR 185
Caledonian Collieries Ltd v Speirs (1957) 97 CLR 202
Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529
Chapman v Hearse (1961) 106 CLR 112
Coco v The Queen (1994) 179 CLR 427
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Coroneo v Kurri Kurri & South Maitland Amusement Co Ltd (1934) 51 CLR 328
Cowell v Corrective Services Commission of New South Wales (1988) 13 NSWLR 714
Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission (2002) 192 ALR 561
Darling Island Stevedoring & Lighterage Co v Long (1957) 97 CLR 36
De Bruyn v South Australia (1990) 54 SASR 231
Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 4 FLR 450
Everett v State of Western Australia [2001] WADC 18
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Geddis v Proprietors of Bann Reservoir (1878) 3 AC 430
Haines v Bendall (1991) 172 CLR 60
Hayes v Dodd [1990] 2 All ER 815
Jones v Schiffmann (1971) 124 CLR 303
Kavanagh v Akhtar (1998) 45 NSWLR 588
Kondis v State Transport Authority (1984) 154 CLR 672
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
McColl v Dionisatos [2002] NSWSC 276; (2002) Aust Torts Reports 81-652
Mengel v Northern Territory of Australia (1992) 109 FLR 411
Mid Density Developments Pty Ltd v Rockdale Municipal Council (1993) 44 FCR 290
Minister for Immigration & Multicultural & Indigenous Affairs v Al Masri [2003] FCAFC 70; (2003) 126 FCR 54
Mouat v Clark Boyce [1992] 2 NZLR 559
Muirhead v Kingborough Council [2000] TASSC 127
Murphy v McCarthy (1974) 9 SASR 424
Nader v Urban Transit Authority of New South Wales (1985) 2 NSWLR 501
Nominal Defendant v Gardikiotis (1996) 186 CLR 49
Overseas Tank Ship (UK) Ltd v Miller Steamship Co Pty Ltd (The Wagon Mound (No 2)) [1967] 1 AC 617
Parker v Commonwealth of Australia (1965) 112 CLR 295
Parramatta City Council v Lutz (1988) 12 NSWLR 293
Perry v Sidney Phillips & Son [1982] 3 All ER 705
Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476
Poseidon Ltd & Sellars v Adelaide Petroleum (1994) 179 CLR 332
Puntoriero v Water Administration Ministerial Corporation [1999] HCA 45; (1999) 199 CLR 575
Purkess v Crittenden (1965) 114 CLR 164
R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2002] UKHL 21
R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115
Romeo v Conservation Commission of the Northern Territory [1998] HCA 5; (1998) 192 CLR 431
South Australia v Wilmott (1993) 62 SASR 562
Stovin v Wise [1996] AC 923
Ultramares Corporation v Touche (1931) 255 NY 170; (1931) 174 NE 441
Walmsley v Cosentino [2001] NSWCA 403
Watts v Morrow [1991] 4 All ER 937
Watts v Rake (1960) 108 CLR 158
Williams v Attorney-General [1990] 1 NZLR 646
Wyong Shire Council v Shirt (1980) 146 CLR 40

BARKER J:

Introduction

On 8 October 1999, Bruce Mark Blight, an inspector of stock appointed under the Stock Diseases (Regulations) Act 1968 (WA), issued a quarantine order under the Enzootic Diseases Regulations 1970 (WA) made under the Act, which placed in quarantine the "Tilba Tilba Stud" farming property near Kojonup, Western Australia and all the sheep on the property. Mr Blight issued the quarantine order because samples taken from two young Damara rams on 28 September 1999 had tested positive to virulent footrot disease. The property remained subject to the quarantine order until about May 2000, when it was sold. A number of the sheep subject to the order remained subject to substitute orders when they were moved to another property, until they were released from quarantine on 18 October 2000.
The plaintiffs say, in essence, that the quarantine order was issued and maintained negligently and that, as a result of such negligence, they lost their interests in the farm or farming business and that the Chief Executive Officer of the Department of Agriculture should now be held liable to them in damages for the financial loss and damage they have suffered.
There is no doubt that the imposition and maintenance of the quarantine order had serious consequences for the farming operations on Tilba Tilba. The question is whether the defendant is liable at law for the financial predicament in which the plaintiffs found themselves following the making of the quarantine order.
Particular issues arising in this action on the question of liability include:
(1)whether the defendant owed each of the plaintiffs a duty of care;
(2)if so, what is the nature and extent of the duty in each case;
(3)if a duty was owed, was it breached.
If the defendant is found liable to the plaintiffs in negligence under the general law, then two further questions arise:
(1)does s 18 of the Act or reg 15 of the Regulations immunise the defendant from any liability that the defendant would otherwise have at law to any of the plaintiffs?
(2)if not, what loss and damage, if any, did each of the plaintiffs suffer as a result of the breach?

The power of an inspector of stock to deal with footrot disease

The Stock Diseases (Regulations) Act 1968 provides for the control of a number of stock diseases, including an "enzootic disease". Part I deals with preliminary matters. By s 6, an enzootic disease means a disease of stock that is not an exotic disease under and for the purposes of the Act.
For the purpose of dealing with stock diseases, the Act empowers an "inspector" to do certain things. By s 6 an "inspector" means, in relation to any stock, the Chief Inspector of Stock and any other inspector of stock and includes a person authorised to act temporarily as an inspector of stock.
The word "stock" means any animal included in the class of sheep and animals proclaimed to be stock for the purposes of the Act.
By s 8, the Governor may appoint a Chief Inspector of Stock and such other inspectors of stock and officers as may from time to time be necessary for the due administration of the Act.
Part II of the Act deals with the "eradication and control of enzootic diseases". Section 9 provides that the purposes of this Part of the Act are to prevent the introduction into the State of enzootic diseases from any other part of the Commonwealth and "to eradicate and control such enzootic diseases as are present in the State".
Section 10(1) empowers the Governor to make such regulations as are necessary and expedient for the purposes of this Part of the Act. By s10(2), Regulations under the section may provide, amongst other things, for the quarantine, examination and certification of any potential carrier, whether brought into the State or not and provide for the seizure and destruction of any found to be infected. Regulations may also provide for the notification and the manner of notification of any occurrence or suspected occurrence of infection and require persons to give all information within their power with respect to any such occurrence or suspected occurrence.
Indeed, regulations made under the Act may severely affect the ability of a person who owns or manages stock to deal with infected stock; and may also prohibit the sale of infected stock.
Section 18 of the Act provides a measure of immunity to a person acting in good faith under the Act. It provides that, subject to s 14 of the Act, civil or criminal proceedings shall not lie against any person -
"(a)for anything done in reliance of a notice or order apparently given or made in accordance with the provisions of this Act;
(b)for any act, matter or thing done, or ordered to be done, by a person and purporting to be done for the purposes of this Act; or
(c)for any act, matter or thing omitted to be done,
unless that act, matter or thing was done, ordered to be done or omitted to be done maliciously or without reasonable and probable cause."
Section 14 was at all material times a repealed section of the Act.
The Enzootic Diseases Regulations 1970 (WA) are the Regulations made in reliance on the regulation‑making power of the Act. Part I of the Regulations deals with preliminary matters. The Regulations apply to any "disease" specified in the First Schedule to the Regulations, as well as to a disease that is not identified but appears not to be an exotic disease, and a reference to disease, as stated in reg 4, includes a reference to -
"(a)the presence of signs of disease;
(b)the presence of the causative agent of disease;
(c)test results consistent with the presence of disease or the presence of causative agent of disease; and
(d)other evidence of disease."
Part C, Div 1, subdiv (1) of the First Schedule of the Regulations specifies those animal diseases of special significance to Western Australia and includes "Footrot in sheep and goats (U5 Protease thermo‑unstable strain of Dichelobacter nodosus)". Virulent footrot is often referred to scientifically as "D.nodosus".
Regulation 4 defines an "owner" in relation to stock to include a person who is the agent of an owner, consignee or a person who is in possession or in charge of stock or otherwise has the control or management of the stock.
Part 2 of the Regulations sets out a number of "general provisions for the eradication and control of enzootic diseases". They include a requirement for an owner to notify the inspector of stock who is normally located nearest to the place where the affected stock is kept and give to the inspector a description of the stock, the number thereof and the place where the stock may be located: reg 5(1).
By reg 7(1), an inspector on receiving such notification or on having other reasonable grounds to suspect the disease exists or has existed in relation to stock in any place within the State may require persons concerned in or having the charge, control or management of stock so affected to give him such information as is within their knowledge relating to that stock as he considers necessary.
By reg 11(1), an inspector relevantly has power with respect to stock or land not then declared to be in quarantine,
"(a)where the stock is not travelling stock, to serve on the owner of the stock or on the owner of the land on which the stock is situated, a notice in the form of Form No. 1 declaring the stock and the land specified in the notice to be in quarantine; or
(b)…,
and where an inspector serves a notice under paragraph (a) … he shall forthwith give notice thereof to the Chief Inspector."
Regulation 11(1a) expressly provides that:
"An inspector -
(a)shall exercise the power in subregulation (1) if he is of the opinion, whether because of his own examination or because of a report by another inspector, a Veterinary Surgeon or any other person who has been consulted regarding the stock or land in question, that a disease specified in Part A or Part B of the First Schedule exists among that stock or on that land;
(b)may exercise the power in subregulation (1) if he is of the opinion, whether because of his own examination or because of a report from any source … that a disease specified in Part A or Part B of the First Schedule may exist, or a disease specified in Part C or Part D of the First Schedule does exist, among that stock or on that land; and
(c)… " (Emphasis supplied).
Regulation 11(3) empowers an inspector to release stock or land from quarantine, in the following terms:
"An inspector may, at any time he considers it is safe to do so, having regard to the control of disease within the State, release from quarantine any stock or land and thereupon he shall give notice of the release to the owner thereof in the form of Form No. 2." (Emphasis supplied)
Regulation 13(1) provides that a person shall not remove any stock from any land that at the time of removal is declared to be in quarantine unless he is the holder of a permit in the form of Form No. 3 issued by an inspector in relation to that stock. A permit so issued may be cancelled or suspended by the Chief Inspector: reg 13(2). Form No. 3, which is set out in the Third Schedule, is there described as a "Permit to move stock/animal products".
Regulation 15 deals with the question of liability for stock loss and provides:
"(1)Subject to any Act relating to the payment of compensation for the loss or destruction of stock, any loss sustained in respect of any stock whilst being in quarantine whether by accident or sickness arising from natural causes or contracted from other stock, or by the destruction or detention or quarantine of such stock to prevent the spread of disease, shall be borne by the owner of such stock and the owner shall have no claim whatever for compensation for any such loss nor for any loss sustained by him through the carrying out or enforcement of these regulations.
(2)An inspector shall not be liable for any loss or damage occasioned to any owner by any act of that inspector, unless the damage is occasioned by his wilful neglect or fault."
Part 10 of the Regulations deals expressly with "Footrot". Regulation 86 specifies certain duties of owners of sheep or goats with footrot and provides that:
"Without limiting the operation of Part 2 the owner of sheep or goats, the subject of a declaration under regulation 11 in relation to the disease of footrot, shall -
(a)subject any of the sheep or goats to any treatment for footrot as an inspector may determine;
(b)move any of the sheep or goats from any part of the land on which they are located to any other part of the land when requested to do so by an inspector; and
(c)not permit the movement of any sheep or goats on to land the subject of a declaration under regulation 11 during the period the land is in quarantine unless a permit for that movement in the form of Form No. 3 is issued by an inspector."
The reference in reg 86 to a declaration under reg 11 is a reference to a notice in the form of Form No. 1 declaring the stock and the land specified in the notice to be in quarantine. The Form No. 1 set out in the Third Schedule is called a "Quarantine order".
Regulation 88 in Part 10 of the Regulations empowers an inspector in these additional terms:
"An inspector may require the owner of stock or the owner of land, the subject of a declaration under regulation 11 in relation to the disease footrot -
(a)to maintain cattle in isolation from any sheep or goats;
(b)to subject any cattle on that land to any treatment as an inspector may determine; and
(c)to maintain any sheep or goats separate from any other sheep or goats in any part of the land on which they are located."
Part 13 of the Regulations deals with offences. Regulation 115(1) creates a general offence: any person who contravenes or fails to comply with any provision of the Regulations or any provision of a condition imposed by or under the Regulations commits an offence.
The Act, when read the Regulations, plainly is intended to provide for the strict eradication and control of enzootic diseases in animals, including sheep, in Western Australia.
As noted above, the Act expressly authorises the making of regulations for the eradication and control of enzootic diseases: s 10(1). I should note in passing that one question raised by the plaintiffs is whether reg 15, which provides that there should be no liability for stock loss and that an inspector shall not be liable for any loss or damage unless it is occasioned by his "wilful neglect or default", is a regulation authorised by the Act, especially in light of the provision made by s 18 of the Act on the same matter.
It is within this regulatory context that the matters in dispute in this action have arisen. The Act and Regulations may be seen to empower the Chief Inspector of Stock and stock inspectors to deal directly with the disease of virulent footrot when they find it. The power to issue a quarantine order in respect of stock infected with the disease and the land on which the stock is found, is a strong regulatory tool. Indeed, as emphasised above, reg 11(1a) requires an inspector to issue a quarantine order if he is of the opinion that footrot exists in stock. The inspector has no discretion in the matter. However, questions of discretion undoubtedly arise when an inspector is faced with the exercise of these significant statutory powers. For example, under reg 11(1)(a), the inspector must specify in the quarantine order the "stock and the land" concerned which is to be "in quarantine". Nothing in reg 11(1)(a) states that "the land" to be specified must necessarily be the whole of a "lot" (as defined, for example, by the Town Planning and Development Act 1926 (WA)) or "farm" on which the infected stock was found by the inspector. One might expect that, generally speaking, the "farm" on which the infected stock were found and the whole of the stock of which an infected animal forms part will fall into question whenever an inspector considers the exercise of the power to issue a quarantine order, but plainly these are matters of discretion.

