Graham Barclay Oysters Pty Ltd v Ryan

BACKGROUND FACTS 92 The reasons of the trial Judge were expressed in 142 pages divided into 12 Parts. Parts 1-7 constituted a summary of evidence and findings of fact of general relevance. 93 It is difficult, without repetition, to give an adequate account of his Honour's summary, which, with respect, is succinct and interesting and it is appropriate to divide the relevant material in the same manner as his Honour. For present purposes, I treat the Barclay companies as one appellant.

The hepatitis A virus 94 There was expert evidence before his Honour relating to the HAV which was not controversial and which his Honour accepted. The virus multiplies, and is symptomatic, only in humans. The incidence of the disease viral hepatitis A ("VHA") in the community is reported at about eleven cases per 100,000 persons per year. However, infections are under-reported; some infections are sub-clinical and are therefore not investigated; and some clinical cases are not reported. 95 Alan Maxwell Murphy had worked as a virologist for some fifty years. He spent twenty five years (1959-1984) as Chief Virologist at the Institute of Clinical Pathology and Medical Research, Sydney, an institution funded by the State. He testified as follows: "HAV is spread by the 'faecal-oral route'. This means that HAV spreads when excreted in faeces of humans and is contracted when humans ingest material contaminated with faeces. A person suffering from HAV may excrete 108 viruses per gram of faeces. The greatest excretion is in the two weeks before the onset of jaundice. Once ingested it is thought that HAV multiplies in the lining of the gut. It is then transferred to the blood stream and carried to the liver. HAV attacks the cells in the liver and at this stage becomes symptomatic. Common symptoms are anorexia, nausea, fever and jaundice. HAV is considered to be a highly infectious virus. This means that only a small number of viruses are required for an infection to result." 96 Professor Clement Boughton, Consultant Emeritus in Infectious Diseases to Prince Henry Hospital and the University of New South Wales, said that in young children VHA is commonly sub-clinical (no recognisable symptoms). In older subjects, a clinical attack of acute VHA has an incubation period of between fifteen and fifty days, and commonly about thirty days. (It was on 25 December 1996 and first week of January 1997 that Mr Ryan consumed oysters bought from Barclay Distributors and he first felt ill on about 30 January 1997.) Professor Boughton stated: "Initial symptoms are often non-specific influenza like, that is, shiveriness, generalised aches and pains, headache, malaise, anorexia and fever. There may be a period of several days of acute fever with temperatures rising to 39 degrees Centigrade. This is then commonly followed by nausea, vomiting and the appearance of dark brown urine. Other symptoms of VHA include itchiness of the skin, profound lassitude, right upper abdominal discomfort due to a tender distended liver and pale bowel motions. The clinical presentation of VHA can be explained by the physiological effects of HAV on the human body. HAV enters the body orally after being consumed. It travels to the gut and is transported by the blood stream from the gut to the liver. The virus invades cells of the liver. …………………………………………………………………………………………… Any severe generalised infection causes tiredness and lassitude. However, the liver is the powerhouse of the body. It converts fat and starch to glucose and regulates the blood sugar level of the body. Because HAV impairs the functioning of the liver, tiredness and fatigue are accentuated. Attacks can vary greatly in severity from person to person. A mild attack may produce slight jaundice and indisposition lasting two to three weeks. A severe attack, however, can be prolonged with jaundice lasting several months." 97 Professor Boughton said that there was no antibiotic treatment for VHA but that the disease does not commonly run a chronic course. He said in relation to the typical case: "Whilst the presentation and severity of VHA varies between sufferers, generally sufferers recover following a period of rest. Nursing care is often required during this period. In severe cases hospitalisation may also be required, particularly when intravenous fluids are required to correct dehydration. Where a VHA sufferer has nobody to provide nursing care admission to hospital may be indicated. In the very acute stage, sufferers often have a fever accompanied by sweating and shivering requiring bed linen to be frequently changed. When sufferers are able to cope with food they need meals prepared for them. Commonly, a person with the illness:- a. is unlikely to be capable of normal household tasks, such as cleaning, food preparation or looking after children; b. will need to be absent from work; c. may require assistance with personal hygiene such as toilet and washing." HAV and oysters 98 A considerable body of expert evidence was given in relation to HAV and oysters. His Honour summarised some of that evidence as follows: "Oysters are filter feeders. They process 10 to 20 litres of water per hour, sucking in the water by movement of their gills and extracting from it particles of matter that enter the oyster's alimentary canal and are subjected to the oyster's normal digestive processes. Some particles are retained, others are excreted by the oysters. Particles may contain, not only nutrients, but pathogens, including viruses. HAV is one such virus. Because the oyster relies on a process of concentrating matter, any viral contamination of the oyster is likely to be at a level of concentration far exceeding the concentration of the virus in the water. HAV does not attack the oyster but will ordinarily be retained in the oyster's flesh. If a person consumes the oyster, Professor Boughton explained, the HAV will survive the consumer's gastric acid and pass into the small bowel and on to the liver, where it will have the consequences set out above. Professor Boughton noted that HAV 'is able to survive for prolonged periods in the environment, in foods, in fresh, brackish or salt waters and in particulate matter suspended in such media'. He said 'This is of epidemiological importance should waters in which molluscs are cultivated become faecally contaminated.'" 99 An issue at the trial was the longevity of HAV in the environment. This issue was relevant to the identification of the event or events that caused the outbreak of hepatitis A. Mr Murphy said: "HAV is an extremely hardy virus. … It can survive in the environment for periods of three months or longer. The major factor which influences the survival of HAV in the environment is the exposure of virus particles to heat and light. HAV particles that are exposed to these elements are likely to die off more quickly than three months. However particles in sediment or in damp or dark surrounds (such as in septic tanks) are likely to remain viable for a more significant period of time. HAV is inactive in the environment, which means that it does not multiply." 100 Dr Gerhard Grohmann had worked in the field of microbiology, particularly virology and public health, for over twenty years. He was a director and principal consultant of Environmental Pathogens Pty Limited, a private testing laboratory, and Chief Scientist and Head, Immunobiology (Vaccines), TGA Laboratories, Department of Health and Family Services, Canberra, and Lecturer in Virology at the University of New South Wales. He referred to two instances in which viruses had been found in sediment, in one case seventeen months after sludge disposal had ceased, and in the other case two years after sewerage discharge had ceased. Depuration 101 There was much evidence before his Honour in relation to the "depuration" of oysters. In June 1978 there had been an outbreak of gastroenteritis involving at least 2,000 people, which was traced to the consumption of oysters grown in the Georges River in Sydney. The oysters had been contaminated with the Norwalk virus which has properties similar to those of the HAV. Following that outbreak, in the period 1981 to 1983, it became mandatory for oysters grown in New South Wales to be depurated for at least thirty-six hours. Mr Murphy described depuration as follows: "Depuration is a process where oysters are placed in tanks of clean and disinfected estuarine water. The water is disinfected by ultra-violet radiation or ozone treatment. I am advised that all of the depuration facilities in use at Wallis Lake use ultra-violet light as a disinfectant. Ultra-violet light, given correct conditions, will destroy all viruses and bacteria it comes into contact with. Ultra-violet light will not destroy viruses and bacteria with which it does not come into contact. The effectiveness of ultra-violet light as a disinfectant depends on the following: a. The maintenance of the equipment used in the depuration tanks; b. The turbidity of the water in which the oysters are depurated; c. The capacity for ultra-violet light to come into contact with each viral or bacterial particle." 102 Mr Murphy explained that the effectiveness of depuration in eliminating the HAV from oysters depends on the oyster's excreting all particles of virus while in the depuration tank and the virus then being destroyed by the ultra-violet light. He continued: "If the surrounding water is heavily contaminated and an oyster takes up a large number of HAV particles, it is unlikely to excrete all these particles during a 36 hour of depuration. In my opinion, 36 hours is an inadequate period of time for depuration. The longer an oyster is depurated for the more likely it is that it will excrete more particles. It therefore follows that the longer the period of depuration, the more HAV is likely to be excreted. However depuration has been shown to be not entirely effective in ensuring the safety of shellfish. While oysters depurated in tanks functioning properly will most likely reduce their viral and bacterial load, they will not necessarily excrete all viruses from their system. In 1981 a study was published by the Institute of Clinical Pathology and Medical Research, Sydney; Health Commission of New South Wales; and New South Wales State Fisheries which found that oysters still contained Norwalk virus even after seven days of depuration. The study concluded that depuration of shellfish was not entirely satisfactory as a means of protecting public health." (emphasis by primary Judge) Mr Murphy said that while depuration should reduce the presence of human viruses in oysters, it will not remove them completely. 