Brett Cattle Company Pty Ltd v Minister for Agriculture

1. Introduction 1 Otto von Bismarck is often credited with coining the aphorism "Laws are like sausages; it is better not to see them being made". This representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) arises from the public outcry following the broadcast by the Australian Broadcasting Corporation on 30 May 2011, on its Four Corners program, of graphic video footage of inhumane slaughter of Australian cattle exported to Indonesia and the decision in response on 7 June 2011 of the then Minister for Agriculture, Fisheries and Forestry, Senator the Hon Joe Ludwig, to make the Export Control (Export of Live-stock to the Republic of Indonesia) Order 2011 (the Second Control Order) that prohibited the export of livestock to Indonesia for six months. 2 Brett Cattle Company Pty Ltd, the applicant, operated Waterloo Station, a property of nearly 189,500 hectares located about 540 kilometres south-west of Katherine in the Northern Territory. Brett Cattle had about 17,300 head of cattle at the beginning of 2011. It was one of many live cattle exporters affected by the Second Control Order. It claims to have lost the opportunity to sell about 2,776 head, principally into that market in 2011 because of the impact of the Second Control Order and to have suffered losses of $2,480,939. 3 Brett Cattle contends that the Second Control Order was invalid and that, in making it, the Minister acted in misfeasance of his public office because, first, he was recklessly indifferent as to whether the order was beyond power under the Export Control Act 1982 (Cth), and secondly, he knew that the order was likely to harm Brett Cattle or the class of live cattle exporters, of which it formed part, or he was recklessly indifferent as to whether the order was likely to cause such harm. Brett Cattle contends that if the Minister had not made the Second Control Order, one of two scenarios would have eventuated, first, he would have made no further order affecting the export of live cattle to Indonesia or, secondly, he would have put in place, around 7 June 2011, a system that created an exception to a general prohibition that would have allowed such exports to occur provided that an exporter could satisfy conditions that ensured that the cattle would not be subjected to any unacceptable or inhumane conditions or treatment. 4 The Minister and the Commonwealth, the respondents (collectively the Commonwealth), deny both that the Second Control Order was invalid and that the Minister committed misfeasance of his office. They also deny that Brett Cattle suffered any loss, or loss of the magnitude it claimed, on the basis that, even had the Minister made a different order that permitted exports to occur before he repealed the Second Control Order on 6 July 2011, Brett Cattle and other class members would not have been able to obtain any approval for exports of cattle in the intervening period or sooner than actually occurred. That is because the Commonwealth contends that no exporter would have been able to establish that there was, or would be, a secure supply chain to ensure that any Australian cattle exported to Indonesia would not be treated inhumanely. The Commonwealth pointed to the fact that it was only on 10 August 2011 that the first live shipment of cattle left Australia for Indonesia under the new Export Supply Chain Assurance System (ESCAS), that the Minister had approved on 6 July 2011, as indicative of the time that it would have taken, in any event, before any live exports could have occurred had the Second Control Order allowed the Minister to permit a shipment that satisfied appropriate conditions. 5 I will consider the issue of liability by first describing the legislative context, Brett Cattle's operations, the factual situation in the industry, including what was known to the Minister's Department, and the Minister's state of mind prior to the making of the Second Control Order, and the circumstances in which the Second Control Order came to be made, namely whether it was valid and, if not, the Minister committed misfeasance in his office. I will make findings on the legal issues in respect of liability. Next, I will consider the factual context for the damages issues, namely the steps taken by the industry and the Department to establish the conditions under which exports could resume and the particular claims for damages that Brett Cattle makes. I will then make findings on the remaining legal issues and address the common questions. 6 The trial occurred in two phases. The first, in July 2017, dealt principally with issues of liability, while the second, which was delayed because Brett Cattle amended its statement of claim in October 2017 and there was a need for further substantial discovery, occurred in December 2018. The Commonwealth called no witnesses in the first phase, but called two in the second phase.

2.1 The legislative context 7 The Export Control Act provided for the control of the export of certain goods, including animals. In the period between 19 April 2011 and 7 July 2011, the Act relevantly provided in s 3 that, unless the contrary intention appeared: goods means: (a) an animal or a plant, or part of an animal or a plant;… order means an order made by the Minister or Secretary under the regulations. prescribed goods means goods, or goods included in a class of goods, that are declared by the regulations to be prescribed goods for the purposes of this Act. regulations includes orders. 8 Next, s 7 provided: 7 Prohibition on export of prescribed goods (1) The regulations may prohibit the export of prescribed goods from Australia. (2) Regulations made for the purposes of subsection (1) may: (a) prohibit the export of prescribed goods absolutely; (b) prohibit the export of prescribed goods to a specified place; (c) prohibit the export of prescribed goods unless specified conditions or restrictions are complied with; or (d) prohibit the export of prescribed goods to a specified place unless specified conditions or restrictions are complied with. (3) Without limiting the generality of subsection (2), regulations made for the purposes of subsection (1): (a) may provide that the export of prescribed goods, or the export of prescribed goods to a specified place, is prohibited unless a licence, permission, consent or approval to export the goods or a class of goods in which the goods are included has been granted as prescribed by the regulations; and… (emphasis added) 9 Under s 25(1), the Governor-General could make regulations not inconsistent with the Act prescribing matters necessary or convenient to be prescribed for carrying out or giving effect to the Act. The power included, as s 25(2)(g) and (h) provided, regulations that empowered, respectively: the Minister to make orders, not inconsistent with the regulations, with respect to any matter for or in relation to which regulations could provide (s 25(2)(g)); and the Secretary to make orders not inconsistent with the regulations or any order that the Minister made under the power conferred in s 25(2)(g), with respect to any animals that were prescribed goods for or in relation to which the regulations could provide (s 25(2)(h)). 10 The Export Control (Orders) Regulations 1982 provided in reg 3: The Minister may, by instrument in writing, make orders, not inconsistent with regulations made under the Act, with respect to any matter for or in relation to which provision may be made by regulations made under the Act. 11 The Australian Meat and Live-Stock Industry Act 1997 (Cth) (the AMLI Act) provided for, among other matters, the issue of licences for export of meat and livestock from Australia and the regulation of meat and livestock export businesses. The AMLI Act defined "meat" to mean and include the flesh of animals and the by-products of animal slaughter (s 3). The Secretary of the Department had power under the AMLI Act: to grant licences to export meat or to export livestock from Australia (s 10); and to make orders, by a legislative instrument, not inconsistent with the regulations made under the AMLI Act, including orders prohibiting absolutely, or subject to compliance with conditions, the export or sale for export of meat or livestock by reference to the countries or places to which the meat or livestock might be exported or any other matter that the Secretary thought appropriate (s 17(1)(a); (3)(a)(iii) and (v)).

2.2 How Brett Cattle operated 12 Brett Cattle purchased Waterloo Station in October 2004. The late Dougal Brett was the manager of the station until his death in a helicopter accident in 2015. His wife, Emily Brett, assisted him in operational decision making for the company. Mrs Brett explained in her evidence that during the period leading up to June 2011 Brett Cattle had about 10,000 breeding cows which were predominantly grey Brahmans, because the Indonesian market preferred that breed. As at June 2011 Brett Cattle had recently started to conduct a cattle cartage business using two road trains for carrying cattle as well as fodder. This generated a small proportion of its income. 13 The wet season in 2010-2011 was long and the rainfall was so significant that by early May 2011 the roads were still not passable for cattle trucks. The dry season usually ran from April to October and sales of cattle usually occurred during the dry season. 14 Brett Cattle managed its herd on a year to year basis by mustering breeder cows and their calves to separate, after weaning, all the steers (castrated males) for sale and all but the best heifers (females that have not produced a calf) which would be retained for breeding. Mrs Brett estimated that about 800 to 1,000 heifers would be retained each year in this process. She said that in 2011, the sole market for Brett Cattle's steers and heifers was the one for Indonesian live exports. Those cattle were well suited to being placed on Indonesian feedlots for fattening in a similar climate before slaughter. That was because it was impractical to cart cattle to the Eastern States. For example Southern Queensland was about 3,300 kilometres from Waterloo Station. If cattle were sent on such a journey it would be necessary to spell them on the way, which would be difficult, especially for large numbers. 15 Mrs Brett explained that the land in the Northern Territory was considered to be good for breeding the species of cattle that are grown there but not suitable for fattening them. That was why it was necessary for Brett Cattle, and other cattle breeders, to sell most of each year's progeny, apart from the need to retain some heifers and bulls to replace those that had come to the end of their useful life. Mrs Brett said that there was not enough feed to keep the cattle bred for sale on stations after they were between 18-24 months old. Waterloo Station had carrying capacity of about 20,000, but did not have enough feed or water to support larger numbers. There was a constant breeding cycle and no particular calving (or breeding) time. Brett Cattle left bulls in the paddocks with the cows and heifers and would muster twice in April to May and August to September to cull the herd. 16 Around October each year Mr Brett would take stock of the number of heifer weaners and steers there were on Waterloo Station so as to be in a position to understand how many of each would be available to be sold in the following year's dry season. He then made enquiries of either livestock agents or live cattle exporters to ascertain the likely demand and prices for the forthcoming dry season so that he and Mrs Brett could prepare a budget for Brett Cattle. The station experienced rates of stock loss between 1.5% and 3% depending on whether Brett Cattle could provide supplement feeding. Each new year, around the time when cattle could be put on road trains to move out of the station, Mr Brett began negotiating sales in earnest and then concluded contracts by email. The contracts would provide Brett Cattle with information as to the number of head of each sex, their required maximum weight, and price. Generally the contracts were for exports to Indonesia and involved Brett Cattle dealing with one of North Australian Cattle Company Pty Ltd (NACC) that was a subsidiary of Elders Ltd, Australian Rural Exports Pty Ltd (Austrex), Wellard Rural Exports Pty Ltd (Wellard) and South East Asian Livestock Services (SEALS). 17 Brett Cattle treated its cattle with hormone growth promoters, which was not a widespread practice in southern Australia and made its cattle less attractive for the domestic market. Indonesia introduced a maximum weight of 350kg for imported cattle in 2010. The Australian feedlots preferred that cattle weighed between 380kg and 400kg when delivered. Mrs Brett explained that there was not enough space on Waterloo Station to grow cattle out to that weight range and so Brett Cattle had to pay for their agistment whilst they fattened on better pastures in areas such as Blackall in Central Queensland. On good growing pasture the cattle could grow close to one kilo per day, but would not grow as much if kept in a feedlot. 18 Prior to despatching cattle for export to Indonesia, Brett Cattle had to muster them using helicopters, stockmen on motorbikes and horseback, depending on the terrain and distance from the holding yards. It owned one helicopter but would charter two or three more to do the mustering. The cattle were chosen on the basis of their weight. They had to be dipped to get rid of buffalo fly and ticks in readying them for export and were held in the yards for four or five days before the road trains took them to the port of loading. During the time the cattle were in the yards, three to five Brett Cattle staff, on a daily basis, gave them feed, cleaned the water troughs and checked their condition as part of standard animal husbandry practice.

2.3 Australia's live animal export industry 19 The live animal export industry had had a history of controversies that emerged from time to time about inhumane or inappropriate treatment of animals after they left Australia, either in relation to conditions on ships transporting them to their ultimate destinations, or as to their treatment after arrival there. There had been various government reviews and specific regulations or orders under the Export Control Act to address problems as they arose. 20 Most recently, prior to the publication of the Four Corners program on 30 May 2011, the Secretary had made an order under the AMLI Act in relation to the export of livestock, particularly cattle, to Egypt (the 2008 AMLI Order). The Explanatory Statement for that order (issued pursuant to s 26 of the Legislative Instruments Act 2003 (Cth), now called the Legislation Act 2003 (Cth)) and the regulation impact statement explained that the Australian and Egyptian Governments had entered into a memorandum of understanding in September and October 2006 on the handling and slaughter of Australian live cattle exported to Egypt. That had occurred following the suspension by a predecessor of the Minister of all trade in live cattle into Egypt. The suspension was the consequence of a broadcast on 26 February 2006 in the 60 Minutes current affairs program of video footage that raised serious animal welfare and handling concerns relating to the then treatment of Australian live animal exports to Egypt. 21 The memorandum led to the establishment of a new facility at an Egyptian port that Australian officials and industry representatives assessed in November 2007 as meeting the Australian Government's requirements and the then version of the current guidelines for animal welfare promulgated by the World Organisation for Animal Health (known by the acronym OIE). The facility consisted of a feedlot and slaughterhouse that ensured that the live Australian cattle that had been tagged before export would be able to be traced individually from before the time they left this country to the point of slaughter in a "closed system" (or what is also called a "closed loop"). In 2010, the OIE replaced that version with the 2010 Terrestrial Animal Health Code that was in force in 2011 to which I will refer in these reasons as "the OIE Code". 22 The purpose of the closed loop system was to ensure that no Australian livestock could be exposed to handling or slaughtering conditions en route to, or in, Egypt that did not meet the then version of the OIE guidelines and any other conditions that the Minister or the Secretary imposed. This objective would be achieved because a livestock export licence to Egypt would require, pursuant to the Secretary's powers to impose conditions under the AMLI Act, that the livestock remain, at all times, within the verifiable closed system. One particular concern that the memorandum of understanding and the new closed loop system addressed was the previous "high risk of leakage", where animals were slaughtered under unapproved arrangements such as street slaughter or unapproved slaughterhouses. The new arrangements required that prior to export, each live animal be tagged individually with a functioning radio tracking device and that on arrival, there would be adequate quarantine for the animals to mitigate the risks of poor handling and slaughter practices. The Secretary subsequently could, and did, approve new Egyptian ports and facilities. 23 Perhaps prophetically, the regulation impact statement for the 2008 AMLI Order stated: The tracking of individual animals and installation of electronic inventory systems is achievable in Egypt given the relatively low numbers of animals (30,000 animals per annum) and the limited (approved) holding and slaughtering facilities available. Applying the same requirements to a market such as Indonesia that imported more than 386,000 cattle in 2006 (and where there are 80-90 feedlot/holding facilities and 350 slaughtering facilities) would not be feasible. (emphasis added) 24 Nonetheless, both the Australian Government and the live cattle export industry recognised that live cattle exports continued to require attention to ensure the application of appropriate animal welfare standards in the processes of export, the receipt and slaughter of the animals in the countries of destination, not least because of the potential for future exposés like the February 2006 60 Minutes broadcast.

2.4 Restraining boxes for cattle 25 From 2000, the live cattle export industry, through industry bodies including Meat and Livestock Australia Limited (MLA) and LiveCorp sought to develop cattle restraining boxes to promote humane methods of holding an animal immediately before slaughtering it in lieu of more primitive and brutal methods to disable and hold steady a beast, such as cutting a tendon, gouging its eye or hoisting it aloft while attempting to kill it. As this description reveals, ad hoc or traditional methods of slaughter, outside a modern abattoir, could be crude and very cruel. 26 The idea behind the restraining box was that it would hold the individual animal in a restraint and then turn it into a position where a slaughterman could easily, humanely and quickly kill it. As the Four Corners program later revealed graphically, that idea fell well short of ensuring an acceptable result. The first and crudest versions of the restraining boxes were called 'Mark I' boxes and these were progressively deployed in Asia, particularly Indonesia, by the Australian live cattle export industry. A June 2009 review, that MLA and LiveCorp commissioned, portrayed the development of restraining boxes as seeking to avoid causing animals severe pain and distress. It reported that at 30 June 2009, 96 Mark I boxes were in use, while subsequent models were in development. The review noted that the OIE Terrestrial Animal Health Code 2008 required the minimisation of avoidable pain and suffering at every stage of the pre-slaughter and slaughter processes until the death of the animal, and: The development of the code involved a study of specific issues associated with slaughter without stunning, acknowledging religious and cultural requirements. The OIE concluded that the process of slaughter without stunning should not be exempt from the guidelines and consequently methods of restraint have to comply with several basic requirements, as detailed below: • Provision of a non-slip floor. • Ensuring that the restraining equipment does not exert excessive pressure, thus causing the animal to struggle or vocalise. • Engineering equipment to reduce the noise of hissing air and clanging metal. • Ensuring equipment has no sharp edges that would harm animals. • Using restraining devices appropriately and not jerking them or making sudden movements. The installation of a restraining box will only achieve all the desired outcomes of the OIE Code if it is operated by a knowledgeable and skilful stockman and maintained to ensure that acceptable standards of animal welfare are consistently achieved. (emphasis added) 27 The review concluded that the use of the restraining boxes improved "the aesthetics of the casting process and is likely to improve animal welfare" but that scientific verification of its actual impact on animal welfare was yet to occur. Importantly, it added that the Mark I boxes demanded "a higher degree of skill and stockmanship to ensure a good welfare outcome". 28 In May 2010, MLA and LiveCorp received a final report of a study they had commissioned titled "Independent study into animal welfare conditions for cattle in Indonesia from point of arrival from Australia to slaughter" and published it in January 2011. The Minister read this in early February 2011. 29 On 22 December 2010, the Royal Society for the Prevention of Cruelty to Animals Australia (RSPCA) provided the Minister with its response to the study. The study's four authors wrote to the Minister on 27 January 2011 in reply to the RSPCA's criticisms saying that they unreservedly stood by their assessment process and reiterated their conclusion that "animal welfare was generally good and that Australian cattle in Indonesia were generally coping well with the conditions to which they were exposed". 30 The study stated that the OIE guidelines had "guided" its assessment including of feedlot management, slaughter processes, animal handling and restraining boxes. The study authors attended six feed lots and 11 slaughter facilities and observed the use of "15 industry funded restraining boxes and 6 improvised 'copy' boxes". It noted that while several advanced facilities used stunning, most were unsophisticated and would not find it feasible to adopt stunning. 31 Stunning involved using an electrically powered or mechanical device to render the animal senseless so that it could be manoeuvred readily into a position for a slaughterman to kill it promptly and efficiently without it offering resistance or suffering pain or discomfort. 32 The study noted that in about four (or 17%) of the 26 acts of slaughter using the restraining boxes that the researchers had witnessed, the animal regained its feet after release. The researchers said that they witnessed a total of 29 acts of slaughter, including ones using the restraining boxes, and observed that the process of casting the animals down in the box on average resulted in moderate, rather than mild, severity of fall and 3.5 head lifts per animal after casting, and that this posed "a significant risk to animal welfare" and: While restraining boxes were observed to significantly improve animal welfare, where severity of the fall was severe and head slapping occurred, significant animal welfare issues were identified that should be addressed through SOP [Standard Operating Procedure] and training. (emphasis and acronym definition added) 33 The study observed that operators at the facilities with replica boxes lacked training and posed a potential animal welfare issue. It noted that slaughtermen did not appear to appreciate, and the SOP did not provide guidelines dealing with, the need to cut the animal's carotid arteries appropriately and to manage occurrences of occluded arteries and false aneurisms that posed issues for an animal's welfare because it could remain conscious for an extended period. The researchers observed one occasion when 18 cuts were made to kill the animal. They observed that this was "a potential animal welfare issue" (emphasis added) but that the resulting colour of the meat did not appear to affect its saleability in the wet market, i.e. the market for immediate local consumption. They also noted some instances of animals having their eyes harmed or tails twisted in the slaughtering process and inconsistent use of SOP in restraining animals and using the restraining boxes including for significant periods before slaughter and that: Following the Halal cut, there were occluded carotid arteries in 48% of cattle and possible extended consciousness in 10% of cattle. 34 They said that stunning "deliver[ed] the single biggest animal welfare benefit" and said that its use "in the slaughter of Australian cattle in Indonesia should be an aspirational goal. In appendix 4, the study reported its recommendations for compliance with the OIE Code and gave those priorities, including giving high priority to ensuring that there were competent and experienced animal handlers because of the significant variations between the excellent and poor treatment of animals that researchers had observed in relation to numerous provisions in the OIE Code.

2.5 The Minister assumes office 35 On 16 September 2010, soon after he had become the Minister, Senator Ludwig spoke at the 2010 AgForce Conference in Rockhampton saying that he did not intend to make "any drastic changes to Government Policy within the portfolio. This includes areas such as live animal exports". 36 The Minister's practice was to read Departmental in-confidence minutes, and other material, such as briefs, on or reasonably contemporaneously with the date on which his office received those documents from his Department. If he first read those in an electronic form on an iPad, his not invariable practice was to sign them at a later time, dating them when he first recalled reading them. A Departmental in-confidence minute was in the form of a document that the Minister could submit to Cabinet for its consideration. I will describe such a document as a 'Departmental minute'. 37 The Minister had received a Departmental briefing for his new portfolio that informed him that Indonesia was Australia's largest market for live cattle exports, comprising in 2009 about 80%, with 768,113 cattle, valued at $478 million. 38 On 30 November 2010 the Minister received a Departmental minute to inform him that officers of the Department would visit Indonesia with an industry delegation in mid-December 2010 to present Australia's concerns about the Indonesian Government's policy to achieve self-sufficiency in beef. The minute noted that, in January 2010, Indonesia had begun limiting the number of import permits that it granted, which the Department expected would result in a 17% reduction in Australian live cattle exports there in 2010. In addition, Indonesia had also begun limiting the arrival weight of imported cattle to 350kg which posed a risk that, if Indonesia were to reject a shipment, there could be quarantine issues were the cargo to be returned to Australia. The minute informed the Minister that Australia had raised its concerns about these changes with Indonesia, including at Ministerial level in carefully targeted and nuanced representations so as "not to overplay Australia's interest in maintaining trade", and foreshadowing a proposed visit by Senator Ludwig in early 2011. The minute included statistics showing the volumes and value of live cattle, beef and offal exports to Indonesia and an overview of the live cattle trade with Indonesia that had developed in the preceding twenty years. It noted that the live cattle export industry was attractive and convenient to producers in areas in northern Australia, but that in the first half of 2010 there had been a sharp decline in exports to Indonesia. 39 As noted above, the RSPCA wrote to the Minister on 22 December 2010 with a detailed critique of the May 2010 study which the Department had provided to it on 15 December 2010. In her covering letter, Heather Neil, the chief executive officer of the RSPCA wrote: From the information available in the report it is clear that the majority of the animals observed (and likely the majority of animals exported) were subjected to significant levels of pain, fear and distress during their handling and slaughter. The scale and significance of the animal welfare issues described in the report show that in terms of risks to animal welfare, the situation in Indonesia is equal to the Middle East. Given this, it is not a trade that the RSPCA believes should continue…. It is the way in which the majority of cattle were slaughtered that has shocked us. While the introduction of restraining boxes is offers some improvement on traditional slaughter methods, we are very concerned that Australian-driven developments have served to entrench practices that involve significant risk to animal welfare. (emphasis added) 40 On 17 January 2011, the Minister wrote to Peter Kane, the chairman of the Australia Livestock Exporters' Council (ALEC) referring to their meeting on 30 November 2010 in which they had discussed issues concerning live sheep exports to the Middle East. The Minister also referred to the broadcast on the ABC's 7.30 Report on 1 December 2010 of footage that Animals Australia had obtained of poor handling, transport and slaughter of sheep to those countries. He reminded Mr Kane that he had told him then that the Government "was very concerned about the mistreatment of animals, and, as part of Australia's live trade, had committed to assessing proposals to improve animal welfare outcomes". The Minister asked Mr Kane for his advice on the use of a closed loop system for the importation, lot feeding and slaughter of livestock in importing countries, similar to the system in use for exports to Egypt. 41 On 21 January 2011, MLA and LiveCorp wrote to the Minister responding to the RSPCA's 22 December 2010 letter. The letter also attached what the industry bodies said was a "detailed action plan". The response stated that the two bodies had employed a full time animal welfare manager based in Jakarta to ensure regular training for SOP at all locations, which they noted was critical. They wrote that the industry recognised that stunning was "a further animal welfare improvement" but that OIE standards did not require it and that a number of practical impediments in Indonesia limited its adoption, including the lack of electricity in some areas and the classification of hand held "captive bolt stunners" as weapons in that country. They wrote that their "first priority is reaching these internationally recognised standards". They included a table that identified industry actions and outcomes. The table noted that a new restraining box (Mark 4) had been designed and the first Mark 4 box had been installed in January 2011. 42 On 14 January 2011, the Department provided the Minister with a minute on the imminent release on its website of the live trade animal welfare partnership 2009-10 project reports. The minute informed the Minister that he could expect media attention and criticism from animal welfare groups, including the RSPCA, given its concern about the operation of the restraining boxes, slaughter techniques and the (scil: lack of) uptake of stunning. It noted that after the Department had provided the RSPCA with a copy of the May 2010 study, the ABC had enquired about the release of the reports. 43 The minute summarised that study as "a thorough review of the animal welfare outcomes in Indonesia" that found "overall…animal welfare in Indonesia was generally good" and that industry had accepted its recommendations in the area of animal management, slaughter practices and animal welfare standards and was expanding its programs to address them. It referred, under the heading "Sensitivity", to the study's observation of one animal being "struck with a knife using a hard impact to sever the skin about the larynx and then up to 18 cuts were made to sever the neck and both arteries". The minute advised the Minister that the MLA had stated that this incident was not representative of normal practices in the region and it was providing training and equipment at the abattoir in response to the study's recommendations. The Department also advised the Minister that the RSPCA was likely to focus on specific examples of poor animal handling or slaughter practice in the study and to demand immediate action from the industry and the Government. It annexed "talking points" for the Minister that indicated that the May 2010 study had been funded by the Government as to 50% and by the two industry bodies as to the balance. The talking points noted that the study was independent and that industry had considered it and was developing a suite of measures to address its recommendations. The talking points also noted one observation in the study of poor slaughter technique but stated that this did not represent normal practice. 44 On 28 February 2011, the Minister replied to the RSPCA's letter of 22 December 2010. He noted that the May 2010 study's authors had "described the improvements in animal welfare at the point of slaughter in Indonesia as 'profound' and 'undeniable'". 45 On 21 March 2011, the Minister wrote to Mr Kane reiterating what he had said at the AgForce conference in September 2010, namely that the Government's support for live animal exports had not changed. He noted having written to ALEC in January 2011 asking the livestock animal export industry to develop proposals to ensure higher standards of animal welfare and was looking forward to receiving ALEC's response. 46 On 22 March 2011, Mr Kane responded on behalf of ALEC. He told the Minister that ALEC, MLA and LiveCorp had held forums with exporters that had "reaffirmed that animal welfare was the most important social issue affecting the live export industry". He said that to improve welfare standards in the Middle East, the industry was proposing adoption of the concept of "supply chain assurance" over the next five years. Mr Kane referred to the Minister's suggestion for a closed loop system similar to that in Egypt but stated that each market in the Middle East was different. He wrote that the supply chain assurance would "encompass elements of a closed loop system to contain livestock" as much as commercially feasible within port, feedlot and processing facilities to minimise leakage. However, ALEC's letter focused only on the Middle East and said nothing directly about Indonesia. 47 On Wednesday 30 March 2011, Lachlan MacKinnon, the chief executive officer of ALEC informed the Department that Animals Australia had footage of cattle being slaughtered in four Indonesian cities and that, although it did not know what the footage portrayed or when it would be used publicly, ALEC was "very nervous". Mr Kane had tried to inform the Minister's chief of staff, Michael Carey, of this development and Mr MacKinnon had briefed Alistair Lawrie, a senior adviser in the Minister's office. They were aware that the Minister was then in Darwin. The Department's Jo Evans, the executive manager of the trade and market access division, emailed various other officers, including a Deputy Secretary, Philip Glyde, to confirm that the Department's strategy advice was to prepare defensive talking points for the Minister in anticipation of a "worse case" scenario of what the footage might contain, but would defer convening its animal welfare working group until more was known. 48 As events unfolded, Mr MacKinnon's information concerned the footage that became the central focus of the Four Corners broadcast two months later. 49 On 31 March 2011, the Department provided the Minister with talking points that referred to the unreleased video footage. The talking points stated "stopping the live trade will not improve animal welfare in any of the countries we currently export to" and also referred to a taskforce that the Australian and Indonesian industries had established to identify and address animal welfare issues in Indonesia.

2.6 The Indonesian live cattle market 50 The parties agreed a number of facts about the Indonesian market for live cattle exports from Australian to Indonesia on which I have drawn here. 51 Throughout the period of time relevant for this proceeding, Australia was the sole source of live cattle imported into Indonesia. Between 2005 and 2009 the number of live cattle exported annually from Australia to Indonesia increased from 347,267 to 751,143. In about July 2010 the Indonesian Government indicated to exporters that it would only issue import permits in 2010 for a total of 452,000 head. However, in the event, 514,935 head were imported into Indonesia during 2010. 52 In December in each of 2010, 2011, 2012 the Indonesian Government announced an annual quota for live cattle imports for the next calendar year. On 28 December 2010, it announced that the annual quota for 2011 would be 500,000 head. In 2011, the Indonesian government issued 'quarterly in advance' live cattle import permits, that were valid for three months. In the next six months, January to June 2011, Australia exported 220,163 head of cattle to Indonesia. 53 Prior to June 2011, only an Indonesian importer licensed to import live cattle could apply for an import permit within its quota allocation. The importer had to apply to the Ministry of Agriculture and, when issued, had to have its import permit validated by the Australian Embassy. The Australian Quarantine Inspection Service (AQIS) would not allow a shipment of live cattle to leave Australia unless there were an import permit that the Embassy had validated.

2.7 The Minister attends a cattleman's conference on 1 April 2011 54 On 1 April 2011, the Minister made a keynote speech at the Northern Territory Cattleman's Conference in Katherine at which, among others, Indonesian diplomats were present. He spoke about his recent visit to Indonesia and the importance of the live cattle export trade with that nation. He told the conference: The live animal export sector is the backbone of many rural and regional communities across Australia, including northern Australia, as it provides a valuable market option for producers. 55 The Minister referred to the recent Indonesian restrictions on the number and weight of cattle as: …a concern for industry and for the Government. However I can assure you all that there has been no change to the Government's policy to support Australia's cattle industry, including live animal exports. During my visit I stressed the importance of maintaining the live cattle trade to my counterparts. I outlined the importance of providing certainty to both Australian exporters and Indonesian importers with regard to live export and boxed beef. 56 The Minister then spoke on improving animal welfare, saying that it remained "a significant issue" and expanded on this theme as follows: Both the Government and industry recognise the importance of improved standards of animal welfare, and the need to clearly demonstrate commitment to those standards to the broader Australian and international communities. Being part of the international live export trade means Australia can help improve the way it operates-benefiting animals from Australia and other countries as well. In conjunction with industry, the Australian Government is jointly investing a total of $3.2 million to the Live Trade Animal Welfare Partnership to further improve animal welfare conditions in importing countries. This is a continuing process of improvement, and more still needs to be done to achieve higher standards of animal welfare practices, particularly in importing countries. I have asked the Australian live export industry to review the progress they are making on improving animal handling practices in importing countries, as well as other ways to achieve higher standards of animal welfare. The Australian Livestock Exporters Council has provided me with their views on this topic, and we will be examining these proposals in coming months. The Gillard Government will continue to work with current trading partners to improve trade conditions for the benefit of both the live cattle and beef industries. (emphasis added) 57 During the morning tea break at the conference, the Minister had a conversation with Troy Setter, who was then the chief operating officer of the Australian Agricultural Company (AACo). Mr Setter had been a director of ALEC since 2009 and the Northern Territory Live Exporters Association. Between 2007 and 2010, Mr Setter had been the Darwin manager of NACC, that was one of the world's largest cattle exporters. In that role he was responsible for exporting, supplying and marketing over 270,000 head of cattle annually. 58 Mr Setter told the Minister that "we've heard that animal activists have been taking footage in Indonesia". The Minister told Mr Setter that the trade was important to Australia and that the industry and Government had to continue to work together. He said that the Government understood the challenges. Mr Setter said that Indonesia was a difficult market because not every supply chain was the same. He told the Minister that large importers such as Elders (which owned NACC), Santori (being PT Santosa Agrindo), AACo and TUM (being PT Tanjung Unggul Mandiri) had "closed supply chains where they have full control of their cattle", but that not every other supply chain did. Mr Setter said that NACC had a closed supply chain. He also said that AACo "followed" its cattle throughout its chain, which I infer was not closed. 59 Mr Setter gave evidence that he had had an earlier (but some time before April 2011) discussion with the Minister about "the supply chain work that we had been doing", but did not elaborate on that topic, beyond saying that in the conversation in Katherine, the Minister stated that "we will need to work together; we will stick with you, Troy; we will stick with the industry".

3.1 The nature of the industry's supply chains 60 As Mr Setter told the Minister in April 2011, there were several large importers of live cattle into Indonesia that had supply chains over which they had control of the cattle in them, at least, to the point of slaughter if that occurred in an abattoir operated by one of them. Those importers were PT Elders Indonesia, a subsidiary of Elders, and Santori, but, as I explain below, not TUM or PT Agro Biri Perkasa (AGP). It is necessary to understand the precise nature of the supply chain that each of those four importers operated in the period prior to the making of the Second Control Order on 7 June 2011. I deal with that issue in the following section of these reasons in relation to each of the four importers. 61 Ashley James was the manager of NACC in 2011. He held that position for four years. He said that NACC's business was to export live cattle to South East Asia, but predominantly to Indonesia. The live cattle for slaughter market was known as the "wet market" as opposed to the market for pre-packaged or boxed beef. NACC's Indonesian customers were, in order of amount of purchases, TUM, Santori, Elders Indonesia and PT Widodo Makmur Parkasa (and its subsidiary, Pash Tengah. 62 Mr James said that an Indonesian import permit required an importer to take the cattle to only one specified location. I infer that the importer would have to specify the feedlot to which the cattle would be taken after the 14 day quarantine period following their disembarkation from the ship. However, after the cattle arrived at the feedlot specified in its import permit, the importer was not constrained from selling or moving the cattle elsewhere. 63 In June 2010, Mr James was involved in the preparation of customer profiles for each of TUM and Santori for use by the board of Elders. These revealed that in 2009, Santori imported (from all sources) into Indonesia a total of about 134,000 head (or about 20% of the total Indonesian market), TUM 82,000, Widodo 51,000 and Elders Indonesia 22,000. TUM purchased exclusively from NACC.

3.2 Elders Indonesia 64 From 2003 to 2013, Richard Slaney was president and director of Elders Indonesia. He explained in his evidence that Elders Indonesia operated as a part of the Elders group. He was in charge of Elders Indonesia's day to day operations and had been involved in the Indonesian cattle industry since 1999. Elders operated several feedlots in Australia. Elders also owned and operated a livestock carrier, MV Torrens, and chartered other vessels as needed to carry live cattle to Indonesia. Each of the ships Elders used for this trade complied with the regulatory requirements of the Australian Maritime Safety Authority. 65 Before the Second Control Order, Elders Indonesia acquired from NACC live cattle for export from Australia to Indonesia, which met all Australian domestic requirements for the care, health and handling of the animals (including for AQIS) up to the point of export. Once the cattle arrived from Australia, Indonesia required that they be held in quarantine in a feedlot for 14 days where they were vaccinated and had blood samples taken. About half of Elders Indonesia's imports of live cattle were tagged in the ear with a visible RFID (radio frequency identification device) or a National Livestock Identification Scheme (NLIS) tag. Those names for the tags were interchangeable and did not signify that there were different tag types (I will usually refer in these reasons to all these tags simply as NLIS tags). Before July 2011 the use of NLIS tags was mandatory in Western Australia and voluntary in both the Northern Territory and Queensland. 66 If cattle did not have an NLIS tag, Elders Indonesia caused them to be tagged with a Z tag when the cattle arrived at the quarantine facility that it used as part of its (Elders Indonesia's) inventory control system from the animal's induction into that inventory until the point of its slaughter. Unlike the NLIS tags, a Z tag was a visual, but not electronically readable, means of identifying each animal individually. Elders and Elders Indonesia used the Z tags and NLIS tags to trace each animal's overall movement in the Elders supply chain. 67 Elders Indonesia owned a feedlot in Lampung province on Sumatra (about ten hours drive and a ferry ride away) and leased an abattoir at Bogor to the south of Jakarta in which it owned all the plant and equipment. Cattle were kept for fattening at that feedlot typically for between 80 to 110 days (a fattening cycle) (although that could last 120 or even 150 days on occasion) and its capacity was about 21,000 head annually. Mr Slaney said that prior to June 2011, Elders Indonesia was intending to expand the feedlot's capacity to 30,000 head per annum over the next two years. The abattoir's about 40 employees worked on a single shift of six days per week that had the capacity to process about 21,000 head annually. Some of those employees had been trained and accredited in Australia. 68 As soon as Elders Indonesia began operating the Lampung feedlot in 2008, Mr Slaney implemented a quality assurance system for it that used substantially the same procedures as Elders applied in its feedlot in Charlton, Victoria. Similarly, by 2007 (about one year after commencing operations) Mr Slaney had Elders Indonesia implement a quality assurance system at the abattoir. At that time Elders Indonesia obtained accreditations for the abattoir under the ISO 9001 standard, which applied for processing and manufacturing, and the Hazard Analysis and Critical Control Points (HACCP) standard, which applied a systematic approach for food safety there. Neither standard dealt with the way in which cattle were slaughtered. And, the abattoir had used stunning since 2000. Mr Slaney gave unchallenged evidence that Elders Indonesia managed the lairage of cattle (i.e. the livestock yards in which cattle are held) and the slaughtering process, and had always used stunning at the abattoir so that the animals "were always very well looked after". 69 Mr Slaney said that this abattoir's capacity per shift could not have been increased but its overall capacity could have been increased by running a second shift. As at 6 June 2011, the abattoir ran a day shift processing boxed beef. This involved animals being stunned, then killed, chilled overnight and deboned before being packaged into vacuum sealed bags. The abattoir could be readily converted to also run a night shift to supply the "wet market", as occurred immediately after Elders Indonesia obtained its ESCAS approval. 70 Elders Indonesia also imported and sold Australian cattle to about six or seven small abattoirs in Indonesia, one near Jakarta and the others in Sumatra. Mr Slaney decided to which abattoirs cattle were sent based on prevailing market prices. Thus, if the prices for boxed beef resulted in better margins for Elders Indonesia, he would maximise their processing through its own abattoir near Jakarta. These other abattoirs had Mark I boxes and processed a total of up to about 50 head per day or roughly half of the total number of cattle that Elders Indonesia imported. However, as noted above, if the Elders Indonesia abattoir worked two shifts daily it could process the total of 21,000 cattle that matched the annual capacity of its Lampung feedlot. Thus Elders Indonesia had the ability to process all the cattle that it imported in its own feedlot and abattoir, rather than sell any of them to its six or seven customers, and to ensure that it could account for every animal by use of its Z tags that it placed on animals that did not already have an NLIS (or RFID) tag. 71 The audit of Elders Indonesia's feedlot and abattoir that SAI Global Ltd conducted on 6 to 8 July 2011 (as part of the implementation of the ESCAS approval process) established that "computer software and records are excellent and enable complete traceability of individual animals from exporter to slaughter". The audit found that the documentation required existed and included the procedures that the Department had specified. SAI Global noted that it had identified some areas that "top management" needed to review and consider "so as to ensure appropriate preventative actions are implemented prior to the next audit" and, importantly, that "staff at the feedlot exhibited good knowledge and practice with regard to animal welfare". SAI Global noted that, initially, some animals had slipped when being discharged from trucks and that three others out of ten had needed to be stunned a second time, but that the Elders Indonesia staff had taken corrective action that remedied those problems. 72 I accept Mr Slaney's unchallenged evidence that the remedial actions were "tweaking" and that: in a processing situation with cattle, we will get those variants on a given day in most situations. And so, therefore, the auditor would often go back and …let you process again or …do it again, and ..that was …. quite a normal situation. It's very difficult to maintain 100 per cent stunning of those cattle. Likewise, cattle could be coming off a truck after a rainy morning and cattle slip. He will recognise those variations we get in in the normal processing of cattle. So but, certainly, there's always room for improvement, yes. 73 I am satisfied that prior to the Second Control Order, Elders and Elders Indonesia (including NACC's sales to it) operated a closed loop system for cattle processed in Elders Indonesia's feedlot and abattoir that used internationally accepted and humane practices to account, care for and slaughter Australian cattle exported to Indonesia.