Issues of discretion will also arise in relation to the exercise of the power under reg 11(3) by an inspector to release any stock or land from quarantine. Neither the Act nor the Regulations specify particular criteria by reference to which that release power should be exercised, only that the inspector "considers it safe to do so".
Similarly, issues of discretion will arise in relation to an inspector's power under reg 13 to permit the removal of stock from quarantine and to issue a "Permit to move". Nothing in the Act or the Regulations specifies any criteria by reference to which this power should be exercised.
Not surprisingly, the Department of Agriculture and the Chief Inspector have developed "policies" and guidelines to guide the exercise of an inspector's powers under the Act and Regulations. Before turning to these, however, it is useful to notice something of the science of the disease of footrot and the circumstances in which the disease may express itself.

Footrot disease

Footrot is a disease caused by a combination of bacteria, but always including the bacterium D.nodosus. The disease affects the hoofs of sheep and goats, causing varying degrees of damage to the horn of the foot, leading to lameness.
Expert evidence adduced for the plaintiffs and the defendant was substantially in agreement about the pathology of footrot. Dr Bruce Allworth, a highly qualified veterinarian and principal of Allworth Sheep and Cattle Production Services, provided background information of footrot and the circumstances in which it may express itself, as well as treatments available for footrot, as did senior officers from the Department of Agriculture of Western Australia, including Dr Peter Gregory Buckman, the Chief Veterinary Officer of the Department, who is also the Chief Inspector of Stock, as well as Robert Keith Mitchell, the officer of the Department responsible for the management of the Footrot Eradication Campaign maintained by the Department.
The disease is detected in sheep by examination of the hoofs of the sheep, and detection of the presence of lesions, loss of interdigital hair, increased moisture between the toes and, in severe cases, separation of the horn of the foot. The lesions may be categorised by their degree of severity, ranging from score 1 (least severe) to score 5 (most severe).
The disease may be virulent or benign and there are different strains of the disease. The lesions appear to be similar for both virulent and benign footrot, although the lesions do not become as severe in the case of benign footrot. Tissue scrapings from lesioned hoofs may be laboratory tested to confirm the presence of footrot and to determine the strain present.
The absence of lesions on a sheep's hoofs does not mean that the sheep is free of footrot. A negative laboratory test result on a sample is not conclusive that the sheep sample does not have footrot.
The expert witnesses generally agree, and I accept for the purposes of this action, that there is no accepted cure for footrot, although footbathing sheep in a zinc hydroxide solution may prevent the spread of footrot in mobs of sheep. However, there is research data to suggest that footbathing may eradicate the disease in individual animals, provided the lesions are minor; that is to say, no more than score 1‑2.
Footrot disease is infectious and may be spread from an infected sheep to another if the second sheep walks over the same ground as the infected sheep within less than seven days. Thus, infection can be spread among sheep paddocked together, or by sheep crossing the same lanes or pathways.
The infection is most likely to express itself in warm, moist conditions. In Western Australia, the infection appears most likely to spread in winter and spring. An "expression period" (usually spring) is so‑called because the disease, which may previously have been undetectable, then expresses itself, causing lesions to develop.
However, not all infected sheep will necessarily develop visible lesions. In some strains of the disease, the bacteria may cause deep, covert lesions that are not visible on inspection.

Department of Agriculture policy on footrot

Principles of good public administration suggest that the Chief Inspector with the assistance of the Department should seek to develop and disseminate to inspectors, and farmers, policies or guidelines designed to guide the exercise of an inspector's powers under the Act and Regulations, even though the Act and Regulations do not expressly require this to be done. However they are to be described, such polices or guidelines have been issued to guide the exercise of discretionary powers of inspectors found in the Act and Regulations in respect of footrot disease, and to inform farmers of what they can expect when they are affected by footrot. Policies and guidelines in these circumstances are designed to ensure a well‑thought‑out approach to the achievement of the purpose of the Act, that is, the eradication and control of enzootic diseases in stock in Western Australia, and also to ensure consistency of regulation from one case of footrot to another, from one farmer to the next.
The circumstances in which policies and guidelines have been developed in Western Australia over a number of years was explained in evidence by the Chief Veterinary Officer of the Department of Agriculture, and the Chief Inspector of Stock, Dr Buckman, as well as other persons employed within the Department of Agriculture and having special responsibilities in relation to the eradication of footrot disease. One of these was Mr Mitchell, who at all material times was responsible for the management of the Footrot Eradication Campaign in close consultation with the Western Australian Sheep Industry as represented on the Footrot Eradication Campaign Advisory Committee (FECAC).
The evolution of the Department's policy was explained in detail by Mr Mitchell. He took a Bachelor of Veterinary Science from the University of Queensland in 1967 and a Master of Veterinary Studies in Epidemiology and Preventative Veterinary Medicine at Melbourne University in 1980. He commenced working for the Department of Agriculture in 1967 as a veterinary officer and has remained with the Department since then. He has extensive experience with footrot eradication and other eradication programmes. From 1968 to 1984 he was based at Bunbury where he was the district veterinary officer, which necessitated a broad knowledge of farming practices, and disease diagnosis and treatment. Thereafter, he had further experience in district offices. His experience in eradication programmes included programmes dealing with tuberculosis, brucellosis and footrot.
Mr Mitchell said the principles of disease eradication in these areas have considerable similarity. Each has to deal with issues of diagnosis, cost effective surveillance and detection methods, movement controls, advice to owners of affected herds or flocks and the importance of animal mob segregation to minimise spread of infectious agent.
In 1994, he transferred to the South Perth office of the Department of Agriculture as the full‑time footrot co‑ordinator, which was later termed "Project Manager, Footrot Eradication". Since then, he has managed the Footrot Eradication Campaign in close consultation with the Western Australian sheep industry, which is represented on the Footrot Eradication Campaign Advisory Committee (FECAC). FECAC is a representative body set up to facilitate the provision of industry views on footrot disease to the Department, although its views do not bind the public officials to whom they are communicated.
Mr Mitchell, in the course of his duties with the Department of Agriculture, has had particular experience with outbreaks of virulent footrot as well as benign footrot. In 1987, he co‑initiated the concept of more proactive footrot surveillance and district surveys to detect other foci of footrot. This strategy was implemented with on‑farm inspections on almost all sheep and goat properties in the Denmark Shire in 1987, and then on higher risk properties in Plantagenet, Albany and Cranbrook shires in 1988‑89. This, he says, led to higher detection rates of latent infections, improved tracing effectiveness and enhanced public awareness and involvement. The concept of more actively searching for virulent footrot was then taken up by the South West region and a major focus centre on Boyup Brook was detected in 1989 and 1990.
In 1989, Mr Mitchell was appointed the chairman/convenor of the Department of Agriculture Footrot Working Party, which developed the first economic and biological model for virulent footrot in Western Australia. In 1990, the working party published the first comprehensive benefit‑cost analysis for virulent footrot (VFR). The analysis evaluated five options:
1.continuing with the current eradication strategy and with current levels of detection and resources;
2.deregulation, in which the Department's role would be changed to providing advice and extension of control measures, and farmers would be responsible for virulent footrot treatments and the control and eradication of virulent footrot in their own flocks;
3.faster eradication, in which inspection resources would be considerably increased with the aim of eradicating VFR from Western Australia within 10 years;
4.partial deregulation, in which the eradication policy would be maintained in the wetter parts of the State; and
5.eradication by destocking all VFR affected flocks possibly combined with an industry administered compensation scheme.
In the analysis, deregulation was used as a baseline against which the other options were compared. The analysis established the economic benefits to Western Australia's sheep industry of maintaining a high level of State‑wide control of VFR. Initially, it was decided to pursue eradication within 10 years. However, in a further review in 1994 a target was adopted of totally eradicating VFR in Western Australia by 2014.
The reasons for adopting the footrot eradication policy were:
(1)it is feasible to eradicate footrot;
(2)eradication will preserve the productive base of the sheep and wool industry and save that industry substantial amounts of money; and
(3)VFR is a painful, crippling condition that should be prevented for animal welfare reasons.
In adopting this policy, the Department has taken what might be described as a more proactive stance, and certainly a stricter regulatory approach, than has been adopted in other States and Territories in Australia. This is not to say that policy approaches that differ from that adopted in Western Australia lack validity, merely that Western Australia believes that its approach is the best for Western Australia.
Between 1990 and 2002, Mr Mitchell organised and managed the Footrot Eradication Project Team within the Department of Agriculture. To help provide standard rules for the operation of the Footrot Eradication Project, the Department published the document "Eradicating Footrot in Western Australia - A Farmer's Guide", as well as the Department's Footrot Operational Manual. The Farmer's Guide was published in 1997 and partially revised in October 1999.
Mr Mitchell emphasised that both the 1997 and 1999 versions of The Farmer's Guide convey the Department's policy on the management and control of virulent footrot disease and indicate that only two options are available for eliminating virulent footrot:
(1)destocking - by removing all sheep and goats; and
(2)summer eradication - elimination of the infection from the flock by culling affected animals by doing at least two summer inspections of all sheep in all mobs.
Dr Allworth confirmed the more rigorous, regulatory approach taken to the eradication of virulent footrot disease in Western Australia, particularly by comparison to current approaches in the States of New South Wales and Victoria. He was familiar both as a primary producer and as a researcher with the regulatory systems in each of the three States. He said that Western Australia is well ahead of the rest of Australia in terms of what they are doing (see transcript 155: the transcript actually refers to the "rest of Western Australia" but plainly Dr Allworth was referring to the rest of the country). Nothing Dr Allworth said challenged the validity of the Footrot Eradication Campaign and the policy adopted in Western Australia and explained by Mr Mitchell in his evidence. However, as noted below, Dr Allworth considered that, in the application of the policy to Tilba Tilba, different options from those actually undertaken were also available.