103 Dr Grohmann also expressed only qualified support for depuration. He said ultra-violet depuration, when carefully performed, yields satisfactory results, but added: "However, virological results are not always satisfactory as shellfish may still contain enteric viruses after purification if the waters are heavily polluted due to uncontrollable environmental factors. The fact that viral outbreaks still occur via contaminated oysters, despite oyster depuration, indicates that current depuration techniques are not always effective in removing pathogenic viruses." 104 Philip D Bird, Technical Adviser to the Oyster Program of the New South Wales Department of Health, wrote a sixty page book titled Purification Technology for New South Wales Oysters which the Department published. In the second edition, published in 1991, Mr Bird also conceded that depuration was not fail-safe. The booklet stated: Purification is the only current viable alternative today in New South Wales for the economic production of raw oysters which affords the least risk to public health. It is not a perfect system and will not guarantee the absolute public health safety of raw oysters, however, on a cost-risk basis it is the only alternative. It must be supported by regular testing of oyster harvest areas to monitor large and extended periods of sewage pollution which are likely to pollute oysters to a degree which makes them incapable of effective purification." (emphasis by primary Judge) 105 His Honour made this observation: "The limitations of 36 hour depuration were graphically demonstrated in the summer of 1989/90 when some 1,200 people suffered gastro-enteritis as a result of Norwalk or Parvo viruses in New South Wales oysters, and again in the Tweed River viral outbreak of August-September 1996." 106 Christopher Martin Burke, a Lecturer in the School of Aquaculture in the University of Tasmania, stated in a report in evidence that while most studies reported reduced viral numbers after depuration, that procedure, as practised, was likely not to ensure the safety of shellfish all of the time. Dr Burke said: "In my opinion it is NOT possible to state unequivocally that commercial depuration can always completely remove Hepatitis A and Norwalk viruses from shellfish." Water testing 107 All the experts regarded the monitoring of water quality as a useful safeguard against the risk of viro-contamination of oysters. Like depuration, however, the procedure was subject to limitations. 108 The expert evidence was that there is no practicable method of directly detecting the presence of the HAV in estuarine water but that it is possible to test the water for bacteria, the presence of which would indicate the likelihood of human faecal contamination. Dr Grohmann said: "Bacterial indicators were developed to control enteric bacterial diseases particularly in the days when cholera, typhoid and dysentery were prevalent. Bacterial indicators have no relationship to the absence of viruses in polluted waters or even in effluent. … … the absence of bacterial indicators in polluted waters cannot predict the presence or absence of human viruses. Bacterial indicators are, however, useful to show how well a sewerage treatment system is managed and to measure how well a particular component of a treatment process is performing. In addition, they are useful for indicating the presence of some bacterial pathogens … If adequate bacterial standards were not adhered to, the risk of bacterial disease would also be extremely high from oysters and recreational swimming in polluted waters. While the lack of bacterial indicators in treated sewage does not indicate the absence of viruses, where there are high bacterial levels from a human effluent source, one can safely assume that levels of viruses will be also high. This is because any treatment which has failed to eliminate bacteria will also have failed to eliminate viruses." (emphasis by primary Judge) 109 Mr Murphy expressed similar views. He favoured testing for faecal coliforms. He said the preferred indicator group is Escherichia coli ("E. coli") which has a strong association with human faeces; the presence of E. coli in water is a good indication of recent contamination by human sewage; there was no technical or practical difficulty in 1996 in testing a water sample for the presence of E. coli; but the absence of E. coli or other faecal coliforms does not negative the possibility of viral contamination because viruses normally outlive faecal coliforms. Nonetheless, Mr Murphy supported faecal coliform testing "as a useful tool in detecting the presence of faecal contamination in water". Oyster flesh testing 110 A further procedure available for the detection of the presence of HAV is that of testing the flesh (sometimes referred to as "meat") of oysters. The only method of flesh testing that achieved support from the experts as being feasible from a grower's perspective on a day to day basis was the Polymerise Chain Reaction ("PCR"). Dr Nicholas John Ashbolt, an environmental microbiologist of fourteen years' standing, who was currently Associate Professor in the Department of Water Engineering at the University of New South Wales and Deputy Director of the Centre for Water and Waste Technology, had specialised over the preceding ten years in water microbiology. He said of PCR: "PCR testing involves biochemical amplification of the viral nucleic acids to facilitate their identification. The test however does not discriminate between infectious or non-infectious virus particles. The test must be performed under laboratory conditions by skilled personnel. PCR testing costs between $50 and $200 per sample." 111 Mr Murphy described PCR as "the current method of choice" for flesh testing and said that it was known and available in November 1996. He agreed, however, that PCR testing could be undertaken effectively only by trained laboratory personnel. 112 Dr Grohmann thought that at its stage of development, PCR had no role to play in the routine monitoring of viral contamination of oysters. He said that PCR testing was still in the research stage in November 1996; that it could be performed only in a limited number of laboratories with specially trained personnel; and that it was expensive. Moreover, he said that the test often failed to detect a virus and that for this reason he did not use it as a routine test in his laboratory. Further, PCR testing destroys the oyster tested and therefore can be used only to test samples and there is a difficulty in extrapolating from the sample. In his view, even if negative results were reliable, they would establish only that the tested and destroyed oysters were not contaminated. 113 The learned primary Judge was satisfied by Dr Grohmann's evidence that it would be unsafe for an oyster grower or a regulatory authority to rely on PCR testing alone as an indication of the absence of viral contamination in an oyster-growing area.

Sanitary surveys - introduction 114 The primary Judge said that having regard to the problems discussed above in relation to other measures, it was not surprising that there was agreement among the expert witnesses that it was sensible to prevent contamination arising in the first place by proper management of growing areas. One suggested component of a proper management régime was a "sanitary survey". His Honour described a "sanitary survey" as: " … a comprehensive and detailed inspection of the foreshores and tributaries of the relevant waterway, the purpose being to identify all points of pollution and determine their effect on the quality of the water in the growing area. The shoreline inspection should be supplemented by a program of water testing designed to detect, and trace the source of, any faecal pollution of the waterway." 115 The parties were not at one as to what constituted an acceptable management régime. His Honour gave a detailed account of the evidence on this issue and said of it: "In reading that evidence, it is relevant to bear in mind that no sanitary survey of Wallis Lake or its tributaries was ever conducted before the hepatitis A epidemic that gave rise to this proceeding." The expert testimony of Mr Alton - USA 116 Mr Ryan's leading witness on growing area management was David Warren Alton, a former officer of the United States Food and Drug Administration ("FDA"). Since the primary Judge relied heavily on the desirability of a sanitary survey, I will, like his Honour, give a somewhat detailed account of Mr Alton's evidence. 117 Mr Alton had a first degree in bacteriology and public health and a Masters degree in sanitary engineering. For more than twenty five years until February 1998 he was involved with shellfish sanitation programs in the United States and internationally. From 1992 until February 1998, he was Associate Director for International Programs, Office of Seafood, in the FDA. In that capacity, he was concerned to ensure that foreign countries that wished to export shellfish to the United States met FDA standards, including standards in relation to growing area management. In substance, in order to be approved, a foreign country had to adopt and enforce a régime akin to the United States National Shellfish Sanitation Program ("the NSSP"). Mr Alton described the NSSP as: " … a voluntary, tripartite program composed of shellfish producing and receiving states [that is, American States],the shellfish industry and federal agencies". 118 The FDA co-ordinates and administers the NSSP and in each participating state one or more regulatory agencies manages the local shellfish program. Mr Alton observed that: "it has been shown that cleansing or the commercial process of Depuration is only ever at best likely to partially decontaminate oysters." He continued: "Growing oysters in water of acceptable sanitary quality is the first critical control point with which the NSSP is concerned. Growing area classification is thus central to the effectiveness of the NSSP. The essential finding of many studies is that any seafood harvested in polluted water is by definition dangerous for the consumer." (emphasis by primary Judge) 119 Mr Alton described the NSSP approach as follows: "Shellfish growing area classification under the NSSP is divided into two parts, the sanitary survey and the bacteriological survey. The sanitary survey provides an overall view of pollution sources, types and volumes of sewage, locations of potential point and non-point sources of pollution and an overview of the total environment of the growing area and the impacts of known or potential pollution sources. The bacteriological survey defines the level of viable sewage organisms in terms of indicator equivalents at any given point in the growing area. The importance of the sanitary survey to classify shellfish growing areas can not be overstated. This is the one classification step that experienced shellfish control agencies believe gives them the best answers on the appropriate classification of shellfish growing waters. The bacteriological survey is a supplement to the sanitary survey and confirms the findings of the sanitary survey with some definition of the concentration of indicator organisms." (emphasis by primary Judge) 120 Mr Alton said that the principal components of a sanitary survey included an evaluation of the pollution sources that may affect the area; an evaluation of the meteorological factors; a review of hydrographic factors that may affect distribution of pollutants throughout the area; and an assessment of water quality. He said: " … a sanitary survey must be made of each growing area prior to its approval by the state as a source of shellfish for human consumption". 