3.3 Santori 74 Santori was a subsidiary of the publicly listed substantial Indonesian enterprise, Japfa Group, and the largest importer of live cattle into Indonesia. Santori had two mechanised western style feedlots in Sumatra, one at Barki and a smaller one at Probolinggo. It sourced its live cattle from three suppliers, one of which was NACC. Mr James regularly visited and checked on how the cattle were progressing though those feedlots, as well as those that TUM operated, in addition to visiting the bigger abattoirs to which Santori and TUM sold. Santori's two feedlots had the capacity of feeding about 60,000 per fattening cycle (equivalent to a total of about 180,000 head annually). It owned an abattoir that, according to the Elders customer profile of Santori (see [63] above), processed about 20% of the cattle in its feedlots and sold the balance into the wet market. 75 Santori was NACC's second largest customer. Mr James acknowledged that prior to June 2011, not all cattle that NACC exported from Australia to Indonesia were tagged. He said that NACC's cattle were not scanned as they were loaded or unloaded and that, depending on the importer, they might have been scanned or not when they arrived at the importer's feedlot. 76 There was no direct evidence as to the standards of animal welfare or slaughtering methods in the Santori facilities prior to 7 June 2011. On 13 June 2011, Santori's Group General Manager, Samuel Wibisono, said in an email, a copy of which the Secretary of the Department, Dr Conall O'Connell, received the next day, that its abattoir was ISO accredited and that it was installing readers for NLIS tags there to set up the closed system that the Minister required. He wrote that Santori's two feedlots already operated NLIS readers and that he believed "we can be ready for an overall feedlot and abattoir audit in as early as 2 months" (emphasis added). However, it is not quite clear what Mr Wibisono meant by "an overall…audit", for earlier in his email he said that he envisaged perhaps, relevantly, Santori and Elders "could pass an audit to comply with the current requirements of Minister Ludwig". However, by 16 June 2011 MLA had provided the Department with information about Santori's then position with respect to ensuring compliance with animal welfare standards from which I infer that it was, if not then fully, substantially compliant and, so, capable of achieving immediate compliance with the OIE Code after whatever minor shortcomings there may have been in its processes. 77 This inference is reinforced by Santori's ability to show such compliance in material that it gave to the Department on 22 June 2011. As at 16 June 2011, Santori was using stunning in its abattoir to process 50 head of chilled beef cuts per day, had the capacity to process up to 160 head in an eight hour shift and could work more than one shift. It stated that it had documented standard operating procedures, complied with both the HACCP and ISO 2200 standards as well as the OIE Code and had the ability to trace individual animals using NLIS tags that it placed on every animal. Given its substantial financial position, Santori would have been able to source and readily install any necessary equipment. 78 Therefore, I find that prior to 7 June 2011 Santori was capable of establishing without delay or difficulty that it could, or did then, operate a closed loop supply system that complied with then OIE Code for all cattle that it processed through its feedlots and abattoir.

3.4 TUM 79 TUM was a family owned business that imported live cattle exclusively from NACC. It had two feedlots near Jakarta, the larger one at Tanjung Burung, that could process about 25,700 head per fattening cycle, and the smaller at Pulo, that could process about 5,600 head per cycle. Both feedlots had concrete floors in which the cattle were hand fed. 80 TUM sold only into the wet market. Prior to 7 June 2011 TUM did not own an abattoir, having sold the one it had owned in about 2008 or 2009. Thus, at that time, TUM could have been part of a closed loop supply chain that, however, would finish prior to the cattle being despatched from TUM's feedlots to an abattoir. All the cattle could be accounted for from the time NACC exported them to when TUM was ready to despatch them for slaughter. 81 Accordingly, the abattoir at which any cattle that NACC sold to TUM were to be slaughtered would have to be identified as one that complied with appropriate quality assurance standards and the OIE Code before Mr Setter's assurance about it to the Minister on 1 April 2011 could be relied on in respect of how its cattle would be slaughtered.

3.5 AGP 82 Between 2000 and 2017 Gregory Pankhurst was chief operating officer of AGP. In 2002 AGP entered into a joint venture with Consolidated Pastoral Co to conduct a cattle feedlotting business in Indonesia. Mr Pankhurst lived in Indonesia and was responsible for AGP's purchases of livestock, arranging their transport from Australia to Indonesia, fattening them after their arrival and then marketing them to abattoirs for sale at, in Mr Pankhurst's words, "the farm gate". 83 AGP had two feedlots on Sumatra, a larger one at Lampung, with a capacity of 28,000 head and a smaller one at Medan, with a capacity of 7,500 head. It used a fattening cycle of 120 days so that it had a total annual capacity of about 105,000 head of cattle. However AGP tried to maintain the feedlots at between 60% to 70% capacity. AGP applied the OIE Code or better in caring for cattle at its feedlots. Mr Pankhurst said that prior to 7 June 2011 the majority of AGP's imported cattle came from Western Australia and had NLIS tags. In addition, on arrival, AGP put a manual tag on each animal that had visually readable means for its identification. AGP did not scan the NLIS tags or add the manual ones until the animals came out of quarantine and arrived at one of its two feedlots. When a tagged animal left the feedlot, AGP scanned its tag. However, the purchasing abattoirs did not scan the tags. 84 AGP did not own any abattoirs in Indonesia, but in the first half of 2011 sold to between 22 to 25 abattoirs, some of which were government owned and others privately owned. Most processed between 5 and 25 head each per night and had a total capacity between them on a single shift of about 250 to 300 head. Only three of the abattoirs that purchased from AGP before June 2011 used stunning. At particular times of year, such as festivals, the abattoirs would increase their intake by working one or more extra shifts so that up to 1,000 animals were slaughtered each day. 85 I accept Mr Pankhurst's evidence that AGP had total control of each of the animals it imported from the time of disembarkation from the ship to when it left the feedlot for the abattoir. However, that meant that, like TUM, prior to June 2011 AGP could only provide a closed loop supply chain up to when the cattle left its feedlots and thereafter it had no control over them, including over their welfare.

3.6 Brett Cattle agrees to sell cattle to Elders 86 On 4 April 2011, the late Mr Brett, on behalf of Brett Cattle, entered into an Elders standard form agreement to buy and sell for delivery 1,100 Brahman steers for $2.15 per kg and 1,100 Brahman heifers for $1.95 per kg. The purchaser was NACC. Delivery was to be on or around 31 May 2011 FAS (free along side) a wharf at Wyndham, Western Australia.

4.1 The lead up 87 On 6 April 2011, Ms Evans emailed Mr Glyde and others in the Department with an update on the Animals Australia footage. She said that industry and the RSPCA had informed the Minister's office that Four Corners might be working on a story about the issue of live trade to Indonesia, with a broadcast later in April or May 2011 and that the Minister's office "is getting prepared". She referred to the footage, a recent Parliamentary debate on the subject and a Senate estimates hearing, including questions on notice and questions that the RSPCA had raised in a meeting with the Department in March 2011. She said that the Minister's office had requested talking points in anticipation of a request for him to be interviewed. 88 As is apparent from the above facts, by early April 2011 both the Minister and his Department knew that there was likely to be a major public affairs broadcast in the near future that would feature some graphic and disturbing footage of cattle being slaughtered or mistreated at probably four sites in Indonesia. Yet, the Department did not prepare, and the Minister did not seek, any policy response beyond talking points, despite the potential impact on a substantial domestic industry, Australia's international trade, reputation and its relationship with the Indonesian Government. Likewise, the industry was hardly being proactive, beyond cooperating with the producers of Four Corners. 89 On 29 April 2011, the Department, through Mr Glyde, provided the Minister with a minute on the topic of live cattle exports. It dealt with the need for the Minister to decide about possible responses to the Four Corners program once it was broadcast, including possibly consulting with Cabinet. This minute referred to the possibility that Four Corners would air footage of facilities where Australian Government funding had been provided to improve facilities or train handlers and that the Minister may be asked about this. It suggested three options, first, that the Minister refer to an existing set of actions, including his request for industry to develop options, including closed loop systems, to improve animal welfare throughout the live export supply chain, secondly, release a public options paper (and a possible outline was attached to the minute) and, thirdly, announce a new set of actions. The minute recommended the first of those options that was broadly along the lines of the supply chain assurance model that industry was working towards. It said that issuing an options paper had "significant risks" of stirring up controversy and would take some time to develop and the announcement of new actions, while feasible, might require Cabinet discussion. 90 The options paper proposed using the OIE Code as the minimum animal welfare standards, however it noted: Preferred approach - industry assessment against standards/goals and/or importing country assessment. The cost of trade for most export industries is the establishment of commercial linkages and. at times, infrastructure to support the trade. In the live animal trade this equates to ensuring that minimum agreed standards (OIE for example) are being met. Therefore, it is an industry responsibility to assess and report on the welfare standards of receiving countries. This approach is closely aligned with the industry's suggested Supply Chain Assurance model. A target of 100% compliance for all shipments with OIE standards is unlikely to be achieved other than through a closed system, and industry is unlikely to agree to such a target. Animal welfare groups will push for such a target and call for exports to be suspended/banned for any breach of the standards. (emphasis added) 91 On 6 May 2011, Mr Lawrie sent to Ms Evans for comment a copy of an ALEC draft "Strategic vision for in-market animal welfare" dated April 2011 that he had received. The draft contemplated that all animals exported from Australia be managed through known supply chains and treated humanely under OIE Code and standards to be achieved by 2015. The draft set out a timetable to that end. 92 On 10 May 2011, Mr MacKinnon sent the Department a final version, now headed "Indonesia animal welfare action plan", that stated a timetable for achieving what it identified as its desired outcome: From 2015, Australian livestock will only be supplied into facilities where supply chains meet relevant sections of the OIE […] standards. 93 On 11 May 2011, the MLA informed the Department that the Indonesian action plan had had significant input from, and was endorsed by, the Indonesian importers and that the Indonesian Government had been consulted and also supported the plan. 94 On 13 May 2011, the Department provided a minute to the Minister addressing both the strategic vision and action plan. The minute noted that the industry sought the Government's support for those documents so that the industry could launch them on the ABC's Landline program (a rural affairs focused current affairs show) prior to the Four Corners broadcast going to air. The minute gave the Department's initial assessment of what the industry proposed, prior to the Minister meeting with its representatives. The Department considered both documents to be positive initiatives and "a good starting point for further discussion and development". The minute observed that a key policy question was what the Government would do if the industry failed to achieve the goals set on time, noting that the timing "lacks urgency". That question included whether the Government would impose a ban on exports to countries in which the milestones were not met by the due date. The minute reminded the Minister of the likely imminence of the Four Corners broadcast and its likely high sensitivity. The Minister annotated, signed and dated 27 May 2011 a version of the minute that was unsigned by the Department. He wrote on it "please add to reading pack". 95 Also, on 13 May 2011, Mr Glyde signed a further minute for the Minister with the Department's review of the Government's policy settings for the live export trade and suggested that he select one of the policy options for approval. The Minister noted, by hand, "Overtaken by events: NFA" [scil: No further action]. I infer that, since the Minister took no decision on the policy options, the events that overtook the subject matter of the minute were the aftermath of the Four Corners program that was broadcast over two weeks later. The three options in the minute were to allow the live export trade to continue on the basis of, first, supporting the current industry approach, which involved accepting that some animals would be treated inappropriately, secondly, ensuring the OIE Code's standards would be met, in default of which trade would be banned to non-compliant markets or, thirdly, allowing the industry to work towards minimising cases of animals being treated below the OIE Code's standards within an agreed time frame. 96 On 17 May 2011, the Minister made a statement to a current affairs journalist, George Negus, that he took animal welfare seriously and had asked the industry for proposals at the beginning of the year to improve the position. The Minister's office anticipated that this interview would go to air on 24 or 25 May 2011. The Minister's statement did not evince any indication of a clear position. 97 On 24 May 2011, Mr Carey sent to Ben Hubbard, the chief of staff of the Prime Minister, the Hon Julia Gillard MP, the Minister's statement to Mr Negus together with an updated brief dated 17 May 2011 prepared for a Senate estimates hearing on 24 May 2011. The updated brief noted that the Government had a number of policy options including an immediate outright ban, a ban phased in over time, stricter supply chain controls introduced either immediately or over time, or a discussion paper presenting options for public response. 98 Also on 24 May 2011, Mr Lawrie emailed Ms Evans noting that the Department was unlikely to provide signed briefs on live exports until the following Monday, 30 May 2011. Mr Lawrie told her "we approve" the Department consulting with the industry about its (but not the Department's) proposals. He noted that one issue that arose in a "portfolio business meeting" or "pbm" "which we would like specific advice on before the end of the week" was the ability to prohibit exports going to specific abattoirs within countries or to allow exports only to specific abattoirs considered suitable. As will appear, this reflected the approach that the Minister adopted immediately after the Four Corners program in the Export Control (Protection of Animal Welfare) Order 2011 that he made on 2 June 2011 (the First Control Order). 99 In addition, on 24 May 2011, Mr Lawrie emailed the Minister with some "lines", being answers, including which he had already told Mr Negus that, I infer, he might say in answer to questions in Senate estimate hearings on the topic of live animal exports. Mr Lawrie's lines foreshadowed that he thought that the Four Corners broadcast would occur on 30 May 2011. Mr Lawrie noted that the RSPCA and Four Corners had refused requests for the Minister and the Department to see the footage. 100 On 25 May 2011, Ms Neil wrote to the Minister on behalf of the RSPCA and Animals Australia. She referred to Animals Australia having brought to his attention in November 2010 the treatment of Australian sheep exported to Kuwait and to her own meeting with the Minister on the day the evidence of that matter was released. Ms Neil referred to being initially encouraged by his response but then being disappointed by his leaving it to the industry to come up with a solution. The letter referred to the history of industry inaction since 2003 in the face of evidence of cruel treatment of animals in countries of export. Ms Neil reminded the Minister that she had sought a meeting with him in February 2011 to discuss matters of concern, including the treatment of Australian cattle in Indonesia and continued: We were advised that such a meeting could not be facilitated. Shortly afterwards, Animals Australia conducted an investigation in Indonesia into the treatment of Australian exported cattle. On viewing the footage I informed your adviser, Alastair Lawrie, that the extent of the cruelty documented exceeded that of the Bassateen abattoir in Egypt and that the only course of action for the government should be to halt the trade to Indonesia. As you are now aware, the evidence from this investigation was provided to the ABC Four Corners program. Had you taken appropriate action over the Kuwait evidence, independent of industry, to ensure Australian livestock were protected from future abuses in that country, and agreed to see us in February, RSPCA Australia and Animals Australia would have, without hesitation, brought this evidence directly to you. Instead, we sought a meeting with the Prime Minister, which was then passed to your office. This meeting request was also denied. We note that no approach has been made to either organisation to provide the Government with the evidence from Indonesia. (emphasis added) 101 Ms Neil also referred to the previous weekend's release of the industry's action plan saying that the industry had a track record of only acknowledging welfare concerns after they had been exposed by others. She said that the suggestion that animals should continue to be exposed to a further four years of abuse while the action plan was unimplemented would be unacceptable to the community. 102 On Friday 27 May 2011, at about 2.40pm, the industry published a media release that said it had received footage on the previous Tuesday (24 May 2011). As a result of viewing the footage, LiveCorp's chief executive officer, Cameron Hall, said that the Australian industry had requested the Indonesia industry to immediately suspend supply of Australian cattle to three facilities. 103 On 27 May 2011 at 4.07pm, the Minister's press secretary emailed a statement by him to the Four Corners reporters. She referred to a conversation earlier that week saying "We remain disappointed that we have not been provided with the footage in question". The Minister's statement was in terms similar to what he had given to Mr Negus. 104 On 30 May 2011, the Department provided an urgent minute to the Minister on options for regulating exports of live cattle on which, it suggested, he might wish to draw in response to the forthcoming Four Corners broadcast. The minute recommended that the Minster note that there were powers to make orders under the Export Control and AMLI Acts including specifying facilities to which exports could occur but that these were disallowable legislative instruments and that some of those options would require a regulatory impact statement. It also asked him to note that, first, some options "would have a moderate to high probability of being disallowed" and, secondly, any new regulation would raise community expectations that the Government was taking a stronger role in enforcing animal welfare overseas which would be very difficult to enforce. The minute recommended that the Minster, first, continue to work collaboratively with industry to encourage voluntary improvement of animal welfare including restricting supply of Australian cattle to abattoirs that had the potential to meet OIE standards within an acceptable time, and secondly, revisit the issue if voluntary steps failed to achieve an improvement. The Minister annotated the minute by indicating that he wished to discuss the recommendations. 105 The minute attached legal advice from, first, Blake Dawson that was undated but given in respect to a request by the Department on 19 May 2011, and secondly, the Australian Government Solicitor (AGS) dated 25 May 2011. 106 Blake Dawson noted that the Department had requested urgent "high level advice" on four options that were discussed at the 19 May 2011 meeting for implementing the industry's plans to improve animal welfare in importing countries. The advice discussed the four options raised in that meeting, namely, first, making no change, secondly, introducing "light touch" regulation under which exporters would be obliged to declare, as a condition of being able to export, the destination import facility for the livestock and that it was on the list of acceptable facilities, thirdly, making an order under the AMLI Act prohibiting the export of livestock other than to an import facility listed as acceptable and, fourthly, making a more extensive order under the AMLI Act that prohibited exports to countries or import facilities in respect of which industry had not developed, or there was not in place, a market plan that had set a timetable for, or achieved in time, particular objectives. Blake Dawson advised that a regulatory impact statement may be required for any legislative instrument that was made that had impacts on business. 107 Significantly, none of the four options on which Blake Dawson gave its "high level advice" included the Minister exercising any power under the Export Control Act. 108 AGS' written advice to Ms Evans of 25 May 2011 was in response to her request, made on 29 April 2011, for advice on the Commonwealth's power to enact legislation creating offences in respect of the participation by Australian individuals and companies in activities occurring in other countries that adversely affected the welfare of cattle exported from Australia. AGS referred to the reason for the Department seeking advice in respect of options for the Government's response to the expected Four Corners broadcast. AGS advised that it was possible to create such offences but that enforcement could be problematic unless the accused was present here. 109 At about 2pm on 30 May 2011, Ms Evans emailed Blake Dawson asking for urgent advice by later that day on whether to amend "one of the pieces of legislation" by adding a schedule of facilities to which it would not be acceptable to export cattle in which the Minister could add names in a list that he could table in the Parliament with reasons in a manner so that the list would not be a disallowable instrument.

4.2 The broadcast 110 On Monday 30 May 2011 at about 8.30pm, the ABC broadcast its Four Corners program on national television. The title, "A Bloody Business" was a foretaste of its content that the presenter, Kerry O'Brien, described with telling accuracy, in his opening sentence, as "a program that will shock you". 111 The program depicted animals being cruelly treated in a considerable number of instances by incompetent or inhumane slaughtermen who attempted to kill them in a manner that was supposed to be in accordance with Islamic requirements for halal meat. However, the depicted inhumanity had no foundation in those religious requirements. 112 The program included interviews with LiveCorp's Mr Hall and Dr Temple Grandin, of Colorado State University, who was an advisor to the cattle industry. Mr Hall said that she was well known internationally and that the Australian industry had adopted, in its training programs, a number of her principles for yard design and movement of animals. The following passage from the transcript of the program, in which the reporter, Sarah Ferguson, interviewed Dr Grandin while they were watching some of the Animals Australia footage, captures the essence of the cruelty and the issue of the Australian Government's role: TEMPLE GRANDIN (Speaking at a meeting of Australian cattle producers): I want to go over some cattle behaviour principles ... SARAH FERGUSON: She also co-wrote the international slaughter guidelines. Watching the footage from Kaliawi, Grandin was shocked. TEMPLE GRANDIN: The conditions are absolutely terrible. I mean you've got a box designed to make a cattle fall down. That violates every humane standard there is all around the world. What I want to know is why is Meat and Livestock Australia's name on the side of this chute? SARAH FERGUSON: Meat and Livestock Australia say they trained the slaughtermen here in January this year. One of the distressed animals falls on the slope leading to the box. TEMPLE GRANDIN: They've got a skating rink for a ramp that the animals can barely, you know, walk up. This is just an absolutely horrible set-up. Now the guy's on top of the animal kicking it because he can't get it to move. I'm really shocked that Meat and Livestock Australia would be involved in building facilities this terrible. SARAH FERGUSON: When the slaughtermen fail to move him, they drive another steer over the top. TEMPLE GRANDIN: (Watching footage of Kaliawi abattoir) With a Brahman-type cattle they can get so stressed that they'll just go into tonic immobility and I think this animal's tired. He's just down now and not even protesting he is so stressed. SARAH FERGUSON: Grandin was particularly critical of the role of the Australian Government and industry. TEMPLE GRANDIN: Is the Government of Australia going in and providing these really horrible facilities? Something's really wrong. I was really shocked to see Meat and Livestock of Australia's name on this equipment. CAMERON HALL: I accept that Temple Grandin may well have concerns. At times we have concerns about the standards at, at facilities, at certain facilities. That's why ... SARAH FERGUSON: Which ones? CAMERON HALL: We continue ... SARAH FERGUSON: Which ones are you concerned about at the moment? CAMERON HALL: I can't be specific. There are a hundred facilities receiving Australian cattle in the Indonesia marketplace. SARAH FERGUSON: The restraining box was designed to replace the traditional method of roping animals to posts before the slaughter. CAMERON HALL: I don't think it's acceptable for Australian animals to be processed in a traditional manner. SARAH FERGUSON: Despite this, the Australian industry continues to send cattle to abattoirs without boxes. At the Kota Binjai abattoir in Medan, a steer is readied for slaughter. The forlorn animal slips repeatedly and is repeatedly abused. The slaughterman appears oblivious to the presence of the camera. The animal's bellowing is haunting. LYN WHITE [of Animals Australia]: I remember thinking so clearly at the time that this animal just didn't understand why he was being beaten, and it was almost like he was calling out why? And there were no answers to that question. (emphasis added) 113 During the program, David Farley, the chief executive officer of AACo, said that it did not know to which abattoir its cattle were sent. At the end of the program, Mr O'Brien informed viewers that after viewing some of the broadcast footage in the preceding week, the industry announced that it had immediately moved to suspend the supply of Australian cattle to three abattoirs. But, the presenter said, as recently as the evening before the broadcast, Australian cattle were still being slaughtered at one of them. At the very end of the program Mr O'Brien told viewers: Although he chose not to be interviewed for the story, the Minister, Joe Ludwig, said in a statement that despite the improvement of animal welfare over the past decade due to industry and government efforts, he accepts that more work needs to be done. Something of an understatement.

4.3 The aftermath 114 The Four Corners program caused an immediate public furore and presented the Government and, in particular, the Minister, with a major political crisis. Later on the evening of 30 May 2011, the Minister issued the following media release: Statement from Senator the Hon Joe Ludwig - Four Corners This evening the Four Corners program aired evidence of animal welfare mistreatment in Indonesian facilities. I was shocked by the footage and the treatment of the animals involved. I have ordered an immediate investigation into the footage by the Department of Agriculture, Fisheries and Forestry and have asked them to provide me with all available options in response to the evidence. I have tonight directed the Department to implement a moratorium on the installation of any new Mark I restraint boxes, as seen being used in the footage. This will apply to the instalment of any new boxes with Commonwealth funds across global markets. Further, I have asked the Australian Chief Veterinary Officer to coordinate an independent, scientific assessment of the on-going appropriateness of both the Mark I and Mark IV restraint boxes. Finally, I have requested a thorough briefing on all of the legislative and regulatory responses available to me for responding to evidence of animal mistreatment, including the banning of trade to specific facilities or destinations. I asked industry at the beginning of this year for proposals on how welfare outcomes could be improved, particularly after animals arrive in importing countries. I am currently considering these proposals. It is clear that industry reforms to animal welfare standards have not gone far enough or been fast enough and much more needs to be done. 115 During the broadcast on 30 May 2011, Blake Dawson replied to Ms Evans' email of earlier that day, copying in Mr Glyde. They said that they made no comment on the non-legal issues of prohibition on export of livestock to specified countries or facilities, including the reaction from importing countries, but assumed that this had been taken into account. They noted that Ms Evans had discussed with them that evening that the Minister was "open to taking more direct action in terms of a prohibition" and thus they had added an additional option in their response. In response to the request about creating a non-disallowable instrument, Blake Dawson advised that one possibility was to amend the AMLI Act to exclude expressly the disallowance provisions of the Legislative Instruments Act for such a result, although the Bill for such an amendment was likely to be the subject of adverse comment, including, by the Senate Committee on the Scrutiny of Bills. Blake Dawson advised that there was one further option for the Minister to take more direct action, namely making an order under s 7 of the Export Control Act prohibiting the export of prescribed goods from Australia absolutely, or to a specified place, or unless specified conditions or restrictions were met. The solicitors advised that such an order would be a disallowable instrument, adding: However, if the order is drafted so that it is clearly based on animal welfare concerns (the welfare of Australian live-stock in importing countries/facilities) disallowance may not be an attractive option. For example, and without considering the drafting in detail, the order could provide to the effect that the export of live animals to [insert names of facilities/countries] is prohibited unless the Minister is satisfied that there are adequate arrangements in place between the Australian export industry and the facility/country to ensure that live animals exported from Australia to that facility/country are treated in accordance with OIE standards or will, within a specified timeframe, be so treated. (emphasis added) 116 Mr Glyde forwarded this email to Dr O'Connell early on 31 May 2011. 117 Meanwhile, late on 30 May 2011, the RSPCA and Animals Australia issued a media release calling for an immediate halt to the cattle trade to Indonesia. The media release asserted that representatives of MLA had visited one of the "most brutal" abattoirs shown in the Four Corners program six times in the previous 14 months. It criticised the use of the Mark I restraint boxes and adopted Dr Grandin's criticisms of their use. Other animal welfare groups and the Australian Meat Industry Council (AMIC) added their support. AMIC asserted that the footage "clearly damages the global image of the $15 billion …Australian meat industry". 118 On 31 May 2011, the Minister stated in a radio interview at 7.15am that he had launched an investigation into what he called the "shocking" footage broadcast the previous night. He said that he had placed a moratorium on the further installation of Mark I boxes and had had the Chief Veterinary Officer (CVO) commence a scientific review of them. He also said that he had asked his Department to provide him with all regulatory options for banning "exports to substandard facilities." He told listeners that "the practices depicted in the footage are unacceptable to the Australian community." When asked about the importance of the Indonesian market, he said: Look, we have an important relationship with Indonesia, not only exports of live cattle, we have an important relationship with sharing intelligence, dealing with a whole range of issues, so it's an important relationship, but it doesn't excuse what I saw last night, the government will be responding to the footage in a comprehensive and considered way. (emphasis added) 119 The interviewer also asked the Minister about the proposal by the independent member, Andrew Wilkie MP, to move that day in the Parliament to ban the export of livestock from Australia. The Minister responded by acknowledging the concerns but suggested that the interviewer should discuss those matters with Mr Wilkie. 120 At lunchtime on 31 May 2011 Mr Glyde, Andy Carroll, the CVO, Ms Evans, and another officer of the Department met with executives of the RSPCA, including Ms Neil, and Animals Australia at Parliament House. Mr Glyde informed the meeting of the Department's concerns about the practices that had been depicted in the previous night's Four Corners broadcast. He confirmed that the Minister had directed the Department to implement the steps that I have described in [118] when summarising the radio interview earlier that day. In addition Mr Glyde said that the Minister had directed the Department, first, to investigate all legislative and regulatory options available to improve animal welfare in the trade, and secondly, to establish an independent review to investigate the complete supply chain for live exports up to and including the point of slaughter. The RSPCA and Animals Australia agreed to provide all footage and other materials that would help and inform the CVO making his assessment. 121 Later on 31 May 2011, the RSPCA provided the Minister with further video material of cruel and inhumane treatment of cattle in Indonesian abattoirs together with its scientific assessment of that footage. That scientific assessment analysed in detail the mistreatment of Australian livestock at 12 named facilities in Indonesia. It pointed to the absence of evidence to suggest that the Australian export industry was in any position to have a significant impact on animal welfare in Indonesian slaughterhouses or to restrict the places in Indonesia to which their cattle could be sent. It stated: Workers at slaughterhouses tend to be unskilled and subcontracted on a temporary basis. Unless the slaughter of Australian cattle could be restricted to locations where a skilled and permanent workforce was employed, pre‐slaughter stunning was effectively used, training and auditing programs were in place, and enforceable animal welfare legislation was introduced, it is difficult to see how their treatment could be reliably and sustainably improved. 122 At 1.40pm on 31 May 2011 the Minister held a press conference at which he announced that he had put in place steps to suspend exports to all the facilities in Indonesia that the RSPCA and Animals Australia had identified. He also said that the Department would undertake a supply chain assurance process to ensure that standards and guidelines for animal welfare were met. He stated "Indonesia has substantially good abattoirs". When questioned about whether he might suspend the entire live export trade to Indonesia, the Minister said that that was a possibility "if we want to go that far: it's certainly on the table because it's important to ensure that we do have animal welfare outcomes that are acceptable and meet OIE guidelines" (emphasis added). 123 Also on 31 May 2011, Mr Glyde, Rona Mellor (another deputy secretary of the Department), Mr Carroll, Ms Evans and another officer met Mr Kane and Mr MacKinnon of ALEC. During this meeting Ms Mellor asked how many animals were then currently in the pipeline and the ALEC representatives estimated that 28,000 were on the water and a further 40,000 were due to be loaded on ships over the following three weeks. The meeting discussed the possible means of establishing systems to track animals in Indonesia after their export from Australian. The ALEC representatives said that even with the tightest controls on the supply chain, cattle could find their way into poorly run facilities. They said that the risk of such leakage was present in any system in the industry and they would provide the Department with possible scenarios. 124 The Minister's notes for what he told the caucus meeting of all his political party's (the Australian Labor Party) Members of the House of Representatives and Senate on 31 May 2011 explained the actions that he had taken to that point. He told them that he had ordered the Department to conduct an investigation into the footage of the Four Corners program and the practices it revealed, imposed a moratorium on the installation of Mark I boxes using Commonwealth funds, asked the CVO to review the appropriateness of using the Mark I and IV boxes, and required a briefing on all legislative and regulatory options available to address animal welfare concerns, including banning specific facilities. He told the caucus meeting that a decision to suspend, ban or phase out live animal exports "would have serious consequences". He pointed out that there were no abattoirs north of a line between Townsville to Geraldton which "means that the live export trade is the main option for cattle produced from this region". He also warned of the possibility of a negative impact on indigenous employment and income as well as the price of beef and lamb for producers across Australia, given the additional meat that would be placed on the domestic market in consequence of a ban. 125 On 1 June 2011 the Minister wrote to Mr Kane asking for the industry to cooperate in suspending the supply of Australian cattle to the 12 facilities the subject of the RSPCA and Animals Australia's materials.

5.1 The First Control Order 126 On 2 June 2011 the Minister made the First Control Order. It came into force on 3 June 2011 after its registration under the Legislative Instruments Act. It specifically prohibited the export of live animals to 12 named places (being those that the RSPCA and Animals Australia had identified to the Minister on 31 May 2011) except pursuant to an approval under cl 5 (the exceptions clause) (cl 4). Relevantly cl 5 provided: 5 Approvals where places conform to OIE recommendations (1) This section applies if the Minister is satisfied, in relation to a place specified in Schedule 1, that: (a) slaughter and related operations are being conducted in accordance with relevant OIE recommendations; or (b) arrangements are in force to ensure that, within a period satisfactory to the Minister, slaughter and related operations will be conducted in accordance with relevant OIE recommendations. (2) The Minister may grant approval in writing for the export of live animals to a place referred to in section 5(1). The approval may be granted subject to conditions specified in the approval. (3) The Minister must not grant an approval in the circumstances specified in section 5(1)(b), unless the Minister is satisfied that slaughter and related operations with respect to the animals to be exported pursuant to the approval will be conducted in accordance with relevant OIE recommendations. (4) Without limiting the circumstances in which the Minister may revoke an approval given under section 5(2), the Minister may revoke the approval if: (a) the Minister considers that operations at the place are not being conducted in accordance with relevant OIE recommendations; or (b) conditions in the approval are not being complied with. 127 Thus cl 5 authorised the Minister to give an approval if satisfied that the slaughter of animals at any of those otherwise prohibited places complied with the recommendations set out in chapter 7.5 of the OIE Code. 128 Also on 2 June 2011, the Secretary made the Australian Meat and Live-stock Industry (Protection of Animal Welfare) Order 2011 (the First AMLI Order). It prohibited the holder of a livestock export license from exporting livestock to any of the 12 named places (cl 4). It required a license holder to provide the Secretary with a declaration that the holder had taken all reasonable steps to ensure that the livestock would not be taken to any of those places and evidence that there was no intention to do so (cl 5). 129 On 2 June 2011, Terry Nolan, the Chairman of AMIC, wrote to the Minister. AMIC represented the vast majority of meat producers in Australia, in particular those who exported meat products that had been processed domestically. AMIC recommended that all live shipments to Indonesia be suspended until an enforceable system for ensuring animal welfare to a standard equivalent to the world class ones in Australia was in place. 5.2 The 2 June recommendations 130 On 2 June 2011, Mr Glyde provided the Minister with a Departmental minute as to the available options. The minute recommended that the Minister sign a three page version of a draft letter to the Prime Minister seeking Cabinet agreement to impose a compliance regime that would ensure that OIE animal welfare standards applied to cattle through and up to the point of slaughter. The Minister signed and dated this minute on 6 June 2011. The minute advised that enforceable options to achieve the best animal welfare outcomes would have the most significant impact on trade to Indonesia, the domestic and other markets. It also advised that other options, for a targeted response, would allow trade to continue while being "extremely difficult to enforce and therefore would not merit the standard of assurance we understand you require". The minute made the following points: a broad prohibition of trade could be enforced, in among other ways, by prescribing a particular period, a specific form of livestock, the achievement of a particular standard and or a specific country. Such prohibitions were relatively easy to implement but would involve significant impacts in Australia on the industry, the market and employment. It was likely that there would also be an impact on overseas markets; the Department, at that time, was only confident that exporters to Egypt could meet a standard of a closed loop to the point of slaughter that complied with the OIE Code standards; a standard that relied on the industry based approach or foreign regulation would not meet animal welfare objectives at that time; requiring mandatory stunning of animals in the importing country would be inconsistent with current Australian practice that allowed slaughter without the animal being stunned; targeted controls would vary in their efficacy in achieving animal welfare outcome and would be difficult to enforce, and "Targeted controls based on negative lists would remain reactionary, addressing welfare concerns as they are identified and/or reported. Enforcement would be very difficult to achieve and leakage is likely. Positive lists also imply a level of ongoing monitoring and compliance activity that is not practical in another country without the full support of the importing country Government. This is unlikely to be provided." (emphasis added); the likely leakage of animals (loss of animals from the controlled system) would result in ongoing criticism of the Government due to a perceived inability to deliver on commitments to address animal welfare issues; non-regulatory options, such as leaving industry to address the problem had failed; and there would be "substantial domestic impacts" from any restrictions. 131 Under the heading "Discussion", the minute stated: 15. Regardless of the option, regulatory or non-regulatory, the establishment of traceability systems for exported animals from northern Australia and enhanced government to government engagement on animal welfare issues will be important. Implementation of the National Livestock Identification Scheme (NLIS) for exported cattle would allow for traceability and audit and would be needed to underpin the transparency of the future trade. 16. Depending on the approach taken, there will be a number of impacts including for example: • on the price of beef in Australian and overseas as well as domestic employment; • on animals on the water and in the supply chain. Consideration would have to be given to livestock shipments currently on water (in transit shipments) and shipments under various stages of preparation. • on other markets that are heavily reliant on Australian livestock; and • possible focus on domestic animal handling practices and animal welfare issues by animal welfare groups. (emphasis added) 132 The draft letter to the Prime Minister (which remained unsent) proposed putting in place a compliance regime in which an export permit for each individual consignment could be issued only to a person who could demonstrate verifiably its full control over the welfare of the animals right up to the point of slaughter. The draft letter estimated that it would take at least six months to implement such a system effectively and proposed that, in the interim, the Government prohibit the export of all live cattle, except to Egypt which already had in place arrangements for a closed loop system. The draft letter stated that the live animal trade, as it then operated, was worth about $1 billion annually and supported about 10,000 jobs, most being in Northern Australia. It also provided data including that, in 2009 and 2010, total live cattle exports were worth respectively $666 million (for about 950,000 head) and $684 million (for about 875,000 head) of which about 770,000 and 520,000 head were exported to Indonesia (worth in 2010 about $400 million). It also stated: Indonesia and other countries where trade would initially cease are unlikely to be fully supportive of the approach that I propose. Concerted effort from the Government will be needed to explain the importance of animal welfare in the Australian community to our trading counterparts in the live trade. In Indonesia's case, it may cause friction in the agriculture arena (there are already tensions there over beef trade) and beyond. The Government will need to rely on the mature and deep relationship we enjoy with Indonesia and carefully handle the announcement and ongoing need for access to the supply chain so as to avoid the possibility of offence. I will seek the guidance of the Minister for Trade and the Minister for Foreign Affairs in this regard. I understand that any legal risks under the WTO and free trade agreements can be managed and that Australia would have good grounds to defend any international legal challenge. (emphasis added) 133 The minute attached six suggested recommendations to Cabinet, including (the 2 June recommendations): 1 I recommend that the Cabinet agree to put in place a compliance regime for the export of live cattle for slaughter whereby export permits are only provided: a. On a case by case basis for individual consignments b. When an exporter can verifiably demonstrate that they have full control over the welfare of the animals they export through to and including the point of slaughter. c. When the standard of welfare achieved is at least consistent with Guidelines in the Terrestrial Animal Health Code (2010) published by the World Organisation for Animal Health (OIE). 2 I further recommend that Cabinet agree to act immediately to prohibit the export of live slaughter cattle to any market with the exception of those where there is a closed loop system that meets the standard of welfare referred to in Recommendation 1 c), pending implementation of the compliance regime referred to in Recommendation 1). 3 I recommend that the Cabinet agree that consideration be given to provision of exemptions from the prohibition where there are contractual obligations with trading partners, predating the prohibition that would otherwise be breached. (emphasis added) 134 On or shortly before 2 June 2011, Ms Evans sought urgent advice from Will Story, Principal Legal Officer of the Attorney-General's Department's Office of International Law (AGD). She told him that the Government was considering implementing an immediate prohibition on all exports of live cattle, except to Egypt, for six months as a transitional measure. The transition would be to a system under which such exports would be permitted if, in effect, there were a closed loop system in which the cattle would be treated and slaughtered only in accordance with the OIE Code. Ms Evans sought Mr Story's advice on the main international trade law considerations that such a course of action entailed.