The Farmer's Guide

Under the Department's policy set out in The Farmer's Guide, and reflected also in the Operational Manual, it is usual practice when footrot is found on a property for the whole of the property and relevant mob of sheep to be placed in quarantine. In this regard, The Farmer's Guide makes no express reference to part only of a farm being quarantined. However, as Dr Buckman acknowledged, if parts of a farm are run as separate management units, there is some scope, in practice, for the quarantining of something less than the whole of the farm.
The Farmer's Guide (both in its 1997 and 1999 versions) and the Operational Manual state that there are two options for release from quarantine, namely:
"(a)De‑stocking. This occurs by the removal of all sheep and goats from the quarantined property, preferably before the autumn break and within 12 months of the property being quarantined. There is scope for other approaches, but these require the approval of the Regional Protection Manager. Once de‑stocking has occurred (the sheep and goats are usually sent for slaughter or live export for meat following the issue of a permit to move), a stock inspector carries out two property inspections 14 days apart to ensure no sheep or goats remain. The property may then be released from quarantine.
(b)Summer eradication. Following detection of the disease (commonly in the spring) infected animals are culled during at least two summer inspections (after annual pastures have dried off) of all sheep in all mobs. One clear summer inspection is required. The property remains in quarantine until the following spring. In late spring, once the flock has gone through a winter which primes the hooves of the sheep and a warm moist spread and expression period, all sheep are examined and if there are no visible signs of footrot or no positive samples for laboratory tests of suspect sheep, the property is released from quarantine. The summer eradication programme must be completed within 27 months, or destocking is required. The 27 month rule was a change to the guidelines, and is subject to an appeal process."
The Farmer's Guide and the Manual also incorporate, as part of the summer eradication programme, the use of footbathing. They recognise that footbathing usually results in a "good clinical response", but cannot be relied on to provide 100 per cent eradication of footrot under field conditions.
Rather, footbathing is suggested as a means of "disease reduction" pending a summer eradication programme to reduce animal pain and suffering, reduce the spread of disease between animals on the property, reduce the number of severe lesions in infected animals and minimise the risk of spread of the disease to neighbouring properties. The Farmer's Guide states (at p 22):
"Agriculture Western Australia's policy is that generally footbathing will be allowed for disease reduction purposes during winter and spring. Approval from the Regional Protection Manager and Footrot Coordinator is required for disease reduction footbathing at other times of the year (except for red markers prior to immediate sale for slaughter)".
However, an "optional Disease Identification Inspection" can also be considered "if the extra mobs that this creates can be run separately". This suggests that there is some merit in footbathing sheep with lesions no more than score 1 to 2 in an attempt to eradicate footrot, rather than culling infected sheep and footbathing only those sheep that show no signs of footrot. This is done through the procedure of five‑day footbathing. This option may be more attractive in the case of high‑value sheep. However, as Appendix 1 to The Farmer's Guide explains, this step or option delays release from quarantine by 12 months.
Nothing in The Farmer's Guide or the Operational Manual guarantees that five‑day footbathing will eradicate footrot or suggests that it is a third option for obtaining release from quarantine.
The Farmer's Guide and the Manual also recognise that when footbathing is carried out it is likely to mask the visible signs of footrot and, hence, when used in connection with a summer eradication programme, should not be carried out within six weeks of a summer inspection or a spring release inspection. In short, an inspection of sheep within six weeks of footbathing is likely to be unreliable.

An inspector's usual responsibilities

Dr Buckman, the Chief Inspector, and who was the Deputy Chief Veterinary Officer and Chief Inspector at material times, referred to the power of an inspector to quarantine a flock of sheep under the Regulations. He noted that an inspector is required to issue a quarantine order whenever he forms the opinion that virulent footrot exists in a flock or on the land on which the flock is being run.
He explained that, given the nature of footrot and the advanced stage of the Footrot Eradication Campaign in Western Australia and its experience with disease eradication programmes, the Department of Agriculture takes a "precautionary approach" to the extent of the sheep and the land to be quarantined when infection is found on a property.
Dr Buckman stated that it is both appropriate and usual for an inspector to quarantine all of the property and all of the sheep on the property unless the inspector is confident that a lesser measure should apply. In this respect, I understood Dr Buckman, when he referred to a "property" to mean the whole of a farm under the control or management of a particular owner or manager.
Dr Buckman expressed the view that an inspector may quarantine less than all of a flock or all of a property if the inspector is confident that infected and unaffected sheep have not, within a period of about two weeks, grazed or walked over common ground and have not used common yards or facilities, and that such separation can and will be maintained into the future.
He added that it is both appropriate and usual for an inspector to quarantine all of a property unless the inspector is confident that a property and flock consists of physically separate and isolated management units.
Thus, for the purpose of quarantining a property for footrot, Dr Buckman considered it is both appropriate and usual for separation within a property to be separation by a fenced road or an adequate barrier fence with separate handling facilities on each of the separate locations.
It follows, said Dr Buckman, that for the purpose of quarantine in relation to the management of a Statewide disease control programme, it is both appropriate and usual for the boundary fences of a property to be the limit of the area of a property quarantine unless there are particular circumstances of management or fencing that warrant part or all of a neighbouring property to be also quarantined.
In response to the question whether on the confirmation of virulent footrot in one sheep on a farm the whole property, or something less, should be the subject of a quarantine order, Dr Allworth expressed the view that it is not always necessary to impose a quarantine order in respect of the whole property. He suggested that if flocks were run "separately" and included high value breeding stock, and mild lesions were found in some sheep in that stock, then it would be important to assess the risk of the various mobs or groups of sheep on the property at the time of diagnosis. He initially expressed the view that it was a "fair premise" to start with that having discovered footrot on a property, quarantining of the whole property may not be necessary. However, Dr Allworth added (transcript 175):
"… having said that in many cases you will end up quarantining the whole property."

He immediately clarified his evidence by stating:
"What we're talking about is we are talking about the end result. I was there talking about the end result. Initially I might quarantine the whole property in the context of WA, but then I might remove it. I have no troubles with all the sheep, including these that you are going to assess, being under movement restriction. What I have a difficulty with in going through it is that those animals that mightn't have been infected remain under that and have to go through a summer eradication program and can't get early release. So initially I'm not saying that you wouldn't quarantine the whole property. I'm not suggesting that at all. That would be, in my view, very appropriate because you haven't been able to assess them, but at the point you're able to make adequate assessment, then it may be possible to remove the quarantine from a some section without going through a summer eradication program …"
Dr Buckman also explained that, in the context of the Western Australian Footrot Eradication Campaign, it is considered unsafe for an inspector, without consultation with the Department's veterinary management, to release a property from quarantine without it having gone through the required seasons under an agreed eradication programme.
Dr Buckman explained that the Footrot Eradication Campaign is supported by both government and industry. FECAC provides the formal liaison between the Department of Agriculture and industry organisations. FECAC has representation from the Department of Agriculture, WA - Farmers, the Pastoralists' and Graziers' Association, the Stud Merino Breeders' Association, the Western Australian Livestock Salesmen's Association and footrot community groups. Dr Buckman says it is both appropriate and usual for the Department to consult members of the FECAC on matters that are considered to be of sensitivity to the industry, including proposals to vary the policies, guidelines or rules of the Footrot Eradication Campaign.
In that regard, Dr Buckman confirmed that The Farmer's Guide sets the common standards important to the eradication of footrot throughout the State.
Dr Buckman further explained that staff are well‑trained in relation to footrot disease. The Department of Agriculture trains them in the diagnosis of footrot, operational procedures and communications. It holds periodical seminars in relation to the Footrot Eradication Campaign policy and operations. They also learn by working on properties with experienced colleagues. The Department has a number of staff with 20 or more years' experience working with footrot.
The Department of Agriculture's approach to the eradication of footrot includes the publication of The Farmer's Guide and the Department's Footrot Operational Manual. These provide guidance on matters of inspection, diagnosis, quarantine, footbathing and release from quarantine. Inspectors work with owners to jointly develop a property management plan for the eradication of footrot from a property. A property management plan assists the owner of the stock to have ownership of the problem and the solution. In some cases, owners choose not to agree to a property management plan or to the available options for eradication given in The Farmer's Guide. As a last resort in such a case, where the owner does not carry out sufficient control measures, an inspector may issue a direction to an owner. However, even in cases where an owner does not agree to a property management plan, Dr Buckman said it is usual and appropriate for an inspector to continue to provide advice and guidance to the owner on measures that might reduce, control or eradicate footrot.

Footbathing treatment - the Department's view

In relation to the treatment available for footrot, Dr Buckman explained that the usual treatment is footbathing. It is used, he said, for two separate reasons: one being in the wet periods of the year to limit the spread of disease, or the risk of spread, or for welfare purposes; the other being to harden the hoof of the animal after the summer eradication programme.
Dr Buckman referred to the guidance on footbathing given in The Farmer's Guide. He said that, in severe cases, it is usual and appropriate for an inspector to recommend footbathing on welfare grounds so as to relieve the severity of the disease and enable animals to better survive through to the summer period. Footbathing is normally by means of standing animals in a shallow bath of a zinc sulphate based solution. Once the inspector has shown the owner how to footbathe sheep, the owner is normally able to carry out the footbathing on his or her own sheep.
Dr Buckman explained that researchers within the Department of Agriculture have been trialling a system of treatment that uses daily footbathing for five days. The trial protocol, which includes inspection by an experienced inspector and the removal of animals with certain foot lesions prior to the commencement of the five‑day footbathing, has led to the eradication of footrot in a number of sheep in research trials. However, he said field testing has yet to show the method to be successful sufficiently often for it to be accepted as an eradication option in The Farmer's Guide. He says there has been no proposal or formal consideration given to the inclusion of five‑day footbathing as an eradication option in The Farmer's Guide.
Dr Buckman further explained that some owners have used five‑day footbathing in winter or spring, and some inspectors have recommended to an owner the use of five‑day footbathing to reduce the risk of spread or severity of disease in the flock and increase the chances of success of the subsequent summer eradication programme. In such cases, it is not expected or usual that an inspector examine the feet of all sheep prior to the commencement of the five‑day footbathing.
Dr Allworth acknowledged the research work in Western Australia in relation to footbathing. His evidence concerning the appropriate use of footbathing treatment and the curative powers of such treatment largely accorded with that of Dr Buckman.