121 He emphasised that the sanitary survey is updated annually (and more comprehensively every third year) in order to evaluate any changes in pollution sources and analyses of water quality samples taken in the preceding twelve months. 122 Mr Alton described in some detail how the results of the sanitary survey and of the bacteriological survey are used. He commenced as follows: "The results of the sanitary survey and bacteriological survey are utlilised to give growing areas one of the following classifications: approved; conditionally approved; restricted; conditionally restricted; or prohibited. All areas that have not been the subject of a sanitary survey are prohibited. Prohibited areas are established adjacent to each sewage treatment plant outfall and other waste discharges of public health significance. An upward revision of an area classification must be supported by an adequate sanitary survey. Maps showing the boundaries and classification of each shellfish growing area are maintained in a central file by the state shellfish control agency." (emphasis by primary Judge) 123 Mr Alton said that there are two primary shellfish growing area classification models: the NSSP, which is a sanitary survey and water sample based classification system, and the European Union ("EU") model, which emphasises samples of shellfish meats for classification purposes. He said: "Sanitary controls under both systems are underpinned by a classification of harvesting areas according to the degree of pollution as judged by faecal indicators. The purpose of this classification is to ensure that shellfish are not harvested from polluted areas. For these classifications or grading of mollusc harvest areas EU Directive 91/492 relies on microbiological analysis of shellfish flesh whereas the US FDA National Shellfish Sanitation Program relies on microbiological analysis of growing waters." 124 In relation to the bacteriological survey, Mr Alton commented that since a "zero tolerance goal is unachievable, the task for any regulatory agency is to determine what level can be tolerated and still maintain safety and quality". 125 A minimum of fifteen water samples must be collected from each station in the approved area, the stations being located adjacent to actual or potential sources of pollution, and sample collections being timed to represent adverse pollution conditions. Mr Alton stated: "Both the coliform and faecal coliform indicator groups have been used successfully in the classification of shellfish growing areas. Neither group fulfils all of the desirable characteristics of the ideal indicator. The standards are based upon the public health assumption that the presence of viable faecal material in estuarine water establishes a potential for shellfish-borne illness. The shellfish control agency must decide how much viable faecal material will be tolerated in waters that produce filter-feeding shellfish destined for the raw market, and then it must establish and enforce the appropriate standards. With our present state of knowledge, testing for bacterial and viral pathogens in oyster flesh may be an adjunct to, but not a substitute for the use of indicator organisms for the detection of faeces in shellfish waters." (emphasis by primary Judge) 126 The NSSP manual requires that the total coliform median or geometric mean MPN (Most Probable Number) of an "approved area" not exceed 70 per 100ml (faecal coliform median not to exceed 14) and that not more than 10 per cent of the samples exceed an MPN of 230 per 100ml (faecal coliform median not to exceed 43). The MPN is a statistical estimate of the number of bacteria per unit volume determined according to a certain test. 127 Mr Alton said that he had visited ten countries in relation to their shellfish programs and found that, in general, those which had signed memoranda of understanding had met or exceeded the NSSP requirements and had experienced "very limited numbers of illness outbreaks or problems". He said: We are learning more about viruses and indicators yet the tried and true faecal coliform indicator applied to an in depth sanitary survey continues to protect the public health of raw and semi-raw shellfish consumers." (emphasis by primary Judge) Mr Alton also observed: "It has been observed that when shellfish are routinely depurated prior to sale that the enforcement agencies and industry members develop a tendency to believe that the situation is well in hand and that the depuration process will solve pollution problems. This unfortunately has been found to not be the case with numerous outbreaks of illness from depurated shellfish taken from improperly classified areas, grossly polluted areas, or areas impacted by human faecal material. It is well documented internationally that virus particles do not completely depurate from shellfish in the short time period of the depuration process (48 - 72 hours). It is also well documented internationally that the normal depuration process does not adequately remove from heavily polluted oysters: bacteria, heavy metals/pesticides, or marine biotoxins (shellfish poisoning). This means, shellfish control programs should have a classification limit on the quality of the growing area water from which shellfish are harvested for depuration. This has been well known in the international community since the 1980's." (emphasis by primary Judge) 128 Mr Alton gave the following evidence in relation to the incidence of HAV contamination in shellfish: "Hepatitis A is one of the most serious illnesses associated with shellfish-vectored disease, causing debilitating and chronic infection and even death. The first documented outbreak of shellfish-borne hepatitis occurred in Sweden in 1956, when 629 cases associated with raw oyster consumption were reported. Subsequent to that, hepatitis A cases were reported in the United States. In 1961, several large outbreaks were reported among consumers of raw oysters in Mississippi and Alabama and consumers of raw clams in New Jersey and Connecticut. Outbreaks of hepatitis A have been reported consistently since the early 1960's and the illness continues to be a public health concern today. Worldwide, the illness is reported frequently. The most disturbing recent incident occurred in China in 1988 when more than 292,000 cases (nine deaths) of hepatitis A (associated with the consumption of uncooked, contaminated cockles) were reported in the urban areas around Shanghai. This outbreak clearly demonstrated the need for effective sanitation programs to prevent the introduction of contaminated shellfish into the marketplace and what can happen when the system breaks down or when there are no effective programs in place." (emphasis by primary Judge) 129 Mr Alton agreed that a system of grower self-regulation was not effective because there will always be the "maverick" who will "pursue the dollar" and not "really care about the general good". However, he also agreed that there was sometimes a problem of overlapping responsibilities and jealousies between agencies. He said that in his opinion "someone ha[d] to actually take charge". 130 Finally, Mr Alton gave evidence regarding the relationship between depuration and classification. The following is the relevant passage from his cross-examination: "Would you agree with this that current purification technology cannot itself always be relied upon to eliminate viruses from oysters?---That's correct. And the answer would be the same whether or not you were taking oysters from a classified or a non-classified area and applying the US purification technology?---No, I wouldn't agree with that because I believe that if you had a classified area the requirements of the NSSP is that shellfish for depuration have to be at least from an area that meets restricted growing area classification. In the process of doing this you throw in some barriers to viral contamination. But if you don't have those barriers before depuration then it's certainly correct to say that depuration cannot always be relied upon to eliminate viral contamination?---Correct. … And even if one was, for example, in the NSSP program dealing with oysters that had come from a conditionally approved or conditionally classified area the result would be the same would it not that depuration applied to oysters coming from such a source would not even then provide an absolute guarantee of freedom from viral contamination?---No, there's no absolute guarantee. It's designed to reduce the risk and it doesn't happen very often but you could have a problem. Finally, I wonder if I could put this to you and ask you if you would agree with this that extreme caution should be exercised when resuming oyster harvesting operations after oysters and water have been polluted by faecal coliform contamination?---That's correct." (emphasis by primary Judge) The expert testimony of Dr Rodgers - Europe 131 The European system of management was described by Christopher John Rodgers, an English fish and shellfish microbiologist, who was employed by the United Kingdom government from 1987 to 1993 to advise on the design and construction of shellfish purification plants. Dr Rodgers is now an aquaculture consultant who advises various international agencies. He confirmed that the European approach is to use flesh tests for classifying harvesting areas. He said that the EU "requires all Member States to classify their shellfish harvesting areas into one of three categories (A, B or C) according to the degree of faecal indicator bacteria present in samples of shellfish flesh." 132 According to Dr Rodgers' testimony, the classification determines the required shellfish treatment régime. Shellfish from Category A areas (where the flesh tests have shown less than 230 E. coli per 100 grams of flesh) may be sold without depuration. Shellfish from Category B areas (where flesh tests do not exceed 4,600 E. coli per 100 grams of flesh in 90 per cent of samples) must be depurated. Shellfish from Category C areas (where flesh tests record up to 60,000 faecal coliforms in 100 grams of flesh) may be placed on the market only after a relaying period of at least two months elsewhere. Dr Rodgers said there is no provision for harvesting shellfish that exceed the upper limit of the most polluted category and that shellfish from those areas may not be placed on the market for human consumption. 