5.3 The Minister meets with the industry 135 On 2 June 2011, Jock Lawrie, the president of the National Farmers' Federation, Mr Kane, Mr MacKinnon, Roly Nieper, the chairman of LiveCorp and Don Heatley, the Chairman of MLA were waiting to meet the Minister at his Parliamentary office. The Minister appeared and pointed to Mr Heatley and Jock Lawrie and said "I want you and you" and they followed him into his office with the only other person present being Mr Carey. Mr Heatley gave evidence about the meeting which lasted about two hours. (When I refer to a Mr Lawrie subsequently in these reasons, the reference is to Alistair Lawrie (see [47]), the Minister's senior advisor). Mr Heatley said that Jock Lawrie said very little during the meeting. 136 The Minister told Mr Heatley and Jock Lawrie that the industry needed to put people on the ground in Indonesia. Mr Heatley said that the industry already had some, but intended to have more people in place as quickly as possible to raise the standard of abattoirs there to achieve OIE requirements. 137 The Minister asked what could be done to resolve the issue. Mr Heatley said that there were some supply chains in Indonesia, such as Elders, that were better than others, in particular the Elders abattoir, which was a world class facility. He said that the industry intended to bring about 25 abattoirs up to the same standard, indeed to the OIE standard, as quickly as possible. He was unsure, when giving evidence, whether the Elders abattoir then complied with OIE requirements, but he said it "clearly had the potential to do so" and that the MLA considered that there were approximately five abattoirs in Indonesia that could achieve the OIE standard "very quickly…and our plan was that we would, within two weeks, have approximately 25 up to that standard." 138 The Minister wanted to know if the industry could move to a closed loop with supply chain assurance. Mr Heatley remarked that one of the major issues would be the prevention of leakage, and the Minister said that this was also one of his concerns. Mr Heatley said that the industry would be "raising the standard of these abattoirs to a point where that leakage didn't occur as best we possibly could." He said that there could not be "a complete fix overnight" to a supply chain in a country like Indonesia. Mr Heatley made the point that there were sovereignty issues in Indonesia that operated in relation to Australia "wanting to impose our will or our view on the Indonesia Government or industry." He reiterated that there were currently about five facilities that were "capable of being OIE accredited" and able to be part of a closed loop supply chain system and the industry was looking to increase that number. 139 The Minister raised the topic of stunning which he said was important. Mr Heatley said that it would be necessary "to work very closely and carefully with…the Indonesian government and industry" to implement stunning in supply chains that complied with the OIE Code. Those present discussed what was needed to be done to achieve a closed loop with supply chain assurance. This included introducing stunning facilities and implementing the National Livestock Identification Scheme in order to prevent leakage from the supply chain in Indonesia. Under the NLIS each animal has a unique, machine readable tag so that it can be traced by reading the tag at every point in the process from the time it is tagged in Australia to when it is slaughtered. 140 During the meeting the Minister said "your social license is lost" and that the industry needed to take action in the next 24 hours. Near the end of the meeting, Mr Heatley asked the Minister that, if he were thinking of implementing a ban on the live trade, could he do two things, first, let the industry clear the pipeline of the tens of thousands of head of cattle moving in the supply chain in Australia, and secondly, consider the geopolitical fallout from any decision that he might take. Mr Heatley expanded on the first request explaining that currently there were people mustering, picking up or delivering cattle to depots or ships, there were ships on charter either inbound on the water or already in port and if there were to be "any cessation of the trade, then it was going to cause enormous issues for the Australian industry" and had the potential to cause major animal welfare issues. Mr Heatley said that, when he raised the second request, the conversation proceeded as follows: His words to me were: "What would you know about Indonesia?" My response was that: "Minister, I had been in and out of Indonesia, South East Asia generally, and pretty much all the markets around the world to which Australia supplied livestock, and that I did not believe that a cessation to the trade, if it was to occur, would be accepted very well by the Indonesians." (emphasis added)

5.4 The pressure for action grows 141 By 3 June 2011 there was sustained public pressure for more Government action. The activist group, GetUp, had launched a television advertising campaign in association with the RSPCA and Animals Australia, calling for a ban on live cattle exports. Ms Neil of the RSPCA wrote to the Minister again on 3 June 2011, identifying more Indonesian abattoirs with poor animal welfare standards. 142 Also on 3 June 2011 Senator Bob Brown, the leader of the Australian Greens political party, wrote to the Minister, other senior members of the Government and the Opposition, informing them that members of the Australian Greens had given notice in both Houses of the Parliament of their intention to introduce Bills to prohibit live export of animals for slaughter. In addition, Mr Nolan, for AMIC, wrote to the Minister on 3 June 2011 saying that AMIC saw no alternative to the immediate suspension of all live animal exports to Indonesia until an enforceable system was in place there to ensure that, up to the time of slaughter, the same animal welfare standards as in Australia would apply to exported animals. 143 On 3 June 2011, Greg Brown, as president of the Cattle Council of Australia, Mr Heatley as chairman of MLA, Mr Nieper as chairman of LiveCorp and Mr Kane as chairman of ALEC wrote to the Minister with their plan, on behalf of the live cattle export industry, to assure the welfare of Australian cattle being processed in Indonesia in response to the Minister's request for such a proposal. The letter acknowledged that the Four Corners broadcast had highlighted grossly unacceptable conduct. It said that the plan addressed the Minister's request that "assurances be provided right along the supply chain" that the cattle be treated in accordance with acceptable animal welfare standards and directed to facilities that met OIE standards". The letter said that the plan committed the industry to investing in abattoir equipment in Indonesia, including, as a central feature, a rapid increase in stunning to raise animal welfare standards. The four signatories wrote that through consultations with Indonesian feedlot owners, they were compiling a list of facilities that potentially met the OIE criteria and that they anticipated that there would be 25 or more facilities that would be accredited by independent veterinary experts of which five, that used stunning, were "modern, advanced facilities". They said that the 25 facilities currently accounted for 40% of the trade. They added that it "is important that the plan be implemented quickly, with abattoirs accredited within two weeks". The letter requested the Government's cooperation in helping to achieve a paid accreditation process. It said: We presume that dialogue has occurred between the Australian Government and Indonesian Government over issues highlighted in last Monday's Four Corners program. It will be important to have Indonesian Government support for the measures outlined in the Plan, including for increased stunning. The letter warned "we cannot guarantee to immediately prevent any instance of unsatisfactory welfare practices in Indonesia - we have no power to do so". It stated that the industry was in the process of increasing the number of Australian cattle handlers in Indonesia from four to over 20 during the following two weeks to ensure the appropriate use of restraining boxes in accordance with the OIE Code. 144 The plan attached to the industry's letter acknowledged that, as it had been prepared only by the industry, it would be beneficial to receive input from each of the Australian and Indonesian Governments and Indonesian industry. The plan said that a preliminary audit of about 100 abattoirs slaughtering Australian cattle in Indonesia resulted in four categories of animal welfare standards ranging from the limited number of "A" (modern advanced facilities using stunning) and some "B" (facilities that met the OIE Code), at least two of which had recently begun using stunning (which, the plan noted, the OIE Code did not make mandatory) and others used restraining boxes "with a high level of proficiency". The plan recommended that regular checks be made by an independent team of veterinary experts approved by the Australian and Indonesian Ministers of Agriculture to ensure that high levels of animal welfare continued. It expressed the intent, over time, to raise the animal welfare standards by raising as many of the 'B' level abattoirs to 'A' level as possible. 145 The plan noted that currently the supply chain involved Australian exporters selling cattle to Indonesian feedlots who then on-sold to butchers or other slaughterhouses. The letter stated "[w]ith a supply chain this long control is sometimes lost over where cattle are finally slaughtered." It recommended shortening the supply chain to the point of slaughter in Indonesia in order to prevent leakage and to provide better assurance of maintaining animal welfare. The plan recommended establishing a list of accredited feedlots to which export permits for Australian cattle only could be issued. The accredited feedlots would have to provide assurances that they would retain control of the cattle to the point of slaughter, being only at an accredited abattoir. The plan contemplated that as soon as practicable an NLIS tagging system be introduced to verify that Australian cattle only went through the restructured supply chain of accredited feedlots and abattoirs. It concluded: "To be fully effective the plan requires the strong commitment of the Indonesian Government". 146 On 3 June 2011 Wellard wrote to the Minister. It expressed its disdain for the treatment of the animals depicted in the Four Corners broadcast. It said that, in 2010, it had launched two ships to carry livestock, Ocean Swagman and Ocean Outback and had commenced construction of two more, all of which had, or would have, high standards of animal welfare. Wellard said that it was both a producer of livestock and commercial exporter of others' animals. It attached its own animal welfare plan to the letter in which it warranted that all feeder cattle would only be exported to Indonesia after 2 June 2011 under tripartite commercial contracts between Wellard and both the importer and abattoir owner. It said that those contracts would bind the parties to scan and keep records of each animal that Wellard supplied and, relevantly, would require, among a detailed list of matters, the abattoir owner to evidence compliance with the OIE Code and to use stunning. 147 On 3 June 2011, Mr Lawrie asked Ms Mellor for information about the then current status of export permits and applications. She replied later that day, noting that six ships with a total of about 25,000 head were in transit to Indonesia, one ship was due to depart that day, and three more permits had been granted for exports up to 8 June 2011 for a total of about 12,500 head, including one for NACC to export 1,900 head from Port Hedland on Falconia, with her departure expected on 5 or 6 June 2011. Ms Mellor also gave details of seven further applications for export permits of livestock cargoes to be loaded on ships due to depart between 8 and 18 June 2011 totalling about 44,000 head. Mr Lawrie forwarded that email directly to the Minister at about 2.30pm that day in one of the very few documents, other than the three Departmental minutes and his media interviews, in evidence as to anything that the Minister saw or said in the lead up to his making the Second Control Order. 148 At 2.43pm on 3 June 2011, Mr Glyde emailed Mr Lawrie with the Department's appraisal of the plan that the four industry bodies had sent the Minister earlier that day. Mr Glyde noted that officials of the Department were meeting with those bodies that afternoon. He wrote that "[t]he plan lacks substance, detail and precision and in our view should not be endorsed by the Minister". He put forward several negative and positive comments on the plan, including its failure to explain how its proponents had suggested that some Indonesian facilities already complied with the OIE Code, its entrenching the use of Mark I boxes, its lack of timelines for the achievement of milestones and its limitation on the accreditation of feedlotters to account only for the movement, but not welfare, of cattle. In particular, Mr Glyde wrote "the compliance regime is entirely industry based". 149 On the positive side Mr Glyde noted that the plan had included independent verification and accreditation, the acceptance of the OIE standards and an acknowledgment that the Mark I boxes were not the best available technology. 150 However, Mr Glyde's assertion that the plan's compliance regime was "entirely industry based" was not correct. That is because the plan contemplated that both the Australian and Indonesian Governments would need to approve an independent team of veterinary experts with responsibility to ensure that animal welfare standards were met and it required "the strong commitment of the Indonesian Government". As the letter of 3 June 2011 enclosing the plan envisaged, the plan would require the involvement and cooperation of both countries' Governments. And, as will appear, the Minister did nothing to seek any involvement of or cooperation from the Indonesian Government before deciding to make the Second Control Order. 151 At 3.30pm Mr MacKinnon met with Mr Glyde and other officers of the Department at its Canberra offices. Mr Glyde told Mr MacKinnon that at best, the industry plan presented an overall concept, but lacked detail and specificity and that this was the view of "the Minister's Office". The Department suggested that the industry needed to consider the impact of itself voluntarily pausing exports. Mr MacKinnon explained that there were already shipping contracts in place for up to the next two years and they had a high value. 152 The officers told Mr MacKinnon that in order for the Minister "to stand with industry" the plan would need to provide assurance that an appropriate, detailed framework could be implemented within a reasonable time. They said that the use of Mark I boxes was under consideration, but currently those boxes were unacceptable. They said that the Department had to provide the Minister with advice about stunning and whether it was achievable across the industry. Mr MacKinnon said that stunning was an issue that was dividing the industry. The officers said that the Department was not the setter of standards in Indonesia but that "the best opportunity" was for the whole supply chain to comply with OIE standards to the point of slaughter. Mr MacKinnon agreed that auditable standard operating criteria needed to apply throughout. The officers said that the plan "needed to answer the burning question for the public and other stakeholders - 'How many more animals will be inhumanly slaughtered while you fix this?'" Mr MacKinnon responded saying that the plan would also highlight the roles of industry and the Government and that he would work with his industry members to address the required specificity, transparency and expectations of the public. 153 Late on 3 June 2011, Mr Story provided Ms Evans with the AGD's draft advice that Australia would have a good arguable case that the measures to implement a six month ban on all live cattle exports would not infringe the General Agreement on Tariffs and Trade. 154 Also, late on 3 June 2011, Paula Svarcas, the Department's acting general manager of bilateral trade, caused Departmental officers to make urgent enquiries of the Australian Embassy in Jakarta with a view to obtaining visas for two named Departmental officers and "an as yet unnamed additional person from the AVA" (viz: Australian Veterinary Association) to visit Indonesia. However, Indonesia did not grant any such visas before 7 June 2011. Ms Mellor also informed Mr Lawrie late on 3 June 2011 that the Department was seeking visas for two staff to travel to Indonesia as quickly as possible, after a discussion they had had that morning. She wrote "[a]s we understand [sic] the size and nature of this task, we will assess the best approach to continue the development of our knowledge of the supply chain over there".

5.5 The weekend of 4 and 5 June 2011 155 During the weekend, officers of the Department worked on a Departmental minute and a redraft of the proposed letter from the Minister to the Prime Minister. In response to a query he had raised about existing contracts, Ms Evans told Mr Glyde that the Department did not "know much about what is involved at this point". 156 On Saturday 4 June 2011, Cathryn Geiger, an acting advisor in the office of the Prime Minister sent Mr Lawrie and Ms Burgman a list of questions for "your two-step proposal" that she wanted them to consider over the weekend, presumably so that this would assist during the lead up to the Cabinet meeting on the evening of 6 June 2011. Ms Geiger stated in an email to other staff in the Prime Minister's office that her purpose in posing those questions to the Minister's staff "is to get them thinking through the consequences of an immediate suspension, prior to actually enacting it." The questions included: Suspension: • What date would the suspension take effect? How will the 3 boats due to leave on Wednesday (presumably loaded on Tuesday) and the other boats later in the week be managed? • What are the legal implications for the Government (and any flow on fiscal implications)? • What is the expected diplomatic and trade impacts, particularly with Indonesia? • What is the economic impact, particularly on jobs in the north? Substantive policy response: • The involvement of industry and animal rights groups will be important in establishing a satisfactory solution for all live exports - what is the likely process for their engagement? • What is the expected direction for this industry in Australia? (emphasis added) 157 As will become evident, there is no evidence to suggest that the Minister gave any substantive thought to the consequences of a suspension of all live cattle exports for the relationship with, and to any response by, Indonesia. 158 Later on 4 June 2011 Mr Lawrie forwarded Ms Geiger's email to the Secretary, Mr Glyde and Ms Evans. He asked them for assistance in answering, among others, all but her first question under the heading "Substantive policy response" that I have extracted in the questions above. Mr Lawrie explained that Ms Geiger's reference to the 'two-step proposal' related to "a possible temporary suspension then reopening (on either interim arrangements or on permanent basis in some months) noting that the Minister has not finalised his position and this is also subject to Cabinet". He also sent a separate email to Ms Evans and Ms Burgman saying that revised talking points were probably more important now than the exact content of the letter to the Prime Minister, and that he agreed "that writing to Indo[nesia] would be a good idea, although that is probably a later priority for tomorrow or Monday morning". 159 Ms Evans responded later on 4 June 2011. She said that the Departmental minute of 2 June 2011 attaching the draft letter to the Prime Minister (see [132] above) summarised all the Department's advices on legislative and regulatory responses. 160 Late in the evening of 4 June 2011, Ms Mellor emailed Susan Reye, a senior general counsel with the AGS seeking urgent advice. Ms Mellor said that in "the range of scenarios we are developing, a suspension or temporary ban on the trade with Indonesia is under consideration within the Department." She sought advice on, first, the Secretary's powers, and secondly, the most effective way, to suspend trade with Indonesia or more widely, in the event that the Government wished to do so. She also sought advice on the consequences where a consignment of live animals was being loaded on a ship when a new order took effect. 161 On Sunday 5 June 2011 at 11.35am, Mark Laduzko of the Department of Prime Minister and Cabinet emailed Ms Mellor about the questions that Ms Geiger had sent Mr Lawrie the previous day. Mr Laduzko wrote: Below are questions from the PMO to your MO. It's a bit concerning that this appears to be coming to Cabinet without papers or agency consultation. Obviously, key issues in any proposal are managing the bilateral relationship and an industry and animal protection stakeholder role in developing the response. Would also be important to have legal advice on potential exposure to compensation claims from industry players that might be affected by a ban on trade. (emphasis added) 162 Mr Laduzko's references to 'PMO' and 'MO' were to the office (i.e. to the political, non-professional public service, advisers) of the Prime Minister and the Minister. 163 During the afternoon of 5 June 2011 the Minister met with, among others, Mr Glyde, Ms Mellor and Ms Evans. The Minister asked for more information on three topics; namely, first, the estimated costs of compensation for detriment caused by defective administration (or CDDA) in the event of there being a temporary or permanent ban on exports of live cattle to Indonesia, secondly, animal welfare, and thirdly, economic impacts. That led to the AGS being asked for its advice on the potential exposure of the Commonwealth to claims for compensation. 164 On 5 June 2011, Mr Glyde, Ms Mellor and Ms Evans received an update on the five ships that were either being loaded or about to load. The update stated that one was already sailing, and the next one due to load, commencing at 8pm to 9pm WST on 6 June 2011, was Falconia. The update noted that the cattle originated from properties through the Pilbara with the furthest about 900km away from the port. 165 At about 6.45pm on 5 June 2011 Ms Evans replied to the questions that Mr Lawrie had sent the previous day: Possible Suspension: • What date would a possible suspension take effect? (any date between now and thurs/fri?) THE SUSPENSION WOULD TAKE EFFECT 24 HOURS AFTER NEW ORDERS LODGED WITH FEDERAL REGISTER OF LEGISLATIVE INSTRUMENTS. THE TIMING WILL DEPEND ON WHEN POLICY DIRECTION IS CONFIRMED. • How will the 3 boats due to leave on Wednesday (presumably loaded on Tuesday) and the other boats later in the week be managed? IF THE BOATS LEAVE PRIOR TO THE SUSPENSION THEY WOULD BE SUBJECT TO THE EXISTING ORDER THAT THE ANIMALS NOT GO TO ANY OF THE 12 BANNED FACILITIES. IF THEY ARE STILL LOADING/AT DOCK THE ANIMALS WILL BE UNLOADED AND WILL NOT DEPART. • What are the legal implications for the Government (and any flow on fiscal implications)? ADVICE IS BEING PREPARED. • What is the expected diplomatic and trade impacts, particularly with Indonesia? WE EXPECT INDONESIA TO BE DISAPPOINTED WITH ANY SUSPENSION OF TRADE. WHILE THEY HAVE BEEN UNDERSTANDING TO DATE, THEY WOULD LIKELY EXPECT TO CONTINUE WORKING SLOWLY TO IMPROVE ANIMAL WELFARE OVER TIME. THERE COULD BE RETALIATORY ACTION BUT IT IS NOT POSSIBLE TO PREDICT AND WILL DEPEND ON HOW MUCH EFFORT IS PUT INTO COMMUNICATING THE SUSPENSION AND ASSURING INDONESIA THAT EFFORT WILL BE MADE TO REOPEN AT LEAST SOME OF THE TRADE AND HELP FACILITIES TO MEET THE NEW EXPECTATIONS. OTHER COUNTRIES WILL ALSO BE AFFECTED. WE EXPECT THE SUSPENSION WOULD PREVENT EXPORT OF SLAUGHTER CATTLE TO TURKEY AND CHINA. IT MIGHT BE ABLE TO CONTINUE TO JAPAN, EGYPT AND POSSIBLY ISRAEL (NO AUSTRALIAN OFFICIAL HAS SEEN THE ABATTOIR IN ISRAEL SO THIS WOULD NEED TO BE CONFIRMED). • What is the economic impact, particularly on jobs in the north? ABARES REPORT ATTACHED. Substantive policy response: • What is the expected direction for this industry in Australia? DEPENDS ON POLICY RESPONSE. WITH NO CHANGE, INDUSTRY EXPECTED TO CONTINUE AT CURRENT LEVELS OR TO GROW. WITH A SIGNIFICANT RESTRICTION ON EXPORT MARKETS THE INDUSTRY WOULD BECOME SIGNIFICANTLY SMALLER BUT SUSTAINABLE. (emphasis added in original formatting) 166 At about 7pm on 5 June 2011, one of the AGS solicitors wrote back to Ms Evans concerned that the AGS was "flying somewhat blind" in providing the requested advice (emphasis added). That was because the solicitors were not familiar with the nature of the contractual arrangements, the premises for holding livestock or the other possible claimants. Mr Glyde replied about 50 minutes later saying that the main focus was to get a legal opinion on the Government's exposure to successful compensation claims by companies that could be affected by a temporary or permanent ban on the export of live cattle for slaughter. 167 At about 8.15pm on 5 June 2011, Mr Glyde asked Paul Morris, a Deputy Secretary in the Department, to obtain more information by noon on Monday 6 June 2011 about the consequences of any proposed suspension of live cattle exports to Indonesia, and to prepare a short summary for the Minister to use in explaining the matter in Cabinet, including the impacts of such a ban in both Indonesia and Australia. 168 At 10pm on 5 June 2011, Mr Lawrie emailed Ms Evans and asked her for a revised Cabinet cover brief (scil: Departmental minute) for the next evening's Cabinet meeting. She responded at 10.25pm saying that she would do so by noon the next day and asked if Mr Lawrie wanted a set of recommendations "that just gets the minimal outcome we discussed today". He replied immediately: Yes please. Covering high level principle (of where we want to get to eg consignment based etc) plus possible suspension only to Indonesia for slaughter cattle. Will let you know if that changes. (emphasis added) 169 Ms Evans immediately forwarded that email to Mr Glyde and Ms Mellor commenting "Info: Fall back recs." [scil: recommendations].

5.6 The events of 6 June 2011 170 At about 6am on 6 June 2011, Ms Evans sought clarification from Mr Lawrie about what he expected from the Department. He responded immediately saying that he wanted a brief (i.e. Departmental minute) revised from the previous week's (i.e. the one with the 2 June recommendations) and a revised draft letter (to the Prime Minister). 171 Ms Evans forwarded to Ms Svarcas at 9.22am on 6 June 2011 copies of a two page revised draft letter, a cabinet recommendation and talking points that she had taken to the meeting with the Minister the day before. That version of the draft letter to the Prime Minister proposed prohibiting the export of live cattle for slaughter to any market where there was a significant risk that OIE standards were not being met, subject to "limited exceptions" to the interim prohibition where contractual arrangements would otherwise be breached, as being worth considering. The form of the draft Cabinet recommendations was the same as that in the 2 June recommendations (see [133]) except that they now proposed that Cabinet note that he, rather than Cabinet, relevantly, would act to prohibit immediately the export of live cattle for slaughter to any market unless there were in place, in effect, such a closed loop system (the 5 June recommendations). 172 The 5 June 2011 draft talking points stated that: • The only other option is an outright ban on live slaughter cattle exports [to Indonesia]. • As this new approach will take time, an interim ban on live cattle (for slaughter) exports is the only pragmatic way to proceed. • The impacts on the industry, and the communities that depend on it, will be dramatic. Consideration may need to be given to transitional assistance. • A reduction in the supply of live slaughter cattle will also have adverse impacts on our trading partners, which will need to be managed. • I have given consideration to the full range of regulatory options available. • While there is legal scope to apply a number of arrangement that target individual facilities or exporters, the ability to ensure compliance limits our choices. (emphasis added) 173 The draft talking points anticipated that it would take six months to implement the new system. The draft talking points also explained that other approaches, such as that in the First Control Order, were impractical because those would involve continuing revelations of facilities of concern and the Minister would have negligible capacity to assure the Government and the community about compliance with the OIE Code by each facility to which exports had been permitted. The draft also stated that the Government had no role or capacity to act overseas and it was unlikely that it could rely on assurances from other governments. It stated that, in the interim, such a regime of prohibition, was the only way to avoid ongoing criticism about animals shipped from Australia. The draft talking points stated that the live cattle export industry, including producers and other businesses in the supply chain, would experience immediate cash flow consequences and damages might be sought in relation to existing contracts with shipping companies and importers. The draft also stated that, in addition, relationships with other countries importing live cattle for slaughter (Turkey, China, Japan and Israel) would be "affected if we choose to extend the prohibition in a manner that would be consistent for all markets" and: Announcement of the approach will need careful handling (it would be best if I can advise the Indonesians personally, before it is announced) and we will need ongoing cooperation from Indonesia to reopen compliant supply chains as soon as practical. (emphasis added) 174 At some point on 6 June 2011, Mr Glyde provided a Departmental minute for the Minister. It recommended that he sign a draft letter to his Indonesian counterpart, Minister Suswono, formally advising him of the effect of the First Control Order. The draft letter referred to the Indonesian Ambassador having told senior officials in the Department that the behaviour shown on the Four Corners program was illegal. It sought in-country cooperation from Indonesia for officials and animal welfare experts to secure the outcomes in Indonesian facilities that the Government was seeking. Although the Minister signed the letter on 6 June 2011, it was never delivered to Minister Suswono. 175 As Mr Lawrie had requested on the previous evening ([168]), Mr Glyde wrote and dated on 6 June 2011 a second updating Departmental minute, which the Minister did not sign. In addition to repeating much of the material in the 2 June 2011 minute (see above [130]), it stated: Australia supplied 100% of Indonesia's live export needs; There were precedents for suspending live animal trade, including two that had not been challenged by legal proceedings, namely in 2003 to Saudi Arabia, and in 2006 to Egypt. However, Wellard had sued a former Secretary in respect of his decision to prevent a shipment leaving for the Middle East, but this action had settled at a mediation (but the minute did not state on what basis); and The Indonesian Ambassador to Australia had apologised officially to Departmental officials and the Indonesian Consul General in Perth had complemented this by making a public apology for the unacceptable treatment of animals as shown in the Four Corners program. They and Indonesian Department of Agriculture officials had said that the slaughtering methods depicted in the broadcast were not halal and were "keen to work with Australia to resolve the issue" (emphasis added). Prophetically, the minute informed the Minister: Nevertheless, Indonesia's Agriculture Minister Suswono, together with a number of Indonesian Parliamentarians, continue to voice concerns that there would be significant impact from a live cattle shortage before and during the Ramadan religious period, which could trigger retaliatory actions and potentially affect the broader trade and economic relationship. (emphasis added) 176 The version of the 6 June 2011 minute in evidence attached both a two page and a four page long draft of a letter to the Prime Minister. As I have noted at [171] Ms Evans had taken to the Minister's office the previous day a two page long version of that letter. The substance of the talking points attached to the 6 June 2011 minute remained the same as those Ms Evans had taken to the Minister's office the previous day. The four page draft letter reflected those talking points more closely than the earlier, shorter versions, and contained a statement that the Minister had considered other options, including using lists of either prohibited or permitted facilities that could receive Australian cattle. But, the draft stated these options would not be "sufficiently enforceable to safeguard the Government's reputation on animal welfare, which is the critical objective at this point". It also stated that "Indonesia and other countries where trade would initially cease are unlikely to be fully supportive of the approach that I propose" (emphasis added). 177 At about 10.06am on 6 June 2011 Blake Dawson emailed its draft advice on the legal mechanisms that the Government could use to prohibit the export of all cattle to Indonesia, having regard to the fact that, at the time any prohibition came into force, some cattle may be in different stages of the export process. The draft advice referred to the powers of the Minister under the Export Control Act and of the Secretary under the AMLI Act. However, it did not discuss any particular draft order or any considerations relevant to its validity in the circumstances. 178 During the morning of 6 June 2011 the RSPCA and Animals Australia issued a press release headed "Minister's Inaction fails Animals and Domestic Beef Industry". The release referred to AMIC's support of the cessation of the live cattle trade to Indonesia. Also during the morning of 6 June 2011 representatives of Animals Australian and AMIC met with the Minister at his office and drew his attention to the press release. 179 At about 12.10pm on 6 June 2011 Ms Evans sent an email to Mr Lawrie, Ms Burgman, with copies to the Secretary, Mr Glyde and Ms Mellor attaching three options (A, B and C) as draft recommendations for the Minister to put to Cabinet. There is no evidence that the Minister personally (as opposed to his "office") received or considered the options or that they reflected his thought processes at any stage of his decision-making leading up to his making the Second Control Order. In making this finding I have had regard to an email chain between Mr Lawrie and Ms Geiger that culminated at 3.33pm that day which I describe below at [187] and to the inference that, because the Minister and the Commonwealth did not lead evidence about whether options A, B and C were before the Minister, any evidence that they could have given would not have assisted their case: Jones v Dunkel (1959) 101 CLR 298; Australian Securities and Investment Commission v Hellicar (2012) 247 CLR 345 at 412-413 [167]-[169] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. Each option commenced with a provision that there be a compliance regime so that export licenses would be issued only if the exporter could demonstrate verifiably that the cattle, in effect, would be in a closed loop system up to the point of slaughter that complied with a defined (but unspecified) standard of animal welfare. Option A, prohibited export to Indonesia until the compliance regime was developed and implemented. Option B, limited exports to a list of abattoirs with acceptable animal welfare practices (including stunning prior to the ritual cut), as the industry had proposed, subject to a one month suspension of trade to enable the proposal to be tested. Option C, limited exports as in option B but without any one month suspension. Neither option B nor option C had any geographical limitation (i.e. applied worldwide). 180 At about 12.27pm on 6 June 2011 the Secretary emailed Ms Burgman and Mr Lawrie attaching the acting CVO's preliminary desk assessment of the Mark I boxes. The Secretary's email noted that the assessment was significant because, although preliminary, it found that the use of the Mark I boxes was not consistent with OIE standards. The acting CVO advised that the initial design of the Mark I boxes predated the adoption of the OIE Code. The assessment noted that its scope was limited to reviewing the design and operation of Mark I boxes without prior stunning. Dr O'Connell expected that the industry would dispute this finding and that, in any event, it would affect "how we view the current industry plan to focus on around 25 abattoirs as many will have Mark I's". The Department provided a minute to the Minister with this assessment (A276/2087) that asked him to note the acting CVO's finding about the Mark I boxes. The minute said that a preliminary assessment of the Mark IV box would be completed by 8 June 2011. 181 At 12.28pm on 6 June 2011, Ms Evans emailed Ms Burgman, Mr Lawrie, the Secretary and others in the Department with the latest ABARES (Australian Bureau of Agricultural and Resource Economics and Sciences) trade statistics for exports to Indonesia of both live cattle and boxed beef. Those stated that in 2010, exports of 517,926 head to Indonesia represented 65% of Australia's live cattle exports and almost all of Indonesia's imports of live cattle for slaughter. 182 At 12.43pm Ms Evans emailed Mr Lawrie and Ms Burgman summarising what she had sent to them during the course of the day. She identified three more sets of material that were still to come, namely the AGS advice, advice about animal welfare issues and advice on possible reviewers. 183 At about 2.02pm on 6 June 2011 an officer of the Department sent Mr Lawrie, Ms Burgman, the secretary, Mr Glyde, Ms Mellor, Ms Evans and others a Departmental minute for the Minister on animal welfare consequences associated with prohibiting live cattle exports to Indonesia. The minute stated that producers did not have the feed reserves to hold all of the animals that were intended for export to Indonesia during the current dry season "without creating a serious on-farm problem", and that overstocking would lead to cattle dying. The minute said that any alternative destinations for the cattle to be sold into the domestic market would involve long road journeys, probably to feedlots on and south of the Darling Downs or meat works on the Queensland coast that processed meat for export. It said that the recently endorsed Australian Animal Welfare Standards and Guidelines: Land Transport of Livestock required that long transport journeys had to be well planned, competently performed and only involve animals that had been prepared so as to be suitable for such a journey. The minute stated: 10. Compounding problems include continuing provision of feed and water to animals that cannot be moved off farm during the dry season, loss of income and cash flow issues for producers and its impact in regional north Australia, including any adverse impact on planned investments in the region. Furthermore, with the likelihood that not all animals will be in optimal condition when road transported, the risks of media presentation of the situation exists, even without incidents involving poor animal welfare outcomes. SENSITIVITY High. Welfare groups are unanimous that stopping the trade will automatically improve animal welfare however this is unlikely to occur without serious effort and support. In addition such a move may strain the Australian Government's relations with both northern communities and the NT government as well as has potential to create economic and social problems the Indonesian Government will have to deal with. (emphasis added) 184 Mr Glyde provided another minute to the Minister after about 2.10pm on 6 June 2011 that summarised and attached the AGS' draft preliminary advice of the same date. The advice was that the risk of legal liability would be very low in respect of claims for negligence, negligent misstatement, misfeasance in public office, breach of statutory duty or intentional interference in contractual relations, provided that the decision-maker exercised the relevant statutory power to make legislative instruments or administrative decisions in good faith in accordance with the legislative requirements. The AGS also said that its advice "is general advice only" and that it could provide advice on particular circumstances if required. 185 At 3.05pm on 6 June 2011, Mr Lawrie emailed Ms Geiger the three options that Ms Evans had sent him at 12.10pm (see [179] above) saying: See confidential draft recs. At this stage, we will be arguing for b or c (and not a). Happy to discuss, although I think ben h and Cecelia [sic] are talking. (emphasis added) The reference to 'ben h' and 'Cecelia' were to Ben Hubbard who was the chief of staff in the Prime Minister's office and Ms Burgman (who was the Minister's deputy or acting chief of staff). 186 During the early afternoon of 6 June 2011 Mr Glyde, Ms Mellor and, for a part, Ms Evans met with industry representatives. At about 2.45pm on 6 June 2011, Mr Lawrie asked Ms Evans for a short summary of the meeting. There was no evidence that any short summary found its way to the Minister or his office except for what Ms Mellor described as "a brief chat" with Mr Lawrie that made him aware of "some" of the following. However, the internal Departmental records of the meeting recorded that the industry's plan currently focused on the five category A abattoirs that took 8% of the trade, used stunning and did not use Mark I boxes, and 20 category B ones, two of which used Mark IV boxes, two of which were trialling stunning using converted Mark I boxes and the balance were using Mark I boxes in accord with the OIE Code. However, two of the category B abattoirs were among the 12 the subject of the First Control Order. Ms Evans summarised the officials' views that, first, conceptually, the industry had not developed the plan much beyond the version discussed on 3 June 2011 and, secondly, the plan would not meet public expectations for safeguarding animal welfare and carried a high risk of failure if further footage of unacceptable practices at an "accredited abattoir" emerged. Ms Mellor commented on Ms Evans' summary at 3.28pm on 6 June 2011 adding that the industry did not have firm timeframes for implementation of the plan and that the industry could give no assurance about the further treatment of 100,000 animals then in the system in Indonesia. 187 At 3.14pm on 6 June 2011 Ms Geiger emailed Mr Lawrie and asked "which is his preferred?" as to the choice between options A, B and C. Mr Lawrie responded soon after at 3.33pm saying "Sorry, please ignore my previous email, was not authorised to send, please delete". 188 At 5.37pm on 6 June 2011 AMIC emailed Stuart Stark, one of the Minister's staff, with a letter referring to the press release and the meeting at the Minister's office earlier that morning ([178]). The letter reiterated AMIC's opposition to the industry's plan and elaborated its criticisms of it. It is not clear whether the Minister saw the letter as Mr Stark emailed Mr Lawrie the next day asking if he had received the letter on the previous night. 189 Dr O'Connell gave evidence in chief. He was not cross examined. Dr O'Connell was called in the second phase of the trial, after the parties had put their substantive arguments on liability over one year before. He said that he had given oral advice to the Minister during the afternoon of 6 June 2011, before Cabinet met that evening. The Commonwealth sought to rely on his evidence as to that oral advice and elicited it in the following: On or before 7 June, before the making of the orders of that date, did you give the Minister advice about a suspension of live cattle exports to Indonesia? --- Yes. Did you give advice orally or in writing or both? --- I gave the Minister advice orally and as the Department, the Department gave him briefs which I had approved. … What did you say to the Minister on that subject? --- I said to him to the effect that in order to meet the requirement that no further animals be subject to the poor handling that had been exhibited prior while we put in place a regulatory framework which effectively control that management of behaviour, that in that interim period a suspension of trade would be necessary if we were to meet the Government's objective. And to what objective do you refer? --- The objective that …all animals that were going through the supply chains would be treated…humanely, to proper animal welfare standards. (emphasis added) 190 Dr O'Connell told the Minister that it could take six months to put the regulatory framework in place. All of what Dr O'Connell described in that evidence repeated the advice that he said he had given the Minister "as the Department" in relation to a total prohibition of live animal exports that would have impacts on, among other countries, Indonesia, as part of a more general effect. So much is clear from the summaries above of the 2 and 6 June 2011 Departmental minutes, their attachments and related documents (see eg [130]-[132], [173], [176]). I understood Dr O'Connell's answers, when he gave them, and now, to reflect that his oral advice was consistent with his, "as the Department['s]", written advice, namely that it was about a worldwide suspension, that necessarily, would affect Indonesia. As he said the "Government's objective", on which he advised, was applicable to all animals going through supply chains, not just ones in Indonesia. I am not satisfied, on the balance of probabilities, that Dr O'Connell's oral advice went any further than the written advice of the Department. In particular, I am not persuaded that he discussed Indonesia specifically when giving that oral advice: see Communications, Electrical, Electronic, Information, Postal Plumbing and Allied Services Union v Australian Competition and Consumer Commission (2007) 162 FCR 466 at 479-482 [29]-[38] per Weinberg, Bennett and Rares JJ (CEPU). 191 In Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 384-385 [62]-[64] Heydon, Crennan and Bell JJ referred to what Handley JA had said in Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419 as being authority "at least" for the proposition that where a party calls a witness but does not question him or her on a particular topic, a court "will be less likely to draw inferences favourable to that party from other evidence in relation to that issue". They said that a witness, who was not a party, was only under a duty to answer questions put to him or her truthfully and that a failure to ask a question in chief of such a witness only permitted the court to infer that the answer would not have assisted (as opposed to would have damaged) the case of the party who called that witness. 192 I reject the Commonwealth's contention that the answers that Dr O'Connell gave, that I have set out above, related to him giving the Minister specific advice about a control order applicable only to Indonesia to the effect of the Second Control Order: Kuhl 243 CLR at 384-385 [63]. In substance, Dr O'Connell's oral advice simply confirmed what he, "as the Department" had already told the Minister about the worldwide prohibition that the Department had included in the 2 and 5 June recommendations, which, necessarily, would affect Indonesia. 193 Cabinet met on the evening of 6 June 2011. The Minister did not put any submission or document before Cabinet and there was no claim for public interest immunity in respect of any such document. By 8pm the Minister had decided to order a complete suspension of live cattle exports to Indonesia for a maximum period of six months and his media officer, Elliot Stein, was preparing draft talking points for him to use to explain the decision. 194 At 9.21pm on 6 June 2011 Mr Hubbard emailed the Prime Minister to inform her that the Minister believed that he had a duty to stop the scheduled departure of the ship due to load live cattle for Indonesia (i.e. Falconia) and would have an exposure if he did not do so, which might be the subject of media attention. He said that the next ships were scheduled to load and leave on Wednesday (i.e. 8 June 2011) and that if they were stopped that was likely to be become news while the Prime Minister was in Darwin. He said that Warren Snowden MP (who was a Member of the House of Representatives with a seat in the Northern Territory) did not agree with the decision to suspend exports to Indonesia and had advised the Prime Minister to speak to cattle producers before the Minister publicly announced the decisions.