Footbathing treatment - Mr Blight's view

It seems, however, on the evidence he gave to the Court, that Mr Blight, the stock inspector who issued the quarantine order in respect of Tilba Tilba on 8 October 1999, at material times personally held a more optimistic view of the curative powers of the five‑day footbathing treatment than did the Department that employed him.
In cross‑examination, in particular, Mr Blight fully explained his views. He explained that there are two types of footbathing: disinfection footbathing, which is more or less used to get lame sheep back onto their feet so that they do not lose body weight and the like and can be sold off to processors; and the five‑day footbathing treatment.
In relation to the latter, Mr Blight explained that he recommends its use on smaller flocks because it is virtually physically impossible to use it on large flocks. He said he often recommends the bathings - five‑day footbathing over 10 days - because it gives very good results, particularly with sheep with lesions that are not "under‑run". That is to say, where the lesions are less than score 3.
Mr Blight considered that, in an appropriate footrot disease situation, the five‑day footbathing treatment can eradicate, not merely reduce, virulent footrot disease. He acknowledged that there is a scientific debate within the Department of Agriculture concerning the accuracy of this view. He observed, when asked whether footbathing eradicates footrot:
"The excuse we get from up above is that the scientific evidence isn't good enough to be able to give it 100 per cent out of 100 per cent, if you understand what I mean, and it is to a degree frowned upon from the upper levels, but working in the field I had had very good success with it, as well as other colleagues. This particular year I've just finished bathing 8000 sheep and it got very, very good results, and that was on Damara sheep."
Mr Blight was then asked:
"What was your opinion of the 5‑day footbathing in this time, 1999? If I was to ask you in September, October 1999 whether footbathing worked as an eradication, what would you say to me?"
He answered:
"I would say we have every chance of eradicating it, as long as it is not above score 2 lesions."
In some aspects, Mr Blight's views reflect the advice in The Farmer's Guide as to the "optional Disease Identification Inspection" step, but he did not see it as an "extra step" resulting in a two‑year release period instead of one, as described in Appendix 1. Mr Blight believed that in appropriate circumstances five‑day footbathing, as he put it, had every chance of eradicating footrot. Mr Blight acknowledged that this view was frowned upon by those superior to him in the Department of Agriculture.
The relevance of Mr Blight's view will be considered further below. First, it is necessary to say something of the plaintiffs and the background to the matters in issue.

Tilba Tilba farming operations and the plaintiffs

Tilba Tilba, at material times, was a convenient way of referring to a farming operation carried on under the effective direction of Nancy Bromham Powell (the third plaintiff). However, the farming operation and the assets relating to it were held by different entities.
The Kojonup property, on which the Tilba Tilba farming operations were conducted, at material times comprised two lots comprising about 2200 acres in area. One lot - Kojonup location 2468 - comprised 1200 acres. The registered proprietor of this lot was the Benchmark Trust (formerly the Madbontom Discretionary Trust) of which Mrs Powell was the trustee. The Benchmark Trust is the second‑named second plaintiff.
The second lot - Kojonup location 8, lot 1 - comprised some 997 acres. The registered proprietor of this lot was the Tilba Tilba Property Trust, of which Mrs Powell was also the trustee. The Tilba Tilba Property Trust is the first‑named second plaintiff.
Thus, in short, the second plaintiffs owned the land on which the Tilba Tilba farming operations were conducted.
The Tilba Tilba Stud Trust, of which Tilba Tilba Stud (WA) Pty Ltd was the trustee, at material times conducted the farming operations at Tilba Tilba. At material times, the farming operations included a purebred Damara sheep breeding operation and a commercial sheep operation producing crossbred Merino and Damara sheep for sale. The operations also included a Merino fine‑wool operation. Mrs Powell, at material times, was the sole director of the trustee of the Tilba Tilba Stud Trust.
In practical and commercial terms, therefore, Mrs Powell controlled the activities of the registered proprietors of the Kojonup properties and the farming operations carried on on that land through the Tilba Tilba Stud Trust.
In about early 1998, the trustee of the Tilba Tilba Stud Trust, through Mrs Powell, agreed with Frank Gordon Taylor (the second‑named first plaintiff) that the Tilba Tilba Stud Trust would provide capital for the purchase of seed stock and the cost of a Damara sheep artificial breeding programme, and that Mr Taylor would manage the programme and provide the labour for the programme, the cost of the programme to be repaid to the Tilba Tilba Stud Trust and the profits thereafter divided equally between the Tilba Tilba Stud Trust and Mr Taylor.
This agreement and division of capital and labour between Mrs Powell and Mr Taylor appears to have arisen because of Mrs Powell's physical incapacity to provide labour and Mr Taylor's willingness and ability to do so. While Mrs Powell had for a number of years lived and worked on a sheep and grain farm in the Kojonup district, in 1979 she was diagnosed with multiple sclerosis. In 1985, Mrs Powell was also diagnosed with Hashimoto's Disease (which affects the thyroid gland). These diseases seriously affected Mrs Powell's capacity at all material times personally to undertake any physical labour.

Some background to the relevant farming operations

Tilba Tilba Stud Trust commenced farming operations as a Merino sheep stud in about January 1990. Mrs Powell achieved some success through the Tilba Tilba Stud Trust as a Merino breeder. Prior to that, it appears that Mrs Powell was involved in general farming operations on a Kojonup sheep and grain farm property. Kojonup location 2468 was first acquired by the predecessor of the Benchmark Trust in February 1994. Kojonup location 8, lot 1, was then acquired by the Tilba Tilba Property Trust in January 1996.
After Kojonup location 2468 was acquired, Mrs Powell caused a five‑bedroom, three‑bathroom homestead, constructed of rammed‑earth, to be built on that lot. Construction of the homestead commenced in about 1994. Mr Taylor was engaged to undertake the construction. When construction of the homestead was substantially complete in about 1998, Mrs Powell offered Mr Taylor the position of farm manager on Tilba Tilba, which he then took up.
In the first half of 1999, Kojonup location 8, lot 1, was subdivided into lots 1 and 2, so that the Kojonup property at material times comprised three lots.
In early 1998, Mrs Powell decided to change the commercial operation at Tilba Tilba from fine‑wool production to Damara meat production. At that time, there were few Damara sheep in Australia and even fewer in Western Australia. The Damara is a largely hairless breed of sheep that originates in Southern Africa and is prized for its meat. Mr Neil Garnett was instrumental in introducing Damaras to Western Australia and co‑ordinated a Damara sheep breeders' group. Mrs Powell dealt with Mr Garnett in pursuing her Damara sheep breeding plans, both early on and later in the piece.
Mrs Powell decided there was commercial sense in establishing an artificial Damara sheep breeding programme. Damara sheep, by comparison with Merinos, were high‑value sheep. For example, by 1999, the price of purebred Damaras was between about $3000 to $5000 for a ewe and between about $2500 to $5000 for a ram.
On behalf of the trustee of the Tilba Tilba Stud Trust, Mrs Powell then concluded the agreement with Mr Taylor referred to above concerning the venture with the Damara sheep and breeding programme.
However, while Mrs Powell decided that a change of commercial operation on Tilba Tilba was appropriate, she also maintained a Merino fine‑wool operation at Tilba Tilba.
In order to effect the artificial Damara sheep breeding programme, Damara embryos needed to be purchased and implanted in other sheep, not necessarily Damara ewes, in order to produce a purebred Damara flock.
In May 1998, Tilba Tilba Stud Trust, trading as "Damara West", commenced an embryo transfer programme, engaging the firm Genstock, an artificial breeding centre near Kojonup, to carry out the transfers. Between May 1998 and September 1999, Damara West undertook a total of eight embryo transfer programmes.
By September 1999, Damara West had produced 206 Damara ewes, 100 younger Damara ewe lambs, 151 Damara rams and 82 Damara ram lambs, as well as about 90 Merino pregnant recipients from the Damara breeding programme.
Damara West also acquired purebred Damara rams for crossbreeding with Merino ewes. Mrs Powell purchased 4500 Merinos through the farming agent, Elders, in about August or September 1998 for crossbreeding purposes.
In October 1998 - that is to say, about a year before the events giving rise to this action - Mrs Powell caused the further purchase of seven Damara rams and the leasing of three Damara rams from a Mr Geoff Crabb, a farmer at Kojonup. These 10 Damara rams, together with five of the first Tilba Tilba home‑bred Damara rams, formed the basis of the Damara commercial operation when it commenced in the 1998/1999 season. They may be referred to as the "working Damara rams".
At material times up to 9 September 1999, the working Damara rams were paddock‑marked with Merino ewes to produce first crossbred Damaras (F1s). The first cross of a purebred Damara ram and Merino ewe (an F1) was born in April 1999.
As it developed then, the farming operations of Tilba Tilba Stud Trust essentially came to comprise two arms. The first was a stud for the production and sale of purebred Damara rams as separate seed stock. This arm may be called the "Damara stud operation". The second was the crossbreeding of Merino ewes with purebred Damara rams to produce crossbred Damaras (F1s) and, in due course, to produce further crossbred Damaras (F2s). The aim was to sell the crossbred F1 and F2 sheep in export and domestic markets. This second arm may be described as the "commercial operation". However, a fine‑wool Merino stud operation was also maintained separately from these two arms of the Damara operation.

The September 1999 sale

In about mid‑1999, Mrs Powell determined that Damara West should offer for sale a good number of the sheep from the Damara stud and commercial operations. The sale was arranged through Elders and set for 9 September 1999.
Damara West offered for sale a total of 151 Damara rams (which included six working Damara rams) 96 Damara ewes, 200 Merino ewes pregnant to Damara rams, and 400 F1 ewe lambs. A total of 247 Damara rams and Damara ewes from the Damara Stud Breeding programme were offered for sale. A number of other sheep from the commercial operation were also offered for sale.
The sale was a failure. Only the six working Damara rams were sold. The various mobs of sheep were then returned to their respective paddocks, with one exception: the working rams, which had previously been paddocked with the ewes in the commercial operation, were paddocked together with the purebred Damara rams from the sale in a paddock known as Road Paddock 2.
Following the unsuccessful sale, Mrs Powell asked Mr Garnett of the Damara Sheep Company to help her market the Damara sheep. On 27 September 1999, Mr Garnett visited Tilba Tilba and graded each of the Damaras. Mr Garnett then developed a marketing plan, which he forwarded to Mrs Powell under cover of a letter dated 5 October 1999. He proposed the sale of the majority of the Damaras by Christmas 1999 at prices of between $2000 and $4500 each.
Mr Garnett's marketing proposal was interrupted by the issuing of the quarantine notice on 8 October.
Indeed, Mrs Powell and Mr Taylor must have been concerned that their plans to market the Damaras were in jeopardy following the advice of Mr Blight (to Mr Taylor) on 28 September, the day after Mr Garnett's visit to Tilba Tilba, that two of the young Damara rams showed signs of footrot.