133 Dr Rodgers said the main reason why the EU system (shellfish flesh testing) was adopted in preference to other systems (such as water testing) was largely historical and related to the end product standard. He said: " … the end product standard was a measure designed to be applied to the shellfish themselves, since these are the objects of the retail sale and public consumption in their raw state, particularly for oysters. In this way the shellfish were considered to act as sentinels and thus reflect the quality of the growing waters, although the relationship between the levels of faecal coliforms in water and shellfish can vary appreciably." (emphasis by primary Judge) 134 In oral evidence Dr Rodgers also described the role of a sanitary survey. He said: "… if you actually have a sanitary survey, and you have good monitoring in place prior to any sort of potential outbreak, you may not actually need to elevate the amount of testing which you routinely undertake, providing you have a historical database which indicates the sort of situation you would expect in any particular area. This type of monitoring program is designed to reduce the risk, providing it is well designed statistically, and the samples are taken regularly. Unfortunately for this type of viral outbreak there are no guarantees that these measures, these risk measures would actually prevent an outbreak because there is still a risk albeit small, even within a carefully designed program that such an outbreak could still occur." (emphasis by primary Judge) 135 Under cross-examination, Dr Rodgers explained that in order to determine initially whether an area was in Category A, B, or C, a sanitary survey identifying actual or potential sources of pollution would be carried out. The expert testimony of Mr Brown - Tasmania 136 A further expert witness, Ray Brown, a qualified microbiologist employed by the Tasmanian government, had, since 1987, managed the Tasmanian Shellfish Quality Assurance Program ("TSQAP") which had been established pursuant to a Memorandum of Understanding between the Tasmanian government and the Commonwealth Department of Primary Industries ("DPI"). The DPI made an agreement with the FDA in respect of certification of the Tasmanian shellfish industry under the United States NSSP. After that agreement was made, the DPI, or its successor in administration, the Australian Quarantine Inspection Service ("AQIS"), established a committee of Australian State governments and shellfish producers called the Australian Shellfish Sanitation Advisory Committee ("ASSAC"). The ASSAC adopted the Australian Shellfish Sanitation Control Program ("ASSCP"). According to Mr Brown, the purpose of the ASSCP was, "to safeguard public health through the implementation of sound, uniform standards in relation to the cultivation, harvest, processing, storage and distribution of shellfish for human consumption". He said: "A principal philosophy of the ASSCP is that if shellfish are only harvested from clean, unpolluted waters, then the shellfish will not be contaminated and public health episodes will be averted". (emphasis by primary Judge) 137 Mr Brown explained the sanitary classification régime in Tasmania as having three components: a shoreline survey; bacteriological examination of water samples; and bacteriological and chemical examination of shellfish. Under the TSQAP, there are four classifications of proposed shellfish harvesting areas: approved, approved conditionally, restricted and prohibited. Mr Brown sounded a warning against reliance upon depuration, and concluded: "In the absence of a sanitary survey a shellfish growing area must be prohibited according to the ASSCP. …………………………………………………………………………………………… In my opinion, a prudent person, with:- a. knowledge of the impact of heavy rainfall on an estuary system; b. a lack of information concerning the impact of pollution sources on the oyster growing areas in the system; and c. knowledge of the public health risks associated with human faecal contamination of oysters would do all things available to them to ensure the safety of oysters cultivated within that estuary system. If there was a danger that depuration was unlikely to be effective in protecting public safety, the only option available to such a prudent person would be to recommend a closure of the growing area or to warn against continuing harvest. Consistent with public health principles, an estuary system should remain closed for harvest until such time as testing confirmed that oysters harvested from the area are fit for human consumption." (emphasis by primary Judge) 138 In cross-examination Mr Brown said that Tasmania and Victoria were the first states to sign a Memorandum of Understanding with the DPI or AQIS and were the foundation members of the ASSAC. He said that South Australia became a full member and that other states sent observers, one representing the relevant state government and the other representing oyster growers in the state. Mr Brown stated that in November 1996 Western Australia and Queensland were "in the throes of implementing the program". Asked about New South Wales, he said "[t]hey were not embracing it at all". He said that the New South Wales government observer had always been Mr Bird of the Health Department who had started to attend meetings in about 1990 but had not attended regularly in recent years. In cross-examination Mr Brown made it clear that responsibility for the TSQAP rested with the Tasmanian state government, specifically its Health Department, rather than with local government or growers. He said that the Health Department bore that part of the cost of the program not covered by the growers' levy and provided the personnel for the shoreline surveys and water bacteriological examinations. National Health and Medical Research Council recommendation of 1987 139 In 1987 the National Health and Medical Research Council ("NHMRC") published a twenty page booklet called "Code of Hygienic Practice for Oysters and Mussels for Sale for Human Consumption". The Code dealt at length with "raw material requirements" and "plant facilities and other operating requirements". The raw material requirements section commenced by addressing "environmental sanitation in growing areas". It included the following: "1. Sanitary disposal of human and animal wastes Adequate precautions should be taken to ensure that shellfish growing areas are free from pollution capable of causing pollution of the shellfish, and extreme care should be taken to protect the shellfish from contamination by any wastes. A clean area surrounding the shellfish growing areas should be established and the dumping of all wastes of agricultural, domestic or industrial origin, including wastes from private residences or boats, should be prohibited. 2. Determination of pollution types and sources Surveys of the shoreline should be conducted to determine sources of both domestic and industrial pollution. Sources may include municipal sewage outfalls, industrial outfalls, mine wastes, geophysical contaminants, agricultural activities, nuclear power plants, refineries or other sources. The need to reschedule sanitary surveys will be determined by changes in population shifts caused by commercial development of the shoreline or other factors affecting local population stability. 3. Classification of the growing area …………………………………………………………………………………… 4. Growing area control (a) Designated growing areas should be routinely monitored for changes in water quality, and sub-standard areas patrolled to prevent harvesting for purposes other than that established by the official agency. (b) Shellfish unless they are to be purified should not be removed for sale from water which, when examined using the methods prescribed, does not meet the following specifications. (i) the coliform median MPN of the water should not exceed 70 per 100 mL, and not more than 10% of the samples taken should ordinarily exceed an MPN of 230 per 100 mL when examined by a 5-tube multiple dilution test; or (ii) the Escherichia coli median MPN of the water should not exceed 2.3 per 100 ml, and not more than 10% of the samples should ordinarily exceed an MPN of 7 per 100 mL." 140 The section of the Code dealing with "plant facilities and other operating requirements" set out depuration requirements including a minimum depuration period of thirty-six hours. The expert testimony of Mr Papworth of Shoalhaven City Council 141 Warwick Andrew Papworth had, since 1993, been Environmental Services Manager of the Shoalhaven City Council ("the Shoalhaven Council"). The City of Shoalhaven contains a substantial portion of the New South Wales south coast. It relies heavily on, inter alia, fishery, and encompasses many estuaries, rivers and lakes, including the Shoalhaven River and Lake Conjola, in both of which there is oyster-growing on a significant scale. Mr Papworth said that the Shoalhaven Council's Environmental Monitoring Program, which had commenced in 1991, attempted, by the collection and analysis of water samples, to provide a body of data by which the Shoalhaven Council could assess the long term impact of its development and planning decisions. The Program also assisted the assessment of water quality for the benefit of users of the waterways, including oyster farmers. 142 The City of Shoalhaven is divided into twenty one catchment areas. Samples are taken from sites in each catchment area and tested against various pollution parameters, including faecal coliforms. Mr Papworth said that if an actual or potential pollution problem was identified or suspected, the Shoalhaven Council would expand its activity in order to identify the source of the problem, monitor it and formulate rehabilitative measures. The Shoalhaven Council provided test results to the local oyster farms. He said that in his experience low water quality coincides with high rainfall. Mr Bird of NSW Department of Health 143 Mr Bird did not testify. Although he was a New South Wales government observer at ASSAC meetings, he rejected ASSAC's approach. In the second (1991) edition of his paper, "Purification Technology for New South Wales Oysters", he said of the possibility of classifying waterways for public health safety as in the United States: "The cost of determining such classifications would be extremely expensive and take several years. The majority of estuaries would probably not be classified as 'approved areas' in which oysters could be harvested all year round with no controls irrespective of weather patterns. Many would be classified as 'Conditionally Approved' which requires certain restrictions and controls when conditions are adverse such as heavy rainfall. Some areas would be 'Restricted' which means that oysters must be treated prior to sale. And others may be classified as 'Prohibited' which means no oysters can be harvested at all! Once such a 'Classification' system is established, the cost in monitoring the areas within the 34 different estuaries [in the State] for changes in classification and enforcing compliance with the classification requirements in terms of administration and laboratory support would be prohibitive." 