5.7 The events of 7 June 2011 195 Early on 7 June 2011, just after midnight, Ms Mellor emailed Ms Burgman and Mr Lawrie with a draft of the Second Control Order that had no time limit, which she said was the Department's view, but that she would also prepare another version of a draft order limiting the period of suspension to six months. She wrote that she was seeking advice about whether it could be effective on 7 June 2011. She said that all other documents, such as draft questions and answers, talking points and statements "will need to reflect the landing on this" and sought that there be clarification later that morning. She wrote in the email about the Falconia shipment: Industry contact The ship loading in Port Hedland has not been given permission to load. Phones have been ringing hot here - I have called our authorised officer in Port Hedland to let him know there is nothing than [sic] can be said. Likewise I called Ashlee [sic] James (the exporter, NACC) to say same - he asked me to call his boss, Tony Dage, Group General Manager - Trade, Elders International …I did this at 11.10pm to indicate that ship wouldn't be going tonight and there was nothing else I could say (all he said was it was costing him money). Holding off reasins [sic] for not giving permission to load for very long tomorrow will be very difficult. There has also been contact from Lach McKinnon and Cam Hall - both have received emails or texts saying that we are not in a position to talk. (emphasis added) 196 Ms Mellor also said that decisions had to be made on the timing of the announcement of the decision and aligning it with other key activities "such as contact between the Minister and Indonesian Govt". 197 At 9.25am on 7 June 2011 David Brightling, the acting principal legal officer in the office of international law in the Attorney-General's Department enquired of Ms Evans whether there had been any changes to the export measures that had been discussed on 4 June 2011 (where Ms Evans had told him and Mr Story that it was likely that in addition to Egypt, Japan and Israel would have satisfactory standards and compliance regimes for animal welfare). Following a conversation with her, Mr Brightling reworked the background section to the draft advice to reflect that "the Government is considering an immediate prohibition on all exports to Indonesia of live cattle for slaughter for a period of six months" and that at the conclusion of that period it would permit exports only where, in effect, the exporter had full control of a closed loop system complying with the OIE Code up to the time of slaughter. But Mr Brightling did not provide any draft advice at that time. 198 At 11am on 7 June 2011 Malcolm Jackman, the chief executive officer of Elders, phoned the Secretary to express his concern that the Department was not giving its approval for the 1900 head of cattle to leave the registered premises at Port Hedland to load onto Falconia even though they were to be shipped to an Elders feedlot in Indonesia. He told Dr O'Connell that Elders would need to bring more feed into the registered premises if the cattle did not load as the fodder would run out. Moreover, Mr Jackman pointed out, Elders was incurring demurrage while the ship waited to load. Dr O'Connell told him that he could not comment when or if permission would be given and said that the operator of the registered premises had to be in a position to feed its animals daily, including managing contingencies. 199 Around the same time the Minister's office requested Mr Glyde and others in the Department to prepare a "talking point pack" for him by 2pm that day. Mr Lawrie received the pack at about 2.37pm on 7 June 2011. This contained suggested comments on the industry's plan of 3 June 2011 including one that said that, whilst the plan had some laudable elements, the Minister would not have been able to rely on it to assure the Australian public that the welfare of Australian cattle exported to Indonesia had been protected. 200 Of course, the talking points were not evidence of the Minister's state of mind at the time that he took the decision because he had no input into their drafting. Rather his "office" staff asked the Department to craft the "talking points" for him to explain what, no doubt, the drafters thought his position might have been. It may be a feature of modern political life, but it is difficult to conceive how a Minister who has taken an important decision can be reliant on people to draft his explanation for it when they do not appear to have had any communication with him as to his actual reasoning process for that decision. 201 There is no direct evidence as to how the Minister actually came to decide to make the Second Control Order in its terms except that he appears to have done so in large part in or after the Cabinet meeting (although he may have only considered the duration on 7 June 2011 as Ms Mellor's midnight email suggested ([195])). 202 At about 3.20pm on 7 June 2011, Ms Geiger asked Mr Lawrie who should call Elders "once the green light has been given for the announcement" and he responded that he thought that the Minister would do so later that day. 203 At about 6.03pm on 7 June 2011 Mr Lawrie, Mr Glyde and others received an update on the then consignments of cattle that were in transit on ships already sailing to Indonesia.

5.8 The Second Control Order 204 At 9.30pm on 7 June 2011, the Second Control Order was registered on the Register of Legislative Instruments kept under the Legislative Instruments Act. It commenced on registration (cl 2) and cl 4(1) provided: "The export of live cattle to the Republic of Indonesia is prohibited for a period of 6 months from the date of commencement of this Order." 205 The Australian Meat and Live-stock Industry (Export of Live-stock to the Republic of Indonesia) Order 2011 (the Second AMLI Order), that the Secretary also made on 7 June 2011 commenced at the same time. It prohibited the holder of a livestock export licence from exporting livestock to Indonesia for the next six months (cl 4(1)). Neither order applied to breeder livestock (i.e. animals not intended for slaughter). 206 The Explanatory Statement for the Second Control Order stated, among other matters, the following: Purpose of the Order The purpose of the Order is to suspend the export of live-stock to the Republic of Indonesia for a period of 6 months from the date of commencement of the Order. This will enable the Australian Government to develop a robust regulatory and compliance regime to address concerns regarding slaughter of live-stock in the Republic of Indonesia. … Consultation Given the circumstances in which the Order needs to be made, detailed consultation with industry has not been possible. (emphasis added) 207 However no regulation impact statement was issued for the Second Control Order. That was despite the Government's best practice regulation requirements that such a statement be issued, as the Office of Best Practice Regulation in the Department of Finance and Deregulation subsequently pointed out to the Department on 20 June 2011. 208 During 7 June 2011 the Minister spoke to his Indonesian counterpart, Minister Suswono, to advise him of the steps that the Australian Government was taking. However, there is no direct evidence of the content or time of their conversation.

6.1 The immediate aftermath 209 On 8 June 2011 the Minister announced publicly, in a media release, that he had made the Second Control Order. He stated that the suspension would remain in place until the Government had established "sufficient safeguards to ensure there is verifiable and transparent supply chain assurance up to and including the point of slaughter for every consignment that leaves Australia". He said that the decision was made "following serious consideration of the advice and evidence that has been presented to the Government since last Monday." The media release also said: Minister Ludwig said the Indonesian and Australian governments have agreed to work closely together, and with industry, to bring about improvements in practices in abattoirs and to make this important trade sustainable in the longer term. "The Australian Government is committed to reaching the best possible outcome for the livestock, the industry and our important relationship with Indonesia," he said. "The introduction of safeguards to foster a verifiable and transparent supply chain assurance system is the best way to achieve this. "After meetings held in Jakarta yesterday, both governments have agreed that Australia and Indonesia will implement an immediate and a longer-term plan. "Experts from both countries will work together to identify abattoirs that adhere to good practices that could form part of an approved supply chain, and to identify those that still need to be improved. "As partners, both countries respect each other's way of working." (emphasis added) 210 The Minister embarked on an intense number of media interviews that day. During an interview on the ABC Radio National Breakfast program with Fran Kelly she asked him: FRAN KELLY: What about the industry itself - the beef growers, the farmers, the processing? Will there be industry assistance? JOE LUDWIG: What I wanted to do was - and of course this impact will be difficult for industry; it will have an impact. What I want to do is listen to industry, see what the issues are as they come forward, because what we do need to do is work for the - to the end point, which is the trade will not be able to be resumed until the government, the community and industry are confident that we have safeguards in place to ensure appropriate animal welfare outcomes. FRAN KELLY: Sure, but this is an immediate disruption to a $318 million industry. Cattle farmers have beef there that they were planning to send to Indonesia, presumably; the domestic market won't be able to take all of them, according to Cameron Hall. Will there be compensation in the short term? JOE LUDWIG: This is about [e]nsuring appropriate animal welfare outcomes, Fran. That's what I'm focused on just today. FRAN KELLY: Is that a no? No compensation to the… JOE LUDWIG: What I'm focused on today is animal welfare outcomes. What I will do is hear from industry about the impacts. (emphasis added) 211 Those answers revealed that the Minister had not given much, if any, consideration in making the Second Control Order to the obvious immediate impact of a suspension on persons in the industry such as Brett Cattle. 212 Later on 8 June 2011 the Minister held a press conference in Brisbane in which the following exchanges occurred: QUESTION: Minister, there are at least 25 large abattoirs in Indonesia that already meet Australian standards, why couldn't you allow those abattoirs to continue processing while the bans apply to the others to bring them up to standards? JOE LUDWIG: What we do have to ensure is that we have a verifiable and transparent system, a supply chain assurance. What I've asked industry to do is to come forward, work with my department to come up with a plan that ensures that we can verify cattle as they leave Australia, as they arrive in an abattoir and there is no leakage from the system because what we have to ensure is that no animal is mistreated in that supply chain. What we don't have at the moment - what we don't have the moment is that supply chain assurance. So not withstanding that you say and you might argue that there are abattoirs that meet certain standards, what we don't have is the supply chain assurance that ensures every cow that leaves Australia on a ship that ends up in a feed lot that then goes to an abattoir is accounted for. QUESTION: What about compensation? Earlier question about orders already in place and contracts already done et cetera, what about the exporters? Are they liable to get any compensation for this? JOE LUDWIG: What I want to do is talk to industry. I do understand there's been significant impact to industry as a consequence of this decision. This decision is based on all the available advice that I've received and of course what we have seen in terms of welfare outcomes for animals. What we then now do - need to do is to talk with industry, look at what those impacts are and sit down with industry and work out both a plan to ensure we have animal welfare outcomes for the supply chain assurance, but we also need to work with the industry to ensure that we've got a plan for the domestic industry…. QUESTION: Everybody knows - with respect you haven't answered the question. Will there be discussion about compensation for the exporters? JOE LUDWIG: In fact I did answer that. I said that I'm keen to sit down and work with industry both in the supply chain assurance and the domestic industry to see what the impacts are. QUESTION: So is that a yes or a no? JOE LUDWIG: What I've said - what I've said is that I'm keen to sit down with industry, I do accept [indistinct] impacts both domestically and along that supply chain and listen to their concerns. (emphasis added) 213 On 8 June 2011 Mr Glyde provided a Departmental minute to the Minister which attached a draft letter to Minister Suswono. The note emphasised the importance of advising Minister Suswono of the decisions and actions that the Australian Government had taken and its reasons for so acting. The note said that the draft letter followed up on the Minister's phone call with his Indonesian counterpart on the previous day and explained the most recent decisions, including the Second Control Order. The Departments of Prime Minister and Cabinet, and Foreign Affairs and Trade had seen and supported the draft letter being sent. The minute explained that it was important to gain Minister Suswono's support for the Second Control Order and the other actions of the Australian Government: as Indonesian Government assistance will be required to facilitate the proposed work by Australian officials in Indonesia as revised arrangements are implemented in the coming weeks. 4. Without Indonesian Government support it will be difficult for Australian officials to access the Indonesian meat establishments where Mark I and Mark IV restraint boxes are installed. It would also be difficult to undertake the review of the live cattle supply chain in Indonesia without Indonesian Government support. 5. The delivery of your letter will also provide a key opportunity for the Australian Embassy in Jakarta to call on Minister Suswono and speak with him directly regarding the government's response to the footage in the Four Comers program. (emphasis added) 214 The Minister did not send the draft letter in the form attached to the minute. During 8 June 2011, the Secretary met with the Indonesian Ambassador but there is no evidence of the content of their discussion. 215 Early in the afternoon of 8 June 2011, Mr Jackman wrote to the Minister, and sent a copy to each of the Prime Minister and the Secretary, seeking urgent approval for Elders to be able to export live cattle to Indonesia. Mr Jackman wrote that the cattle would be processed only in a closed loop system through Elders' wholly owned facilities, being the Lampung feedlot and the Bogor abattoir. Mr Jackman wrote that Elders' request was urgent because there were 1937 head of cattle at Port Hedland that had satisfied all other requirements for export on Falconia and that the original intention had been to send them to the Lampung feedlot. The letter pointed out, as was the case, that the Bogor abattoir had HACCP and ISO 9001 accreditation, was fully equipped with stunning and restraining equipment and operated by Australian management in the same manner as if it were located in Australia. Mr Jackman noted in the letter that the abattoir was subject to regular audits by SAI Global as part of maintaining its HACCP and ISO 9001 accreditations. He wrote: In short, Elders is able to demonstrate that it can satisfy all of the requirements articulated by the Commonwealth for a verifiable and transparent supply chain that safeguards the welfare of the animals concerned and therefore is unaware of any reason why such approval should not be granted. 216 Soon after, on that afternoon Mr Jackman spoke with the Minister and then summarised that discussion in an email he sent to the Secretary. Mr Jackman asked Dr O'Connell to phone him to discuss making arrangements for officers of the Department who were to travel to Indonesia on the following Monday, 13 June 2011, to be able to visit the Elders Indonesia feedlot and abattoir. Dr O'Connell waited until 13 June 2011 to speak with Mr Jackman (see [220] below). 217 On 12 June 2011, the Minister wrote to Minister Suswono referring to their telephone call on 7 June 2011 and to "close consultation between our officials in Canberra and Jakarta in the last week or so". He sought that this consultation continue and intensify. The Minister explained that "until we are confident that acceptable animal welfare standards can be guaranteed, we have determined that the most appropriate course of action is to suspend exports of Australian livestock for slaughter to Indonesia". The Minister wrote that the Government had "carefully considered all options for addressing animal welfare concerns for cattle exported for slaughter and will develop a system that requires absolute supply chain assurance from exporters for every consignment". He indicated that it may take some time to develop such a system. The Minister asserted that "the Australian Government is not singling out Indonesia", saying that it had announced previously "an independent review of the live export supply chain for all production animals for all markets". He sought Minister Suswono's support for any in-country facilitation needed for officials and animal welfare experts to secure Australia's goals. The Departmental minute dated 8 June 2011 recommending that the Minister send this letter reminded him that the earlier letter to Minister Suswono, that the Minister had signed on 6 June 2011, had not been delivered. 218 Between 12 and 13 June 2011, Mr Glyde visited Indonesia and met with Vice-Minister for Agriculture, Bayu Krisnamurthi, who told Mr Glyde that the Indonesian public might think it unfair that trade to their country had been suspended pending a review, while for all other markets the review would occur before any decisions to suspend trade. Mr Glyde was informed on the visit by all the senior officials with whom he met that the Indonesian Government, including the President, had concerns about the effects of the Second Control Order on domestic supply and prices, especially with the approach of the month long Ramadan period. 219 On 13 June 2011 the Secretary told the Australian Industry Government working group (which the Minister had established on 10 June 2011) at its meeting that it was likely to take at least three to four weeks to develop a proposal for a framework that could be put to the Minister. He said that the Government might consider granting interim approval for a closed loop system to enable trade to resume earlier but that "stakeholders needed to be mindful of broader public perception should this occur". Dr O'Connell emphasised that the Government would need assurance that the whole supply chain would ensure appropriate handling of animals and traceability. 220 Dr O'Connell gave evidence that he and Ms Mellor met with Mr Jackman on 13 June 2011. Mr Jackman told them that Elders operated a closed loop system in Indonesia using stunning that had accreditation under ISO 9001 and HACCP. Dr O'Connell said that the Department: would be keen to work with Elders to get evidence of the claims and work with them to see whether their closed loop system could potentially meet the requirements of the government in terms of traceability, individual identification of animals, meeting the animal welfare standards and controls, including audit function. 221 On 14 June 2011 Ms Mellor wrote a Departmental minute for the Minister in which she recommended that he agree to pursuing a limited reopening of trade beginning with a trial using Elders and included a draft letter in reply to Mr Jackman's 8 June 2011 letter. The minute observed that there were some "gaps" in the Elders proposal, namely that animals were not tagged until they were in its Bogor feedlot and its abattoir used a restraint box with which the Department was not familiar and that it would need to be seen and assessed. It stated that Elders appeared to have an approach that would meet the principles in the Government's policy and was willing "to review and revise its processes and address any concerns". The Minister did not agree to the recommendation, and wrote a note on the minute on 17 June 2011 asking the Department to progress the reopening of "trade where standards can be assured". I infer that the Minister by then was aware of the discussion on 16 June 2011 between the Minister for Trade, the Hon Dr Craig Emerson MP, and the Indonesian Minister for Trade, Dr Mari Pangestu. The Department of Foreign Affairs and Trade (DFAT) note of their conversation recorded: Dr Emerson asked a hypothetical question: if Australia was able to resume trade to a handful of abattoirs (say 5-6), rather than waiting for a larger number (say 20-25), would there be any domestic sensitivities on the mix of foreign or local companies? Would it create an unfavourable impression if we were only working through Australian or foreign-owned companies, or was it more important to get the trade moving again? Dr Pangestu replied that there were very strong feelings about Australia in Indonesia. If we were to decide on a smaller number of abattoirs it could not be foreign-owned abattoirs alone, and would need to include some domestically-owned abattoirs in the mix. She thought the bigger Indonesian companies should meet the requisite standards. Dr Emerson thanked her for the assessment. He added that the longer we waited, the longer no trade took place - this put pressure on both sides. (emphasis added) 222 On 17 June 2011 the Minister signed Ms Mellor's draft letter to Mr Jackman. It said that Mr Jackman's 8 June 2011 suggestion that Elders could adopt a closed loop system was "an attractive proposal" and that he was aware that the Department and Elders were discussing it. 223 The Minister visited Indonesia between 19 and 21 June 2011. He received a DFAT brief for the visit that informed him that Indonesian officials did not have a clear view on how to proceed with matters but that "irritation towards Australia in the Agriculture Ministry is growing". DFAT advised him that the Australian requirement for auditing of Indonesian facilities was a potential sticking point because Indonesia would not accept that Australian exporters could appoint auditors to operate in Indonesia. DFAT noted that the Minister's proposed meeting with Minister Suswono would be particularly important because of the latter's criticism of Australia's lack of consultation prior to implementing the suspension and his suggestion that it was a strategic tactic to increase exports of boxed beef to Indonesia. The briefing note included a note by Dr Mark Schipp, then a senior officer in the office of the CVO, that reminded the Minister that Minister Suswono had refused access to Indonesian abattoirs to a team of veterinary officials from the Department and the Australian Veterinary Association who sought to undertake an initial on-the ground inspection of Mark I and Mark IV boxes. Dr Schipp said that such access was required in order to complete the independent scientific assessment of the facilities that used the Mark I and Mark IV boxes. Dr Schipp recorded that Minister Suswono had met the team personally and told them that he would not force anyone in the industry to grant them access to feedlots or abattoirs until standards had been developed and agreed by both Governments and industry members were ready to meet those standards. 224 Dr O'Connell gave evidence that the Minister proposed to each of Ministers Suswono and Pangestu on his Indonesian visit that both Governments might consider re-establishing the trade in accordance with a suggested approach that the working group had developed. The Minister provided both the Indonesian Ministers with a copy of a detailed document containing the suggested approach for an ESCAS that included a proposal, made on the basis that Australia was not seeking to regulate in Indonesia, that Australian exporters had to engage independent third party auditors to verify their supply chains. Rather the group suggested that those reports be provided to both Governments. The document suggested that the standards be based on the OIE Code for animal welfare, noting that both Australia and Indonesia were members of the OIE. 225 Meanwhile, on 20 June 2011, Mr Jackman urged Dr O'Connell and Ms Mellor to allow Elders to consult with its Indonesian customers on the working group's suggested approach. Also, Mr Jackman sought simultaneously on 21 June 2011 to progress Elders being granted an export permit on the basis of its existing closed loop system. Ms Mellor wrote to Mr Jackman saying that the Department still had to examine Elders' supply chain but, she cautioned, even if that proved to be satisfactory, the Government needed to be confident that the Indonesian Government endorsed the suggested approach before any export permit would be granted. 226 The Commonwealth sought to draw on the absence of any response from Mr Jackman or Elders to Ms Mellor's further deflection of this latest attempt to obtain an exemption from the Second Control Order for Elders based on its closed loop system, as somehow relevant to negating or weakening Brett Cattle's claim for damages. The Commonwealth's argument on this point had no substance. Ms Mellor was repeating the Department's constant refrain that Elders seemed to have a system along the lines that could be adopted, but the Department would need to verify the system for itself, when it knew that it could not do so because the Indonesian Government had refused to allow that to occur until both Governments has sorted out their differences caused by the unilateral suspension of trade that the Second Control Order had imposed. If Elders and Mr Jackman did not push their quixotic quest for an exemption further after this latest rebuff, I infer that was because they could read the clear writing on the wall. Elders would have to wait until the Government could come to terms with the Indonesian Government on a new regime for live animal exports that would also meet the Australian public's expectations for animal welfare, as the Minister saw them. 227 On 22 June 2011 officials from the Australian Embassy met with some officials from the Indonesian Ministry of Trade. The Embassy's record of the meeting noted that, although they had invited the Ministry of Agriculture, no one from that Ministry attended. The Embassy's note recorded that Senator Ludwig had met both Ministers Suswono and Pangestu and informed them that Australia regretted the impact of the live import suspension on supply in Indonesia. The Ministry officials enquired why Australian could not immediately certify the 25 abattoirs that the Cattle Council of Australia had identified as already meeting international animal welfare standards. The Embassy officials explained that, while the local abattoirs might meet the standards, "the issue lay in the enforcement" and that this was significant in the Australian community response. The Ministry officials said that they were extremely concerned to ensure that there would be adequate beef supplies in the lead up to Ramadan and that beef prices were already rising. The Ministry officials said that they planned to meet their colleagues from the Ministry of Agriculture on 24 June 2011 to coordinate a response. 228 On 23 June 2011, the Senate Standing Committee on Regulations and Ordinances wrote to the Minister about his and the Secretary's apparent failures to comply with s 17 of the Legislative Instruments Act when making each of the First and Second Control and AMLI Orders. The letter observed that s 17 required a rule-maker to be satisfied that such appropriate consultation had occurred as was reasonably practicable, especially where the legislative instrument was likely to have an effect on business. The letter noted that s 18 allowed exceptions to the requirement for consultation, including where an instrument had to be made as a matter of urgency. The Committee wrote that the definition of "explanatory statement" in s 4 required a description of the nature of any consultation or, if there were none, an explanation for its non-occurrence. The letter stated that the Minister's and Secretary's explanatory statements for each of the four orders had asserted that "given the circumstances in which the Order needs to be made, detailed consultation with industry has not been possible." The Committee recorded that it found that statement to be ambiguous and sought the Minister's response by 12 August 2011 to enable it to consider whether the Orders might be disallowed. 229 On 24 June 2011, a sub-working group of the working group met under its Chair, Dr Schipp, and approved a detailed document entitled "Guidance on meeting OIE Animal Welfare Standards". 230 On 26 June 2011 the Secretary, as Chair of the working group, wrote to the Minister attaching three working papers agreed by it at its meeting on 24 June 2011. He reminded the Minister that he had presented drafts of those papers, as a suggested approach, to the Indonesian Government on 20 June 2011. The Secretary set out four key explanatory points namely: the OIE Code did not require pre-slaughter stunning, and cattle could be slaughtered in Australia without stunning for limited religious purposes. However, the live cattle export industry representative on the working group noted that their industry had a commercial preference for stunning and would pursue this when the trade reopened; the working group did not interpret the OIE Code as allowing animals to be thrown or dropped prior to slaughter; the working group considered that, while industry would use NLIS tagging as a commercial preference, the regulatory framework requirements for tracing of export animals should be outcomes based; and the welfare outcomes that the Government sought would be regulated by placing conditions on export licenses. 231 On 27 June 2011 the Minister recorded his decisions agreeing with recommendations in a Departmental minute that Ms Mellor had prepared on 21 June 2011. He decided that, first, there would be a limited and progressive reopening of livestock exports to Indonesia, secondly, he would make an order under the Export Control Act varying the then current prohibition if the Secretary were satisfied that animal welfare outcomes would be achieved, and thirdly, he would seek, from the Prime Minister, an exemption from the requirement for a regulation impact statement. In this way, the Minister approved an ESCAS to allow the live animal export trade to Indonesia to resume. Also on 27 June 2011 the Minister wrote to the Prime Minister seeking an exemption from having to make regulation impact statements for the previous actions he and the Secretary had taken in respect of livestock exports to Indonesia. 232 On 28 June 2011, Mr Morris emailed the Australian Ambassador to Indonesia, Greg Moriaty, seeking the Ambassador's views on whether Minister Suswono, who was then publicly seeking a reopening of the live cattle trade to a large number of local abattoirs, might be prepared to accept a progressive reopening of the trade. The proposal was for Australian officials to discuss with their Indonesian counterparts a list of between 15 to 20 abattoirs that they could indicate would be capable of being brought sequentially into compliance with the OIE Code over the next four to six weeks and further lists of abattoirs that could achieve that standard respectively in six to nine, and 12 to 18, months' time. 233 On 1 July 2011 Mr Jackman emailed the Minister directly. Mr Jackman acknowledged that he was bypassing normal protocols but wanted to "progress a solution for all of us". He believed that by the end of the following week Elders would have a complete supply chain that met the Government's "three elements of standards, traceability and audit", and that the same supply chain model could be extended quickly to key industry players with whom Elders was communicating, namely Wellard, AACo, Consolidated Pastoral and Heytesbury, as well as the Indonesian "key partners", Santori and TUM. He explained that it was important to get import permits from the Indonesian Government for the third quarter of 2011, and then to manage the logistics, especially shipping. Mr Jackman asked the Minister if they could discuss when he "might be comfortable in giving us a green light to start locking in all the elements to restart the trade." This was one of the very few documents in evidence (the Departmental minutes and DFAT briefing note comprising most of the others) it is certain that the Minister, as opposed to his "office", actually saw. The Minister forwarded Mr Jackman's email to Mr Carey within minutes of receiving it. Mr Jackman had attached a string of emails between Tony Dage, Elders group general manager-trade and Ms Mellor dealing with the way that Elders proposed to satisfy the proposed requirements, including having Australian and Indonesian personnel of SAI Global conduct an audit of Elders' entire supply chain between 5 and 8 July 2011. 234 On 5 July 2011 the Australian Embassy reported on the latest developments. The Embassy had agreed with the Director-General Livestock Services, of the Ministry of Agriculture, Prabowo Canturroso, and his team that the OIE Code should be used for the reopening of the trade and that this team had confirmed that about ten abattoirs would be able to meet those guidelines immediately and thus process Australian live cattle. The Embassy asked Director-General Prabowo whether joint inspections by Australian and Indonesian Government experts would be possible. He said that the Ministry was sensitive about Australians visiting abattoirs and it would be necessary for Minister Suswono to be comfortable before he would allow this to occur. He said that the Indonesian Government could assess compliance of abattoirs by itself, and if independent auditors were used, they would have to be accompanied by an Indonesian Government representative. The Embassy said: We explained our need to demonstrate domestically that we have had the opportunity to look at the abattoirs at the outset of the trade being resumed and to be satisfied that the necessary facilities met animal welfare concerns. Prabowo noted our interest but said the time was not yet right for Australian officials to have access and this would be subject to agreement by the Minister. (emphasis added) 235 On 5 July 2011, the Department provided the Minister with a minute in which it recommended that he agree to recommence live cattle exports to Indonesia in accordance with a mechanism that would be in a new order under the AMLI Act and that he repeal the Second Control Order. 236 On 6 July 2011 Minister Suswono contacted the Australian Ambassador to discuss resumption of the live cattle trade. He told Mr Moriaty that Indonesia was now ready to support the issue of import permits and invited Australia to lift its temporary suspension of the trade, which Indonesia would find acceptable.

7. The new ESCAS system commences 237 On 6 July 2011, the Minister signed the 5 July 2011 Departmental minute and noted his agreement to the Department's recommendations. He made the Export Control Repeal Order 2011, that repealed the First and Second Control Orders (cl 3) and the Secretary made the Australian Meat and Live-stock Industry (Export of Live-stock to the Republic of Indonesia) Order 2011 (No2) (the Third AMLI Order). The Third AMLI Order repealed the First and Second AMLI orders (cl 3) and implemented a closed loop system under which the Secretary could issue a livestock export licence for Indonesia only if satisfied that the licence holder had in place arrangements to ensure that the consignment of live cattle would be the subject of transport, handling, slaughter and related operations that were in accordance with the OIE Code (cl 6(2)). Clause 6 of the Third AMLI Order was in substantially similar terms to the exceptions clause of the First Control Order (see [126]). Significantly, however, the precise requirements for the ESCAS were not included in the Third AMLI Order, but the Secretary applied them administratively when considering applications for export licences under that order. 238 On 7 July 2011 the Minister wrote to Minister Suswono referring to his discussion on 6 July 2011 with the Ambassador. He confirmed that he had lifted the suspension and that Minister Suswono had told Mr Moriaty that his Ministry was in a position to issue import permits to facilitate the trade as soon as possible, a step the Minister welcomed. On the same day Minister Suswono told the Indonesian press that the Indonesian Government had not made any agreement with the Australian Government in order to lift the suspension and reiterated his disappointment with the original decision. 239 Ordinarily, Indonesia would have issued on 1 July 2011 import permits for live cattle for the quarter ending 30 September 2011. In the event, on 8 July 2011, the Indonesian government announced that it would issue import permits for a total of 180,000 in that quarter. No cattle exports from Australia to Indonesia occurred in July 2011. 240 On 13 July 2011, NACC wrote to Brett Cattle terminating its contract, made on 4 April 2011, based on force majeure (see [86]). The letter stated that, to date, the Government had not granted any export permits, despite indicating its preparedness to do so in the future. NACC wrote that it was unclear how long it would take before permits could be issued and, accordingly, given the disruption to date, it had exercised its contractual right to terminate.