Inspection of the sheep by Mr Blight on 28 September 1999, the issuing of the quarantine notice on 8 October 1999 and a précis of subsequent events

The primary factual and legal matters in issue in this action have their genesis in the inspection of sheep at Tilba Tilba by Mr Blight, in his capacity as an inspector of stock appointed under the Stock Diseases (Regulations) Act 1968, on 28 September 1999.
Mr Blight, with another stock inspector, Ms Eileen O'Neill, had attended the sale on 9 September 1999, but only as a Departmental observer. He had informed Mrs Powell that should any animals be sold to Eastern States buyers, it would be necessary for her to obtain animal health papers from a stock inspector. Some time after the sale Mr Blight was requested by Mr Taylor to return to Tilba Tilba to inspect two young Damara rams that had been sold at the sale to an Eastern States purchaser. Mr Blight attended Tilba Tilba on 28 September 1999 for this purpose.
Mr Blight was an experienced inspector, well respected in the Department and also within the sheep industry in the greater Katanning district in which he worked. He had commenced working as an inspector of stock with the Department of Agriculture on 1 June 1978 and had continued in that capacity without interruption up to and including the time of the events material to this action. At material times, he was based at Katanning.

Mr Blight's work with the Department had included dealing with arsenic contamination, trialling backline chemical treatments on bare shorn sheep, monitoring retailers of veterinary preparations and animal feeding stuffs, such as vaccines and antibiotics, and conducting inspections for footrot and other diseases. In the context of footrot eradication, he had been involved with several major eradication incidents in the Kojonup district (in 1978‑1980 and 1999) as well as in nearby Boyup Brook and Cranbrook. He had also been involved with minor eradication incidents in Katanning, Tambellup and Narrogin, amongst other places. In 1983, Mr Blight had been seconded for a period of eight months to work with the Commonwealth Government at Cocos (Keeling) Islands' International Quarantine Station in his capacity as a stock inspector. He also carried out quarantine duties at this station. Mr Blight was, at material times, an experienced field officer in relation to footrot inspection and eradication procedures and programmes.
As of about 28 September 1999, Mr Blight had carried out inspections at approximately 2500 farms in the Katanning inspection area which covers 11 shires, including Kojonup. Approximately 400 of these farms were sheep farms located within a 50‑kilometre radius of Tilba Tilba. By all accounts, Mr Blight was held in high regard by the Department and farmers with whom he dealt, alike. He was generally familiar with the Tilba Tilba property and Mrs Powell. He knew Mrs Powell suffered from health problems.
On 28 September 1999, when he carried out his inspection, Mr Blight discovered lesions on the hoofs of the two young Damara rams which were consistent with footrot disease. He took samples from each sheep for the purposes of laboratory testing.
Mr Blight says that his usual practice when taking samples from sheep is as follows:
•to take samples from suspect sheep in the presence of the owner or manager;
•when taking a sample to demonstrate the procedure and explain and familiarise the owner or manager with the visual signs of a footrot‑like lesion;
•to have with him equipment for the purpose of taking samples;
•when taking samples from a sheep, to take two samples each from a separate hoof of the sheep. Each sample is put into a bottle of Stuart's transport medium gel, so that there are two bottles for each sheep from which samples are taken and each bottle is identified by reference to the relevant property by writing on the label; and
•to package and dispatch the samples by courier to the Albany Footrot Reference Centre the same day or, if that is not practicable, to refrigerate the sample overnight and dispatch it as soon as possible thereafter.
Mr Blight says he followed his usual practice on this occasion and, in the presence of Mr Taylor, observed lesions consistent with footrot of score 1 to 2 on the hoofs of both sheep. He then took samples from both sheep.
Mr Blight advised Mr Taylor that he suspected the sheep had footrot. He also advised Mr Taylor that he could not issue animal health papers for the movement of the sheep and that there should be no movement of any sheep from Tilba Tilba until he had obtained the results of the sample analysis.
Mr Blight says that he then told Mr Taylor he would like to discuss the situation with Mrs Powell, who he knew "owned" the Tilba Tilba property, but was informed by him that Mrs Powell was ill and in hospital; and so he was unable to meet her on that occasion.
Mr Blight says he then informed Mr Taylor that the results of the sample analysis were usually available within 10 to 14 days, and that if the sample analysis showed virulent footrot, Tilba Tilba would be placed under footrot quarantine and that a disease eradication programme would be necessary for all the sheep on the property.
Mr Blight also says that, during his conversation with Mr Taylor, Mr Taylor informed him that he (Mr Taylor) knew very little about footrot.
Mr Blight then left Tilba Tilba, returned to Katanning and dispatched the samples to the Albany Footrot Reference Centre.
Mr Taylor's recollection of the events and what was said on this occasion is not materially different from that of Mr Blight in most respects, but it does differ in some.
Mr Taylor recalls that Mr Blight inspected the two sheep and pointed out a small yellowish spot above the hoof of one of the rams about half the size of his little fingernail and showed him the damp lesion, hair loss, the smell and said words to the effect, "It is footrot". He says Mr Blight used clippers to clip or pare the hoof nail and explained that, "This is what you have to do".
Mr Taylor estimates that Mr Blight's inspection of the two Damara rams, which occurred at the shearing shed, took about half an hour. Neither before it nor after it did Mr Blight conduct any other inspection of the property.
Mr Taylor understood that the scrapings from the lesions taken by Mr Blight would be submitted to laboratory testing and the results, which would confirm whether or not the two sheep had footrot, would be available in about 10 days.
Mr Taylor does not appear to accept, however, that Mr Blight then advised him that a disease eradication programme would be required if the sheep had virulent footrot.
He also does not accept that Mr Blight asked to speak with Mrs Powell. In fact, Mr Taylor says Mr Blight said he did not wish to deal with her because he knew she was ill.
On 8 October 1999, following his receipt of laboratory tests showing that the samples from the two Damara rams had tested positive for virulent footrot, Mr Blight issued a quarantine order which declared Tilba Tilba and all sheep on Tilba Tilba to be in quarantine.
What happened after the quarantine notice was issued gives rise to the matters in issue in this action. In short, Mrs Powell and Mr Taylor say Mr Blight "ordered" them to footbathe the Damara mob using the five‑day footbathing treatment, and told them nothing more.
They say they were thereby left with the understanding that the five‑day foot bathing treatment would "cure" the sheep from footrot and, more particularly, permit the release of the Damara sheep from quarantine. They say they were not informed that the sheep might, in fact, have to remain in quarantine because of the footrot eradication policy applied by the Department of Agriculture. In particular, they say they were not told anything about the two options referred to in The Farmer's Guide: the summer eradication programme, and the destocking option.
Indeed, Mrs Powell and Mr Taylor suggest they only became aware of the policy and these options when Mrs Powell first obtained a copy of The Farmer's Guide - the 1997 version - from Mr Blight, which she says occurred on 29 October 1999.
The plaintiffs contend that, because Mr Blight determined how best to get the animals clean and sold quickly, he neglected to consider and put to Mrs Powell and Mr Taylor an obvious option, which was to isolate the valuable stud animals, including the mob of Damara ewes and the mob of Merino recipients and their progeny in the stud programme, and then to wait and see if the virulent footrot disease expressed itself when the spring expression period arrived.
The plaintiffs say Mr Blight did not do this because from past experience he was "almost certain" that whatever the footrot infection status was of the animals, score 1 and 2 lesions were the perfect category for success of the footbathing treatment.
The plaintiffs say the defendant, through Mr Blight, was negligent in failing to tell Mrs Powell and Mr Taylor that the five‑day foot bathing treatment was not an option and would not satisfy the criteria for release, and that they should have been given the option of waiting and seeing whether the sheep were infected.
During the balance of October and in early November 1999, Mrs Powell and Mr Taylor, and Mr Blight and other stock inspectors and other senior officers within the Department of Agriculture, took various steps and gave consideration to whether or not the Damara mob, particularly the Damara rams, could and should be released from the terms of the quarantine order.
Mr Blight, by letter dated 7 November 1999 to Dr Casey, the Department's Programme Manager, Animal Health - Operations, put forward a request on behalf of Mrs Powell that she be given "dispensation" to sell the Damara rams to pastoral clients in the north‑west of the State. Mr Blight supported her request with a recommendation that she should be given such dispensation "on the basis, that the sheep in question were given the treatments mentioned and that they inspected with no active lesions or scar tissue being observed".
That request, despite further supporting information put forward by Mrs Powell in writing to Dr Casey, was rejected by Dr Buckman, the Chief Inspector, on or about 11 November 1999, following consideration of the matter by the Footrot Eradication Campaign Advisory Committee (FECAC). The refusal was conveyed to Mrs Powell by letter from Dr Casey the next day. Before the request was declined, it was also considered and rejected by FECAC.
Subsequent requests for reconsideration of that decision made by Mrs Powell and other subsequent proposals for the lifting of the quarantine order in respect of the sheep in the Damara operation, or some of them, made respectively in late November 1999 and again in late December 1999 were also rejected by Dr Buckman.
It seems that, because of the precarious financial position that the plaintiffs found themselves in following the issuing of the quarantine order and the inability to sell the Damara sheep, Mrs Powell found it necessary to cause the sale of the Tilba Tilba property about March 2000. The sheep that then remained on it were moved, with the permission of a stock inspector, and subject to new quarantine orders, to a property in the Serpentine‑Jarrahdale district. Permits to move the sheep to the new property were issued on about 4 May 2000. New quarantine orders were issued on 9 May 2000.
On 18 October 2000, the animals then on the Serpentine‑Jarrahdale property were inspected and found to be free of footrot. They were then released from quarantine.