144 His Honour noted that Mr Bird had not explained what he meant by "prohibitive" or why it was that the cost of a classification system could be borne in other Australian states and overseas but not in New South Wales. As Mr Bird did not give evidence, these questions could not be explored with him. 145 In contrast to Mr Bird, Dr Burke thought a sanitary survey an essential adjunct to depuration. He said that in November 1996, a hepatitis A outbreak was "a serious possibility, serious in the sense that you've got to be careful and be worried about it". Later, he said that he understood that Barclay Oysters' depuration system was "good by normal industry standards". He stated: "The crucial issue is to actually know the estuary and if you haven't done the sanitary survey you are not going to be in a position to say whether or not a pollution source has been stopped, you know, a sewage works is now functioning properly, there's no, storm water overflow or whatever. If you haven't done the sanitary survey, no, you're not going to be able to do it. You'll have to rely on testing the oysters for faecal coliforms and we know that that leaves you open to false negatives for viruses because viruses may be in there with zero E-coli." (emphasis by primary Judge) Primary Judge's findings 146 The learned primary Judge set out his findings about the proper management of oyster production as follows: "(i) depuration for 36 hours is not an adequate protection to oyster consumers against the foreseeable risk of contracting viral disease, including hepatitis A; (ii) that being so, it is good practice to manage oyster growing areas in such a way as to minimise the risk of viral contamination of the waters in which the oysters are grown; and (iii) whether or not growing areas are classified and differing harvesting regimes formally adopted, as in the United States, Europe and Tasmania, a management regime that complies with proposition (ii) requires, at the least: (a) an initial sanitary survey to identify possible sources of pollution of the growing waters; (b) regular update surveys to detect any change in the pollution situation; and (c) regular monitoring of faecal coliform or E. coli levels of the growing area water, by testing samples of the water itself or oyster flesh. This must be done in a systematic manner so as to enable the test results to provide assistance in locating pollution sources and guidance as to the safety of recommencing harvesting after heavy rain." 147 His Honour noted that propositions (i) and (ii) were accepted by all the experts who gave evidence, by those who devised the United States, European and Tasmanian oyster management régimes, and by Mr Bird, and that in relation to proposition (iii) the only dissentient appeared to be Mr Bird. His Honour also said that Mr Bird's position has at all material times been that adopted by the New South Wales Department of Health and, through it, by the State. Then his Honour said this: "The State's failure to recognise the need for items (a), (b) and (c) in proposition (iii) is not only at odds with practice widely accepted outside New South Wales; it leaves oyster consumers exposed to an unnecessary risk of viral disease - from pollution sources that are capable of being detected and rectified. There being no evidence of facts suggesting it is reasonable for those controlling oyster growing areas in New South Wales to adopt a lesser standard of protection to consumers than is required in comparable communities elsewhere, the State's position must be regarded as failing to ensure an adequate standard of management of oyster growing areas." 148 It is appropriate to pause in this account of his Honour's reasons to observe that his conclusion was one of general application throughout the State. What his Honour was saying was that in the light of the expert evidence and the evidence of growing area management régimes elsewhere, it was inexcusable that the State had relied on only a policy of mandatory depuration and not on a policy directed to ensuring a satisfactory standard of growing waters.

Part 3 - The New South Wales Regulatory System 149 In April 1992, the New South Wales Minister for Health Services Management, the Hon Ron Phillips MP, published a document prepared by an Advisory Committee, titled "New South Wales Oyster Quality Assurance Program". The Advisory Committee was chaired by Mr Bird and also comprised a Fisheries Department Officer and three industry committee representatives. One of those representatives, David Maidment, was an industry observer at ASSAC, while another, Peter Clift, was a Wallis Lake grower. The document noted that to date no hepatitis cases had been reported from shellfish in New South Wales, but that the potential hazard must be considered a serious one. The document stated: "It must be emphasised that adoption of a clean waters classification system by the N.S.W. oyster industry and relevant agencies either for domestic use or for intended export of oysters to the U.S. market is not something which could be achieved overnight. The collection and analysis of the necessary data is an expensive and time consuming exercise and for export purposes, is likely to be subject to detailed scrutiny by U.S. authorities and lengthy negotiations at government level." 150 The Advisory Committee did not recommend adoption of a clean waters classification system and referred to what it described as various "inherent problems and difficulties" in that approach. Instead, the Advisory Committee recommended a pollution early warning system and vigilance against developments that would adversely impact on oyster-growing areas. It also recommended that it be a condition of purification plant licences that all oysters treated in them be cultivated, harvested and purified in accordance with an approved quality assurance program. 151 The Advisory Committee presented its Final Report in February 1994. Under the heading "Export Considerations", the Committee stated as follows: "A small section of the industry, with a view to export, would prefer the establishment in NSW of a Clean Waters Classification system based on the American National Shellfish Sanitation Program (NSSP), funded by Government (be it State or Federal). In developing the NSW Oyster Quality Assurance Program the Advisory Committee recognised that it was essential that the Program provide a pro-active mechanism that could be quickly implemented to deal with the intermittent pollution events that currently effect the microbiological quality of oysters in the domestic market place. It was also recognised that, although it is desirable that estuaries be classified in terms of pollution risk in the future, which can be achieved under the Program, the industry can ill afford the delay required to provide the data to establish such a classification scheme covering all commercial oyster producing estuaries in NSW. However, the NSSP procedures and standards were taken into account by the Advisory Committee during the program development process. The NSSP standards can be met under the program, if the local estuaries so desire, by increasing the testing regimes in their estuaries and carrying out more detailed documentation and auditing required by the NSSP. It is the view of the Advisory Committee that the industry at this stage could not afford to establish and maintain a monitoring program in each oyster producing estuary in NSW as set out under the NSSP. It is the view of the Advisory Committee that it would be more cost efficient and appropriate for NSW to have a limited number of strategic estuaries approved for export under the NSSP through an extension of the Program at a later date. This would provide an affordable opportunity for farmers wishing to export their oysters to relay their oysters in these estuaries for the required period, as specified by the NSSP, prior to export. The establishment and maintenance of a NSSP program in these estuaries could only occur after lengthy negotiations by the industry with Australian Federal, NSW State and US Government authorities." (emphasis by primary Judge) 152 The Committee recommended that "[m]embership of an Oyster Quality Assurance Program be made compulsory for all oyster leaseholders either by a condition of oyster lease ownership or oyster sale". 153 His Honour reviewed the relevant legislation. In 1994, Fisheries Management Act 1994 (NSW) was enacted. In the course of his Second Reading Speech on the Bill for the Act, the responsible Minister said that new aquaculture permits would: " … become the tool by which the industry is managed, with the result that most of the operational controls on oyster farmers will be removed from the leases and placed on permits." The Act commenced on 16 January 1995. Section 8 in Part 2 of the Act provided for a "fishing closure" to be effected by empowering the Minister, in subs (1): "(1) The Minister may from time to time, by notification, prohibit, absolutely or conditionally, the taking of fish, or of a specific class of fish, from any waters or from specified waters. (2) Any such prohibition is called a fishing closure." (The word "fish" was defined by s 5 to include oysters.) Section 14 made it an offence to take fish in contravention of such a "fishing closure". 154 Part 6 of the Act (ss 142 - 191) was headed "Aquaculture Management". Section 142 defined "aquaculture" so as to include cultivating oysters for the purpose of harvesting them with a view to sale. Section 143 empowered the Minister to make aquaculture industry development plans. Section 144 made it an offence for a person to undertake aquaculture except under the authority of an aquaculture permit. A ground on which an application for a permit might be refused was that it was "inconsistent with any relevant aquaculture industry development plan". Section 156 required a permit holder, if the regulations so required, to pay to the Minister an annual contribution towards the cost (among other things) "of monitoring the quality of the environment in which aquaculture is undertaken and of testing the quality of the fish … cultivated". Subsection 160(1) empowered the Minister to cancel or suspend an aquaculture permit under certain circumstances, including for mismanagement. 