7.1 The ESCAS approval process 241 Once the Secretary made the Third AMLI Order, exporters to Indonesia needed to satisfy the Secretary that any proposed exports of live cattle to Indonesia would remain only in an auditable closed loop system that ensured that the cattle were traceable and would be treated in accordance with the OIE Code up to and including the time of slaughter. 242 The first four supply chains for which the Secretary granted export permits under the Third AMLI Order were, in chronological order, Elders Indonesia, Santori, AGP and TUM. I will describe below the steps that occurred in connection with those supply chains obtaining the permits. On the same day, 12 August 2011, as he had done so for Wellard to supply Santori, the Secretary also granted an export permit for International Livestock Export Pty Ltd but there is no evidence about International's supply chain (see [434] below). 243 Obviously enough, once the Minister and the Department made clear what they required as part of the ESCAS, exporters and their Indonesian customers would have had to create databases and install tagging and tag reading equipment, to the extent that these were not already in place, in order to meet the ESCAS requirements of traceability for each animal at all points in the supply chain up to the time of slaughter. Similarly, all of the contracts for supply of cattle would have needed amendments to incorporate provisions to ensure that the cattle, first, would remain in a closed loop system and, secondly, would be treated at all times up to slaughter in accordance with the OIE Code (see [262] below). There was no evidence that any of those matters took any significant time to put in place, other than in cases where construction work had to occur, stunning equipment had to be obtained and or staff trained. However, as Mr Pankhurst explained there were delays in obtaining audits after the ESCAS began because of the limited number of auditors in Indonesia. Mr Slaney said that the Department's approval process "took a long time". 244 On 20 July 2011 Mr Slaney raised concerns with Paul Ross of DFAT (whom I infer was an officer of the Australian Embassy in Jakarta) that the Department had not specified or agreed criteria for auditors beyond requiring that they be accredited under ISO 9001. He suggested that this made the new approvals process vulnerable to abuse in circumstances where several persons in the Indonesian industry had "told me personally that they can pay for the audit results!" Mr Slaney asked that DFAT inform the Department about this risk. On 21 July 2011 Mr Ross forwarded, in an email, Mr Slaney's email and a detailed note of their subsequent conversation to officers of the Department. 245 On 26 July 2011 Ms Mellor sent the Minister a Departmental minute on the new regulatory ESCAS framework. She noted that no details of that framework had been published to date, but that the Department proposed that they be, once the Minister had approved the framework, in early August 2011. The note informed the Minister that the RSPCA was also seeking details about the framework. 246 Also on 26 July 2011, the Minister wrote to the Secretary in reply to his letter of 26 June 2011 (see [230] above) saying: The proposed regulatory framework and guidance on meeting OIE animal welfare standards will give the industry and exporters a sufficient basis to demonstrate good management of animals through the whole supply chain. Importantly, I am confident the proposed approach not only addresses animal welfare outcomes but will also provide the live export industry with greater certainty into the future. 247 Mr Pankhurst wrote a report in late October 2011 stating: Since the re-opening of the trade some 70 days ago, around 100,000 head of cattle have arrived in Indonesia. These will be ready for slaughter in another 30 days and, to keep up the throughput, 1,430 head will have to be slaughtered daily and as there are only 16 "approved" facilities to date, each will have to process on average I 00 head each day, every day. AGP has 8 of the approved facilities, these are exclusive and will not process any other feedlotters cattle. The combined capacity of these 8 facilities is less than 200 head, so the other 8 will in fact have to process 1,200 head or 150 head each day. This is simply not possible and this is where the current system breaks down. In next 4 weeks in is anticipated that 15 - 20 more facilities (across all operators) will be approved. (bold emphasis added)

7.1.1 Elders Indonesia's ESCAS approval 248 Mr James gave evidence that Elders had to build a database on its computer system to enable all cattle that it and its subsidiaries exported to Indonesia to be traced. There was no suggestion in the evidence that this was a difficult exercise, given that the industry already used NLIS tags in Western Australia and elsewhere. 249 On 14 July 2011 Elders submitted to the Department the SAI Global audit of its feedlot and abattoir dated 8 July 2011 to which I referred at [71] above and sought approval for its subsidiary, NACC, to be granted export permits on the basis that it had a closed loop system in Indonesia that complied with the Department's new requirements for an ESCAS. 250 On 29 July 2011, the Secretary approved NACC's application to export live cattle to Indonesia. Dr O'Connell wrote to Mr James advising him that he had granted NACC that approval to export under the Third AMLI Order. This was the first time that the Secretary had granted such an approval. Thus, Elders again had the ability to export live cattle from Australia to Indonesia so long as they were processed by Elders Indonesia in its feedlot and abattoir. There was no evidence that Elders, apart from building a tracking program into its database, had needed to make any substantive changes to its supply chain or Elders Indonesia's two facilities that had existed before the Second Control Order. 251 On 26 August 2011, the Secretary approved two local Indonesian feedlots and one abattoir to which Elders could export live cattle from Australia as part of the ESCAS. 252 On 28 November 2011, the Secretary approved more local abattoirs and a depot to which Elders could export live cattle from Australia as part of the ESCAS. 253 On about 28 December 2011, the Secretary approved Elders Indonesia's newly built (second) abattoir as part of the ESCAS. 254 Each of the seven abattoirs that the Secretary approved on 26 August 2011 and 28 November 2011 as part of Elders' satisfying requirements of ESCAS had been Elders Indonesia's customers prior to the Second Control Order. Mr Slaney explained that the audits of each of those seven abattoirs occurred very soon after Elders Indonesia had installed stunning equipment at it. He said that each of the abattoirs already had a restraining box installed before June 2011. Elders Indonesia had begun importation of stunning equipment in May 2011. Mr Slaney said that Elders Indonesia had to arrange other works so that each of the seven customer abattoirs would be able to become accredited in the ESCAS, namely, the upgrading of the facilities at each abattoir for the cattle, including in respect of unloading ramps, lairage, flooring and lighting as well as training the persons operating in each abattoir. The upgrade work for each facility took approximately several weeks to complete, and Elders Indonesia undertook the work at some of them simultaneously. He said in his unchallenged evidence that I accept: The audit process itself was not too delayed. The approval process was certainly delayed. So the ability of NACC to obtain approval from the Department of Agriculture certainly took a long time. So we were unable, even though we had … the audit processed, so to speak, and approved, the approval to let cattle into that supply chain took quite some time to come out of Canberra. (emphasis added) 255 Mr Slaney gave evidence that the last of the customer abattoirs was "approved" by October 2011. I infer that he meant that the improvement works and audit report for that abattoir had been conflated by that time. Thus, it took between about one and two months for the Secretary subsequently to approve it to become part of Elders Indonesia's approved facilities for the ESCAS.

7.1.2 Santori's ESCAS approval 256 On 12 August 2011, the Secretary approved Wellard's application for the first exports of live cattle to Santori under the Third AMLI Order. The approval related to cattle being sent to, first, Santori's Barki feedlot and its abattoir, and, secondly, AGP's feedlot and the Z-Beef abattoir.

7.1.3 TUM's ESCAS approval 257 Within about a week after the Second Control Order came into force, TUM began construction of its own abattoir. Mr James said that TUM's new abattoir had a capacity of about 200 head per night. On 21 August 2011 SAI Global completed its audit of TUM's new abattoir and its two existing feedlots. 258 On 26 August 2011 the Secretary approved NACC's application for the export of live cattle to TUM's closed loop system on the basis that they would be consigned only to each of its two feedlots and from there to its abattoir.

7.1.4 AGP's ESCAS approval 259 AGP had begun importing stunning equipment prior to June 2011. In May 2011 AGP had imported into Indonesia four pneumatic stunners and installed them in abattoirs in Sumatra that, in total, processed about 50 head per night. By late October 2011, AGP had installed 17 stunners in upgraded facilities throughout Sumatra. Mr Pankhurst said that AGP found that on average it cost about AUD70,000 to upgrade an abattoir so as to comply with the ESCAS requirements. 260 On 27 and 28 July 2011, Sucofindo conducted audits of AGP's feedlot and one abattoir (C V Zaky Putra Pratama - Z-Beef), and on 16 and 17 August 2011 Sucofindo conducted audits of the Zul and Sofyan abattoirs. All of those facilities were in Lampung. Austrex had engaged Sucofindo to perform the audits. Sucofindo prepared two audit reports, one dated 20 August 2011, in respect of the Zul and Sofyan abattoirs, and the other dated 27 September 2011, in respect of AGP's feedlot and the Z-Beef abattoir. In its 20 August 2011 audit report, Sucofindo reported that in respect of the Zul and Sofyan abattoirs, AGP had in place arrangements that would comply with, in substance, the ESCAS requirements. Sucofindo came to the same conclusion in its 27 September 2011 audit report in respect of AGP's feedlot and the Z-Beef abattoir. 261 On 5 August 2011, the Secretary granted Austrex approval for live cattle consigned for shipment on MV Brahman Express to be exported into AGP's closed loop system on or about 10 August 2011 on condition that they be sent only to AGP's Lampung feedlot and Z-Beef's abattoir. As I noted at [256], on 12 August 2011, the Secretary granted Wellard's approval to export to AGP in a closed loop system with Z-Beef's abattoir. 262 On 15 September 2011 Austrex and AGP entered into an exporter supply chain assurance system agreement in respect of AGP's long term supply to the Z-Beef, Zul and Sofyan abattoirs. That agreement recited that in order to obtain an approval under the Third AMLI Order, an importer (in that case AGP) had to declare that it would comply with the conditions in clauses 2 to 13 of the agreement. Those clauses spelt out that all animals had to go into a secure supply chain as specified in the agreement and that the standards for animal welfare in the OIE Code and the Department's checklist of targets and measurements of these standards would apply to them (cll 2-3). Each animal had to be traceable throughout the supply chain from consignment in Australia until slaughtered and would be sent only to a specified port, feedlot and abattoir (cll 4-8), transported, kept and slaughtered in specified conditions (cll 9-10). The agreement also required the importer to prepare reports, cooperate in auditing and in providing the Department with information about the importer's performance of its obligations under the agreement (cll 11-13). I infer that an agreement in this form (an ESCAS agreement) was one of the Department's requirements for approval of an export licence under the ESCAS. Effectively, this was the type of agreement that Wellard promised it would enter when it wrote to the Minister on 3 June 2011 ([146]). 263 Mr Pankhurst said that Sucofindo's audit process "was quite lengthy and somewhat confusing" and it took about one month to complete its initial audits. There was no evidence of any earlier audit report or exporter supply chain assurance system agreement for the AGP feedlot and the Z-Beef abattoir but I infer that the Secretary was prepared to exercise his power under cl 6 of the Third AMLI Order in a pragmatic business-like way in giving his 5 and 12 August 2011 approvals. 264 By early August 2011, each of the three abattoirs was using stunning. Mr Pankhurst said that Sofyan was one of the first abattoirs to install stunning after the Second Control Order, even though it processed only two to five head per night. He said that, originally, those three abattoirs could process a total of between about 15 to 20 head per night, but "when we did our upgrades with them, they had the capacity to do about 150 a night", using two shifts. Mr Pankhurst said that, by the end of October 2011, eight of the abattoirs that were AGP's customers had received audit certifications that they complied with the ESCAS requirements. And, he said that by the end of 2011, all 22 abattoirs to which AGP supplied live cattle complied.

7.2 Conclusion on the ability of the industry to comply with the ESCAS 265 The live cattle industry was able to adapt relatively quickly to bring about compliance with the ESCAS. Of course, it could not do so before, first, the Minister identified the requirements for the ESCAS and, secondly, until 7 July 2011 when the Indonesian Government indicated that it would issue import permits and allow work to be done in its jurisdiction so that the ESCAS system could operate. 266 Elders Indonesia and Santori could comply with the requirements of the Third AMLI Order immediately, because they could operate already in a closed loop system that complied with animal welfare standards at least consistent with the OIE Code. I have not overlooked, in making this finding, that there was a need for cattle that did not already have a tag to be tagged, tag readers to be installed and for there to be new software programs obtained or written to ensure that the cattle could be traced through the supply chain or for there to be audits. The tags were relatively inexpensive and could be produced quickly. Brett Cattle acquired and received 1,000 stamped tags by late July 2011 at a cost of about $1.00 each (including GST). Mr Pankhurst said AGP "developed our own app so that data could be transferred from the [tag] scanner back onto our database in realtime". And Elders Indonesia, Santori and AGP were able to obtain export permits under the Third AMLI Order within about three or four weeks after the Secretary made it.

8. Brett Cattle's claim against the Commonwealth 267 Brett Cattle pleaded that the Minister acted in misfeasance of his office in making the Second Control Order on the basis that, first, the Second Control Order was outside the power in the Export Control Act and Export Control Regulations because it was unreasonable or lacked proportionality, and, secondly, in making it he was recklessly indifferent to its invalidity, recklessly disregarded the means of obtaining legal advice as to its validity, knew that if made, it would cause loss to producers, exporters and service providers of livestock exports to Indonesia and was recklessly indifferent to the loss that the Second Control Order was likely to cause to them. 268 For the reasons which follow, I am satisfied that the Second Control Order was invalid and the Minister acted in misfeasance of his office.

8.1 The elements of the tort of misfeasance in public office 269 The tort of misfeasance in public office, although recognised by the Privy Council and the High Court as "well established" (Dunlop v Woollahra Municipal Council [1982] AC 158 at 172 E-G; Northern Territory v Mengel (1995) 185 CLR 307 at 345 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ, 355 per Brennan J, 370 per Deane J) is still undergoing judicial consideration of its precise limits, that are undefined (Mengel 185 CLR at 345; Sanders v Snell (1998) 196 CLR 329 at 346 [42] per Gleeson CJ, Gaudron, Kirby and Hayne JJ). 270 Relevantly, it is a tort that requires the claimant to establish that the public officer abused or misused his or her office intentionally, that is by either intending to cause harm (the first limb) or knowingly acting in excess of his or her power (the second limb): Mengel 185 CLR at 345; Sanders 196 CLR at 344-345 [37]-[38], 346-347 [42] per Gleeson CJ, Gaudron, Kirby and Hayne JJ; Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 at 153-154 [11], 164 [55] per Gummow, Hayne, Heydon and Crennan JJ. The intention or state of mind of the public officer when exercising the power, which he or she appears to hold, is critical to the ascertainment of whether he or she misused the public office in that exercise. In Sanders 196 CLR at 344-345 [38] Gleeson CJ, Gaudron, Kirby and Hayne JJ said: For present purposes it may be accepted that the tort of misfeasance in public office extends to acts by public officers that are beyond power, including acts that are invalid for want of procedural fairness [Mengel 185 CLR at 356-357, per Brennan J.]. But to establish that tort, it is not enough to show the knowing commission of an act beyond power and resulting damage. As the majority said in Mengel [185 CLR at 347]: "The cases do not establish that misfeasance in public office is constituted simply by an act of a public officer which he or she knows is beyond power and which results in damage. Nor is that required by policy or by principle. Policy and principle both suggest that liability should be more closely confined. So far as policy is concerned, it is to be borne in mind that, although the tort is the tort of a public officer, he or she is liable personally and, unless there is de facto authority, there will ordinarily only be personal liability [See James v The Commonwealth (1939) 62 CLR 339 at 359-360, per Dixon J. See also Racz v Home Office [1994] 2 AC 45 at 50-54, per Lord Jauncey of Tullichettle]. And principle suggests that misfeasance in public office is a counterpart to, and should be confined in the same way as, those torts which impose liability on private individuals for the intentional infliction of harm. For present purposes, we include in that concept acts which are calculated in the ordinary course to cause harm, as in Wilkinson v Downton[[1897] 2 QB 57], or which are done with reckless indifference to the harm that is likely to ensue, as is the case where a person, having recklessly ignored the means of ascertaining the existence of a contract, acts in a way that procures its breach." For the purposes of deciding Mengel, the majority considered it sufficient to proceed on the basis that the tort requires an act which the public official knows is beyond power and which involves a foreseeable risk of harm but noted also that there seems much to be said for the view that misfeasance extends to the situation of a public official recklessly disregarding the means of ascertaining the extent of his or her power [Mengel 185 CLR at 347]. (emphasis added) 271 Additionally, as Brennan J explained in Mengel 185 CLR at 357 (and see too at 370-371 per Deane J): the mental element is satisfied when the public officer engages in the impugned conduct with the intention of inflicting injury or with knowledge that there is no power to engage in that conduct and that that conduct is calculated to produce injury. These are states of mind which are inconsistent with an honest attempt by a public officer to perform the functions of the office. Another state of mind which is inconsistent with an honest attempt to perform the functions of a public office is reckless indifference as to the availability of power to support the impugned conduct and as to the injury which the impugned conduct is calculated to produce. The state of mind relates to the character of the conduct in which the public officer is engaged - whether it is within power and whether it is calculated (that is, naturally adapted in the circumstances) to produce injury…. For example, the officer's administrative act may be invalid because he or she did not treat the plaintiff with procedural fairness. It is the absence of an honest attempt to perform the functions of the office that constitutes the abuse of the office. Misfeasance in public office consists of a purported exercise of some power or authority by a public officer otherwise than in an honest attempt to perform the functions of his or her office whereby loss is caused to a plaintiff. Malice, knowledge and reckless indifference are states of mind that stamp on a purported but invalid exercise of power the character of abuse of or misfeasance in public office. If the impugned conduct then causes injury, the cause of action is complete. (emphasis added) 272 The House of Lords held in Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 at 192 F-G per Lord Steyn (with whom Lords Hope of Craighead at 197 C-D and Hobhouse of Woodborough at 231 F-H agreed) and 228 A-D per Lord Hutton (with whom Lord Hobhouse also agreed) that recklessness may be a sufficient state of mind to establish commission of the tort: see too Futuris 237 CLR at 153-154 [11], 164 [55]; Nyoni v Shire of Kellerberrin (2017) 248 FCR 311 at 328 [80] per North and Rares JJ. 273 In Three Rivers [2003] 2 AC at 191 E-F Lord Steyn spoke of "two different forms of liability for misfeasance in public office": the first is "targeted malice" where the public officer engages in conduct with the intention to injure a person or persons; the second is where the public officer acts "knowing that he has no power to do the act complained of and that the act will probably injure the plaintiff. It involves bad faith inasmuch as the public officer does not have an honest belief that his act is lawful." His Lordship discussed what constitutes the element of bad faith in the second form, which was an issue in that appeal (and is so in this proceeding), and, after referring to Mengel 185 CLR 307, the decisions of the Court of Appeal of New Zealand in Garrett v Attorney-General [1997] 2 NZLR 332 and Rawlinson v Rice [1997] 2 NZLR 651, and the formulation of the concept by Clarke J at first instance, (Three Rivers District Council v Bank of England [1996] 3 All ER 558 at 581) who had drawn particularly on what Brennan J had said in Mengel 185 CLR at 356-357, Lord Steyn said ([2003] 2 AC at 192 G): …reckless indifference to consequences is as blameworthy as deliberately seeking such consequences. It can now be regarded as settled law that an act performed in reckless indifference as to the outcome is sufficient to ground the tort in its second form. 274 He clarified that the state of mind that the public officer had to have when acting was "reckless indifference to the illegality of his act" ([2003] 2 AC at 193 C-D). 275 Lord Hobhouse discussed three types of malice in his speech in Three Rivers [2003] 2 AC at 230G-231C, namely, targeted malice, (intentional but) untargeted malice and reckless untargeted malice, saying (relevantly, to the issue in this proceeding) of the last: Thirdly there is reckless untargeted malice. The official does the act intentionally being aware that it risks directly causing loss to the plaintiff or an identifiable class to which the plaintiff belongs and the official wilfully disregards that risk. What the official is here aware of is that there is a risk of loss involved in the intended act. His recklessness arises because he choses wilfully to disregard that risk. (emphasis added) 276 In Sanders v Snell (No 2) (2003) 130 FCR 149 at 174 [95] Black CJ, French and von Doussa JJ distilled from the decision of the High Court in Sanders 196 CLR 329 that in order for an office holder to be liable for the tort of misfeasance in public office, he or she either had to have actual knowledge that the action was beyond power or be recklessly indifferent to that possibility "coupled with knowledge of or reckless indifference to the possibility that his action would cause or be likely to cause injury." 277 The yardstick of recklessness as a state of mind for an intentional tort is determined subjectively rather than objectively, as Gummow, Hayne and Heydon JJ explained in Banditt v The Queen (2005) 224 CLR 262 at 265 [2]. In substance, a statement made recklessly, without caring whether it is true or false is akin to saying it without any belief in its truth. Their Honours said, relying on Lord Esher MR's reasoning in English and Scottish Mercantile Investment Co Ltd v Brunton [1892] 2 QB 700 at 707-708, that "one who wilfully shuts his eyes to what would result from further inquiry may be found to know of that result". And they approved the following passage from Lord Edmund-Davies' dissenting speech in Commissioner of Metropolitan Police v Caldwell [1982] AC 341 at 358 C-D (see 224 CLR at 266 [3]): "So if a defendant says of a particular risk, 'It never crossed my mind,' a jury could not on those words alone properly convict him of recklessness simply because they considered that the risk ought to have crossed his mind, though his words might well lead to a finding of negligence. But a defendant's admission that he 'closed his mind' to a particular risk could prove fatal, for, 'A person cannot, in any intelligible meaning of the words, close his mind to a risk unless he first realises that there is a risk; and if he realises that there is a risk, that is the end of the matter'[See Glanville Williams, Textbook of Criminal Law (1978), p 79]. (emphasis added) 278 In Minister of Fisheries v Pranfield Holdings Ltd [2008] 3 NZLR 649 at 675 [118] O'Regan J, giving the judgment of the Court of Appeal comprising himself, Ellen France and Baragwanath JJ, adopted Brennan J's formulation of, and test for, recklessness in Mengel 185 CLR at 357. O'Regan J also drew support for that conclusion from Lord Hobhouse's speech in Three Rivers [2003] 2 AC at 230-231 where his Lordship formulated the test as follows (Pranfield [2008] 3 NZLR at 675 [119]-[120]): Another way of putting it is that [the public officer] must be shown either to have known that he was acting unlawfully or to have wilfully disregarded the risk that his act was unlawful. This requirement is therefore one which applies to the state of mind of the official concerning the lawfulness of his act and covers both a conscious and a subjectively reckless state of mind, either of which could be described as bad faith or dishonest. 279 O' Regan J referred to a footnote appearing at [2003] 2 AC at 231 where Lord Hobhouse added: . . . 'without an honest belief' in the lawfulness of his conduct best conveys the requisite state of mind covering both actual knowledge and dishonest disregard. (emphasis added) 280 There has been a difference of opinion in Australian appellate courts as to the test applicable in the second limb of the test governing the office holder's state of mind as to the consequences of acting knowingly or recklessly in excess of his or her power. The preponderant view is that it is sufficient that he or she must also have known, or been recklessly indifferent to, the fact that the plaintiff or applicant was likely to suffer harm. The other view (which I am of opinion is incorrect) is that it is sufficient that there be only a foreseeable risk of harm. 281 In Cornwall v Rowan (2004) 90 SASR 269 at 324-325 [212], Bleby, Besanko and Sulan JJ held that the second limb of the tort would be satisfied if the public officer was recklessly indifferent or deliberately blind to the invalidity of, or lack of power for, both his or her act and that it would be likely to cause injury. More recently in Obeid v Lockley (2018) 98 NSWLR 258 Bathurst CJ at 293-294 [157]-[159] and 297 [170]-[172], Beazley P agreeing at 302 [206], and Leeming JA at 309 [242] considered, in obiter dicta (see at 293 [153] and 311 [243]) that, when engaged in the act or omission complained of, the public officer had to be aware of or recklessly indifferent to the fact that the plaintiff or applicant was likely to suffer harm. Their Honours rejected the approach of Doyle CJ, Duggan and White JJ in State of South Australia v Lampard-Trevorrow (2010) 106 SASR 331 at 387-388 [263]-[264] that it was sufficient for there to be only foreseeable risk of such harm to constitute the tort. The Full Court there had proceeded on the basis that they were bound by what Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ had said in Mengel 185 CLR at 347, namely that: However, it is sufficient for present purposes to proceed on the basis accepted as sufficient in Bourgoin [SA v Ministry of Agriculture, Fisheries and Food ([1986] QB 716 at 740, per Mann J; on appeal [1986] QB 741 at 777, per Oliver LJ), namely, that liability requires an act which the public officer knows is beyond power and which involves a foreseeable risk of harm. (emphasis added) 282 I agree with Bathurst CJ, Beazley P and Leeming JA in Obeid 98 NSWLR 258 that in this passage the plurality in Mengel 185 CLR at 347 did not decide that mere foreseeability of harm was sufficient. The plurality were content to assume that, even if foreseeability of harm were the test, the Mengels failed to establish their cause of action based on misfeasance in public office because, regardless of that assumption, they had argued, incorrectly, that "it was sufficient that the officer concerned ought to have known that he or she lacked power" (185 CLR at 347). All the justices in Mengel 185 CLR 307 rejected such a test and held that the tort was intentional. That is why in the paragraph immediately preceding their reference to Bourgoin [1986] QB at 740, Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ explained that policy and principle required that liability for the tort of misfeasance in public office be confined "in the same way as those torts which impose liability on private individuals for the intentional infliction of harm" (185 CLR at 347). 283 In any event, I am bound by Sanders (No 2) 130 FCR at 173 [95] to proceed on the basis that the officer must be aware of, or recklessly indifferent to, the fact that the applicant or plaintiff will suffer harm. Mere foreseeability of harm is a long way short of an intention to inflict the harm or a reckless indifference to the likelihood that a person affected by the abuse of power would suffer harm as a result. 284 In addition, a finding that a Minister has committed misfeasance in public office should only be reached having regard to the seriousness of such a finding based on evidence that gives rise to a reasonable and definite inference that he or she had the requisite state of mind: cf Commonwealth v Fernando (2012) 200 FCR 1 at 28-29 [128]-[130] per Gray, Rares and Tracey JJ.

8.2 The test for determining the validity of delegated legislation 285 In exercising a statutory discretion or power, ordinarily, in the absence of an express legislative intention to the contrary, a Minister or other officer of the Commonwealth must act in conformity with what Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ said in Graham v Minister for Immigration (2017) 263 CLR 1 at 30 [57] namely: The concept of the national interest, the Minister's satisfaction as to which is the subject of the second condition of s 501(3), although broad and evaluative, is not unbounded. And the statutory discretion enlivened on fulfilment of those statutory conditions must in each case be exercised by the Minister "according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself"[ R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 189, citing Sharp v Wakefield [1891] AC 173 at 179. See Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1; Minister for Immigration and Border Protection v Eden (2016) 240 FCR 158]. (emphasis added) 286 In Murphyores Incorporated Pty Ltd v The Commonwealth (1976) 136 CLR 1 at 17-18 Mason J, with whom Gibbs J agreed, adopted what Kitto J had said (with the agreement of Menzies J) in Reg. v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 189, which is distilled in the quotation in [285] above that I have taken from Graham 263 CLR at 30 [57]. Stephen J (with whom Barwick CJ and Gibbs J also agreed) said of a broad statutory power, which all of the justices in Murphyores 136 CLR 1 considered was conferred on the Minister by statutory predecessors of s 7(1)-(3) of the Export Control Act, "only something amounting to a lack of bona fides could justify curial intervention in decisions made in exercise of the power" (136 CLR at 14 and see too at 12-13). 287 The classic expression of the test for determining the validity of delegated legislation is contained in the reasons of Dixon J in Williams v Melbourne Corporation (1933) 49 CLR 142 at 155 (Attorney-General (SA) v Adelaide Corporation (2013) 249 CLR 1 at 40 [60] per French CJ; 57-83 [117]-[199] per Crennan and Kiefel JJ; South Australia v Tanner (1989) 166 CLR 161 at 164 per Wilson, Dawson, Toohey and Gaudron JJ, see also 175 per Brennan J). Dixon J said: To determine whether a by-law is an exercise of a power, it is not always enough to ascertain the subject matter of the power and consider whether the by-law appears on its face to relate to that subject. The true nature and purpose of the power must be determined, and it must often be necessary to examine the operation of the by-law in the local circumstances to which it is intended to apply. Notwithstanding that ex facie there seemed a sufficient connection between the subject of the power and that of the by-law, the true character of the by-law may then appear to be such that it could not reasonably have been adopted as a means of attaining the ends of the power. In such a case the by-law will be invalid, not because it is inexpedient or misguided, but because it is not a real exercise of the power. (Compare Widgee Shire Council v. Bonney [(1907) 4 CLR 977 at 982, 986]). (emphasis added) 288 Ordinarily, an exercise of power by an officer of the Commonwealth is subject to judicial review in the original jurisdiction of the High Court under s 75(v) of the Constitution and, relevantly, for present purposes, in this Court pursuant to s 39B(1) of the Judiciary Act 1903 (Cth). For, as Gaudron, McHugh, Gummow, Kirby and Hayne JJ said in Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 513-514 [104]: The reservation to this Court by the Constitution of the jurisdiction in all matters in which the named constitutional writs or an injunction are sought against an officer of the Commonwealth is a means of assuring to all people affected that officers of the Commonwealth obey the law and neither exceed nor neglect any jurisdiction which the law confers on them. The centrality, and protective purpose, of the jurisdiction of this Court in that regard places significant barriers in the way of legislative attempts (by privative clauses or otherwise) to impair judicial review of administrative action. Such jurisdiction exists to maintain the federal compact by ensuring that propounded laws are constitutionally valid and ministerial or other official action lawful and within jurisdiction. In any written constitution, where there are disputes over such matters, there must be an authoritative decision-maker. Under the Constitution of the Commonwealth the ultimate decision-maker in all matters where there is a contest, is this Court. The Court must be obedient to its constitutional function. In the end, pursuant to s 75 of the Constitution, this limits the powers of the Parliament or of the Executive to avoid, or confine, judicial review. (emphasis added) 289 Relevantly, s 75(v) of the Constitution enables the Court to determine whether an administrative decision (including a decision to exercise a power or make an order under an Act, such as the Second Control Order) is affected or vitiated by a jurisdictional error or some other basis for judicial review: Plaintiff S157 211 CLR at 506 [76]-[77]; Kirk v Industrial Relations Commission (NSW) (2010) 239 CLR 511. Of course, it is a jurisdictional error for a Minister (or another officer of the Commonwealth) to make a decision that is unreasonable or irrational: Minister for Immigration v Li (2013) 249 CLR 332. In my opinion, Stephen J's reference to a lack of bona fides in Murphyores 136 CLR at 12-14 includes a decision that is so unreasonable or irrational as to amount to a jurisdictional error. Such a decision falls neatly within Dixon J's explanation of a decision that "could not reasonably have been adopted as a means of attaining the ends of the power…because it is not a real exercise of the power": Williams 49 CLR at 155. And as Dixon J explained in Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360, appositely in the present case: Moreover, the fact that he has not made known the reasons why he was not satisfied will not prevent the review of his decision. The conclusion he has reached may, on a full consideration of the material that was before him, be found to be capable of explanation only on the ground of some such misconception. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law. (emphasis added) 290 In more recent years, the Courts have used the test of proportionality in arriving at an assessment of whether delegated legislation is a valid exercise of the power to make it. In Li 249 CLR at 352 [30] French CJ said that "a disproportionate exercise of an administrative discretion, taking a sledgehammer to crack a nut, may be characterised as irrational and also as unreasonable simply on the basis that it exceeds what, on any view, is necessary for the purpose it serves" (footnote omitted, see too at 362 [63], 367 [76], and at 369 [85] where Hayne, Kiefel and Bell JJ said "but the result itself bespeaks error", and at 376-377 [108]-[110] per Gageler J). 291 In Adelaide Corporation 249 CLR 1 the majority of the Court evaluated the validity of delegated legislation, being a municipal by-law, by reference to the common law principle of legality and the requirements of reasonableness and proportionality (see at 30 [41], 34-40 [47] -[60] per French CJ, 53-54 [105]-[106], 56-58 [116]-[123] per Hayne J, 83-84 [198]-[201] per Crennan and Kiefel JJ and 90 [224] per Bell J, see too 66-67 [148]-[150], 76 [158] per Heydon J). 292 One important common law right, to which the principle of legality attaches, is the right to carry on business in one's own way within the law: The Commonwealth v Progress Advertising and Press Agency Co Pty Ltd (1910) 10 CLR 457 at 464 per O'Connor J, as applied in Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 252 per Deane, Dawson, Toohey and Gaudron JJ. Gleeson CJ elegantly stated the principle in Electrolux Home Products Pty Ltd v Australian Workers Union (2004) 221 CLR 309 at 329 [20]-[21]. In substance, as he identified, the law presumes that it is highly improbable that the legislature "would overthrow fundamental principles, infringe rights, or depart from the general system of law" unless it expresses such an intention with "irresistible clearness": Potter v Minahan (1908) 7 CLR 277 at 304 per O'Connor J. Gleeson CJ elaborated what this entailed as follows (221 CLR at 329 [21]): In R v Home Secretary; Ex parte Pierson ([1998] AC 539 at 587, 589), Lord Steyn described the presumption as an aspect of the principle of legality which governs the relations between Parliament, the executive and the courts. The presumption is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted. The hypothesis is an aspect of the rule of law. (emphasis added) 293 The applicability of the principle of legality to the exercise of a delegated legislative power is no less confined. One way in which the Parliament sought to ensure that those to whom it had delegated a power in legislation actually turned their minds to the significance and potential impact of an exercise of that delegated power was its prescription in the Legislative Instruments Act. That provided that before a rule-maker, such as the Minister (see s 4(3)), exercised a delegated legislative power first, he or she had to be satisfied that any consultation that he or she considered appropriate and to be reasonably practicable had occurred, particularly if the proposed legislative instrument (such as the Second Control Order) was likely to have a direct, or substantial indirect, effect on business (s 17(1)) and, secondly, he or she had to lodge an explanatory statement of the measure to explain, (a) its purpose and operation and (b), if no consultation had occurred under s 17 before it was made, why not (s 26(1); and see the definition of explanatory statement in s 4(1) of the version of that Act in force in 2011, now found in ss 26(1A)(a), (b) and (c)). However, a failure to consult or prepare an explanatory statement did not affect the validity or enforceability of the legislative instrument (ss 19, 26(2)). And, s 18 provided that the nature of the instrument might be such as made consultation unnecessary or inappropriate, including because it was required as a matter of urgency. 294 In Adelaide Corporation 249 CLR at 83-84 [200]-[201] Crennan and Kiefel JJ, with whom Bell J substantially agreed (although, as I explain in [306] below, not on the application of the test in the circumstances), said that Dixon J's statement of the test of reasonableness in Williams 49 CLR at 155 "bears an obvious affinity with a test of proportionality." Crennan and Kiefel JJ said that in Tanner 166 CLR at 165, Wilson, Dawson, Toohey and Gaudron JJ had equated that test with that of reasonable proportionality, referring to what Deane J said in The Commonwealth v Tasmania (1983) 158 CLR 1 at 260. They also stated that the test of validity for delegated legislation was whether the impugned provisions "are a reasonable means of obtaining the ends of the rule-making power" citing Coulter v The Queen (1988) 164 CLR 350 at 357 per Mason CJ, Wilson and Brennan JJ. 295 In McCloy v New South Wales (2015) 257 CLR 178 at 213 [68] French CJ, Kiefel, Bell and Keane JJ said that proportionality testing is a tool of analysis for ascertaining the rationality and reasonableness of a legislative restriction. They discussed proportionality as follows (at 215-216 [74]: Proportionality provides a uniform analytical framework for evaluating legislation which effects a restriction on a right or freedom. It is not suggested that it is the only criterion by which legislation that restricts a freedom can be tested. It has the advantage of transparency. Its structured nature assists members of the legislature, those advising the legislature, and those drafting legislative materials, to understand how the sufficiency of the justification for a legislative restriction on a freedom will be tested. 296 Their Honours said that there were at least three stages for assessing the proportionality of a statute, namely whether it was, first, suitable, secondly, necessary, and, thirdly, adequate in its balance (McCloy 257 CLR at 217 [79]). They said that suitability was also referred to as "appropriateness" or "fit", but the measure was to be tested by ascertaining whether it would contribute to the realisation of the statute's legitimate purpose. Unless that could be done, its use could not be said to be reasonable. The test at the first stage required there be a rational connection between the provision in question and the statute's legitimate purpose, so that its purpose could be furthered (257 CLR at 217 [80]). 297 Their Honours said that the second stage of the test looked to whether there were other, equally effective, means of achieving the legislative object which had a less restrictive effect on the freedom and were obvious and compelling. In cases where such alternative measures were available, the use of a more restrictive one was not reasonable and could not be justified (257 CLR at 217 [81]). In Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [102] Gleeson CJ, Gummow, Kirby, Hayne, Crennan and Kiefel JJ described this as a "criterion of 'reasonable necessity'". 298 French CJ, Kiefel, Bell and Keane JJ identified the third stage, adequacy, as involving a question of whether the burden on the freedom was undue or impermissibly burdensome, again having regard to the statutory purpose (McCloy 257 CLR at 218 [86]). 299 The first two of those stages involves the relationship between the legitimate legislative purpose (or "ends") and the means to achieve it. A legislative purpose may be the most important factor in justifying the effect that the measure has on the relevant right or freedom (257 CLR at 218 [83]-[84]). 300 I am of opinion that the explanation in McCloy 257 CLR 178 of how proportionality operates as a tool of analysis in the constitutional context is apposite to the analysis of proportionality in determining the validity of delegated legislation: see too Adelaide Corporation 249 CLR at 84 [201]; Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381 at 399-400 per Beaumont and Hill JJ; Betfair Pty Ltd 234 CLR at 477 [102]-[103]. 301 In Austral Fisheries 40 FCR at 399 Beaumont and Hill JJ held that a power, that appeared to be unlimited, to make a provision in an instrument of delegated legislation was nonetheless constrained by three principles of statutory interpretation. Those were that, first, in the absence of an explicit contrary provision, the power should be interpreted so as not to result in an operation that is, in the court's opinion, "capricious and irrational" (applying Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 321 per Mason and Wilson JJ), secondly, an exercise of the power will be invalid if it "could not be justified on any reasonable ground", being one reasonably open to the decision-maker (applying Parramatta City Council v Pestell (1972) 128 CLR 305 at 323 per Menzies J), and thirdly, "a reasonable proportionality must exist between the designated object or purpose and the means selected by the [delegated legislation] for achieving that object or purpose" (applying Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 29 per Mason CJ): see too 40 FCR at 382-384 per Lockhart J. 302 In 1993, Hill J observed when agreeing with Gummow J, in Minister of State for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 582, that the application of the "reasonably proportionate" test in administrative law was then "still fluid in Australian jurisprudence". Gummow J, with whom Cooper J also agreed (43 FCR at 582), suggested that when the question is the validity of delegated legislation made pursuant to a valid enactment, "the proportionality principle is differently focused" to when the issue is the constitutional validity of a law: Dover 43 FCR at 577. There, Gummow J identified the fundamental question by reference to what Lockhart J had said in Austral Fisheries 40 FCR at 383-384 as being whether the delegated legislation is within the scope of what the Parliament intended when it enacted the legislation conferring the power to make the delegated legislation. Cooper J distilled the test as follows (Dover 43 FCR at 585): The test of proportionality reflects an underlying assumption that the legislature did not intend that the power to enact delegated legislation would be exercised beyond what was reasonably proportionate to achieve the relevant statutory object or purpose; the test of reasonableness assumes that the legislature did not intend to confer a power to enact delegated legislation which enactment no reasonable mind could justify as appropriate and adapted to the purpose in issue and the subject matter of the grant. Whether one describes the test as one of "reasonable proportionality" or "unreasonableness", the object is to find the limit set by the legislature for the proper exercise of the regulation or rule making power and then to measure the substantive operation of the delegated legislation by reference to that limit. In my view there is no substantive difference between the tests as stated. (emphasis added) 303 In McCloy 257 CLR at 210-211 [57]-[58] French CJ, Kiefel, Bell and Keane JJ said that in applying the criterion of proportionality, as a tool of analysis in assessing the validity of legislation, the court can have regard to whether there is an obvious and compelling, alternative reasonably practical, but less drastic, means of achieving the same purpose or end as in the impugned statutory provision. But, they warned, "courts must not exceed their constitutional competence by substituting their own legislative judgments for those of parliaments." The same caution must apply to a court's examination of the validity of the exercise of a power to make delegated legislation. 304 French CJ described as a suggestion (in a footnote in Adelaide Corporation 249 CLR at 40 [61]) Gummow J's statement (in Dover Fisheries 43 FCR at 577) that, in the case of the validity of delegated legislation, "the proportionality principle is differently focused" to that where constitutional validity is in issue. However, the Chief Justice proceeded to analyse the validity of the by-law, as an exercise of the statutory power, using proportionality analysis as a tool. He said that Dixon J's test in Williams 49 CLR at 155 was "[a] high threshold test, which falls into the class of proportionality criteria … to determine the validity of delegated legislation" (249 CLR at 37 [55]-[56]). He explained that "the high threshold test for reasonable proportionality" was applicable to the assessment of the validity of delegated legislation made in the exercise of a purposive power. He said, in respect of Dixon J's test, that the criterion of reasonable proportionality could be seen as "an appreciation of the unreasonableness criterion adapted to a purposive law-making power" (249 CLR at 40 [59]-[60]). In my opinion, French CJ was not propounding a new criterion or test; rather he was emphasising that the court could only hold that an exercise of delegated legislative power was invalid, if the measure adopted was not reasonably proportionate to achieve the legislative purpose of its conferral, and that issue was to be tested using proportionality analysis. 305 Like French CJ, Crennan and Kiefel JJ analysed the validity of the challenged by-law using the proportionality tool of analysis in the same way as it is used in assessing the validity of a statute. Indeed, Crennan and Kiefel JJ said that an analysis, based on Dixon J's test in Williams 49 CLR at 155, "necessarily raises questions similar to those considered in the context of the implied constitutional freedom of communication" (249 CLR at 84 [201]; see too at [202] and 85 [206]). 306 However, Hayne J, with whom Bell J agreed on this issue, took a different view and said that the question of statutory validity of the by-law is tested by asking whether the measure was so unreasonable that it could not fall within the statutory power, whereas the question of its constitutional validity was "whether the by-law is reasonably appropriate and adapted to serve a legitimate object or end in a manner compatible with the constitutionally prescribed system of government and the freedom of political communication which is its indispensable incident" (249 CLR at 63 [137], 90 [224]). 307 The exercise of a power to make delegated legislation will be unreasonable if it involves oppressive or gratuitous interference with the rights of persons who are subject to the measure to such a degree "as could find no justification in the minds of reasonable men", so that the court could conclude that the legislature did not intend to give authority to make it: Jones v Metropolitan Meat Industry Board (1925) 37 CLR 252 at 261 per Isaacs J with whom Knox CJ at 257 and Rich J at 270 agreed (see too Brunswick Corporation v Stewart (1941) 65 CLR 88 at 99 per Williams J). 308 The presence of political considerations as a, or even the, motivation for a political decision-maker, such as Cabinet, a Minister or a local government council, exercising a legislative power to make delegated legislation that is within the literal meaning of the power, cannot, of itself, lead to the measure being invalid. After all, the nature of our democratic system of government is to entrust executive power to Ministers who are answerable to Parliament which, in turn, is answerable to the electorate, (and local councillors who are answerable to their electorates) for the political choices and decisions that they make. Often contentious issues require governmental decision-makers to exercise powers under legislation that can address and regulate the subject matter of the debate. Such exercises of power can be characterised pejoratively, from time to time, as "political decisions", but such a characterisation does not bespeak any necessary impropriety, unreasonableness or inappropriateness in the decision that would lead to it being found to be invalid on the basis that it was not within the, usually very broad, range of choice that the legislature conferred on its delegate. The essence of government is the making of choices between alternative courses on which reasonable minds not only might, but frequently do, differ. 309 And, often governmental decision-making can result in an outcome in which, to draw on a well-known, perhaps apposite aphorism: one man's meat is another man's poison: cf South Australian River Fishery Association Inc and Warwick v South Australia (2003) 85 SASR 373 at 392-393 [115]-[116] per Doyle CJ, at 416 [213] per Gray J, and at 421 [241]-[242] per Besanko J. There Besanko J said (at [241]) that "it is difficult to envisage a situation in which political considerations of themselves could constitute an improper purpose in circumstances where the exercise of power is otherwise valid" (emphasis added). Doyle CJ held (at 392-393 [116]) that "if two quite different but acceptable courses of action are open in a given case involving the exercise of a statutory power for a specified purpose, the government of the day is entitled to adopt the course which will secure a political advantage". In the same vein, Spigelman CJ, with whom Beazley and Tobias JJA agreed, noted in Murrumbidgee Groundwater Preservation Association Inc v Minister for Natural Resources (2005) 138 LGERA 11 at 48 [144], that, inevitably if significant changes are made to an established regulatory regime "there will be winners and losers. Considerations of equity are quintessentially matters for political decision-making". 310 The court will not find delegated legislation invalid merely because it may think that it could have been framed more fairly or in a way that could have resulted in less hardship, or that it is inexpedient or misguided: Williams 49 CLR at 155; Ferrier v Wilson (1906) 4 CLR 785 at 801-802 per Isaacs J; Murrumbidgee Groundwater 138 LGERA at 48 [144]. Rather, invalidity is a consequence of the court concluding, as Dixon J explained in Williams 49 CLR at 155, that the measure "is not a real exercise of the power" because "it could not reasonably have been adopted as a means of attaining the ends of the power". That question can be evaluated (see [296] above) using proportionality analysis as a tool, as I will do below.