The plaintiffs pleaded case

The plaintiffs expressly plead that -
(a)the defendant was obliged to perform and did perform the statutory functions referred to in s 6 of the Agriculture Act 1988 (WA), including exercising various of the statutory powers as pleaded in pars 9 and 10 of the amended statement of claim which included -
(i)the carrying out of statutory functions throughs its servants and agents including persons authorised to act as an inspector of stock under the Stock Diseases (Regulations) Act 1968; and
(ii)by its inspectors' exercised powers under the Enzootic Diseases Regulations 1970.
(b)the plaintiffs were required to give effect to and carry out any request made or direction given by the defendant through its inspector;
(c)the plaintiffs were prohibited from removing stock or any animal produce from Tilba Tilba unless permitted by an inspector;
(d)the defendant knew or ought to have known that the Damara rams, Damara ewes and breeding stock were of great value to the plaintiffs;
(e)the defendant knew or should have known, as was obvious and was the fact, that the plaintiffs were vulnerable to financial harm if the statutory functions were not carried out with reasonable care, skill and diligence;
(f)financial harm to the plaintiffs was a reasonably foreseeable outcome to the defendant if the statutory functions were not carried out with reasonable care, skill and diligence;
(g)a relationship of proximity existed between the plaintiffs on the one hand and the defendant on the other in all of the pleaded circumstances;
(h)the class of persons at risk of financial harm if the statutory functions were not carried out with reasonable care, skill and diligence was confined and readily defined to those persons or entities who owned or carried out the business at Tilba Tilba, and would not give rise to any risk of indeterminate liability on the part of the defendant; and
(i)the plaintiffs were members of that class of persons at risk.
The plaintiffs further plead that the defendant breached the duty of care owed to the plaintiffs and was negligent in:
(a)failing to advise the plaintiffs in a timely manner that the property of Mr Crabb was in quarantine;
(b)failing to ascertain the movements or holding arrangements of the Damara rams, Damara ewes and breeding stock before ordering or recommending the footbathing of the Damara rams, Damara ewes and breeding stock;
(bb)failing to advise the plaintiffs or any of them of the reasonably available option for ascertaining whether the Damara rams, Damara ewes and breeding stock had virulent footrot by waiting for a period of about between four to eight weeks to enable virulent footrot, if it exists in the sheep, to express itself;
(c)failing to ascertain the existence of footrot within the various mobs of sheep on the Kojonup property by inspecting, if necessary, each and every Damara ram, Damara ewe and breeding stock prior to ordering footbathing of all sheep;
(cc)failing to ascertain the holding arrangements of the sheep such that the Damara ewes and breeding stock were run as separate mobs and thereby constituted separate management units and ought to have been released from the quarantine order;
(d)ordering the footbathing of the Damara rams, Damara ewes and breeding stock;
(e)failing to advise that the effect of the footbathing administered by Mr Taylor between 10 and 20 October 1999 was to -
(i)mask any symptoms of footrot for a period of six weeks;
(ii)render worthless any inspection conducted during the period of six weeks;
(iii)compromise an early lifting of the quarantine order;
(iv)prevent an assessment to be made as to whether the Damara ewes and breeding stock had contracted virulent footrot;
(f)failing to advise the plaintiffs of the defendant's requirement that -
(i)inspection of stock prior to carrying out footbathing be conducted by a qualified inspector; and
(ii)an inspector experienced at five‑day footbathing and research should be present at the footbathing;
(g)failing through its inspectors to adhere to the requirement that inspection of sheep prior to footbathing be conducted by a qualified inspector;
(h)ordering Tilba Tilba Stud and Mr Taylor to test for footrot within two weeks of footbathing when it knew or should have known that the results would not relied upon for the purpose of determining whether sheep could be released from quarantine;
(i)failing to advise inspectors that the defendant did not accept a footbathing programme as grounds for early release from quarantine;
(j)failing through its inspectors to develop any appropriate management plan for footrot on the Kojonup property at an early stage;
(k)failing to advise the plaintiffs of reasonably alternative methods of managing the outbreak of footrot, in particular methods likely to reduce the period of quarantine;
(l)failing to use a reasonably alternative method of managing the eradication of purported footrot in the Damara rams, Damara ewes and breeding stock;
(m)failing to give effect to the recommendations of its field officers for an early release from quarantine;
(mm)the decision made on or about 22 November 1999 by Dr Roy Casey not to release the Damara rams, Damara ewes and breeding stock from the quarantine order, having no power to do so and who in so deciding, did not permit or allow the exercise by Stock Inspector Blight of Mr Blight's statutory power to release the Damara rams, Damara ewes and breeding stock, or any of them from the quarantine order;
(n)failing to release the Damara rams, Damara ewes and breeding stock from the quarantine order after the inspections had shown all Damara rams, Damara ewes and breeding stock to be clear of footrot.
I should note in passing that the plea of negligence in par (a) concerning the quarantining of Mr Crabb's property was not supported by the evidence and was not pressed in closing by counsel for the plaintiffs. It is not further considered in these reasons.
Thus, the plaintiffs, in general terms, appear to contend that both the exercise of the power to issue the quarantine order (and the issuing of the order), as well as the "order" to undertake the footbathing treatment and the failure to exercise the power to release land and stock from quarantine, involved breaches of duty of care owed by the defendant (or its stock inspectors) to the plaintiffs.
While I think it may be said with some degree of justification, as the defendant does, that the plaintiffs have not defined - I would prefer to say, not carefully defined - in their pleadings the particular duty or duties of care contended for and, in effect, rely on their particulars of duty and of breach in order to more particularly frame the duties of care they contend for, I am satisfied that the essence of the plaintiffs' claim of negligence is sufficiently crystallised in its pleadings (aided by its written and oral contentions) to be dealt with. Indeed, as the defendant apprehended and accepted in its written closing submissions, the plaintiffs argue that there is both -
(a)a duty to exercise statutory powers with reasonable care so as to avoid pure economic loss to the plaintiffs; and
(b)a duty to take affirmative action to avoid reasonably foreseeable pure economic loss to the plaintiffs.
The plaintiffs sue the defendant on the basis that the defendant is liable for the acts or omissions of inspectors of stock under the Act and Regulations and other officers of the Department of Agriculture. The defendant is a body corporate set up by s 8 of the Agriculture Act 1988 (WA) which is capable of being sued in that corporate name: s 8. The defendant has power to do all things necessary or convenient to be done for or in connection with the performance of the functions of the Department, subject to the direction and control of the Minister: s 9. The functions of the Department are broad and include providing research, advisory, diagnostic, training, extension, regulatory and other services and assistance to agricultural industries and communities.
The defendant does not take issue with the proposition that, if the plaintiffs are able to establish that an inspector of stock or other relevant officer of the Department breached any duty of care owed to any of the plaintiffs, then the defendant may be held liable for such breach. The defendant, however, denies relevant duties of care contended for or their breach.

Events between 8 October and 8 November 1999: Mr Blight's, Mrs Powell's and Mr Taylor's recollections

The events between 28 September and 7 November 1999, and later, have been referred to briefly above.
Mr Blight recalls that, on 3 October and 5 October 1999, after he had taken the samples for laboratory testing on 28 September, he received telephone calls from Mrs Powell and Mr Taylor in regard to the sample results. Mrs Powell and Mr Taylor accept that one or other of them telephoned Mr Blight more than once to ascertain the laboratory results. Mr Blight's diary entries for each of 3 and 5 October confirm Mr Blight's evidence. On each occasion, he advised them that the results were not yet available. It appears, naturally enough, that Mrs Powell and Mr Taylor were very concerned about the situation. They were then developing plans with Mr Garnett for the marketing of the Damaras, something no doubt made imperative by the failure of the sale on 9 September.
On 8 October 1999, Mr Blight received a facsimile transmission from the Albany Footrot Reference Centre confirming that the samples contained virulent footrot.