155 Subsection 189(1) provided, relevantly: "(1) The Minister may, by a fishing closure under Part 2, prohibit during a specified period the taking of fish … cultivated under an aquaculture permit from the area to which the permit applies if satisfied: (a) that the area is in such a condition that the taking of fish … from the area ought to be suspended, or (b) that the fish … are, or are likely to be, unfit for human consumption." 156 The Fisheries Management (Aquaculture) Regulation 1995was made under the Act. Like the Act, it commenced on 16 January 1995. It contained provisions dealing with aquaculture permits. Permits were divided into nine classes. Class A permits authorised "extensive aquaculture on public water land". It is not in dispute that the permits which came to be issued to Wallis Lake oyster farmers were all class A permits. The Regulation was amended with effect from 1 May 1995 so as to include a new Division 4 providing for a New South Wales Shellfish Quality Assurance Program and for local quality assurance programs at the individual estuary level (I will use the abbreviation "QAP" to signify "quality assurance program", whether the overarching State one or a local one.) An explanatory note to the amending Regulation included the following: "The object of this Regulation is to provide for the determination of a commercial aquaculture industry development plan to ensure that shellfish taken for sale for human consumption from estuarine waters in New South Wales are of the highest quality and, in particular, are free from disease and pollutants. The plan is to consist of a New South Wales Shellfish Quality Assurance Program, which is to include local shellfish quality assurance programs for estuarine waters in New South Wales where shellfish aquaculture is carried on. It will be a condition of all class A aquaculture permits that permit holders comply with the requirements of the New South Wales Program and the relevant local program." 157 The new Division 4 encompassed cll 12A to 12M. Clause 12A contained definitions, including a definition of "shellfish" as "bivalve molluscs". Clause 12B provided: "12B(1) The Minister is required to determine as a commercial aquaculture industry development plan a program to assure the quality of shellfish taken from estuarine waters for sale for human consumption. (2) The plan is to consist of the New South Wales Shellfish Quality Assurance Program, which is to include local shellfish quality assurance programs for those estuarine waters where holders of class A permits operate aquaculture farms. (3) The objective of the New South Wales Program is: (a) to ensure that shellfish are taken from estuarine waters to be sold for human consumption only if: (i) the shellfish meet the quality standards specified in or under the program, and (ii) those waters meet environmental standards so specified, and (b) to supervise the co-ordination of local programs; and (c) to ensure that local programs meet the objectives specified in paragraph (a). (4) The Minister is responsible for establishing the New South Wales Program in consultation with the New South Wales Committee. (5) If there is an inconsistency between the New South Wales Program and a local program, the New South Wales Program is to prevail." 158 Clause 12C required the Minister "to appoint an advisory committee, to be called the New South Wales Shellfish Quality Assurance Committee". It was to consist of a chairperson appointed by the Minister, four class A permit holders and the Director of Fisheries or his nominee. The clause also required the Minister to appoint "a local shellfish quality assurance committee for each area or group of areas of estuarine waters to which the New South Wales Program relates". 159 Neither the New South Wales Committee nor any local committee was to be subject to the control or direction of the Minister but the Minister could require a committee to reconsider a decision and could remove members of a committee from office. 160 Clause 12D gave the New South Wales Committee responsibility for supervising and administering the New South Wales Program. Clause 12E gave local committees responsibility for local programs. Clause 12G made it a condition of a class A permit that the permit holder comply with the requirements of the New South Wales Program and any relevant local program and pay charges levied by the local committee. By cl 12H each holder of a class A permit was required to pay to the Minister a contribution towards the cost of operating the State Program and of maintaining the State Committee. 161 There was some delay in the appointment of members of the State Committee. That Committee's inaugural meeting was held on 15 December 1995. Annette Fordham was chairperson. The Committee appointed a State Co-ordinator, Dr Kerry Jackson. She commenced full-time duties on 2 September 1996. This coincided with an outbreak of gastroenteritis, involving at least ninety-three people, caused by oyster-borne Norwalk disease in the Tweed River growing area. Mr Bird made a report on this epidemic dated 6 November 1996 which contained the following observations: "The outbreak attracted wide national media coverage and oyster sales from the Tweed stopped. A month after the outbreak, sales were still below 50% due to harvesting suspensions and adverse consumer reaction. The Tweed River was closed by NSW Fisheries on 4 September 1996. The smaller harvesting area of Chinderah was re-opened on 18 September 1996 but the major area was still closed by 6 November 1996. A quality assurance program was established to monitor the public health safety of oysters and water in growing areas and indicates a continuing water quality problem. Sewage from the sewerage system, septic tanks and boats are suspected. This incident raises a number of problems requiring solutions: an effective oyster quality assurance program, greater compliance by purification plant operators, hygienic oyster processing, an adequate trace-back system, a more effective public health network, a modern government virology laboratory and greater community and government involvement in addressing sewage pollution of our rivers." (emphasis by primary Judge) 162 Mr Bird's report was made some two months after the Tweed River outbreak and only some two weeks before the "rainfall event" that seems to have caused the pollution that gave rise to the claims before his Honour. At the time there was still no New South Wales Shellfish QAP as required by cl 12B of the Regulations. Nor was there any Wallis Lake local QAP.

Monitoring of water quality by the Council down to mid-1993 163 Between August 1989 and late 1993 the Council had monitored the water quality of the Lake. Brian Anthony Brooker, who was at the time the Council's Senior Environmental Health Officer, or a trainee working under his instruction, took samples every few weeks at ten locations on the Lake and at the mouths of five stormwater outlets into the Lake. The person who took the samples noted the tide or outlet flow conditions, weather and temperature and analysed the samples for faecal and total coliforms in a small Council laboratory. The results varied considerably. His Honour said: "In some locations, notably the stormwater drains, the faecal coliform reading frequently exceeded the accepted standard of 14 per 100 ml; there were sometimes several thousand faecal coliforms per 100 ml. Even at sites within the lake itself, readings were often in the high hundreds or thousands. Mr Brooker did not carry out any systematic investigation of the cause of these high readings. Neither did he explore the relationship between rainfall events and faecal coliform readings, by deliberately taking samples after heavy rain. This was not because he was unaware of the link between rainfall and increased pollution. Mr Brooker was the author of a report submitted to the Development Committee of Council on 11 June 1991 in the name of the Chief Health and Building Surveyor, John Chadban. That report noted the United States standards for the quality of water in which oysters are grown and commented on graphs prepared by Mr Brooker showing total coliform and faecal coliform counts in the period September 1989 to October 1990. Mr Brooker wrote: 'From the graphs it can be seen that water quality for the majority of the year complies with the requirements where oysters are NOT [emphasis Mr Brooker's] required to be purified. The times when the water quality does not comply with the U.S. standards generally correspond with times of high rain fall. Fresh water inflow brings with it high bacterial contamination such as sewerage surcharge, urban run off, rural run off, septic tanks etc. Through identification of point sources the level of pollution can be lowered. [emphasis by trial Judge] This should have the beneficial affect [sic] of decreasing the period of contamination thus increasing times when oysters may be harvested without purification. In addition to reduction of bacterial contamination, the lake system would also benefit from a reduction in nutrient load as the process of reducing bacteria would also reduce nutrients. The relationship between high bacterial levels and fresh water can be further defined by salinity tests to determine the level of fresh water. A correlation between a specific level of salinity and a specific level of contamination would give the oyster industry a high degree of confidence in the water quality at the time of harvesting with the knowledge that purification is or is not required. A further advantage in determining a specific correlation between salinity and bacterial contamination is the time normally required for the lake water to achieve a satisfactory water quality. Given weather forecasting and salinity readings the harvesting of oysters could be programmed according to conditions.' Mr Brooker went on to note: 'Total Catchment Management systems are being adopted for may [sic: 'many'] river systems and one of the primary considerations of such is water quality. With the information that Council now possesses, a basis for water quality can be formed as a goal for management.' The report stated the future program: 'It is now proposed to:- 1. increase sampling during rain periods and over tidal variations for the development of salinity bacterial correlations, 2. of point source [sic] to be carried out to locate specific pollution sites.' The report concluded with a recommendation that the information, including the future program, be noted. Apparently the Council committee adopted that recommendation. None of the proposed action was taken." 