9.1.1 As to validity of the Second Control Order 311 Brett Cattle had argued that the 2 and 5 June recommendations contemplated that the Minister should make a new control order that allowed him to make exceptions to a general prohibition so as to allow exports to occur within an assured export system scenario. It also contended that an order to the effect of the total prohibition on exports to Indonesia was not contemplated at all in any Departmental recommendation to the Minister. 312 The Commonwealth submitted that the Second Control Order was legislative in nature, and in order to be found invalid, it had to be so unreasonable that it fell outside the scope of the power to make orders that the Parliament conferred on the Minister in the Export Control Act. The Commonwealth argued that the mere fact that the Second Control Order may not strictly conform to a prior recommendation by the Department was not indicative of invalidity, especially if Cabinet had considered it appropriate to make the order. It argued that the highest policy decisions affecting Australia are brought to Cabinet. It contended that Brett Cattle's suggested construction of the 2 and 5 June recommendations was misconceived because, read correctly, those recommendations did not provide for any exception of the kind Brett Cattle suggested. The Commonwealth argued that the criterion of unreasonableness in this context had a high threshold, even higher than the standard in Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223, particularly since a control order was subject to disallowance by either House of the Parliament. 313 The Commonwealth also contended that disproportionality was not a separate or independent ground of invalidity of delegated legislation. It submitted that disproportionality was only relevant to determining validity when delegated legislation was made pursuant to a purposive power and the measure could not reasonably be seen as being made for the prescribed purpose, so that it lacked a sufficient connection to the legislative power. In addition, the Commonwealth submitted that invalidity did not necessarily result if, in some application, the delegated legislation went beyond what was reasonably necessary to achieve an end within the power or the rule-maker could have adopted a less restrictive measure to achieve the same ends. The Commonwealth argued that the Second Control Order was not indiscriminate or disproportionate merely because, as Brett Cattle had argued, it affected trade to facilities in Indonesia that had animal welfare standards that met or were consistent with the OIE Code. While accepting that there was a small number of facilities that complied, or could comply readily, with the OIE Code, the Commonwealth argued that those were a small fraction of "hundreds" of Indonesian abattoirs. It contended that the immediate difficulty that confronted the Minister was the need to ensure that there were acceptable animal welfare standards generally for the live cattle export trade to Indonesia. It noted that, at the time, there was no system of supply chain assurance in place to enable the tracking and control of animals in Indonesia up to the point of slaughter. It submitted that the purpose of the Second Control Order was to enable the Department to have time to create such a system. 314 The Commonwealth submitted that the Second Control Order was a step in the Government implementing a new policy that it had adopted on 7 June 2011 only to permit exports of livestock "where basic international animal welfare standards could be assured to the point of slaughter." It argued that the Second Control Order and the Second AMLI Order paused the export of cattle to Indonesia "for so long, and only so long, as was necessary to create the administrative framework to implement that policy." It argued that the Second Control Order was not unreasonable or disproportionate given, first, the evidence of the widespread failure in Indonesia to comply with the OIE Code and, the absence of existing means to restrict the export of animals to, what turned out to be approximately 10, facilities in Indonesia that met the OIE Code and secondly, "the high public and political controversy concerning animal welfare standards in the live export industry which emerged on and from 30 May 2011, and on which there were strongly held community views". The Commonwealth contended that it was open to the Minister to make the Second Control Order to implement the new policy in the circumstances.

9.1.2 The Minister's state of mind 315 The Commonwealth argued that the Minister had not acted with inexplicable or irrational haste and that there were sound reasons for his taking urgent action when making the Second Control Order as he did. The Commonwealth contended that the political controversy about the mistreatment shown in the Four Corners program demanded a swift and effective resolution. It submitted that, on 3 June 2011, the AMIC representatives, in urging a swift response, had told the Minister that the animal welfare issues in Indonesia threatened the reputation not only of the Australian live export trade but also that of the nation's overall meat and livestock industry worth over $7 billion per annum. It also referred to an ABARES report that Ms Evans sent to Mr Lawrie on 3 June 2011. That report stated that in 2009-2010 the value of total frozen and chilled (i.e. boxed) beef exports was around $4 billion. 316 The Commonwealth argued that, in the facts as happened, the Minister did not, and did not need to have, concerns about his power to make the Second Control Order, and had obtained appropriate advice from Blake Dawson, AGS and the Department to assure him as to his powers and any liability resulting from their exercise before he acted. It contended that these factors, together with the representations of the RSPCA and AMIC, as well as Cabinet consultation, provided a sufficient basis to negate the possibility of a finding that the Second Control Order was an unreasonable exercise of power.

9.2.1 The issues before the Minister 317 There was ample material before the Minister at the time of his decision that revealed a range of reasonable, but very diverse, available responses to address the then current political issue of what, if anything, should be done in addition to the First Control Order. There was no unique answer to deal with the risk of live cattle exported from Australia being subjected to inhumane treatment in Indonesia of the kind depicted in the Four Corners program in other abattoirs than the 12 to which the First Control Order prohibited exports. Moreover, any order under the Export Control Act could be disallowed under s 42 of the Legislative Instruments Act by either House of the Parliament within 15 days of it being tabled which had to occur pursuant to s 38 of that Act within six sitting days of its registration. 318 The Minister was aware of, among others, the views of the RSPCA, Animals Australia, and some Parliamentarians. They had canvassed that there be a total and permanent prohibition on the live export trade. The then current animal welfare concerns could be seen as another example of past instances of publicised mistreatment of livestock exported from Australia at or prior to slaughter. As the Minister told Mr Heatley on 2 June 2011 "your social license is lost" (see [140]). And, as the foreshadowings of Mr Wilkie MP and Senator Brown suggested, such a prohibition would be the subject of a Bill for an enactment ([119], [142]). The Minister was also aware that AMIC advocated a suspension of the live export trade to Indonesia until an enforceable system could be established to ensure that the same animal welfare standards as in Australia applied up to the time of slaughter, being substantially the effect of what became the Second Control Order ([142]). However, AMIC's proposal did not discuss the legal basis on which the suggested suspension could be made. 319 It may be accepted that these were reasonable and genuinely held views of responsible members of the community about how to address a serious issue. The Minister was entitled to take those views into account in formulating his course of action. But the course of action that he selected had to be either one that he could take under the law as it stood or by proposing or supporting legislative change in the Parliament. The mere fact that there were reasonable views in support of a temporary or permanent prohibition of live animal exports generally, or to Indonesia specifically, did not create some extra dimension to the exercise of the power which the Minister had to make a valid order under the Export Control Act. 320 The live cattle export industry representatives had told the Minister that about 40% of the total trade in livestock exports to Indonesia already were, or could readily be put in closed loop supply chains that would operate throughout to the point of slaughter at least consistently with the OIE Code. The material before him did not suggest, at least with Elders' supply chain to its own feedlot and abattoir in Indonesia, that there was a realistic risk of Elders making any departure from the OIE Code. Mr Heatley had told the Minister at their private meeting in his office on 2 June 2011 that there were currently about five facilities in Indonesia that were capable of being OIE accredited ([137]). 321 I reject Brett Cattle's argument that recommendation 2 in the 2 and 5 June recommendations included a proposal that there be a general power to make an exception to the absolute prohibition and that the Minister chose to override that course of action for no good reason. Recommendation 2 stated: I further recommend that Cabinet note that I intend to act immediately to prohibit the export of live slaughter cattle to any market with the exception of those where there is a closed loop system that meets the standard of welfare referred to in Recommendation 1 c), pending implementation of the compliance regime referred to in Recommendation 1). (emphasis added) 322 Mr Glyde changed the introductory wording slightly in the 6 June Departmental minute to read "I further recommend that Cabinet agree that I act". The natural and ordinary meaning of the Departmental minutes dated 2 and 6 June 2011 and their attachments (to which I have referred at [130] and [175]) made it clear that recommendation 2 in the 2 and 5 June recommendations proposed an exception only for the then existing closed loop system for livestock exports to Egypt. 323 Recommendation 2 and Mr Glyde's 6 June 2011 Departmental minute referred to "any market" in the sense of "any country". That is because the contemporaneous talking points, the three page draft letter to the Prime Minister in the 2 June Departmental minute, that the Minister signed on 6 June 2011, and both of Mr Glyde's 6 June 2011 two and four page revisions of that draft, each referred to an absolute prohibition on live exports to any market except Egypt, which had a single closed loop system. The third recommendation was that there could be an exception, subject to further consideration, if there were contractual obligations that predated the order which would be breached if the order applied to the contract. Those documents also referred to the significant immediate and longer term financial impact on the livestock export industry from the implementation of both the immediate prohibition of export to any market and the longer term use of an ESCAS. This understanding of the Departmental advice is also consistent with what the Secretary told the Minister orally in the afternoon of 6 June 2011 (see [189]). 324 The 2 and 5 June recommendations did not include a specific prohibition of export of livestock solely to Indonesia; nor did any Departmental minute, or its attachments or any of the draft legal advice that the Department received. The 2 and 5 June recommendations proposed a general prohibition on all exports of livestock with a view to implementing an industry wide ESCAS applicable to all export markets (except for the existing closed loop system for livestock exports to Egypt). Nonetheless, the immediate focus of the Minister's and the Department's attention was the Indonesian market. As Mr Lawrie's email to Ms Evans late on 5 June 2011 showed, at the meeting earlier that day the discussion had included the "possible suspension only to Indonesia for slaughter cattle". He asked her for draft recommendations based on the discussion, which she sent at 12.10pm on 6 June 2011 as options A, B and C ([168], [179]). Option A reflected the possible suspension to Indonesia. 325 All of the Department's written advice prior to the time when the Minister decided to make the Second Control Order contemplated a worldwide prohibition and the development of a worldwide solution to ensure that all supply chains would have an ESCAS in which animal welfare would have to be at least consistent with the OIE Code: hence the references in that material to there only being one possible exception, being the case of the existing closed loop system in Egypt. Yet, the Second Control Order was confined to prohibiting any exports of livestock to Indonesia and did not apply to exports to any other markets in which Australian livestock, equally, could be exposed to mistreatment after export. 326 The Minister submitted no document to Cabinet for its consideration in the meeting in the evening of 6 June 2011 ([193]).

9.2.2 Was the Second Control Order suitable? 327 The long title of the Export Control Act was "an Act to provide for the control of the export of certain goods and for related purposes". The definition of "prescribed goods" and the suite of powers that s 7 conferred to make regulations to prohibit the export of prescribed goods evinced that the purpose of the Act was to enable the Government to make an appropriate and proportionate prohibition on the export of one or more goods to address a particular situation. The Export Control Regulations vested in the Minister the power to make orders, not inconsistent with any regulations made under the Act, with respect to any matter for or in relation to which a regulation could be made under the Act (reg 3). The suite of powers under s 7 was extensive and elaborated the general power in s 7(1) to prohibit the export of prescribed goods. Relevantly s 7(2) set out four alternative forms of prohibition, namely prohibition of export of goods absolutely or to a specified place, and, in either of those cases, unless specified conditions or restrictions were complied with. 328 The Explanatory Statement for the Second Control Order stated that its purpose was to suspend the exports of livestock to Indonesia for six months to "enable the Australian Government to develop a robust regulatory and compliance regime to address concerns regarding the slaughter of live-stock in the Republic of Indonesia" (see [206]). Thus the end that the Second Control Order sought to achieve, using the means of a total prohibition of all exports of livestock to Indonesia for a period of six months, was to allow the Government to work on developing such a regime that would "address concerns regarding" the slaughter of livestock in Indonesia. 329 Thus, the absolute prohibition in the Second Control Order can be seen as an interim step towards ensuring that Australian livestock exported to Indonesia would be handled in the future in an ESCAS that complied with the OIE Code. In that sense it was "suitable" so as to meet the first stage of the proportionality analysis: McCloy 257 CLR at 217 [79]-[80].

9.2.3 Was the Second Control Order necessary? 330 The Second Control Order prohibited absolutely the export of the prescribed goods, livestock, to a specified place, Indonesia, for six months. It was an order that s 7(1), in its natural and ordinary meaning, appeared to permit the Minister to make. However, in its practical operation the Second Control Order had, and was calculated to have, an immediate and significant detrimental economic impact on a major industry in Australia and the conduct of business by persons in that industry. 331 The Minister was aware that a total prohibition would involve, as the Departmental minutes of 2 and 6 June 2011 and the various versions of the draft letter to the Prime Minister reminded him ([130]-[132], [171], [176]), significant detrimental impacts in Australia on the live cattle export industry, market and employment. Moreover, the draft talking points that Ms Evans had taken to the Minister's office on 5 June 2011 described these impacts as "dramatic". At that meeting he had asked for more information on the potential costs if he made an order that resulted in claims for compensation and on the economic impacts of what he was discussing ([163]). He also discussed this topic in his press conference on 8 June 2011, saying "I do understand that there's been a significant impact to industry as a consequence of this decision" ([212]). And, in his interview with Fran Kelly on 8 June 2011, the Minister said that "this impact will be difficult on the industry". When Ms Kelly challenged him, he said "This is about [e]nsuring appropriate animal welfare outcomes, Fran. That's what I'm focused on today" (see [210]). And, the Minister knew that, on his instructions, the Department had delayed granting permission to load Falconia on 6 June 2011 with its proposed cargo of cattle that NACC and Elders had arranged. He did that to ensure that the cargo would be subject to the prohibition once the Second Control Order came into force (see [194]). 332 Accordingly, the Minister was aware of the immediate economic impact that the Second Control Order would have on persons involved in the live cattle export industry. 333 The practical operation of the total prohibition in the Second Control Order was to prevent Elders and other exporters who had, or readily could have, a closed loop supply chain that had animal welfare standards in operation to the point of slaughter that were at least consistent with the OIE Code from carrying on business for six months in respect of exports to the very valuable Indonesian market. It gave no opportunity to such an exporter to satisfy the Minister that, whatever requirements might be developed for a "robust regulatory and compliance regime", that exporter already had (or readily could put) in place such a system. 334 I reject the Commonwealth's argument, put in address by senior counsel, that "a complete answer" to Brett Cattle's case was the acknowledgement in the industry's plan of 3 June 2011, that the existence of long supply chains in Indonesia entailed that control was "sometimes lost" over the place where cattle were slaughtered. All that the plan did was to state the obvious. The plan did not say that there were no closed loop supply chains in Indonesia nor did it acknowledge that those chains leaked. 335 The Explanatory Statement for the 2008 AMLI Order recognised, when imposing the Egyptian closed loop regulatory regime (see [23] above), that the tracking of individual animals and installation of electronic inventory systems to ensure animals were sent only to approved holding and slaughtering facilities "would not be feasible" in a market such as Indonesia. 336 Of course, no regime or system could offer or ensure that there would never be cases of transgression of or departure from whatever standard applied. Human conduct does not work that way. The best that can be hoped for is that a system, regime or law will set a standard or norm of conduct that will be adhered to in the ordinary course of affairs. Thus, it would be crying to the moon to expect a regime that would operate so that there could never be the possibility of any leakage of one or more animals from a closed loop supply chain or inhumane treatment of livestock within it. 337 If Elders Indonesia or Santori were permitted to import cattle for slaughter on condition that they only did so in their own abattoirs, there was no reasonable basis to suggest that there was a realistic risk of the cattle going elsewhere. The Minister, acting rationally and in accordance with law, was not entitled to ignore that reality in his considerations, especially after his lengthy private discussion with Mr Heatley in his office on 2 June 2011. Mr Heatley had told him that "there were some supply chains in Indonesia that were better than others, and I used the Elders supply chain as an example, particularly their abattoir, which was a world class facility". There was no material before the Minister prior to his making the Second Control Order that suggested that Mr Heatley's settlement was in any way inaccurate. 338 When he made the Second Control Order, the Minister was aware from what Mr Setter had told him on 1 April 2011, his meeting with Mr Heatley and Jock Lawrie on 2 June 2011 and the live cattle export industry's letter of 3 June 2011, that there were likely to be some supply chains in Indonesia and about five abattoirs there, including, in particular, Elders' supply chain and abattoir, that could operate immediately as a closed loop system and were capable of satisfying the OIE Code and a total of 25 abattoirs (including the five above) representing 40% of the trade that could meet those guidelines, if not immediately, then within a relatively short time. And the Minister knew, as he told the press conference on 31 May 2011, that Indonesia had substantially good abattoirs although, obviously, standards could, and did, vary from that description to those filmed in the Four Corners program ([122]). 339 The mere possibility of an occasional error or a failure to comply with an otherwise satisfactory system, regime or process would not warrant a reasonable person in the Minister's position ordinarily, using a power to impose a total prohibition on the employment of that system, regime or process while some attempt was made to improve on it. Sledge hammers are not reasonably appropriate or adapted to crack nuts: Li 249 CLR at 352 [30]. 340 The Minister's decision on 7 June 2011 to impose a prohibition in the Second Control Order on the export of all livestock only to Indonesia for six months had an operation that was unequal in its impact on the industry. That is because exports of livestock could still be made to any other country or market, regardless of the standard there of animal welfare, yet the Second Control Order prevented everyone engaging in that trade to Indonesia, including persons who did or could, immediately or within a reasonable time short of six months, export livestock to Indonesia in a closed loop system that complied with, or was no less effective than, the standards of animal welfare in the OIE Code. 341 Just five days earlier the Minister had made the First Control Order. That contained the exceptions clause and permitted him to grant approval for export of livestock to any of the 12 prohibited abattoirs if he were satisfied that the animals would be handled throughout and slaughtered in accordance with the OIE Code (see [126]). Were the exceptions clause, or a clause to similar effect, to have been included in the Second Control Order, it would have been substantively appropriate and adapted to achieve the end that the Minister sought to bring about which allowing him the power to grant relief from the absolute prohibition. Yet there was nothing in the evidence to indicate that the Minister gave any consideration at all (or that the Department even put before him the possibility of including) the exceptions clause (or some similar provision) in the Second Control Order. 342 The First Control Order is conclusive that the Minister must have been aware of the possibility of using the means of including the exceptions clause again, or some provision to its effect, when he decided to make the Second Control Order. 343 The Minister did not have to take at face value the accuracy of the assertions that Mr Setter made on 1 April 2011 and those that Mr Heatley, in particular, made in the meeting of 2 June 2011 and the live export industry's letter of 3 June 2011 that there were, or could without any significant further work be, closed loop systems in place to the point of slaughter for live cattle exported from Australia to Indonesia that provided animal welfare standards at least consistent with the OIE Code. However, those assertions were capable of verification, and, if, when checked, were found to be correct, the prohibition of the continuation of the export of live cattle through those supply chains would serve no legitimate purpose. That made the absolute prohibition in the Second Control Order capricious and unreasonable in its practical operation. 344 The OIE Code expressed its standards at a high or "principles" level, as the Department's phraseology in its 2 and 5 June recommendations recognised, when suggesting that the new regime would prescribe a standard of animal welfare "at least consistent with" the OIE Code. Dr Schipp, who was the Chair of the OIE standards subgroup, said in his evidence that the intention of establishing that subgroup was to "operationalise" those standards. He said: What do you mean by operationalise the standards? --- So the OIE code chapter provides the outcomes agreed by all countries who are members of the OIE, but they are at - a principles or an outcomes level and - the intent was to introduce performance measures and indicators that would allow …operators of the - slaughter facilities to know at what standard they should be performing, to allow auditors to measure their performance against those standards. So it was a guide for both the facilities and for the auditors of those facilities. (emphasis added) 345 Moreover, the 2 and 5 June recommendations expressly contemplated in recommendation 1 that once an ESCAS was established, export licenses would be granted only on a case by case basis if the exporter could demonstrate verifiably that it had a closed loop system and in it the standard of animal welfare was at least consistent with the OIE Code. If the industry assertions were correct, there was no reason why the Second Control Order could not have included the exceptions clause which, in substance, envisaged the application, on a case by case basis, of the future formalised system the subject of recommendation 1. 346 I reject the Commonwealth's argument that because the Department did not include a broader proposal for an exception to the worldwide suspension than to a market (i.e. country which had a standard of animal welfare at least consistent with the OIE Code) in the 2 and 5 June recommendations, the Second Control Order could not be found to be invalid. The Commonwealth contended that the Department had proposed a policy of only allowing trade to continue to a market, being a country, if "the Department" could be objectively satisfied as to the assurances given concerning animal welfare", and that could only happen once the proposed regime was in place. That argument was circular. It presupposed that, because no one could satisfy a non-existent state of affairs, being the yet to be formulated regime, therefore, it would not be possible to provide any reasonable interim power to grant an exception to the total prohibition. 347 If the Department's advice was irrational, capricious or unreasonable, because it ignored or omitted the inclusion of an exception, such as the exceptions clause, the Minister cannot call that defective advice in aid to justify his decision to impose an absolute prohibition on exports of live cattle to Indonesia. And, prior to 7 June 2011, it was illogical, to the point of irrationality, to suggest that no exporter would be able, immediately or within a reasonable time well short of six months, to provide objectively verifiable material or evidence to the Minister (or his Department) that established that the exporter could keep cattle in a closed loop system in Indonesia up to the time of slaughter that had animal welfare standards at least consistent with the OIE code. 348 If the Second Control Order had contained a power to make an exception (as the First Control Order had), allowing the grant of an export permit if the Minister was satisfied that the exporter met his requirements, it would have achieved the animal welfare and regulatory ends, which the Second Control Order sought to achieve with substantially less injurious effects than the absolute prohibition on all exports to Indonesia that the Minister chose. 349 It could not have been necessary to achieve the Minister's purpose to prohibit persons who already had a satisfactory system in place that ensured appropriate animal welfare standards applied at all relevant points, or who could implement such a system promptly, from carrying on existing businesses and fulfilling their existing contractual obligations. An exception to the absolute prohibition in the Second Control Order would not have obliged the Minister to allow any livestock to be exported, unless the exporter first satisfied the Minister that his or the Government's requirements would be met. Such a power would provide the Minister with a wide discretion that could have enabled a significant amount of the trade to continue amounting to up to 40%, if the industry representatives' predictions proved to be correct. 350 The Minister's stated purpose for the Second Control Order, in his Explanatory Statement, was to "enable the Government to develop a robust regulatory and compliance regime to address concerns regarding the slaughter of livestock in the Republic of Indonesia" (see [206] above). However, it was reasonably practical, obvious and compelling to ensure that any control order preserved the Minister's ability to grant, by use of a provision to the effect of the exceptions clause, an export permit to an exporter that he was satisfied already did have, or could take steps readily to implement, a closed loop system with appropriate animal welfare standards in which its livestock would be kept: McCloy 257 CLR at 210-211 [57]-[58]. The inclusion of such a provision was so reasonably practicable, obvious and compelling that the Minister had adopted the exceptions clause when making the First Control Order five days before. 351 While it may have been reasonable to think that the development of a new regulatory system may have needed up to six months to complete, as Dr O'Connell advised the Minister on 6 June 2011, there was no rational reason in the meantime to prohibit from carrying on business an exporter who could satisfy the Minister that it already did, or readily could, comply with the substantive requirements of the OIE Code, that would be the basis of the future contemplated ESCAS. There was no legal or Departmental advice that a control order should not contain any power to grant an exception, or that omission of such a power was necessary or would be lawful in its circumstances. The 2 and 5 June recommendations simply asserted that the only exceptions to a worldwide prohibition should be in respect of exports to Egypt and, possibly, under existing contracts. There was no reasoning in support of the prohibition needing to be so absolute that the Minister should not be able to make an exception. A power to grant an exception would operate as the Explanatory Statement for the First Control Order explained the exceptions clause, namely: The Order prohibits the export of live animals to those places. However, if in the future the Minister is satisfied that slaughter and related operations at a listed place are in accordance with the OIE recommendations or will conform to those recommendations within a period satisfactory to the Minister, the Minister may grant approval to an exporter to export live-stock to that place. In relation to places where the Minister considers that slaughter and related operations will comply within a satisfactory period, but not that they already comply, the Minister may grant approval for an export only if satisfied that the live-stock in that export will be treated in conformity with the OIE recommendations. The approval can be given subject to conditions, and can be revoked, including where the Minister is not satisfied that the OIE recommendations are being complied with. (emphasis added) 352 It follows that there was an equally effective and less restrictive means to achieve the Second Control Order's ends in accordance with the Minister's purpose. The provision of a reasonable exception, such as the exceptions clause, that the Minister had included just days earlier in the First Control Order, to relieve against the inflexible and absolute prohibition in the Second Control Order, was an obvious and compelling alternative. Yet, remarkably, the Departmental minutes and other documents in evidence made no mention of such an alternative, much less any consideration of it or why it ought not be adopted. 353 There was no evidence that the inclusion of a power to make exceptions could have rendered a control order that imposed an otherwise total prohibition on live cattle exports any less effective in achieving the Government's objective. Its objective was to allow the Minister to establish an appropriate regulatory and compliance regime that would ensure that exported cattle would not be subjected to inhumane treatment. I am satisfied that the inclusion in the Second Control Order of a provision to the effect of the exceptions clause would not have impeded the Government and the Minister from achieving their objective when imposing a prohibition on live cattle exports to Indonesia on 7 June 2011 or thereafter. 354 For these reasons, I am of opinion that the use of the absolute prohibition in the Second Control Order was neither necessary nor reasonably necessary and could not be justified for the purpose of the second stage of the proportionality analysis: McCloy 257 CLR at 217 [81].

9.2.4 Was the Second Control Order adequate in its balance? 355 I also reject the Commonwealth's argument that the Second Control Order was valid because the Minister's power to make it was purposive and it was reasonably capable of being seen as within a prescribed purpose with a sufficient connection to the authorising legislation, in the sense that French CJ explained in Adelaide Corporation 249 CLR at 37-40 [55]-[61]. Here, s 7 of the Export Control Act conferred a series of discretionary powers on the Minister to prohibit exports, but did not expressly identify when, or in what circumstances, or for what purposes, he could exercise those powers. The discretions were not absolute and had to be exercised within proper limits: Ipec-Air 113 CLR at 189. In The Queen v Australian Broadcasting Tribunal; Ex Parte 2 HD Pty Ltd (1979) 144 CLR 45 at 49 and 50, Stephen, Mason, Murphy, Aickin and Wilson JJ said: the problem lies in ascertaining what are the proper limits of the discretion. In the absence of some positive indication of the considerations on which a grant or refusal of consent is to depend, the discretion is "unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view", to use the words of Dixon J. in [(Water Conservation and Irrigation Commission (N.S. W.) v.]Browning ((1937) 56 CLR 746 at 758.). In that case his Honour went on to remark, (as he had done earlier in Swan Hill Corporation v. Bradbury ((1947) 74 CLR 492 at 505), "on the impossibility, when an administrative discretion is undefined, of a court's doing more than saying that this or that consideration is extraneous to the power". … The general rule is that a discretion expressed without any qualification is unconfined except in so far as it is affected by limitations to be derived from the context and scope and purpose of the statute. (emphasis added) 356 Clearly enough, the purpose of s 7 conforms with the long title of the Export Control Act, namely that it was an "Act to provide for the control of the export of certain goods and for related purposes". However, the fact that the power in s 7 is for the purpose of control of exports does not create an unconfined power to control exports for whatever reason or in whatever ways or circumstances that the Minister thinks fit. Rather, the principles governing the validity of the exercise of delegated legislative power require the measure to be reasonably appropriate and adapted as a means of attaining the ends of the power in the particular circumstances in which it is intended to apply: Williams 49 CLR at 155; Adelaide Corporation 249 CLR 37 [55]-[56], 40 [59]-[60], 84 [201]-[202], 85 [206]. The power could not be exercised by selecting a means (the absolute prohibition on exports) of attaining an end to which the power conferred by s 7 was intended to apply (the prevention of the inhumane treatment of livestock) that was unreasonable in its practical operation. 357 I reject the Commonwealth's argument that the "standard of unreasonableness is even higher than Wednesbury". It relied on a remark of Spender J in Lamason v Australian Fisheries Management Authority [2009] FCA 245 at [176] who said, without citing any authority, that in the case of a legislative instrument "the matter has to go even further than Wednesbury unreasonableness". If Spender J was referring to some other standard or legal test, I respectfully disagree and am bound to apply the test of unreasonableness in respect of the validity of delegated legislation as stated by Dixon J in Williams 49 CLR at 155 and explained in Adelaide Corporation 249 CLR 1. 358 In addition, the impact of the absolute prohibition in the Second Control Order on an exporter which did, or readily could meet the substantive requirements of the exceptions clause, was unduly and impermissibly burdensome. Having regard to the Minister's purpose of developing a regulatory and compliance regime while the absolute prohibition remained in force, it was needlessly burdensome to prohibit someone who already did (or easily could) meet his objectives for that regime, from carrying on businesses or exporting pending its finalisation. Thus, the Second Control Order also did not satisfy the third stage of the proportionality analysis because it imposed an undue or impermissible burden on the common law right to carry on business, here an export business, that did not pose a risk to animal welfare: McCloy 257 CLR at 218 [86]; Wentworth 176 CLR at 252; Electrolux 221 CLR at 329 [20]-[21]. 359 The significant powers that the Parliament conferred on the Minister in s 7 of the Export Control Act contemplated that they would be utilised to regulate the grant of export licences to meet the exigencies or demands of a particular situation. The Minister could not make an order that imposed a total ban on all exports under s 7(1) on a mere whim, although the legislation had no express qualification on the scope of the power. Export trade in goods involves persons in Australia carrying on lawful businesses of selling their goods to persons overseas. Regulating the ability to export such goods can have greater or lesser impact on the business interests of those exporters and those with whom they deal (including persons in Brett Cattle's position). The Parliament did not intend that the power in s 7 could be used indiscriminately, capriciously, unreasonably or so as to cause unnecessary disruption to such lawful trade or economic loss on those engaged in it. 360 There was no rational or reasonable justification for the Minister to exercise his powers under the Export Control Act to prohibit the export of livestock to Indonesia that were in no realistic danger of being mistreated. The Minister had to exercise his discretionary power to make a control order according to the rules of reason and justice, according to law and within the limits that an honest man competent to discharge the duties of his office: Graham 263 CLR at 30 [57]. The purpose of the Second Control Order in suspending trade was, first, to develop a regulatory and compliance regime to minimise the risk of exported animals being treated inhumanely in Indonesia, and, secondly, to minimise the occurrence of mistreatment in the meantime. The omission of any power in it to allow the issue of an export permit where the Minister was satisfied that there was no real chance that the exporter would expose livestock to such mistreatment up to the point of their slaughter, given what he knew about the impact on the industry of an absolute, even if temporary, prohibition, was capricious, irrational and unreasonable. The absolute prohibition could not obviate any risk of mistreatment to which cattle would be exposed if they were to be exported as part of a supply chain that complied throughout with standards of animal welfare at least consistent with the OIE Code. 361 The total prohibition was not reasonably appropriate and adapted as a means of attaining the purpose of preventing the mistreatment of livestock exported to Indonesia. That is because it capriciously and irrationally prevented a substantial number of persons from continuing to carry on their lawful businesses where those businesses did not involve, or could have taken reasonably prompt steps to ensure that they did not involve, livestock being exposed to the risk of inhumane treatment in Indonesia. The "true character" of the Second Control Order was that of an unreasonable overreach that did not achieve an outcome that was "a real exercise of the power": Williams 49 CLR at 155. 362 The Secretary's Explanatory Statement for the Second AMLI Order said that it "complements" the Second Control Order. As the Commonwealth put in final address, the Secretary's role was to give effect to Government policy as decided. The Second AMLI Order, the purpose of which was to give effect to the Minister's decision, would not have been made had the Minister not made the Second Control Order. 363 For these reasons, I am of opinion that the Second Control Order was invalid.