Dr Allworth expressed the opinion that, given the ideal conditions for footrot expression which appear to have been present, certainly on the basis of the prevalence in the Merino sheep sold for slaughter as of about 20 October, the second option should have been considered. If on inspection no sheep were detected with lesions, it would have been possible to re‑inspect the sheep at regular intervals and detect disease if present soon enough still to implement a footbathing programme. By leaving the sheep challenged (environmentally) and unfootbathed, a good case for excluding (or releasing) these sheep from quarantine could have been made.
Dr Allworth pointed out that subsequent inspections of these sheep later in 1999 and in early 2000, failed to detect footrot in them at any time.
However, as Dr Allworth observed, because they were in fact footbathed at the suggestion of Mr Blight in mid‑October 1999, it was not possible to say definitely that they were always clean. The intensive footbathing programme may have eliminated early infection which was present, but not detected by the manager or by Mr Blight and Mr Jolly on 11 October. Alternatively, as Dr Allworth said, they may always have been free.
Dr Allworth therefore expressed the opinion that it was not reasonable to footbathe all the Damara ewes (and Merino recipient sheep) in the absence of further investigations to first establish their likely infection status. He said that while it may well be argued that these ewes could have had prior exposure to footrot and therefore represented a risk, this could have been adequately assessed by appropriate examination and sampling of the Damara ewes by the Departmental officers prior to footbathing. He said the ability to detect footrot in the ram lambs and the high reported prevalence in the Merinos on the same farm demonstrate that conditions would have been suitable for establishing the disease status of these sheep at that time.
Thus, for Dr Allworth the question was whether there might have been greater consideration given to the isolation of the Damara ewes and Merino recipient ewes with a view to establishing their disease status during the spring expression period with a view to determining whether they, as a separate mob, might have been the subject of release from quarantine or a permit to move to some other place.
The Department at all material times took a precautionary approach to the management of infected flocks. Normally, following detection of the disease on a property, infected flocks - not mobs - are not examined for release from quarantine until the flock has undergone a summer eradication programme followed by one winter and spring period, a period of time and season that softens the hoof and in which spread can more easily occur, and after which previously undetectable infection is more likely to be detectable. Dr Buckman's and Mr Mitchell's evidence explaining this approach has been referred to above.
So far as Mrs Powell's request, through Mr Blight in his letter dated 7 November 1999, to permit the movement of Damara rams to the pastoral regions of the State was concerned, Dr Buckman stated that based on his discussions with Mr Mitchell and other information about the proposed movement, including Mrs Powell's letter to Dr Casey, as well as his own experience with footrot and other disease eradication programmes, he formed the view that it was not safe to permit the movement unless there was convincing evidence that the movement would not involve the risk of spread of footrot and industry representatives had been consulted about the proposal.
In the event, he was not satisfied that that request could be supported.
Dr Buckman having refused that request then further considered Mrs Powell's request for reconsideration of the decision which request for reconsideration he saw on or about 17 November 1999.
Dr Buckman again consulted with Mr Mitchell and also spoke with Dr Depiazzi, the Department of Agriculture's senior research officer for footrot. He gave full consideration to the request to move the Damara rams to the pastoral region. However, the meeting with these other advisers confirmed his view that it would be unsafe to conclude that footrot had been eradicated from Tilba Tilba by means of five‑day footbathing carried out on the property.
On 29 November 1999, Dr Buckman further considered a request from Mrs Powell for permission to sell some of her Damara ewes to properties in other States for the purpose of embryo collection. Dr Buckman advised Mr Mitchell that he saw it as reasonable to permit such a movement, provided the authorities in other jurisdictions were fully informed of the facts of the matter and provided they indicated to the Department they would accept such a movement of sheep. This matter did not progress further.
On about 10 December 1999, Dr Buckman further noted a request from Mrs Powell that 159 Damara rams be release from quarantine, but he again determined that the proposal did not satisfy the requirements for release from quarantine and added nothing to the information considered in relation to the first request which was refused by letter dated 12 November 1999.
Dr Buckman then, on or about 22 December 1999, further received a request through Dr Danny Roberts, who had become the case manager on Tilba Tilba, made on behalf of Mrs Powell requesting the release of 271 Damara ewes and 68 Merino recipient ewes. This request was made on the basis that the November/December period was unseasonably wet and could be viewed as an alternate to a spring expression period. Because the ewes did not show any evidence of virulent footrot disease, Dr Roberts suggested they might be released. However, Dr Buckman, after taking of advice from Mr Mitchell, determined that the Department should not release the sheep until they had been through a full winter and spring spread and expression period.
None of these further requests for release either of the Damara rams or the Damara ewes and Merino recipient ewes or their progeny suggests that Dr Buckman did anything apart from exercise his judgment carefully in respect of the relevant issues involved.
Dr Buckman emphasised that the defendant's policy on footrot eradication is to cast a wide net over a property upon which a known outbreak of footrot has occurred. He stated, and I accept that it is the Department's approach, that this is fundamental to any State‑wide animal disease eradication programme and is fundamental to the footrot eradication campaign that is pursued by the Department and which informs the actions of the Department and its stock inspectors.
It follows that it is not the defendant's ordinary policy to release properties from quarantine on a paddock‑by‑paddock basis or on an individual mob of sheep basis.
However, Dr Buckman recognised that to assist owners whose properties have been quarantined because of an animal disease, the Department, as a matter of normal animal disease eradication programme policy, gives consideration to contracting the area of a property to remain in quarantine and undergo eradication measures on an "if, and as appropriate" basis.
Nonetheless, Dr Buckman did not accept that it was appropriate in the Tilba Tilba case to have approached the quarantining or, more importantly, the release from quarantine of the sheep on Tilba Tilba on a mob‑by‑mob basis, as suggested by Dr Allworth - at least in relation to the Damara ewes and Merino recipients. Dr Buckman emphasised that the entire flock remained in quarantine in accordance with normal procedures.
Dr Buckman explained in his oral evidence (at transcript 1390) that:
"The footrot program, if we're referring to footrot in this instance, in Western Australia is at a very advanced stage. That means at that stage of a program the level of risk that one might accept in dealing with a property or accepting in terms of risk of reinfection of other properties is very much lower than it is in the early stages of an eradication programme or during a control program. So it would be normal in the late stages of a programme to operate on a whole‑of‑property basis in terms of quarantine and release from quarantine. There will be exceptions in some cases, depending on the circumstances, but as a normal policy one would operate on a whole‑of‑property basis."
Dr Buckman added (at transcript 1390) that:
"The application that came forward in relation to the rams, my view was that the proposal that I had seen in relation to those created a risk in two areas: one a biological risk in terms of the possible spread of disease and the other risk is in association with the operation and management of a disease eradication program. Proposals or policies in relation to release from quarantine need to be made being mindful of the state of the programme and in each case that any policy position arrived at must be available to all other properties in a similar circumstance. The effect of that is in some cases that a position may be arrived at that may appear reasonable on one property taken in isolation but if transferred to the whole of the program across the State becomes unmanageable. With reference to the proposal as it was, it was a proposal for animals to move to pastoral areas and whilst the biological risk of disease could be expected to be less in that area the normal management of animals, the control over animals, is normally less than in the more closely settled areas. So the risk in relation to animals and the movement of animals themselves increases significantly in pastoral areas compared to closely‑management agricultural areas.
… [In relation to the proposal concerning the ewes] As I recall my concerns were in the same area, one of a biological risk but significantly, as I viewed it, the risk that it posed to the proper continuation and management of the footrot eradication program. The stage that program is at is one where there are relatively very few properties in quarantine. It means in some ways that the spotlight comes upon the various properties that are in quarantine and where, you might say, exemptions or changes are made or things are varied for an individual property within the industry in which this program operates, it's generally not very long before the news of that travels widely and then there are difficulties for any program to manage the fallout from that variation."
Dr Buckman recognised that there may be, generally speaking, different options available for the management of footrot when it breaks out. When asked about the apparently different approaches suggested by Dr Allworth and the approach he took, Dr Buckman stated (at transcript 1397):
"I would say that on any property it depends on the circumstances that exist at the time. We could consider, you might say, all sorts of different options that might happen in relation to a population or groups of population and disease and the spread of disease and I guess in dealing with the issue and having discussed it without Dr Allworth in a telephone meeting that was arranged, the circumstances that exist at the time that infection is found on a property are critical to the way in which one might move forward on the basis of having found that infection. If one took a property in isolation where there was no footrot eradication campaign at the stage that it is in Western Australia, then one might take a different approach than might be reasonable given the stage of the footrot eradication program in Western Australia and the nature of that program. We have I guess had many discussions with Dr Allworth over many years about the treatment of properties and the approach to properties and footrot in Western Australia and they are thoroughly engaging discussions. However, at the end of the day, Western Australia is the only jurisdiction in Australia in which there is a footrot eradication campaign, a campaign that has gone for many years and has reached a level where there are very few infected properties."
Dr Buckman emphasised that whilst the policy expressed in The Farmer's Guide and the Department's Operational Manual might not exclude the "wait and see" approach suggested by Dr Allworth as one option, the fact that an option is not excluded is quite different from the question of what is appropriate or a reasonable course of action to take in dealing with the disease.
In all of the circumstances, I do not believe it can be said with any scientific or other justification that the policy reflected in the Department of Agriculture's footrot eradication campaign is wrong or constitutes some error of judgment. The evidence shows that in Western Australia a concerted attempt has been made by government with the support of the pastoral industry, not merely to manage and control footrot when it breaks out on a particular property, but to eradicate it so that it does not present a risk to the pastoral industry throughout the wider State.
It is part of the Department's Footrot Eradication Campaign to apply the eradication policy on a farming property basis. While there is some room for variation of the policy in particular circumstances as they arise, the primary approach taken by the Department is that a quarantine order should apply to the whole of the farming property on which sheep are found and to all of the sheep found on that property. The quarantine order then will not be lifted unless either there is a total destocking of animals on that property or the summer eradication programme is undertaken.
The actions of Dr Buckman and other officers of the Department concerning Mrs Powell's request to release first the Damara rams and later the Damara ewes and Merino recipients were guided by nothing other than a careful consideration of the risks posed from agreeing to such requests to the spread of virulent footrot disease in Western Australia, something which under the statutory powers and policy that informs the exercise of those powers they are concerned to eradicate.
It was important to Dr Buckman at all material times to maintain the integrity of the footrot eradication policy. This meant, unless a very good reason could be established, that one of the two options set out in The Farmer's Guide - the summer eradication programme or total destocking of the property - had to be adopted. No doubt, from Dr Buckman's point of view the fact that the Damara sheep had, by 11 November, been treated with five‑day foot bathing treatment complicated the issue because of its masking effect, but the question remained whether, in all of the circumstances that then prevailed, including the fact that virulent footrot had broken out in the commercial Merino stock should, in the exercise of his judgment, permit the partial lifting of the quarantine order.
In my view, the plaintiffs have not demonstrated that the decision made by Dr Buckman on 11 November 1999 constituted a faulty exercise of judgment or an excess of his powers under the Act and Regulations. As a result, I do not consider that the refusal of the Department notified on 12 November 1999 to release the Damara rams from quarantine constituted a negligent failure to exercise a regulatory power.
Moreover, for the same reasons, I do not consider that the failure of Dr Buckman or Dr Casey to reconsider the refusal of 12 November 1999 or the later refusal in January 2000 to release the Damara sheep from quarantine constituted a negligent failure to exercise a regulatory power.
The only question left to be determined, in effect, is whether Mr Blight's encouragement of Mrs Powell and Mr Taylor to undertake the five‑day foot bathing treatment of the Damara stud sheep was, of itself, an act of negligence. If it was, it must be shown, of course, that Mr Blight owed the plaintiffs a duty of care to give any such advice with due care and skill, that the plaintiffs relied on his advice and that the advice was wrong.
The manner in which the plaintiffs appear to put their case in relation to this question is that Mr Blight as a stock inspector had the power to direct or require Mrs Powell and Mr Taylor to do certain things and that Mr Blight exercised this power by "ordering" them to undertake the five‑day foot bathing treatment.
Assuming, for the purposes of this argument, that such a direction might be given by an inspector - for example, pursuant to the power in reg 11A(1)(b) that provides that the owner of any stock subject to a quarantine order may be directed by an inspector "to treat the animals in a manner specified in the direction" - the question is whether any such direction was in fact given by Mr Blight. If it was given, it certainly was not given in writing.
While there may be room for the view that any direction given under reg 11A must be in writing, there is nothing in the regulation that expressly says so.
However, for the reasons I have already given in dealing with the events between about 8 October 1999 and 7 November 1999, I do not consider that Mr Blight at any time purported to give a direction of the type contemplated by reg 11A(1)(b) to Mrs Powell or Mr Taylor. I am quite satisfied, as I have already found, that Mr Blight made it plain to Mrs Powell and Mr Taylor during this period that, in the case of an outbreak of footrot disease on a farm such as theirs, a quarantine order must be issued and that thereafter the land and stock would only be released from quarantine if one of the two options laid out in The Farmer's Guide were put into effect; namely, the total destocking of the property or the undertaking of the summer eradication programme. It was in that context that Mr Blight first actively promoted the five‑day foot bathing treatment of the Damara rams as a means of "curing" the sheep, in the sense that if the sheep could be shown, following the five‑day foot bathing treatment, to be free from footrot, the Department of Agriculture might agree to provide a "dispensation" from the strict application of the two‑option policy in the special case of Tilba Tilba . Later Mr Blight also recommended the Damara ewes and recipient Merinos be footbathed.
The question may perhaps be put whether Mr Blight was negligent in giving the footbathing advice to Mrs Powell and Mr Taylor in these circumstances, given that the footbathing in mid‑October made unreliable the results of the inspection of the Damara sheep in the six weeks following treatment.
It may perhaps be argued that, in all the circumstances as they had developed following the imposition of the quarantine order, Mr Blight, as the stock inspector, was in a position to exercise regulatory power in relation to Mrs Powell and Mr Taylor and conveyed to them that he had special knowledge about footrot management. In turn, they were in a position of considerable vulnerability at that time, not being familiar with the disease of footrot or its treatment. In such circumstances, Mr Blight may well be said to have owed them a duty of care when giving them advice as to how they might best proceed to obtain the early release of their Damara mob from quarantine.
Put that way, I consider Mr Blight did owe Mrs Powell and Mr Taylor, and the entities with whom they were closely associated - that is, all the plaintiffs - a duty of care at that time to give Mrs Powell and Mr Taylor accurate advice about how to respond to the position they found themselves in, with the quarantine order in place and a need to secure the release of the Damara sheep - especially the rams - as soon as possible in their own financial interests. However, it was not because the plaintiffs were given an "order" or a "direction" under the Regulations by Mr Blight that this was so. It was because, for the reasons just given, a special relationship existed between the parties in which Mr Blight knew that Mrs Powell and Mr Taylor were dependent upon his advice and were likely to act upon it, that such a duty arose.