164 In a memorandum to the Council's General Manager dated 19 April 1993, written by Mr Brooker in the name of Mr Chadban, Mr Brooker described the testing programs for Wallis Lake and Smiths Lake as "serving a vital purpose in assessing water quality". He pointed out, however, that the existing program measured only microbial quality and ignored "biological, physical and chemical parameters which are ecologically more important". The memorandum suggested the Council extend into these areas. But far from extending its testing program, a few months later it terminated it. Mr Brooker said this happened as a result of a discussion between himself and Mr Chadban. He said: "We discussed the staff and the resource problem and we came to a decision that for the time being that we'd recommence at a later date." In fact the program was not recommended prior to the events that gave rise to this proceeding. 165 The primary Judge recorded: "Mr Brooker said the cost of the testing program was only $2,000 per year. Much of the work was done by trainees; it occupied about four and a half days per month. The decision to abandon testing was taken because the latest trainee had just left and Mr Brooker felt he had insufficient time to do all the work himself." A non-statutory committee of local growers 166 Not long before termination of the Council's water testing program, a committee was established under the name "Wallis Lake Oyster Quality Assurance Committee". The members were elected at a meeting on 14 December 1992 chaired by the Shire President and attended by sixteen local oyster growers, two officers of the Department of Fisheries and some Council officers. This was subsequent to publication in April 1992 of the State Advisory Committee's document "New South Wales Oyster Quality Assurance Program" referred to earlier. Mr McOrrie of the Department of Fisheries explained to those present the concept of an "Oyster Quality Assurance Program". In a report to Council, Mr Chadban stated: "The objectives of the policy are:- a. To introduce a program which provides, at estuary level, long term quality assurances in respect of oysters offered for sale for public consumption via industry self-regulation. b. To facilitate an understanding of the oyster farming environment in each estuary so that existing problems can be rectified and future degradation of waterways avoided. It is intended therefore that growers, to a large degree, will control their own destiny by collecting data about their waterway, imposing harvesting restrictions during certain conditions, creating public awareness, undertaking sampling programmes and continually monitoring all sampling results. The responsibilities of the latter are quite onerous and if properly undertaken will guard against the 'pollution scare' that is too frequently levelled against oysters." 167 The Committee met on 22 February 1993. Seven people attended. They comprised four growers (including Mr Barclay), an officer of the Department of Fisheries and two Council officers, namely Mr Chadban and Richard Powell who was Council's Water and Sewerage Engineer. One of the growers, Robert Moran, chaired the meeting and was appointed "Area Co-ordinator". Mr Chadban was appointed Secretary. The Committee adopted the following Preliminary Policy: "Resolved on the motion of M. Verdich and W Snowdon that the following Preliminary Policy be adopted:- 1. That commencing in September/October, 1993, two oyster samples be taken from the four zones within the estuary, before depuration and after depuration, and that this continue on a monthly basis for the duration of the harvest season. 2. Harvesting shall not be permitted when water salinity levels are reduced to below [a stated level] in the harvest area. 3. Harvesting will not be permitted to resume until such times as water tests indicate a salinity level of at least [a stated level] AND that tests on individual oysters meets [sic] the required health standards." 168 The Committee also resolved that the Lake estuary be divided into four zones and that each of the Committee's grower members would be a zone monitor. The idea was that each zone monitor would be responsible for contacting growers in the zone whenever there was a question of stopping harvesting because of weather conditions, with a view to the making of a common decision. 169 A few days after the meeting, Mr Chadban issued a Media Release which attributed to Mr Moran the statement that the Lake's oyster farmers "have now taken the first step towards controlling their own destiny". Mr Moran was quoted as saying: "For too long farmers from Wallis Lake have been tarred with the same brush as less responsible growers from other areas. We aim to install stringent requirements which will guarantee our product anywhere and people will know that to eat a Wallis Lake oyster is the safest thing they can do." 170 Apparently the Committee continued to meet every month or two. The primary Judge said that judging by its minutes in evidence, its main business was arranging with Microtech Laboratories in Sydney for the projected oyster flesh testing and collecting a $50 levy from each local oyster lease holder. From time to time the Committee drew Council's attention to possible pollution points but the evidence does not reveal whether Council investigated the matters raised. Prior to the hepatitis A epidemic that gave rise to the present case, the Committee did not formulate a local QAP. It will be recalled that the Final Report of the Advisory Committee was dated February 1994; that the Fisheries Management Act 1994 commenced on 16 January 1995, that the regulation which provided the legislative basis for QAPs commenced on 1 May 1995; and that the rainfall event which seems to have caused the pollution which caused the outbreak occurred from 23 to 25 November 1996. Professor Brown's two reports of August 1994 171 Members of the Committee, but apparently not the Committee itself, were involved in a project conducted by Professor Kenneth Robin Brown on behalf of the Institute for Coastal Resource Management at the University of Technology, Sydney. Professor Brown was the Director of that Institute. The Institute received government funding to produce a mariculture study and oyster management plan for Wallis Lake. After consultation with relevant people, including local oyster growers and community groups, the Council, the Department of Fisheries and the Department of Conservation and Land Management ("CALM"), Professor Brown's team published two documents in August 1994: the Wallis Lake Mariculture Assessment and the Wallis Lake Oyster Management Plan. Copies of these documents were sent to the Minister for Fisheries, the Minister for Public Works, the Council and other persons, including numerous growers. 172 The documents were lengthy and his Honour set out what the second document stated about pollution. The following are the parts which his Honour highlighted: "Water pollution from sewage and in the case of Wallis Lake, probably agricultural runoff, poses environmental threats to oyster culture in the Lake. ………………………………………………………………………………… Pollution is allowed to continue and the risks to the oyster farms are increasing, ………………………………………………………………………………… … there are real dangers of effluent and stormwater contaminants entering the Lake. ………………………………………………………………………………… Small recreational boats in particular are using the Lake in increasing numbers. Not only do many dump raw effluent into the Lake as such small boats are too small to have on board retention tanks. Shore based 'environmentally friendly' toilets could be installed by Council at strategic areas. An education campaign is required to effect hygienic practice. ………………………………………………………………………………… Because clean water is essential for the industry to exist and prosper, the quality of water conditions of the Lake should be monitored on a regular basis and the results of these tests should be available to the public." 173 Professor Brown gave evidence. His written evidence concluded with the following: "6.1 The preponderance of international experience demonstrates that the central components of successful quality assurance for oyster production are:- a. Careful and close scrutiny of the environment in which oysters are to be cultivated - the more pristine the environment the better; b. In urbanised areas of existing oyster production, comprehensive pollution surveys should be undertaken designed to identify point sources of pollution. c. Once identified, point sources must be regularly monitored. Such a program of monitoring should include as a minimum regular faecal coliform (e coli) testing as a measure of faecal contamination. In Wallis Lake the peak harvesting period coincides with the busiest time of year for the district in terms of tourism. This places additional pressures on sewerage facilities and septic tank systems. It is particularly important that testing of suspected sources is intensified during this period. d. Management plans for oyster growing areas should be designed and implemented. Central to management of oyster cultivation is testing the quality of water of the oyster growing area prior to harvest. Testing must be statistically valid and take account of the specific characteristics of the catchment (eg tidal movements) and the methodology of harvest. For example oysters are generally harvested at low tide. Tests conducted at high tide will give a better pre-harvest indication of any faecal contamination. e. Suspension of harvesting following defined events (such as rain) is also central to reducing the risk of contaminated oysters being harvested. The duration of any withholding periods should be reliant on testing outcomes following events. 6.2 The quality assurance regime in place at Wallis Lake in the summer of 1996-97 compares unfavourably with the practice of other oyster growing regions in Australia and internationally. This is because: a. at Wallis Lake no detailed pollution surveys had been undertaken to identify likely sources of pollution; b. no apparent monitoring of water quality was occurring at pollution point sources or in oyster leases; c. no effective system was in place to withhold harvesting following events such as rain and/or where elevated faecal coliforms levels were indicated. 6.3 As a result, oysters which were cultivated in waters contaminated with HAV were able to be harvested, depurated and sold to consumers without the presence of HAV being detected. 