9.3 The Minister committed the tort of misfeasance in public office 364 My finding that the Second Control Order was invalid and thus its making was beyond the Minister's power, makes it necessary now to determine whether Brett Cattle has established the other elements of the tort of misfeasance in public office. 365 In the following part of my reasons, for simplicity I will use "Elders" generically to refer to the overall business carried on by the various members of the Elders group, such as Elders itself, Elders Indonesia and NACC. That generic usage conforms to the way in which, for example, Mr Jackman made representations to the Prime Minister, the Minister and the Secretary on behalf of the Elders group during the relevant period. 366 In arriving at my findings as to the Minister's state of mind when he made the Second Control Order I have done so having regard to the requirements of s 140 of the Evidence Act 1995 (Cth) and, in particular, the gravity of that finding: see too Fernando 200 FCR at 28-29 [128]-[130]. I have also acted on the test as explained in Mengel 185 CLR 307 and the authorities to which I have referred at [269]-[284] above. 367 It may be accepted as axiomatic that, because Cabinet's deliberations were not able to be disclosed in evidence, no adverse inference can be drawn against the Minister in respect of his failure to give evidence as to what occurred in the Cabinet meeting: cf The Commonwealth v Northern Land Council (1993) 176 CLR 604 at 615-616 per Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ; Minister for the Arts, Heritage and Environment v Peko-Wallsend Ltd (1987) 15 FCR 274 at 279 per Bowen CJ, 302 per Wilcox J. 368 However, there either was or was not an explanation as to why the Minister made the Second Control Order without it including any power to make exceptions to the absolute prohibition it imposed. The Minister gave no evidence and I infer that any evidence that he could have given as to his state of mind would not have assisted his or the Commonwealth's case: Jones v Dunkel 101 CLR 258; Hellicar 247 CLR at 412-413 [167]-[169]. However, the availability of that inference does not change Brett Cattle's onus to prove the Minister's state of mind. 369 Assuming that the Second Control Order resulted from a decision of a Cabinet on 6 June 2011, I am of opinion that the Minister's failure to give evidence as to why it contained no provision for an exception still justifies an inference that any explanation he could give, beyond that this was a Cabinet decision, including a reasoning process (even if it were one that which commanded the majority view of Cabinet and which Cabinet solidarity required the Minister to uphold regardless of any contrary or other view he may have had personally), would not have assisted the Commonwealth's case. If he implemented a Cabinet decision in accordance with his duties as one of its members, the justification or lack of rationality of the decision remained the same. He can be seen as adopting the decision and implementing it with the state of mind that, on the whole of the evidence, should be inferred as being that which actuated him, as the repository of the power, to make the Second Control Order. 370 A court cannot find, in the absence of a reason disclosed in the evidence directly or by inference for a Minister's decision, that Cabinet must have had some reason not otherwise apparent in the evidence, for adopting a policy that the Minister's decision reflected and that that unrevealed reason provided a sufficient lawful basis for the decision. The determination of a policy in is the province of Cabinet, but the question whether a decision implementing the policy is valid must be decided by the court according to law based on the evidence before it. 371 An abuse of official power by a Minister acting with fidelity to, or if lawfully possible, pursuant to, a Cabinet decision about how the Minister should exercise the power would be as much a misfeasance in public office as a decision by the Minister alone. If the Minister made the Second Control Order because Cabinet decided a policy that he, as a member, had to implement himself, it may or may not be the case that he (in implementing Cabinet's view) acted reasonably (within the meaning of the authorities concerning the validity of delegated legislation) for doing so even though it did not contain a power to make an exception. 372 In the end, the Minister, not Cabinet, had the statutory authority and responsibility to make the Second Control Order and it is his, not Cabinet's, state of mind that is relevant to the tort of misfeasance in public office. The Commonwealth did not suggest any other position and it accepted vicarious liability for the Minister's conduct complained of. 373 For the reasons which follow, I am satisfied that the Minister acted recklessly as to, first, his power to make the Second Control Order in the terms that he used and, secondly, the fact that persons engaged in the live export trade to Indonesia, such as those in Brett Cattle's and Elders' position, would suffer harm unjustifiably.

9.3.1 The Minister's state of mind as to his power 374 Although the Minister's decision to make an order to the effect of the Second Control Order occurred on 6 June 2011 after the Cabinet meeting of that evening, other than the fact that the Minister did not put any document before it, there is no evidence of, first, what occurred in Cabinet (which was, understandably, not admissible in evidence because it was subject to public interest or matter of state immunity) or, secondly, any decision Cabinet may have made that led to the Minister's decision. Therefore, I must act on the evidence before me so far as it reveals what the Minister knew or was told before he made the Second Control Order and draw inferences as to his state of mind from that evidence. 375 First, the Minister had no written or oral advice from either the Department or a lawyer that it was lawful to make the Second Control Order in the absolute terms that it contained. The Departmental advice that the Minister received was addressed only to a generalised recommendation for a control order that provided for a worldwide prohibition on livestock export for slaughter with the exception of exports into the Egyptian closed loop system and, possibly, for existing contracts. The legal advice that the Department had received was also in very general terms and in draft form. The AGS solicitor had written to Ms Evans on 7pm on Sunday, 5 June 2011, saying that the AGS was "flying somewhat blind" because it had no familiarity with the contractual arrangements of persons who might have been affected, premises for holding livestock or other possible claimants (see [166] above). The AGS premised its draft preliminary advice of 6 June 2011 on the basis that it was "general advice only" that it based on the assumption that the decision-maker would exercise the relevant power in good faith and in accordance with law: see [184]. Blake Dawson's draft advice of early 6 June 2011 simply outlined the obvious, namely that there were powers in the Export Control and AMLI Acts, but did not discuss what was necessary to ensure the validity of an order in the terms of the Second Control Order in the circumstances known to the Minister (see: [177]). 376 In the absence of evidence of exactly what was before the Minister, I infer that he read the AGS' 6 June 2011 draft preliminary advice and Blake Dawson's general advice. Clearly enough, neither advice explained what the legal requirements were for the lawful exercise of the Minister's power to make the control order in the precise or substantive terms in which he made it. Rather, the advices assumed that the Minister would exercise his power lawfully without telling him how to do so. But the Minister decided to go ahead regardless, knowing and intending that the Second Control Order would relate specifically to Indonesia and contain no power for him to make an exception despite the immediate significant economic impact it would have on those engaged in the live export trade to that country. Significantly, on 5 June 2011, he had sought specific advice on those topics (see [163] and [166]). 377 He made the order intending to prevent Falconia being loaded with cattle for which she was ready ([194]-[195]). The Minister was aware that Elders was asserting, and was likely to be doing so reasonably, that it had the ability to ensure it could keep cattle in a closed loop system and in conditions that were at least equivalent to those in Australia up to the point of slaughter in its own feedlot and abattoir. In other words, the Minister knew that Elders would be able to comply with whatever conditions the yet to be formulated compliance and regulatory regime might contain, because its feedlot and abattoir and other operations were run in the same way, and with the same standards, as similar operations in Australia. He also knew that there was no current suggestion of inhumane treatment of any livestock in Elders' closed loop system. But, he closed his mind to making any further inquiry or seeking specific legal advice about whether there was a risk that an order in the absolute form of the prohibition that he adopted in the Second Control Order would be invalid if it was not justifiable, first, to omit any power to grant exceptions and, secondly, to cause economic harm to persons such as Elders and others in the live cattle export industry: Banditt 224 CLR at 265-266 [2]-[3]. 378 In other words, the Minister exercised his power recklessly. He knew that there was a risk that the Second Control Order might be invalid and despite asking for advice on general questions, he did not ask for and, received no, advice that the actual control order he proposed to make would be lawful. He shut his eyes to what might be the answer and went ahead regardless: Banditt 224 CLR at 265-266 [2]-[3]. 379 Secondly, the Commonwealth relied on Dr O'Connell's evidence in chief of his oral advice to the Minister on 6 June 2011 before the Cabinet met (set out in [189] above). He said that he told the Minister on 6 June 2011 that in order to meet the Government's objective that no further animals be subject to the poor handling it would be necessary to suspend live trade while the Department developed a regulatory framework. The Commonwealth contended that that evidence supported its argument that it was open to the Minister to make the Second Control Order. I explained at [190]-[192] above why I rejected that argument. In addition, senior counsel for the Commonwealth did not ask Dr O'Connell in his evidence in chief any questions about whether, first, the Minister had sought, or he gave, any advice specifically about Indonesia, or about the inclusion of a power to make an exception to the prohibition, such as the exceptions clause that was in the First Control Order for persons who already could, or readily could take steps to, meet the objective of treating all Australia livestock humanely, and secondly, there was any reason why such a provision should not have been considered for inclusion in the Second Control Order, as one had been in the First Control Order. I infer that any answers that Dr O'Connell could have given to those questions would not have assisted the Commonwealth's case: Kuhl 243 CLR at 384-385 [62]-[64]. Had it been necessary for me to do so, I would also have found that the failure to ask Dr O'Connell about those topics in his evidence in chief would support an inference that his answers would have exposed facts unfavourable to the Commonwealth: Ferrcom 22 NSWLR at 418F-G; CEPU 162 FCR at 525-526 [230] and the cases there cited. 380 Thirdly, on 5 June 2011 when he was considering imposing a prohibition solely on exports to Indonesia (see [163], [168] and option A in [179] above), the Minister specifically asked for more information about the estimated costs of compensation for detriment caused by defective administration ([163]). That meant that the Minister appreciated that there was a real risk that if he made a control order that was an act of defective administration, the Commonwealth may be liable to pay compensation to persons adversely affected by it. And, he must have realised, at least when he received the legal and Departmental advice to which I have referred in [375]-[376] that it did not tell him anything about whether an order in the terms of the Second Control Order would be lawful or "defective administration". Yet, with that awareness of what the former Secretary of Defence of the United States of America, Donald Rumsfeld, once described as "known unknowns", the Minister plunged ahead to make the Second Control Order. He knew that he had no advice about whether it would be valid and that there was a real risk that it would not be. There was no evidence that the Minister could not have sought legal advice about the lawfulness of making the Second Control Order (assuming that he decided to make it after Cabinet met) before he actually took the step of making the order. 381 In those circumstances, I infer that the Minister deliberately took the risk, when making the Second Control Order, that it could be invalid, but he did not care whether it turned out to be so or not. He was quintessentially reckless in exercising his power when he made the Second Control Order.

9.3.2 The Minister's state of mind as to the likely harm 382 First, the Minister knew of, or was recklessly indifferent to, the injury that a control order with a total prohibition on all livestock exports was calculated to produce on persons, such as Elders, who could have met his requirements immediately that would justify him making an exception: Mengel 185 CLR at 370-371. The Minister's decision to make the Second Control Order had the immediate and intended impact of suspending a very significant amount of current and planned trade. He made that decision not caring that it would damage unjustifiably persons in Australia as well as some businesses in Indonesia, including abattoirs and existing supply chains that already did, or could without difficulty, ensure that cattle exported from Australia would not be mistreated. For example, in his 8 June 2011 press conference in Brisbane he gave the following answer to a question about why the Second Control Order had no provision for any exceptions (I have set out the full answer at [212]): Q: Minister, there are at least 25 large abattoirs in Indonesia that already meet Australian standards, why couldn't you allow those abattoirs to continue processing while the bans apply to the others to bring them up to standards? A: What we do have to ensure is that we have a verifiable and transparent system, a supply chain assurance….So notwithstanding that you say and you might argue that there are abattoirs that meet certain standards, what we don't have is the supply chain assurance that ensures every cow that leaves Australia on a ship that ends up in a feed lot that then goes to an abattoir is accounted for. (emphasis added) 383 And, earlier on 8 June 2011 in his interview with Fran Kelly, the Minister answered a question about whether there would be compensation for persons in the live export industry who would be affected adversely saying "what I'm focused on today is animal welfare outcomes. What I will do is hear from industry about the impacts" (emphasis added) (see [210]). 384 Each of the above answers exemplifies that, when making the Second Control Order, the Minister knew, or was recklessly indifferent to the fact, that its absolute prohibition on exports would operate to cause unjustifiable immediate economic harm, at least, to Elders and those who had contracted with it for the cattle ready to be loaded on Falconia if those animals were not shipped to Indonesia in accordance with those contracts: Sanders (No 2) 130 FCR at 173 [95]. 385 I have made this cognate finding, of knowledge or reckless indifference about the harm, because the Minister's overall state of mind was one of reckless indifference as to the risk that the Second Control Order would be invalid. Clearly enough, he knew that the order itself would cause immediate economic loss to many persons. But that knowledge was part of the context of his overall decision-making in which he acted with reckless indifference in taking the risk of making an invalid order, as I have explained. Part of that recklessness was his knowledge of the consequences that persons in the live cattle export industry would suffer economic loss whether the order was valid or not. 386 Secondly, despite the obvious major disruption to the existing domestic industry that an immediate total prohibition on exports would cause, there was an equally obvious major disruption to the Indonesian economy that the Indonesian Government would be forced to hastily address. Mr Laduzko's comments to Ms Mellor on 5 June 2011 (see at [161]) offer a significant insight into the lack of an orderly and usual policy development process as the Minister hastily sought to find a political solution to the ongoing controversy generated by the Four Corners program. It is not any part of the judiciary's role to evaluate how the Executive Government conducts the nation's foreign relations. As Doyle CJ said in South Australian River Fishery 85 SASR at 385 [61], in dismissing complaints as to the invalidity of a regulation made in a similar manner: The other complaints are, in brief, that the Minister adopted the change of policy hastily and without adequate consultation, and that the new policy would cause significant loss to licence holders. The court's function does not extend to enforcing its view of what is an appropriate process for the making of regulations, and in particular its view as to the consultation that should occur before regulations are made. (emphasis added) 387 However, the Minister was aware, at least from the Departmental minutes and the draft letters to the Prime Minister (eg at [132], [176]), that a decision to suspend the live cattle export trade to Indonesia while the Department developed and then implemented a regulatory and compliance regime for slaughtering the cattle in Indonesia, would be of significance to the Indonesian Government. That was not least because of the implications of any suggestion that the Australian Government might be seeking to regulate matters in Indonesia that had the potential to be seen as within Indonesia's sovereign power. So much was evident in Ms Geiger's unanswered query in her email of 4 June 2011 "what is [sic] the expected diplomatic and trade impacts, particularly with Indonesia?" (see [156]). Ms Evans' email to Mr Lawrie at 6.45pm on 5 June 2011 made clear that the Department (in the context of a proposed worldwide prohibition) "expect[ed] Indonesia to be disappointed with any suspension of trade" and that "there could be retaliatory action but it is not possible to predict". She said that "much would depend on how much effort is put into communicating the suspension and assuring Indonesia that effort will be made to reopen at least some of the trade and help facilities to meet the new expectations" (see [165]). 388 The Minister obtained no advice on the specific potential impact on relations with Indonesia of the Second Control Order applying only to exports to that nation. The 2 and 6 June 2011 Departmental minutes had informed the Minister of this issue especially, before and during Ramadan, and the potential for Indonesia to take retaliatory action. It said that Indonesia was "keen to work with Australia to resolve the issue" ([175]). But the Minister did nothing to explore how Australia might work with Indonesia to do so before making the Second Control Order. As I have noted, Ms Evans was addressing a proposed control order that applied to all exports and was not limited only to Indonesia. The version of the draft letter to the Prime Minister that Mr Glyde provided to the Minister on 6 June 2011 said that "Indonesia and other countries where trade would initially cease are unlikely to be supportive of the approach I propose" (emphasis added) ([176]). Mr Heatley also had told the Minister of the likelihood of an adverse Indonesian reaction to a cessation of the trade in the meeting on 2 June 2011 ([140]). 389 It seems that the Minister informed Minister Suswono of the Second Control Order in a telephone conversation on 7 June 2011 only after he had taken the decision to make it ([208], [213]). On 14 June 2011 Dr Pangestu, the Minister for Trade, had told her counterpart, Dr Emerson, that there were local sensitivities about the impact of the Second Control Order and the need to include local Indonesian operations, in the initial process of approving a small number of abattoirs to commence the reopening of the trade ([221]). It took quite some time before Minister Suswono finally contacted the Australian Ambassador on 6 July 2011 to discuss resumption of the live export trade. That only happened after Director-General Prabowo had discussed matters with the Embassy the previous day, 5 July 2011, including the sensitive question about joint Australian and Indonesian expert inspections of facilities ([234]). 390 Before deciding to impose a total prohibition in the Second Control Order the Minister did nothing to explore with the Indonesian Government how to deal with the animal welfare concerns he had. That inaction was calculated to extend the time needed for resumption of the trade because of the factors to which I have just referred and that could increase the resulting economic harm.

9.3.3 Conclusion as to misfeasance 391 The industry representatives had told the Minister, on 1 April 2011, through Mr Setter, on 2 June 2011, through Mr Heatley, and on 3 June 2011, through correspondence, that there were persons who met, and others who relatively easily could meet, the requirements of having a closed loop supply chain with animal welfare standards at least consistent with the OIE Code. Moreover, Elders and Santori, in fact, did meet those requirements as at 7 June 2011. The Minister actually knew of the real potential for such persons to suffer significant economic loss if they could not export cattle that they could ensure would be kept within such a closed loop system, and they did suffer such loss. 392 When he made the Second Control Order the Minister knew that: • it would prohibit any exports to Indonesia without any exception in an industry that in 2010 had exported over 500,000 live cattle worth about $400 million; • the industry representatives had told him that there were supply chains in Indonesia that had, or readily could be adjusted to have, a closed loop system with animal welfare standards that were at least compliant with the OIE Code; • he had made no attempt to explore agreeing an appropriate solution with the Indonesian Government and that an order prohibiting all exports there would cause that Government concern; • he had no Departmental advice to make an order in a form that affected only exports to Indonesia; • he had no legal advice that he could make lawfully the, or any, order in such a form; and • there was a real risk that, if he made the order in the form he adopted, it might be invalid. 393 Yet, with that knowledge the Minister made the Second Control Order shutting his eyes to the risk that it might be invalid and to the damage that it was calculated to cause persons in the position of Brett Cattle: Banditt 224 CLR at 265-266 [2]-[3]; see [277] above. 394 I am comfortably satisfied, based on the whole of the evidence, that the Minister was recklessly indifferent as to the availability of his power to make the Second Control Order in its absolutely prohibitory terms without providing any power of exception and as to the injury which the order, when effectual, was calculated to produce: Mengel 185 CLR at 370-371. 395 Accordingly, the Minister committed misfeasance in public office when he made the Second Control Order on 7 June 2011.

10. What damage did Brett Cattle suffer? 396 Brett Cattle pleaded that one of two alternate hypothetical scenarios would have occurred had the Minister not made the Second Control Order, namely exports would have continued subject to either: (1) the First Control Order continuing in force, so that the only prohibition on supply continuing would be to the 12 abattoirs named in it (the no change scenario), or (2) a new control order that would have been made to require, as a condition for the grant of an export permit, an exporter to demonstrate that it had control over a supply chain through to the point of slaughter that had animal welfare standards at least equivalent to the OIE Code (the assured export system scenario).

10.1 Principles 397 A court may draw inferences in favour of a plaintiff or applicant when it finds that the wrongdoer's action complained of itself made quantification difficult: Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 at 416 [74] per Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ applying Armory v Delamirie (1722) 1 Stra 505; 93 ER 664 per Pratt CJ; LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 499 at 508B-C per Hodgson J and Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 at 59D per Handley JA with whom Mason P and Beazley JA agreed. 398 In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257 at 266 [37]-[38], Hayne J, with whom Gleeson CJ, McHugh and Kirby JJ agreed (at 259 [6]-[7]), said that the plaintiff (in the case of a claim for damages for breach of contract): had to prove these matters on the balance of probabilities and with as much precision as the subject matter reasonably permitted. [Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 80, 83-84 per Mason CJ and Dawson J, at 138 per Toohey J, at 153 per Gaudron J, at 161 per McHugh J; Ratcliffe v Evans [1892] 2 QB 524] It may be that, in at least some cases, it is necessary or desirable to distinguish between a case where a plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence. In the former kind of case it may be that estimation, if not guesswork, may be necessary in assessing the damages to be allowed. [Fink v Fink (1946) 74 CLR 127; McRae v Commonwealth Disposals Commission (1951) 84 CLR 377; Jones v Schiffmann (1971) 124 CLR 303; Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625; The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 per Mason CJ and Dawson J, 138 per Toohey J]. References to mere difficulty in estimating damages not relieving a court from the responsibility of estimating them as best it can [Fink v Fink (1946) 74 CLR 127 at 143 per Dixon and McTiernan JJ; McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 411-412 per Dixon and Fullagar JJ; The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 per Mason CJ and Dawson J] may find their most apt application in cases of the former rather than the latter kind. This case did not invite attention to such questions. Placer sought to calculate its damages precisely. (emphasis added) 399 Brett Cattle lost the benefit of the 4 April 2011 contract when NACC exercised its right of termination on 13 July 2011 (see [240]). That event could be seen as crystallising a loss with some precision, albeit the precise number and mix of head that NACC would have purchased under that contract had some flexibility. However the other claims that Brett Cattle has are for the loss of a chance or commercial opportunity to sell cattle and earn income from its road haulage business. 400 A plaintiff must prove, as an element of the tort, that he or she or it has suffered actual loss or damage in an action on the case, such as the tort of misfeasance in public office. Damage in that class of case is, as Bowen LJ (giving the reasons of Lord Esher MR, Fry LJ and himself) said in Ratcliffe v Evans [1892] 2 QB 524 at 532, "the gist of the action and must be proved with certainty and precision". However, as Bowen LJ said (at 532-533): In all actions accordingly on the case where the damage actually done is the gist of the action, the character of the acts themselves which produce the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry. The rule to be laid down with regard to malicious falsehoods affecting property or trade is only an instance of the doctrines of good sense applicable to all that branch of actions on the case to which the class under discussion belongs. (emphasis added) 401 The Second Control Order caused a very significant distortion in the live cattle export market. It would not be possible to prove or predict exactly what future sales and revenues Brett Cattle would have generated in the period following 7 June 2011. It is sufficient evidence of loss or damage if the wrongdoer commits an intentional tort, that in its nature is intended or reasonably likely to produce, and in the ordinary course of things actually produces, a general loss of business, as distinct from the loss of a particular sale, customer or contract: Ratcliffe [1892] 2 QB at 533. And, since Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355 per Mason CJ, Dawson, Toohey and Gaudron JJ, a plaintiff or applicant can show, on the balance of probabilities, that he or she has suffered some loss or damage by proving that he or she has lost a commercial opportunity that has some value (not being a negligible value). The court values the loss of that commercial opportunity by reference to the degree of probabilities or possibilities.

10.2 Brett Cattle's submissions - the no change scenario 402 Brett Cattle argued that in the absence of evidence from the Minister as to what he would have done had he not made the Second Control Order, it should be inferred that he would have done nothing in addition to the First Control Order. It submitted that the onus was on the Minister to say what he would have done. It argued that in the no change scenario, exports would have continued uninterrupted, except to the 12 facilities named in the First Control Order. 403 I reject Brett Cattle's hypothetical no change scenario argument. After he made the First Control Order, the public and political pressure on the Minister to take more effective action increased. I infer that this was because, as a matter of common sense, it was unlikely that the revelations in the Four Corners program of abattoirs where the inhumane treatment of animals had been filmed identified the only places in Indonesia where that or similar activity was occurring. If further revelations of such activity emerged, the Government, and the Minister in particular, were likely to be open to criticism for confining the prohibition in the First Control Order to only the 12 named facilities.

10.3 The assured export system scenario 404 The Commonwealth argued that it would not be appropriate to draw an inference that the Minister's evidence would not have assisted its case based on his failure to give evidence on what he might have done in a hypothetical scenario had he not made the Second Control Order. It contended that the Minister could not be expected to give such evidence, because he made his impugned decision after a Cabinet meeting and that any forensic examination of alternative hypotheses would, or could, not occur since the deliberations of Cabinet were not admissible because of public interest or matter of state immunity. 405 Had he acted with a proper appreciation of the power he had to make a control order, the Minister is likely to have adopted, within a reasonable time after 6 or 7 June 2011, the obvious and compelling means of limiting the exposure of exported cattle to the risk of inhumane treatment in Indonesia by framing a control order in terms of a general prohibition of any exports of live cattle to Indonesia, but subject to him having power to grant exceptions in the same way as the exceptions clause provided. (The exception clause was analogous to the Secretary's discretion in the Third AMLI Order). I will refer to such an hypothetical order as an Exceptions Order. I infer that he would have done this in an orderly way after seeking to gain the cooperation of the Indonesian Government and others. Because the Minister did not give evidence as to how he would have acted, I have drawn this inference on the basis that is consistent with first, how he in fact acted in making the First Control Order and accepting the appropriateness of the Third AMLI Order, secondly, my findings as to why the Second Control Order was invalid and thirdly, the absence of evidence that the Minister would not have made an Exceptions Order, had he correctly appreciated what a lawful exercise of his powers required acting according to the rules of reason and justice as an honest person competent to discharge the duties of his office: cf Graham 263 CLR at 30 [57]. 406 Had the Minister decided to act in this way I think it is likely that he would have done so with the purpose of ensuring that an export permit would only be granted if an exporter could satisfy him, acting reasonably, that it would use a closed loop supply chain that would not expose any cattle exported to Indonesia to any real risk of inhumane treatment up to (and, of course, including) the time of slaughter. 407 The OIE Code was drafted at an outcomes or principles based level, as Dr Schipp said in his evidence. Thus, had the Minister made an Exceptions Order, it would be possible for an exporter to satisfy the Minister or the Department that the proposed animal welfare standards applicable to a particular cargo were at an acceptable level, namely one consistent with the outcomes or principles in the OIE Code. This could have included using an agreement similar to an ESCAS agreement, or that suggested to the Minister by Wellard on 3 June 2011, to provide the Minister or Department with an appropriate degree of assurance. An agreement to that effect would provide a contractual set of obligations to assure the Minister and the Department that the importer would keep every animal within its closed loop supply chain and treat it in accordance with the OIE Code (see [146], [262] above). That form of contractual obligation provided a practical and efficient mechanism to bring about the considerable likelihood that there would be compliance with the Minister's and the Department's requirements. There is no reason why the Minister could not have required a similar contractual set of obligations as a condition of granting an export permit had he made an Exceptions Order. Stunning was not mandatory under the OIE Code. The exporter would also have had to satisfy the Minister or Department that the animals in the proposed cargo could be traced throughout its supply chain. That would have been relatively simple through the use of manual, Z or NLIS tags providing a satisfactory tracing system. 408 Mr Jackman's assurances to the Minister and the Secretary before and after 7 June 2011, and Ms Mellor's recommendation to the Minister of 14 June 2011, show that it is highly probable that Elders would have entered into a contract, or given the Minister a binding undertaking, in the form of an ESCAS agreement as a condition of being able to export to Indonesia pending the formalisation of an ESCAS. I infer that Santori and AGP would have acted in the same way. 409 I also think it likely that, had he not been acting recklessly, the Minister would have heeded the suggestions about the impact on foreign relations in the Departmental minutes and associated documents to which I have referred at [387] above. In that regard, the Departmental minute of 6 June 2011 had told him that the Indonesian Government was "keen to work with Australia to resolve the issue". Ms Evans' advice to Mr Lawrie at about 6.45pm on 5 June 2011 (set out at [165]) above would have informed the Minister of the importance of communicating the Government's decision and reassuring the Indonesian Government about the importance of trade and of helping facilities there to meet the new expectations. It is likely that had the Minister acted in accordance with law in making a further control order he would have consulted with, and sought to obtain the cooperation of, the Indonesian Government before imposing it and would have been mindful about the likely reaction of the Indonesian Government to the unilateral imposition of an Exceptions Order or other form of control order. 410 There was no necessity to make the Second Control Order as early as 7 June 2011 other than to prevent Falconia being loaded. Since Elders already had a closed loop supply chain (to its own feedlot and abattoir) that substantively met the Government's objectives (as evidenced by Ms Mellor's recommendation on 14 June 2011 to allow Elders to be permitted to undertake a trial run, which the Minister rejected: see [221] above), the Minister or officials could have discussed with Indonesian counterparts how to implement some form of verification system of the Indonesian facilities to which Australia cattle might go that would be acceptable for both Governments. That may have led, with Indonesia's desire to resolve the issue and its need to maintain supply for Ramadan, to a more rapid implementation of the ESCAS than actually occurred due to delays that seem to have been connected to Minister Suswono's apparent displeasure about the Second Control Order. 411 The Commonwealth submitted that Brett Cattle had not established that it would have suffered any damage had the assured export system scenario occurred. That was because, it contended, once the Third AMLI Order had come into operation, the industry responded as fast as it could to establish an ESCAS with which the major market participants could comply reasonably quickly. It asserted that the key elements to meet the requirements for any assured export system would have been substantially those used in the ESCAS and taken approximately the same time to formulate. The Commonwealth argued that the Department and the industry could not have put into operation an assured export system any faster than when that actually occurred in establishing the ESCAS when the Third AMLI Order was made. The Commonwealth also submitted that the Government had adopted its new policy on 6 June 2011, requiring it to take prompt action to ensure that no Australian cattle would be exported unless there was in place "a system that requires absolute supply chain assurance from exports for every consignment", as the Minister had informed Minister Suswono in his letter of 12 June 2011. 412 The Commonwealth also contended that even if some parts of an assured export system could have been established sooner than the ESCAS, there would have been fewer cattle exported than in the no change scenario. The Commonwealth argued that: the Assured export system, as asserted by [Brett Cattle] would have required the exporter who wished to use the supply chain to demonstrate …, to the Departmental representative's satisfaction, that the supply chain was one in which: (a) "proper slaughtering practices were observed (by the Departmental official whom the applicant says…would have been sent to inspect the abattoirs in the supply chain) (b) the exporter had a means of tracing the animals through the supply chain (c) welfare standards at least consistent with OIE standards would be met (emphasis added) 413 The Commonwealth argued that Brett Cattle's hypothetical assured export system scenario broke down for at least five reasons, none of which were, in my opinion, persuasive. 414 First, the Commonwealth contended that the assured export scheme scenario assumed that the Indonesian Government would have been content to allow Australian Government officials to inspect abattoirs. The Commonwealth submitted that in June 2011 the Indonesian Government had refused to grant such permission when it was sought. However, the argument that an Australian official would have had to inspect any Indonesian abattoir was not part of Brett Cattle's pleaded or argued case. Moreover, Ms Mellor's recommendations to the Minister on 14 June 2011 to allow Elders to pursue a limited reopening of the trade, on which Brett Cattle relied, showed it was not an essential precondition of a reasonable interim system, such as an assured export system, that any Australian official had to inspect an abattoir. In addition, the inspection request refusal, to which the Commonwealth referred, occurred after the Minister imposed the Second Control Order, an action that the Department had advised him was calculated to upset the Indonesian Government (see [223]). 415 Secondly, the Commonwealth argued, even if the Indonesian Government had been cooperative, it would have taken time to make the necessary arrangements, formulate the applicable agreed standards, obtain the evidence of compliance and for the Department to then assess each application. That contention ignored the evidence of Ms Mellor's ability to make her 14 June 2011 recommendation. Had the Minister pursued cooperation with the Indonesian Government, within an assured export system, it is likely that Minister Suswono would have facilitated the process immediately, as in fact occurred on 6 July 2011 once relations had healed when he contacted the Australian Ambassador ([236]). The common-sense course of using independent auditors, with the consent of the Indonesian Government, as ultimately adopted, is likely to have been taken in early June 2011, had the Minister made an Exceptions Order. 416 The Commonwealth focused on an argument that it based on Brett Cattle's written submission that the assured export scheme "would have entailed an inspection and approval of supply chains by representatives of the Department and the submission of proof of compliance to representations of the Department by those involved in the supply chain". Brett Cattle noted in that respect that on 3 June 2011 Ms Svarcas had sought to obtain visas for two officers and a representative of the AVA so that they could visit Indonesia (see [154]). The Commonwealth's argument sought to debunk Brett Cattle's submission by reference to Indonesia's refusal to allow any Australian Government officials to inspect abattoirs prior to the two countries' Governments' agreement to implementation of the ESCAS and the resumption of trade. It submitted that, in the event, the two Governments agreed to the use of independent auditors, as opposed to officials of each Government. 417 I reject the Commonwealth's argument. For the reasons I have given, had the Minister acted with less haste and not made the Second Control Order without any consultation or attempt to arrive at a solution by cooperative negotiation, the discussions between the two Governments were much more likely to have proceeded cooperatively. The 6 June 2011 Departmental minute had informed the Minister that Indonesia had suggested such cooperation ([176] above). 418 I am of opinion that the approach to be taken in evaluating what would have happened in the hypothetical assured export system scenario must assume that the Minister and the Department would have sought to implement the theorised system effectively and pragmatically so as to keep as much of the live export trade operating as possible, subject to ensuring that the interim case by case approval process took all reasonable precautions to ensure that each animal would be treated, verifiably, in accordance with the OIE Code up to its slaughter. 419 It follows that, had the Minister validly made a further control order, it would have addressed the risk of exported Australian cattle being sent to any facilities in Indonesia where they could be exposed to inhumane treatment during the period while the Minister put in place his objective of establishing an ESCAS. 420 Thirdly, the Commonwealth submitted that until, in effect, the Minister had formulated and implemented the ESCAS, there would have been a de facto ban anyway and it was unknowable whether an assured export system could have been implemented more quickly than actually happened with the establishment of the ESCAS. I reject that argument. Ms Mellor's 14 June 2011 recommendation demonstrated its inherent meretriciousness. It showed that the Department was capable of making very quick, reasonable, case by case, assessments of all of the matters that the Minister's policy concerns for ensuring animal welfare aspired to achieve. The Minister's refusal to accept that recommendation occurred in the context of the complications of his making the Second Control Order and the Indonesian Government's reaction to it (see [217]). 421 By 21 June 2011 the Department, in effect, was connecting the progress of Elders' proposal to Elders having to meet the by then almost developed ESCAS requirements, rather than offering a reasonable exception based on the ability of Elders to comply with the Government's policy (see [226] above). Crucially, the Department engaged in this conduct when considering Elders' proposal in the context of the situation that the making of the Second Control Order had created. It was not dealing with the hypothetical position in which an Exceptions Order had been made. 422 Fourthly, the Commonwealth argued that even if there were an assured export system for each of the four supply chains (Elders Indonesia, Santori, TUM and AGP) that Brett Cattle claimed could comply with the interim and ESCAS requirements, the number of lost export sales would be limited to the available capacity of each of those supply chains during the period between 7 June 2011 and when each chain received its first approval under the ESCAS. That argument is not correct for the reasons I explain at [444]-[447] below. 423 Fifthly, the Commonwealth argued that none of those four supply chains would have been found by the hypothetical Departmental representatives to comply with the assured export scheme's requirements at any time prior to when it received approval under the ESCAS. I reject that argument. Both Elders Indonesia and Santori complied, or could easily have complied, with the ESCAS requirements prior to 7 June 2011 (see [73], [78]) and TUM and AGP could have done so but only by specifying particular abattoirs that complied with the OIE Code ([81] and [85]). In the event, TUM had to construct its own abattoir before gaining its first ESCAS approval ([257]-[258]). And AGP's feedlot supply chain complied before 7 June 2011 (see [85]) although it did not have any customer abattoirs that did. However, on 5 August 2011 AGP benefited from an ESCAS approval for export to its feedlot and the Z-Beef abattoir. 424 The Commonwealth also contended that as at 7 June 2011 "there were no supply chains with security against leakage" that could be characterised as a closed loop and that had "assured animal welfare standards". I reject that argument. Elders Indonesia, Santori, and up to and including their feedlots TUM and AGP, had closed loop systems. Each of those importers had control, within their supply chains, over the cattle they imported. If it were a condition of a permit, in an assured export system, to export cattle to Indonesia that there be no leakage or supply of cattle outside a chain that the Department had approved, contrary to the Commonwealth's submission, the exporter and importer would have ensured that they made no sales or deliveries beyond what they were allowed. In the event, the Minister achieved this result by requiring the use of an ESCAS agreement between the exporter and importer (see [262]). Moreover, tagging of cattle was not a difficult process to implement. 425 I infer that, had the Minister decided to make an Exceptions Order he would have done so on or about 9 or 10 June 2011, after Falconia sailed with her scheduled cargo after 7 June 2011, so that appropriate consultations could occur with the Indonesian Government and others. As at 5 June 2011, the next ships after Falconia that were due to load were Molunat on 8 June 2011 with cargo of 1,195 head arranged by SEALS and Ocean Swagman on 10 June 2011 with a total cargo of 7,576 head, comprising cargoes of 2,800 and 4,776 head arranged by SEALS and NACC respectively. The Department had approved export of SEALS' cargo on Ocean Swagman but it was still processing NACC's and the other SEALS' cargoes. There was no evidence about SEALS' ability to comply with an assured export system but it took until 8 September 2011 for SEALS to obtain approval to export in the ESCAS (see [434] below). Therefore I am not satisfied that the Minister would have allowed either SEALS cargo to be exported. 426 I also infer that, as actually happened, the Minister would have been able to approve the ESCAS no later than when he did, on 27 June 2011 (see [231]), which Indonesia would already have agreed to implement. That would have brought forward the making of the Third AMLI Order to no later than 27 June 2011. Had this scenario occurred, both Elders and Santori would have been able to continue exporting cattle within their existing closed loops throughout June 2011. It is safe to infer that they would have negotiated with other exporters that had existing arrangements to ship cattle, but which were not then in a position to comply with an assured export system, to subcharter vessels and substitute cargoes so much as they could within the capacities of Elders' and Santori's closed loop supply chains in order to minimise the impact of the partial prohibition under an Exceptions Order. Commercially, exporters which could not comply would want to minimise their potential losses by using their existing contracts to enable Elders and Santori to export as many head as they could rather than incurring avoidable losses by cancelling or terminating those contracts. This hypothetical situation is unlike the position when the ESCAS began and there were no existing charterparties or export contracts that could be used. 427 The Commonwealth's arguments sought to postulate how the assured export system scenario would operate, by theorising that an exporter would have had to meet punctiliously every requirement of the ESCAS. Those arguments were in the nature of an Aunt Sally that, of course, had to result in the assured export system scenario failing to work until the ESCAS was established, when the scenario would be otiose. But, as the Secretary's approval of Austrex's first ESCAS application on 5 August 2011 showed, in the real world, once the Secretary made the Third AMLI Order, the Department and the industry worked cooperatively, with common-sense and caution, to ensure that the mandated system worked pragmatically (see [261]-[262], [265]-[266)). After all, it was not in an exporter's interest to allow any violation of the conditions in the ESCAS to occur, since that would spell disaster for its business and possibly the live cattle export industry as a whole. The same pragmatic constraint would apply to the behaviour of an exporter who could satisfy the Minister that an export permit should be granted for an individual cargo while the interim assured export scenario remained in place: Murphy 216 CLR at 416 [74]; Placer (Granny Smith) 196 ALR at 266 [34]-[38]; Sellars 178 CLR at 355.