The circumstances in which the relevant duty of care arose is similar to that pleaded in par 39(g) of the amended statement of claim, where the plaintiffs plead: "A relationship of proximity existed between the plaintiffs on the one hand and the defendant on the other, arising from the circumstances pleaded in par 39(e) above", that is to say, that the stock inspector knew that the plaintiffs were vulnerable to financial harm if the statutory functions were not carried out with reasonable care, skill and diligence. The main difference between that plea and the reasons why I consider such a duty existed is that I do not consider Mr Blight was exercising a statutory function or power when he advised them to footbathe the sheep; he was simply giving advice from a position of knowledge when he knew or ought to have known that Mrs Powell and Mr Taylor were relying on his advice.
The question is whether a duty of care in the terms I have formulated was breached. I do not think that it was.
This allegation of negligence essentially relies, first, on the proposition that Mr Blight should immediately have advised the plaintiffs, on issuing the quarantine notice, to isolate the Damara stud and commercial mobs and then wait and see whether any further outbreak of footrot disease occurred amongst them before deciding whether footbathing was appropriate. As explained above, this was not a realistic option at all so far as the infected Damara rams were concerned, and it was speculative so far as the ewes were concerned.
Moreover, so far as Mr Blight was concerned, there was no other approach reasonably available to Mrs Powell and Mr Taylor based on his understanding of the Department's policy and his experience. Unless the sheep could be shown to be free from footrot disease, there was no likelihood that the Department's two‑option policy would not be strictly imposed.
In any event, the wait and see - or do nothing - option would have been, on any assessment, a poor option for Mr Blight to have offered the plaintiffs in relation to the high‑value Damara rams at the outset of the quarantine period. Dr Allworth acknowledged that in relation to the Damara rams and, to a lesser extent, in respect of the ewes and Merino recipients.
Although no lesions were seen on the Damara ewes or the Merino recipients when Mr Blight and Mr Jolly inspected them on 11 October, seven of the Merino recipients were later observed to have foot abscesses. While foot abscesses do not necessarily indicate the presence of virulent footrot, abscesses are a condition of the hoof that may harbour the virulent D.nodosus bacteria. As the Damara ewes and Merino recipients were footbathed, the fact that footrot was never identified in the Damara ewes and the Merino recipients in subsequent inspections does not establish that virulent footrot was never present in those mobs of sheep. Indeed, by reason of the occasions of contact, including crossing the same ground, between the Damara ewes and the commercial Merino ewes, the latter of which on about 20 October were found to have virulent footrot, it is reasonable to conclude that there was a real risk that the Damara ewes and Merino recipients were infected when the quarantine notice was issued on 8 October. In these circumstances, the "wait and see" option would have offered no benefit, only downside.
Further, the wait and see option in relation to the Damara ewes and Merino recipients is premised on the assertion that they were maintained as an isolated mob.
I accept the defendant's submissions that, despite the plaintiffs' assurances that the Damara West breeding programme sheep and the commercial operation sheep were kept separate, there is considerable evidence of contact between them involving a risk of cross‑infection. These risks include ‑
(1)The failed sale of 9 September 1999 involving the presentation for sale of sheep from both the Damara West Breeding programme and the commercial operations. Although Mr Taylor gave detailed evidence of how he moved the sheep over the ground, these sheep were in close proximity and crossed the same ground, not separated by double fencing or held in separate management units. Mr Mathew Young saw Damara ewes and rams together in the shed on the day of the sale.
(2)Inspectors Blight and Jolly returned to Tilba Tilba in October 2002 and took a series of photographs and a video of the state of the fences. Mr Blight said that he recalled the fences being in poor condition and the photographs and video, at least in some instances, show locations where a sheep could, indeed, breach the fence or navigate a gap in a gate. I accept it is unlikely that the deterioration depicted in the photographs had only occurred in the two years following the sale of Tilba Tilba in April 2000.
(3)During the course of Embryo Transfer programme 7, one of the recipients impregnated with an embryo was not presented for scanning, presumably because it could not be located. The sheep was later located and scanned when the recipients from programme 8 were scanned. In addition, in programme 8, five Damara ewes presented for the programme were unable to be flushed because they were already pregnant. These ewes were still pregnant when scanned approximately 45 days after the implanting of recipients for programme 8. Given the timeframe, I accept that these ewes could only have become pregnant while on the Kojonup property between programmes 7 and 8. This suggests a lack of mob integrity.
(4)After the failed sale on 9 September 1999, Neil Garnett visited the Tilba Tilba property and graded the Damara sheep on 27 September 1999. The inspection was done on a mob‑by‑mob basis in one of the sheds, with all Damara sheep crossing the same ground. This inspection occurred after the working Damara rams and the other purebred Damara rams were paddocked together on 10 September 1999.
(5)The plaintiffs offered no explanation as to how footrot spread to the fine‑wool Merinos, which it plainly did, so that during October the outbreak of footrot in that flock was well established. The fine‑wool Merinos were supposedly kept separate from the Damara sheep because of the risk of their wool becoming contaminated with Damara wool. The disease may have reached the fine‑wool Merino sheep through crossing contaminated laneways or yards, or by unintended sheep‑to‑sheep contact. It is noted that the fine‑wool Merino ewes were paddocked near the boundary of Tilba Tilba adjacent to a neighbouring property which was subsequently found to have footrot. In addition, it emerged during the course of the trial that the plaintiffs used fine‑wool Merino wethers as "teasers" prior to them being paddock‑mated with working Damara rams. Disposal of some wethers is noted in the tracing documents provided by the plaintiffs. The teasers were put with the commercial Merinos before the working Damara rams were put with the commercial Merino ewes. This would suggest that the Merino ewes were the source of the footrot, rather than the working Damara rams. In that regard, it may be noted that the plaintiffs initially paddock‑mated the Damara rams with the fine‑wool Merinos.
(6)When the plaintiffs left Tilba Tilba in May 2000 and moved to the Serpentine‑Jarrahdale property, they took with them two Damara ewes with two Damara lambs, clearly their progeny. No explanation advanced as to how these lambs were conceived. It may be noted that after Mr Garnett inspected all of the plaintiffs' Damara sheep on 28 September 1999, he wrote to Mrs Powell suggesting that the breeding Damara ewes be mated with Damara rams. This advice was consistent with the views of Mrs Heggaton in relation to the use of ewes for embryo transfer - maiden ewes could be flushed twice before they should be allowed to lamb. Thereafter, the ewes could re‑enter the embryo transfer programme. Mrs Powell conceded that Damara ewes and rams may have been mated at Tilba Tilba. This may be how the two purebred lambs were conceived. This is supported by Mrs Powell's letter to Dr Casey dated November 1999, where she stated: "At no time have the Damara ewes or recipient ewes (other than 19 breeders in L4) come into contact with any Damara rams or any other sheep at all". Thus, it is reasonable to suggest that, after the issue of the quarantine order, at least some of the purebred Damara ewes had contact with the purebred Damara rams. These rams were from the mob in which virulent footrot was first discovered. The plaintiffs made no assertion of separation within the mob of Damara ewes.
(7)Mrs Powell said that her diary entry for 26 January 1999 read: "Damara rams out from ewes and in with PB Damara ewes". She did not accept that this entry meant that Damara rams had been paddocked with Damara ewes and then with commercial Merino ewes, and then purebred Damara ewes, but that interpretation is open.
It follows that the plaintiffs have not established that the Damara ewes and Merino recipients were maintained in a separate management unit from other mobs of sheep known to be infected, either before or after the imposition of the quarantine order and would have faced insurmountable obstacles in convincing the Chief Inspector that partial release of those sheep was appropriate.
At the very least, Mr Blight was entitled to take the view, that I accept he did take, prior to the imposition of the order, that mob integrity between the Damara mob and the commercial mob had not been maintained. At the time he made his report dated 7 November 1999, Mr Blight was satisfied that, since the issuing of the order, "mob integrity through yards has been absolute", but that was not his view of the position prior to that time.
I should also note that the fact that two Damara rams tested positive to virulent footrot following inspection on 28 September 1999, and a number of sheep in the commercial Merino operation tested positive less than a month later, on about 20 October, does not make the plaintiffs' case any easier to argue. No doubt, mob integrity of the Damaras following the five‑day foot bathing treatment recommended by Mr Blight provided considerable assurance that during that period at least, mob integrity had been maintained. But, as noted above, that is not to say that the damage had not already been done by an earlier breakdown in mob integrity. Mr Blight said as much when tested on this point in cross‑examination.
In cross‑examination (at transcript 955), Mr Blight rejected the proposition that he "ordered" Mr Taylor to undertake the five‑day foot bathing treatment. Mr Blight suggested that the terminology he might have used was: "If you do this footbathing, we'll possibly get rid of the bug. Let's do it." Mr Blight then added:
"If we hadn't have done it, I don't know what sort of a mess we would have been in."
Mr Blight's view, in the light of his knowledge of the terms of the Department's two‑option policy and the fact that only persons superior to Mr Blight could allow any variation from it, was that the only possible way through or around the policy was to demonstrate that mobs of sheep were free from footrot. Only the five‑day footbathing treatment offered a means of establishing this. Thus, it was imperative to undertake the treatment. At material times, Mr Blight could see no way forward other than footbathing, apart from culling the sheep.
When asked in cross‑examination (at transcript 956) whether the policy options were the only options and whether he proposed Mr Taylor should act on his footbathing suggestion, Mr Blight answered:
"That was my suggestion. That was the only other way of salvage that I was confident in doing the job."
In all these circumstances, the recommendation made by Mr Blight that five‑day footbathing treatment be undertaken in respect of the Damara stud sheep seems to have been an obvious and sensible one for a person in his position to have made to persons in the positions in which Mrs Powell and Mr Taylor then found themselves. Within the Department itself, the question of the efficacy of five‑day footbathing treatment appeared at material times to have been open to argument and persuasion. Dr Casey's correspondence of 29 October and 4 November certainly suggest he had not ruled out the variation of policy option on the basis of footbathing having produced acceptable results. While The Farmer's Guide noted that such a treatment might prove beneficial - although not an eradication option - it is worthy of note that when "dispensation" was sought by Mrs Powell, through Mr Blight, on 7 November 1999, Mr Mitchell also sought out the express views of Dr Depiazzi on the question. Plainly, serious consideration was given to the question whether the five‑day footbathing treatment, in all the circumstances of this case, and in light of the strong recommendation made by Mr Blight and his experience in the field, should be treated on this occasion as a sufficient eradication measure or at least a sufficient ground to permit the policy to be varied on this special occasion. However, it seems the carefully considered views of Dr Buckman, the Chief Inspector, to the contrary endorsed as they were by FECAC, won the day.
That this is so only goes to confirm the reasonableness of the suggestion made by Mr Blight that the five‑day foot bathing treatment be undertaken in respect of both the Damara rams and the Damara ewes and recipient Merinos. His advice cannot be said to have been foolish or wrong. It just did not achieve the result he and the plaintiffs hoped it would achieve. In Mr Blight's assessment, which I consider to have been reasonable at the time, it was the only realistic option available. To do nothing - the so‑called "wait and see" option - was fraught with extreme danger so far as the Damara rams were concerned and attended with real risk so far as the other Damara sheep were concerned, as it might have resulted in a more severe outbreak of virulent footrot disease. Given Mr Blight's experience with five‑day foot bathing and its demonstrated advantages in small mobs of sheep - and the subsequent debate within the Department as to its efficacy as an eradication measure - Mr Blight's advice to Mrs Powell and Mr Taylor that they should undertake the five‑day footbathing treatment, with a view to convincing his superiors that a dispensation from the usual policies of the Department should be granted, was good practical and commercial advice. That his recommended approach, adopted by Mrs Powell and Mr Taylor, did not have the desired effect, does not mean that his recommendation was wrong or given in breach of the duty of care that he owed Mrs Powell and Mr Taylor.

Conclusion

While Mr Blight and other stock inspectors and officials within the Department of Agriculture at material times owed the plaintiffs a duty of care when exercising the power to issue a quarantine order and also when considering whether or not they should exercise the power to release land and sheep from a quarantine order to exercise the power in each case with due care, skill and diligence, I do not consider that, at any material time, any stock inspector or other officers within the Department of Agriculture for whom the defendant was responsible, acted or failed to act in a way that breached those duties of care.
In these circumstances, there is no need to consider the further questions identified above, concerning whether the Act or Regulations immunise the defendant from any liability that the defendant would otherwise have at law to any of the plaintiffs, or as to the assessment of quantum of loss and damage in the event that liability were established.
The action by the plaintiffs against the defendant should be dismissed.