11.1 What exports were lost between 7 June 2011 and the implementation of the ESCAS? 428 The next issue is what capacity did Elders Indonesia, Santori and AGP have to import cattle in an assured export system scenario that each could retain in its closed loop system, after the Second Control Order came into force and until the first approvals occurred under the ESCAS system (the lost export period)? 429 Feedlots in Indonesia supplied abattoirs on a regular basis with consignments of cattle as they reached the end of a fattening cycle. This was a constantly recurring situation that required regular replenishment of cattle in the feedlots with imports from Australia. 430 TUM could only operate a closed loop once its newly constructed abattoir was able to begin processing animals after 21 August 2011 (see [257]-[258]). Accordingly, I find that it would not have been in a position to comply with any assured export system prior to the ESCAS coming into operation. 431 As I noted at [50] above the parties agreed on a number of facts about the Indonesian market as well as other matters that concerned the assessment of any damages and I have drawn on those in what follows. 432 Between 1 August 2011 and 31 December 2011, Australia exported 191,894 head of cattle to Indonesia, making a total 412,057 of exports for 2011 (and no cattle were exported in July 2011). Total exports in the next three years were 276,295 head in 2012, 448,950 head in 2013 and 715,806 head in 2014. 433 By 31 December 2011, at least 27 feedlots and 58 abattoirs had satisfied the audit requirements for the ESCAS, however not all audits reported on the total capacity of the relevant facility. In addition to the audits that I have summarised above in respect of Elders Indonesia, Santori, TUM and AGP, audits had approved: between 18 and 30 July 2011 at least five feedlots with a capacity of over 63,000 head per fattening cycle and at least two abattoirs with a capacity of about 240 head per day (if the smaller one, the Bogor City abattoir, operated on two shifts); and, between 2 and 24 August 2011 at least eight more feedlots with a carrying capacity of about 55,000 head and at least five abattoirs with a capacity of about 360 per day. 434 The parties agreed that in the period between 1 July 2011 and 31 December 2011 AQIS granted export permits to six exporters for export of live cattle for slaughter in Indonesia, which I have collated and summarised in the table below. The exporters were Austrex, Halleen Australasian Livestock Traders Pty Ltd, International, NACC, SEALS and Wellard: Exporter and No. of Head Month 2011 Austrex Halleen International NACC SEALS Wellard July 3,0001 August 7,0162 4,1464 3,149 6,4023 September 10,038 9,501 17,962 3,9715 28,352 October 2,985 1,921 17,757 13,484 November 3,087 10,085 3,010 2,037 21,654 December 2,058 1,0856 4,888 6,245 2,046 11,284 Total 25,184 1,085 30,541 51,123 8,054 81,776

1. For Elders; AQIS permit 29 July 2011 (but ship sailed on 10 August 2011) see [250] above 2. For AGP; see [259] above 3. For Santori; Secretary approval 12 August 2011 (see [256] above), AQIS permit 16 August 2011 4. First permit 12 August 2011 5. First permit 8 September 2011 6. First permit 12 December 2011 435 These total 197,763 head, about 6,000 more than the agreed figure of 191,894 head for the period 1 August 2011 to 31 December [432].

11.2 The parties' submissions 436 Brett Cattle argued that as at 7 June 2011 the unused feedlot capacity of Elders Indonesia, Santori, TUM and AGP was between 42,492 and 55,473 head. It contended that the combined capacities of the abattoirs to which those four importers supplied cattle was between 233 to 493 head per day (but this figure included 200 head for TUM's abattoir that was not fully operational until late August 2011). Brett Cattle extrapolated from those figures that about 1,631 to 3,451 head could have been slaughtered per week had the assured export system scenario operated during the lost export period. Brett Cattle argued that the shortfall of 87,943 head from the total Indonesian quota of 500,000 head for 2011, would have been supplied had the assured export scheme scenario applied. It contended that it had budgeted to sell 4,976 head in 2011 into the Indonesian market and, would have done so, as it usually did through NACC, Wellard, SEALS and Austrex. It submitted that those cattle would have been included in the extra 87,943 cattle that should have been exported to meet the yearly quota. It argued that its loss should be assessed on the basis that it would have sold all the 4,976 head into the Indonesian market. It also claimed that it had incurred losses for agistment, cartage of cattle to agistment and extra bank charges. 437 The Commonwealth contended that, assuming that Brett Cattle could establish that the four supply chains (Elders Indonesia, Santori, TUM and AGP) would have received approval under the assured export scheme scenario, the total increase in exports of live cattle to Indonesia for 2011 would have been only about 16,000 head more than the actual number. It submitted that the hypothetical additional exports would be only 20% of the 'total' shortfall of 87,943 head exported to Indonesia in 2011 below the Indonesian Government's quota for that year of 500,000. 438 The Commonwealth contended that, even though it called evidence from Mr Slaney, Mr James and Mr Pankhurst, Brett Cattle's case had advanced only "unsound" assumptions and estimates, not supported by evidence, about the potential or unused capacities of the feedlots operated by Elders Indonesia, Santori, TUM and AGP, when those were matters of historical fact. I reject that submission. At the time each of those witnesses gave evidence he had long since ceased to be an employee of Elders Indonesia, NACC (in Mr Slaney's and Mr James' cases) and AGP (in Mr Pankhurst's case) and therefore he could not be expected to have had access to his former employer's company's records. Moreover, NACC was a supplier of cattle to feedlotters in Indonesia and there is no evidence that it somehow might have had precise records of its Indonesian customers' feedlots' capacities during specific periods in mid 2011. In the absence of any evidence to suggest otherwise, I infer that the records of Elders Indonesia and AGP were in Indonesia. (In so finding I have not overlooked that counsel for the Commonwealth cross-examined Mr Pankhurst on two internal AGP reports on the Zul and Sofyan abattoirs dated 23 and 24 April 2011 (which became an exhibit). However, there was no evidence of how those documents became available for use in this proceeding.) The Commonwealth's submission on this point was a speculative and unsubstantiated criticism of the three witnesses' evidence given in December 2018 as to the actual position in Indonesia in mid to late 2011. 439 I am satisfied that Brett Cattle's witnesses' evidence of the used and spare capacities of the feedlots and abattoirs with which each of Mr Slaney, Mr James and Mr Pankhurst had been familiar many years before giving evidence, was as precise as was reasonably possible and was sufficient unto the day in all of the circumstances. Precise quantification of the capacities and performance of those foreign businesses' facilities was not the concern of anyone at the time in 2011, or until much later, in relation to the operation and effects of the Second Control Order on the Indonesian market. Those questions only became relevant for the purpose of these proceedings. There was no need in 2011 to collect contemporaneous material for use in a proceeding such as this that was not commenced until three years later: Murphy 216 CLR at 416 [74]; Placer (Granny Smith) 196 ALR at 266 [34]-[38]; Ratcliffe [1892] 2 QB at 532-533. 440 The Commonwealth argued: Given that cattle were generally in feedlots for at least 100 days on feed …none of the capacity hypothetically used for the first round of cattle under the "Assured Export System" would have left the feedlot (such as to free up further capacity) before the ESCAS came into effect. As for any cattle already in the feedlot as at 7 June 2011, the applicant has not established at what stage those cattle were at in the fattening period, and therefore cannot establish when any capacity in respect of them would have become free (and particularly, whether any capacity in respect of them would have become free prior to the supply chains obtaining ESCAS approval). In light of these matters, the proposition that the continual cycle of cattle in the feedlots would have generated any additional capacity should be rejected. 441 I reject that argument. It depends upon the unattractive, indeed absurd, logic that, despite the Minister deliberately using his power to prohibit Falconia loading her cargo, NACC could not prove that those cattle would have been sent to a particular feedlot in Indonesia that required replenishment. At the time, no assured export system scenario operated so the then intended destination of that shipment was irrelevant. The argument also ignored the reality that the Second Control Order prohibited the ongoing ordinary operation of the live cattle export trade to Indonesia in which the cattle, once they arrived there, went into feedlots on a continuing basis. Once there were no cattle coming in from Australia to replenish those sent to slaughter, the effect of the interruption to the ordinary course of business began to accrue progressively over fattening cycles. That effect commenced when Falconia did not arrive in Indonesia to discharge the cargo that the Second Control Order prohibited her from carrying. Had an assured export system scenario operated, the number of lost sales must be determined in a real world, practical way by estimating the unused capacity of the supply chains consisting of feedlots and abattoirs that could have met that system's requirements: see Murphy 216 CLR at 416 [74]; Placer (Granny Smith) 196 ALR at 266 [37]-[38]. 442 The unchallenged evidence of Mr Slaney, Mr James and Mr Pankhurst was that the relevant supply chains had extra capacity as at 7 June 2011 to absorb a greater number of head of cattle in the ordinary course of their businesses that were, in fact, able to be utilised, from time to time, to meet increases in demand. In cross-examination Mr James gave this answer, which I accept and infer applied to all persons who could obtain an ESCAS approval as well as those in an assured export system scenario: And is this correct, that once NACC had satisfied the requirements and obtained approval under ESCAS for a supply chain from DAFF, that in 2011 it exported as many cattle into its ESCAS approved supply chains as it could obtain orders from importers for? --- Yes. (emphasis added) 443 The Commonwealth put a fall-back argument that the maximum number of head that could have been imported in an assured export system scenario was 15,590. That argument was based on Brett Cattle's submissions that used the following calculations about the slaughtering capacity of the abattoirs in the Elders Indonesia, Santori and AGP supply chains that could have satisfied the approved export system's requirements: Importer Abattoir head per day Total for days between 14 June 2011 and date of first ESCAS approval Total lost sales Elders Indonesia 58 45 2610 Santori 160 59 9440 AGP 75 52 3900 Total 15,590

11.3 Consideration 444 The Commonwealth's submissions demonstrated that the theory on which Brett Cattle postulated its calculation involved double-counting the capacity of each supply chain, first in the assured export system and then in the ESCAS system. However, that demonstration exposed a fallacy under which both sides appear to have made their submissions about the lost export period. That fallacy arose because Brett Cattle's methodology overlooked that each approved supply chain's ultimate maximum capacity in 2011 operated for a lesser time than it would have, had there been no absolute prohibition on exports under the Second Control Order. The supposed double-counting resulted in a significant understatement of lost exports of live cattle to Indonesia, not the other way round. 445 It follows that the parties' submissions adopted an erroneous approach to calculating the loss of exports by focusing on calculations of the number of cattle that could have been processed in the period in which the assured export system scenario would have operated. However, the exports that would have occurred in that period were likely to have been equivalent to those that actually occurred as soon as each of the three importers (Elders Indonesia, Santori and AGP) obtained its first ESCAS approval. That is because the hypothesis assumed that each importer could have complied with any requirements of the assured export system scenario, and achieved imports of the same number of head that it did when it obtained its first ESCAS approval. However, Elders Indonesia and Santori already met those requirements with their closed loop systems on 7 June 2011. Thus they would not have experienced any substantive interruption to their businesses, because they would have been able to meet the requirements of the assured export system scenario with no, or no substantial, delay. 446 I infer that AGP would have had to provide the Department with some detail about the three initially approved abattoirs before it could gain approval under the assured export system (as it did in gaining the Austrex shipment approval on 5 August 2011 without apparently an audit) and that this would have taken some time because AGP did not own or operate the abattoirs itself, unlike Elders Indonesia and Santori. I infer that this process would have taken about 14 days, so that AGP lost the ability to import for 45 days in 2011. 447 Thus, if an Exceptions Order had been made, each importer would have been able to satisfy the Minister or the Department of its ability to operate a closed loop supply chain with animal welfare standards at least consistent with the OIE Code weeks earlier than when it obtained the first ESCAS approval. Once the importer had done so, I infer that it would have immediately begun acting as it ultimately did in seeking to bring as many of its customer abattoirs into a condition to meet the then anticipated ESCAS requirements or those that would have applied in the assured export system. In other words, once the three importers had been able to satisfy the requirements of the assured export system, they would have begun investing immediately into increasing the numbers of cattle they could process in their closed loop supply chains, as they actually did once the ESCAS system began. That means that the number of lost days before the importer's first ESCAS approval represented the loss of the chance to import a larger volume of cattle at the end of 2011 when their ESCAS supply chains had a much greater capacity. 448 Mr Slaney said that before June 2011 Elders was processing around 600 cattle on a monthly basis in its abattoir and selling another 600 head to its six or seven other customer abattoirs. He said that the monthly total would increase to 1,600 head during Ramadan. He said that Elders Indonesia could contain in its feedlot and process in its abattoir about 21,000 head per annum on a single shift, which is about 1,750 per month [67]). I find that if the assured exports scheme scenario applied during the lost export period, then Elders could have imported and processed in its closed loop system about 1,750 head per month. 449 Santori could hold a total of about 180,000 head per annum or 15,000 per month in its two feedlots. In the ordinary course it processed about 20% or 3,000 of those animals per month in its abattoir that operated a single shift, but had the capacity to operate two shifts. Brett Cattle asserted that Santori would have processed 160 head per day or 4,800 per month at its abattoir. It made that estimate based on the abattoir operating one shift. I infer that Santori would have operated its abattoir on two shifts because, if the assured export scheme scenario operated, there would be a limitation on the number of abattoirs that could comply with the OIE Code during the lost export period. There would have been a considerable demand for cattle to go into the wet market in Indonesia in this period that could not otherwise be satisfied. Thus, I infer, based on Mr James' evidence, Santori would have processed in its closed loop system as many head for which it had capacity during the lost export period, namely about 6,000 per month (see [77]). Indeed, this may understate the Santori abattoir's capacity (of about 9,600 head), if it worked two shifts to process more (see [74] and [77] above). 450 AGP's two feedlots had a total capacity of about 105,000 or about 8,750 per month. AGP operated a closed loop system, that complied with the requirements of the ESCAS, up to the time the cattle left its feedlots ([85]). I infer that, based on the short period in which they gained approval in the ESCAS, the three abattoirs in which AGP had installed stunning equipment before 7 June 2011 (Z-Beef, Zul and Sofyan) would have been able to satisfy any requirements for an assured export scheme ([84], [256], [260]). AGP upgraded those three abattoirs to increase their total daily capacity from between 15 to 20 head per night to about 75 head using one shift (or about 2,250 per month). I infer that these upgrades occurred between 7 July 2011 and late July and mid-August 2011, once AGP knew what the ESCAS requirements were and that there was certainty about the live cattle export trade continuing. Had an assured export system scenario applied, I infer that AGP would have begun its upgrade program immediately after 7 June 2011. Thus, AGP would have been able to sell cattle to abattoirs in its closed loop system that progressively increased in number from 3 to 22 by late November 2011 (i.e., this upgrading work would have occurred one month earlier than actually occurred, once the ESCAS requirements became known) ([259]). This would have enabled AGP to import from about 21 June 2011 (allowing about two weeks for it to have satisfied the requirements of an assured export system) progressively more and more cattle during the second half of 2011 at the commensurate rate of growth it did between 5 August 2011 and 31 December 2011 (as the number of its complying and upgraded customer abattoirs increased), those imports would have included about a further about 4,400 head (based on its pre 7 June 2011 monthly total feedlot capacity of about 8,750 per month) for about 15 days. 451 Had the Minister made an Exceptions Order on or about 7 June 2011, Falconia would have been able to carry her cargo of 1,900 head that Mr Jackman had told the Minister were destined for Elders Indonesia's feedlot. The Minister would have imposed conditions that those cattle be identified by being tagged and only be slaughtered in Elders Indonesia's abattoir. I am satisfied that Elders would have taken immediate steps to ensure that those conditions would be met. Elders Indonesia's abattoir could process 58 head daily. It would take about five weeks to slaughter that cargo which would occur progressively over a three month period into the future once the cattle had completed their fattening cycle. 452 And, had the Minister made an Exceptions Order, it is likely that International, as well as AGP, would have been able to satisfy the Minister within a similar period of no later than the 38 days between the Third AMLI Order and 12 August 2011, when it obtained its first approval from AQIS. That is because International was able to satisfy the ESCAS requirements within about five weeks of the Third AMLI Order. Similarly, SEALS is likely to have been able to satisfy the Minister under an Exceptions Order within the two months it took to obtain such an approval. In any event, both International and SEALS would have been able to satisfy the requirements for an ESCAS approval by about 13 July 2011 and 8 August 2011 respectively, assuming that the Department would have established those during the period an Exceptions Order remained in place with the more active co-operation of Indonesia than occurred by no later than 7 July 2011. 453 In those circumstances each of the six exporters with approvals under the ESCAS as at 31 December 2011 is likely to have obtained export permits at least one month earlier than it did. That would have given each of them the opportunity to export for the whole of one extra month in 2011 with at least the approved capacities that they actually had in December 2011 (since exports would have begun at least one month before they in fact did after the Third AMLI Order). And, based on my findings, during the lost export period, Elders Indonesia, Santori (through at least Wellard) and AGP (through at least Austrex) would have been able to import cattle into Indonesia respectively 22, 35 and 15 days earlier than occurred while they had to wait until the Third AMLI Order came into force. 454 Had Elders Indonesia, Santori and AGP been able to import cattle under the assured export system scenario during the 22, 35 and 15 day periods to which I referred above, it is likely that those imports would have reflected the imports actually made in the corresponding period once they and their Australian suppliers gained their ESCAS approvals, as summarised in the table below: Date Exporter No of Head 29 July 2911 NACC (for Elders Indonesia) 3,000 5 August 2011 Austrex (for AGP) 4,060 12 August 2011 Wellard (for Santori) 6,402 6 September 2011 Wellard 6,465 9 September 2011 Wellard 17,772 16 September 2011 Wellard 4,115 Total 41,814

455 Since Santori was the largest Indonesian importer of live cattle from Australia, I infer that it imported all four of the Wellard shipments totalling 34,754 head in the 35 day period between 12 August 2011 (when the Secretary approved the first shipment for which AQIS subsequently granted its permit on 16 August 2011) and 16 September 2011. 456 That raises the question whether each of Elders Indonesia, AGP and Santori could have processed all of those head within its supply chain eventually (after the cattle completed their quarantine and fattening cycles) to the point of slaughter earlier than when each received its first ESCAS approval, as well as being able to do so for the equivalent number of head they actually imported in 2011. 457 Elders Indonesia would already have the 1,900 head from Falconia to process in its closed loop supply chain, had she been allowed to load on about 7 June 2011. NACC obtained its first ESCAS approval for 3,000 head 22 days after the Third AMLI Order. While Elders Indonesia's abattoir could process up to 1,750 head per month, Elders would have anticipated obtaining approval for the six or seven customer abattoirs progressively, as in fact occurred. I infer that Elders would have been able to provide the Minister a verifiable assurance that it would retain the 3,000 head at its feedlot and only allow them to be sent to an abattoir that satisfied the requirements of an assured export system. As events transpired NACC was able to gain ESCAS approvals in 2011 to export over 50,000 head. Thus, had the Minister made an Exceptions Order, it is likely that it could have been able to export to Elders Indonesia or another customer that complied with the requirements of an assured export system, the 1,900 head in the Falconia cargo and about another 3,000 head in late June 2011. 458 Similarly, I infer that Austrex would have been able to satisfy the Minister to grant it an export permit for another 4,060 head which it could have processed in an assured export system as it progressively increased the capacity of its supply chain. As I noted in [427], soon after the Third AMLI Order came into force other Indonesian feedlots and abattoirs with substantial capacity were able to satisfy the Secretary that they should be approved in the ESCAS. 459 For the same reasons, I infer that Wellard would also have been able to export for Santori about 35,000 head more in the 35 days of its lost export period. It appeared to have been able to export substantial numbers of cattle under the ESCAS without difficulty. 460 Thus I find that in the lost export period NACC, Austrex and Wellard would have been able to export (in addition to the actual exports each made between 7 July 2011 and 31 December 2011) about an additional 44,000 head (including the Falconia cargo). This is a similar number of head that Ms Mellor informed Mr Lawrie on 3 June 2011 were due to be shipped between 8 and 18 June 2011 ([147]) although, of course, not all of those shipments may have been destined for supply chains that could have complied with the requirements of an assured export system. 461 There were substantial numbers of live cattle exported in September, October and November 2011, with December appearing to be a quieter month. Had the Minister made an Exceptions Order so that all six exporters would have had an extra month in 2011 (being December) in which to export live cattle to Indonesia, based on the pattern and size of their actual shipments in the table at [434] it is likely that they would have exported about a further 45,000 head in about late November and December half of 2011. That is because the ESCAS supply chain each had would have had the capacity to absorb about that number of head by then. I have arrived at that estimate using a broad brush approach based on the following table: Exporter No of Head Austrex 3,000 Halleen 1,000 International 10,000 NACC 9,000 SEALS 2,000 Wellard 20,000 Total 45,000

462 Thus, it is likely that, had the Minister made an Exceptions Order, about 88,000 head, or approximately the balance of the unfilled Indonesian quota, would have been exported. However, this methodology and assessment has not been considered by the parties. Accordingly, before determining the question of what exports would have been made in 2011 had an Exceptions Order been made, I will allow them to make further submissions as to any errors in the methodology or analysis that I have undertaken in arriving at the provisional findings above. I am also to make a finding about what allowance might be appropriate having regard to the need for me to assess the value of the loss of opportunity.

11.4 Agreed facts as to quantify Brett Cattle's loss 463 On 9 August 2011, Brett Cattle entered into a new contract with NACC to sell up to 3,200 head of Brahman, comprising 1,600 steers for $1.95 per kg and 1,600 heifers for $1.80 per kg for export to Indonesia on or around 4 September 2011. In the event, this contract came to be performed on 12 September 2011 when NACC took delivery of 2,656 head. 464 During 2011, Brett Cattle sold a total of 3,609 head in the following completed transactions: Date Purchaser No of Head Net proceeds of sale (including GST) 12 September 2011 NACC (Export see [463] above) 2,656 $1,586,121.59 27 October 2011 NACC (Domestic sale at Blackall) 130 $48,846.42 4 November 2011 Moonson Pastoral (Domestic) 479 $252,417.20 24 November 2011 AACO (Domestic) 229 $116,267.80 15 December 2011 Top End Land & Livestock (Export) 115 $84, 620.67

465 The parties agreed that Brett Cattle sustained the following losses as a result of the Second Control Order and that, if it were invalid, it could recover as damages (subject to the qualifications in (1), (3) and (4) below): (1) extra costs of $127,307 incurred due to the resale of the 2,200 cattle the subject of the 4 April 2011 contract between Brett Cattle and NACC (see [86] above). However, the Commonwealth argued that if an exceptions order had been made, and the Minister had been satisfied that the cattle could have been exported into a closed loop supply chain that complied with the OIE Code, Brett Cattle would have incurred those costs in any event (the delayed sales loss); (2) lost sales of 1,366 head, being the difference between the 4,976 cattle that Brett Cattle would have sold in 2011 had the Second Control Order not been made, and the 3,610 head that it sold in that year (where the parties agreed that the value of the lost sales should be based on the average prices and weights per kilogram of $1.95 for heifers that weighed 295 kilograms and $2.15 for steers that weighed 320 kilograms). The lost sales would have been $1,207,598 if, as Brett Cattle contended, 65% of the 1,366 head lost sales were steers, or $862,799, if, as the Commonwealth contended, only 50% would have been steers (the lost sales); (3) a loss for agistment that should be based proportionally on Brett Cattle having incurred $950,000 as the cost of agisting 1,751 head in 2011 and 2012. However, the Commonwealth disputed that so many, or any, head needed to be agisted (the agistment loss); (4) $46,034 as the cost of cartage of the 1751 head to where Brett Cattle agisted them. However, the Commonwealth argued that liability for this loss accrued only if and to the extent that Brett Cattle could establish the agistment loss (the cartage loss); and (5) $150,000 in fees, penalties and additional interest charges on overdue payments and its overdraft facility (the bank charges loss).

11.5.1 The delayed sales loss 466 Brett Cattle was due to dispatch, on 31 May 2011, the cattle appropriated to meet its contractual obligations under its 4 April 2011 contract with NACC. However, only after Brett Cattle had mustered them out of paddocks, based on their weight, and dipped them to clean buffalo fly and ticks from them, Mrs Brett said that NACC informed it that MV Sahiwal Express, the vessel scheduled to carry them to Indonesia, would now only load on 13 June 2011 at Wyndham. 467 Normally, after mustering and dipping, Brett Cattle kept the animals due to be consigned in a holding yard for four or five days and fed them hay. Three to five people had to perform that task. Once the Second Control Order was in effect, Brett Cattle continued to hold and feed 2,200 head, that it had mustered in anticipation of what it needed to deliver to NACC, in the holding yards for a further 21 days. Mrs Brett explained that Brett Cattle decided to act in that way because of the uncertainty of whether these animals might be able to be sold under the NACC contract and the cost that it would have to incur if the cattle were returned to their paddocks and the same process of mustering, dipping and feeding them had to be undertaken again if a new sale occurred later. 468 On 6 June 2011 NACC sent AQIS a notice of intention and a consignment risk management plan (the AQIS notice) in anticipation of 2,141 of Brett Cattle's animals being loaded on board Sahiwal Express on 13 June 2011. 469 The Commonwealth argued that the AQIS notice stated that the whole consignment for loading on board Sahiwal Express on 13 June 2011 was destined for delivery to persons other than Elders Indonesia, Santori, TUM and AGP. It contended that, therefore, the cargo would not have been approved under an assured export system scenario. It followed, so the argument ran, that Brett Cattle would not have been able to sell those animals at the time and accordingly did not suffer any loss that it would have been able to avoid under an assured export system. 470 I reject the Commonwealth's argument. Had an assured export system scenario been in place, as Mr James said, NACC (see [442]) would have rearranged its position so as to maximise the use of Elders Indonesia's then significant unused capacity which was more than adequate to receive and handle Sahiwal Express' proposed cargo of 2,717 head. After all, it had already chartered the ship and the impact of the new situation restricting the issue of export licences to persons who could comply with the requirements of the assured export system would have created a supply shortage in Indonesia and commercial opportunities for those, like NACC, through Elders Indonesia, who could comply with the new regime. 471 Accordingly, had an Exceptions Order been made, Brett Cattle would not have incurred the delayed sales loss because it would have been able to deliver the 2,141 head to NACC at about the time that this would have occurred in the ordinary course. The Commonwealth did not suggest that Brett Cattle had acted unreasonably in incurring the $127,307 expense and only contested it on the basis of its rejected argument above. 472 In their joint expert report, Siobhan Hennessey and Antony Samuel (the experts) showed that Brett Cattle had sold an average of 4,525 head of steers and heifers in each of 2008, 2009 and 2010 with each year's sales varying by less than 100 head from that average. The experts also agreed that: Brett Cattle's total sales in each of the three years averaged 5,082 animals, including steers and heifers; and had Brett Cattle achieved its budgeted sales target for steers and heifers of 4,976 in 2011, that would have been 10% higher than the equivalent average sales in the preceding three years, and higher than any of its equivalent sales in the preceding six years. 473 There is no persuasive feature in the evidence to suggest that had 2011 been a normal year, Brett Cattle would have been able to achieve a materially better or different result in sales than in the three previous years. Mrs Brett did not suggest in her evidence any reason why the 2011 budget forecast of about a 10% increase in sales of steers and heifers would be achievable. Brett Cattle's sales of steers and heifers in the three years 2008, 2009 and 2010 did not vary in relation to the significant variations in total live cattle exports to Indonesia which were about 640,000, 750,000 and 515,000 in those years. 474 The experts also agreed that in 2008, 2009 and 2010 Brett Cattle's sales represented an average of 0.71% of all steers and heifers exported to Indonesia, but in 2010 those sales represented 0.86% of the total relevant exports. There was a drop in Australia's total exports of live cattle to Indonesia in 2010 that came about after Indonesia introduced a maximum weight restriction of 350kg per head ([38], [51]-[52]). Nonetheless, Brett Cattle's total export sales remained relatively constant, albeit below its budgeted figure for the 2010 year. That may have reflected the work that Mr and Mrs Brett had done since Brett Cattle acquired Waterloo Station. Indeed, Mr James said that when trade recommenced in 2011, NACC gave Brett Cattle priority because "they had some of the best cattle in the Territory". 475 I reject the Commonwealth's argument that Brett Cattle's opportunity to make sales in 2011 was limited to a range between 3,500 to 4,000 head and that its claim that it would sell 4,976 head was exaggerated. The argument ignored the facts that Brett Cattle's actual sales were more than the Commonwealth's posited low point of 3,500 head and that, effectively, the whole live cattle market lost two months of potential sales (June and July) because of the impact of the Second Control Order. 476 Brett Cattle actually sold 3,609 steers and heifers in 2011. It also was ready to sell the 2,141 head due to leave on the cancelled contract for export on Sahiwal Express. Those facts supported its claim that it would have sold 4,976 head in 2011 had the Second Control Order not been made. However, in assessing that claim as one for loss of a commercial opportunity, in my opinion, Brett Cattle is likely to have achieved sales of the average number of head from the preceding three years. 477 Accordingly I find that Brett Cattle would have sold about 4,525 head of steers and heifers in 2011 had the Second Control Order not been made.

11.5.2 The lost sales 478 The contract that Brett Cattle entered into with NACC on 9 August 2011 for the sale of 3,200 head in equal numbers of steers and heifers came to be performed on 12 September 2011 with the completed sale of only 2,656 head of which 65% were steers. That was a different proportion to the 50% provided in their 4 April 2011 and 9 August 2011 contracts and in Brett Cattle's budget that Mr Brett had prepared before April 2011. The 4 April 2011 contract would have represented about 44% of Brett Cattle's agreed expected sales of 4,976 head for 2011. The AQIS notice, that NACC gave on 6 June 2011, stated that the cargo would include 1,259 steers and 882 heifers from Waterloo Station. That meant that about 70% of that cargo were steers. 479 The Commonwealth relied on Mrs Brett's evidence in chief in support of its contention in the agreed facts in [465(2)] as follows: And what mix of steers and heifers were you projecting? --- It would have been around an even mix of both. 480 I regarded Mrs Brett as a generally honest and reliable witness. However, I do not consider that her answer reflected any more than her supposition that she and Mr Brett had budgeted to sell an even mix. That was a conservative assumption. The evidence showed that an even mix was a different proportion both from Brett Cattle's consistent historical sales and those it actually made in 2011. 481 The experts agreed that in the period between 2005 and 2010 Brett Cattle sold on average about twice as many steers as heifers or in proportion of about 66.7% as to 33.3%. Although this historical pattern was not reflected in the contracts of 4 April 2011 and 9 August 2011, I infer that Brett Cattle would have maintained a similar proportion of sales of steers and heifers as had occurred in the past had the 2011 year proceeded in the ordinary course. NACC appeared to have decided to acquire fewer animals under each of those contracts than the agreed numbers. It may be that by NACC buying greater numbers of the more valuable steers the parties were content to vary both the total number of cattle to be sold and the mix, consistently with the historical pattern. This finding is also broadly consistent with Brett Cattle's other sales during 2011 in which it consistently sold substantially more steers than heifers in about the same proportions as it had historically.

11.5.3 The agistment loss 482 After the Second Control Order came into force, Brett Cattle had to continue to hold the about 2,200 head it had mustered in anticipation for their shipment on Sahiwal Express. Mrs Brett said that it kept those cattle for about 89 days until 1,600 of them were appropriated for the 9 August 2011 contract with NACC ([463]). Those cattle would not otherwise have needed pastures or supplements to maintain their health and weight. Brett Cattle had to purchase over 26 tonnes of supplements and 415 tonnes of hay that its employees then had to feed to the animals that it now was continuing to keep in the two steer and heifer paddocks, rather than returning them whence they had been mustered. 483 In the later months of 2011, Mr and Mrs Brett considered that they were overstocked. Mrs Brett said that they had lost faith in the live export market by this time and decided to spread this risk from being solely reliant on the Indonesian market. She said that was why they decided to agist more than the 1,300 unsold head that they had budgeted to sell in 2011 (in the forecast 4,976 sales). In order to preserve Waterloo Station's pastures for future stock, they decided that they would send stock to agistment which, in the end, totalled some unsold 1,751 head. 484 They sent 800 head to a property south of Darwin in the Douglas Daly region, with the anticipation of selling them as live exports early in 2012 and the balance to Blackall in Queensland. They had to dip the cattle again, weigh, draft and then load them onto Brett Cattle's trucks. The cost of carriage of those animals to the agistment destinations is the basis of the claim for the cartage loss. 485 The trucks drove the consignment destined for Blackall, via Mount Isa, where the cattle were unloaded and spelled for 24 hours or so to rest, feed and water before being reloaded for the carriage to Blackall. 486 Once in Blackall the cattle were put into a feedlot to be fattened and sold into the domestic market. However, because Brett Cattle had used hormone growth promotants for its animals on Waterloo Station, they fetched less than animals that were not fed hormones, which were more attractive to buyers in southern Australia. 487 The Commonwealth argued that the agistment loss would arise only if Brett Cattle could establish that it suffered a significant loss of sales in 2011 as a result of the making of the Second Control Order. It relied on its arguments that I have rejected in dealing with the lost sales issue above to support its contention that, even if an assured export system scenario would have operated, no or no substantive sales would have occurred in it before the ESCAS come into operation. 488 The conduct of Brett Cattle in sending the 1,751 head to agistment was a reasonable response to the Second Control Order's impact in effecting destruction of its market opportunities. The parties agreed that Brett Cattle's loss under this category of damage was $950,000 in respect of 1,751 head. The Second Control Order placed Brett Cattle and others in its position in a very difficult situation. Lord Macmillan lucidly expressed the following principle for recovery of damages in such a scenario in Banco de Portugal v Waterloo & Sons Ltd [1932] AC 452 at 506 (albeit that his Lordship was discussing damages for breach of contract, but the principle is of general application): Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticize the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken. (emphasis added) 489 The fact that the precise number of cattle that Brett Cattle agisted cannot be precisely linked to a lost sale does not mean that it is disentitled to recover the whole loss $950,000.

11.5.4 The cartage loss 490 The Commonwealth accepted that if Brett Cattle established the agistment loss, it was also entitled to the cartage loss in the agreed figure of $46,034. The cartage loss arose because, as Mrs Brett explained, Brett Cattle had to use its own road train trucks to transport the 1,751 head to agistment. Accordingly, I find that Brett Cattle is entitled to recover the cartage loss.

11.5.5 The bank charges loss 491 Throughout the period after 7 June 2011, Brett Cattle experienced significant financial pressure from its bank to reduce its overdraft which was about $2.4 million when the Minister made the Second Control Order. It was paying a penalty rate of interest 3% above its ordinary loan rate of 10.5%, because it had exceeded its approved overdraft limit of $2.2 million. The difficulties in selling cattle after 7 June 2011 exacerbated the financial stress that Brett Cattle was experiencing. One reason why Mr and Mrs Brett decided to expand Brett Cattle's business into the domestic market after 7 June 2011 was pressure from its bank. The bank had expressed its unease to them that Brett Cattle had been solely dependent on the live export model. 492 I am satisfied that the interruption to Brett Cattle's cash flow and its increased expenditure caused by the Second Control Order and the cancellation of the 4 April 2011 contract was a common sense cause of its incurring the bank charges loss. It follows that Brett Cattle is also entitled to recover $150,000 in respect of the additional sums it had to pay to its bank.

12. The common questions 493 There are at least three questions that I presently consider arise, the answers to which are likely to be common to all claims that group members may have. Those questions and my provisional answers, based on the reasons I have given, are as follows: (1) Was the Second Control Order valid? It was invalid for the reasons at [317]-[363] above. (2) Did the Minister commit the tort of misfeasance in public office when he made the Second Control Order? The Minister did commit the tort because he acted recklessly as to both his power to make the Second Control Order and the fact that persons engaged in the live export trade to Indonesia would suffer harm from it unjustifiably, for the reasons at [364]-[395] above. (3) What would have happened had the Minister acted lawfully? The Minister would have made a control order that provided exceptions to the general prohibition in the Second Control Order in, or to the effect of, the exceptions clause in cl 5 of the First Control Order for the reasons at [404]-[427] above, and provisionally [428]-[462]. 494 In addition, once the parties consider my provisional findings about damages, they should be able to identify common questions as to the capacity that the Indonesian market would have had, after 7 June 2011, to import more cattle on a basis that the Secretary would have approved under the ESCAS or an earlier exceptions power.

13. Conclusion 495 The parties will need to consider the appropriateness and correctness of the methodology and calculation of the total number of cattle that would have been exported to Indonesia in 2011 had the Minister made an Exceptions Order based on my findings, the formulation of the common questions and their answers, and the form of the orders necessary to give effect to these reasons. The parties can also identify any other errors that I may have made and ask for corrections before I make final orders. The Commonwealth will have to pay the costs of the proceedings. 496 I will order that the parties confer and seek to agree a form of orders to give effect to these reasons and, in the event of disagreement file, in mark up, within 14 days a set of draft orders identifying the points of difference together with written submissions limited to five pages in support of their respective positions. I certify that the preceding four hundred and ninety-six (496) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.