6.4 Had a comprehensive quality assurance regime, of the kind described above, been in place at the time, it is my opinion that consumers represented in the current proceedings would not have contracted HAV from Wallis Lake oysters. This is because: a. A detailed pollution survey would have identified the likely sources of pollution, such as caravan parks, the unsewered township of Nabiac, the risk of pollution from recreational boaters and campers, and storm water drains carrying urban run off into the lake. b. These point sources could then be routinely monitored by regular testing for faecal coliforms; c. The water quality in the oyster lease areas would also have been the subject of rigorous testing. d. In my opinion, elevated levels of faecal coliforms would have been detected during this period at pollution point sources and in the oyster lease areas. Faecal contamination sufficient to contaminate the oysters cultivated from the Lake with HAV would have been reflected in detectable elevations in faecal coliform levels. e. Elevated levels of faecal coliforms at point sources and in oyster leases would have triggered: i. further testing (including viral testing) which would have been likely to confirm the presence of pathogens including HAV; and ii. a withholding period from harvesting and sale; f. Furthermore, the period was marked by heavy rainfall. The rainfall in November 1996 of itself would have caused the harvesting of oysters to be withheld for a period. 2. In any event, contaminated oysters would not have been available for consumption by those persons who subsequently contracted HAV." (emphasis by primary Judge) 174 The primary Judge recorded that Professor Brown's views expressed in this passage were not challenged in cross-examination or contradicted by other experts. His Honour also referred to other evidence of recognition of the importance of maintaining the water quality of the Lake. 175 Professor Brown agreed that for a Wallis Lake oyster farmer, it was not just good practice but an absolute necessity that, after rainfall, harvesting should cease until after adequate testing. The Wallis Lake Estuary Management Committee 176 In August 1994, Council decided to establish a "Wallis Lake Estuary Management Committee". The Committee was active by March 1995 at the latest. It included representatives of the Council, the Department of Public Works ("PWD"), CALM, the Department of Fisheries, the Environment Protection Authority ("EPA"), the Waterways Authority, the National Parks and Wildlife Service, a person representing recreational boaters, Mr Barclay representing the oyster industry and two community representatives appointed by Council. On 8 June 1995, the General Manager of the Council wrote to CALM seeking a grant of $10,000 for studies of Wallis Lake and Smiths Lake. In the letter he described the function of the Committee and of an apparently similar committee established in respect of Smiths Lake, in these terms: "The Committees will oversee the preparation of a Management Plan for each lake, the aim of which is to sustain a healthy, productive and attractive estuary where balanced and co-ordinated management of resources ensures sustainability of diverse natural systems whilst meeting community needs. The Committees, which have representation from Council, State Government agencies and the local community, are being guided by the Estuary Management Manual in formulating the plans. In accordance with the Management Process it is now ready to proceed with step 2, the preparation of data Compilation studies for each lake." 177 At a meeting held on 26 July 1995, the Committee resolved that preparation of the Management Plan be given priority and that the Plan should be one which: ". analyses the existing condition of the catchment; . identifies issues impacting on the long term (10 year plus) Ecological Sustainability of the catchment; . nominates a range of options for the on-going management of the asset; . recommends a preferred strategy in the form of a plan of action." His Honour said: "The Plan was intended to be developed in three phases, the time for each of which was stated in weeks. The total estimate was 51 weeks. In December 1995, the Minister for Land and Water Conservation acceded to Council's request for a $10,000 grant towards the cost of the plan. Notwithstanding this and later additional assistance from CALM, when this case was heard, almost three years later, the plan was still incomplete." 178 On the appeal, it was submitted that in this passage his Honour mis-stated the effect of the relevant document by arriving at the total of fifty-one weeks by erroneously adding up various numbers of weeks which were not separate components of an addition.

Part 5 - Contamination of the Lake 179 The learned primary Judge reviewed, over twenty-three pages, the evidence touching faecal contamination of Wallis Lake under ten headings: (i) The problem at Nabiac, a village of about 600 people within the Shire of Great Lakes, northwest of Forster-Tuncurry and about 17.5 kms away which lacked a reticulated sewerage system and relied substantially on septic tanks. (ii) Flow from Nabiac to the Lake, that is, whether septic effluent discharged into the Wallamba River at Nabiac would reach the Lake during the time the viruses in the effluent remained viable. (iii) Cooloongolook, a village which lies beside the Cooloongolook River which flows into the Lake, is a little closer by river than Nabiac to the oyster areas in the Lake, and discharged septic effluent at one location at least, into the Cooloongolook River. (iv) Shalimar Caravan Park, or, more fully, the Shalimar Ski and Caravan Park, a caravan park situated on a bank of the Wallamba River containing substantial mobile homes and numerous caravans catering for permanent residents and casual holiday makers, which relied on a septic sewerage system. (v) Wallamba Caravan Park, a caravan park near the Shalimar Caravan Park on the Wallamba River which also relied on a septic sewerage system. (vi) The Little Street public toilet, a public toilet in Little Street Forster some 800 metres north of the Barclay companies' premises on the shore of the Lake. (vii) Islands in the Lake, which were used by overnight campers and some of which had makeshift "pit toilets". (viii) Watercraft, many of which were not fitted with "holding tanks or other suitable treatment devices" and most of which "were fitted with 'standard' direct disposal units". (ix) Stormwater drains, some of which in Forster and Tuncurry carried high levels of faecal coliforms to the Lake, especially after heavy rain. (x) Other possible sources, notably seepage from Council's sullage depots and escape of sullage into the Lake during its transportation from the Forster sewerage treatment depot to Tuncurry sewerage treatment depot.

Part 6 - Council's position Council's statutory powers 180 The learned primary Judge discussed the legislation in force at the time relevant to the Council, its financial situation and its reaction to the septic tank problem. The Council exercised powers under the Local Government Act 1993 (NSW), s 7 of which specified the Act's purposes, including: "(a) to provide the legal framework for an effective, efficient, environmentally responsible and open system of local government in New South Wales, … (d) to give councils: … a role in the management, improvement and development of the resources of their areas; (e) to require councils, councillors and council employees to have regard to the principles of ecologically sustainable development in carrying out their responsibilities". 181 Section 68 required the Council's approval before a person carried out an activity specified in the Table to that section. The Table included "Carry out sewerage work" and "Install, construct or alter a waste treatment device or a human waste storage facility or a drain connected to any such device or facility". The term "sewerage work" was defined in the Dictionary to the Act in wide terms as follows: "sewerage work means the construction, alteration, extension, disconnection, removal, ventilation, flushing or cleansing of any sewerage service pipes or fittings or fixtures communicating or intended to communicate, directly or indirectly, with: (a) a septic tank, an effluent or a sullage disposal system, or (b) any sewer of a council, and includes work of sanitary plumbing and work of house drainage." 182 Senior counsel for the Council submits that the prohibition in s 68 of certain activities without Council approval is irrelevant to any question of his client's liability. 183 Clause 45 of the Local Government (Water, Sewerage and Drainage) Regulation 1993(NSW) provided that in determining an application under s 68 of the Act for, inter alia, "carrying out sewerage work", a council was required to have regard to "the protection and promotion of public health", "the protection of the environment" and other matters specified in the clause. 184 By way of summary his Honour stated that s 124 of the Local Government Act 1993 empowered a council (amongst other things) to order an owner or occupier of premises: "(i) to take action to comply with relevant standards in relation to a 'sewerage system on premises'; (ii) to do or refrain from doing specified things 'to prevent environmental damage' or further environmental damage, where damage to the physical environment has been caused, or is likely to be caused, by drainage works;

(iii) to cease conducting an activity that is a threat to public health; and (iv) not to permit the use of a human waste storage facility on premises after a specified date." 185 I refer to s 124 in more detail later. Section 125 empowered a council to abate a public nuisance or to order a person responsible for a public nuisance to abate it. 186 Part 2 (ss 191-203) of Chapter 8 (ss 186-203) of the Act gave councils extensive powers of entry, inspection and investigation, including powers of entry, inspection and investigation on private land: see ss 192 and 197. Section 197 provided: "If a person authorised by a council enters any premises under this Part for the purpose of making an inspection and as a result of that inspection, under a power conferred on the council, the council requires any work to be carried out on or in the premises, the council may recover the reasonable costs of the entry and inspection from the owner or occupier of the premises." 187 His Honour also referred to s 29 of the Clean Waters Act 1970 (NSW) which empowered an "authorised officer" to enter any premises for the purpose of investigating discharges of wastes or pollutants into any waters. His Honour noted that Mr Brooker, at least, was such an authorised officer. Section 27 of the Clean Waters Act read as follows: "27(1) Where any waters, … are polluted by any person, any statutory authority or local authority may and shall, if directed to do so by the Authority [the EPA], take such action as is necessary to remove, disperse, destroy or mitigate the pollution and may recover all costs and expenses incurred by it in connection with the removal, dispersal, destruction or mitigation of the pollution from that person. (2) Any such costs and expenses may be recovered as a debt in a court of competent jurisdiction." Evidence was given about Council's financial situation but nothing turned on the detail of this evidence in the appeal. 188 Council officers were aware of the health significance of pollution from septic tanks. In September 1996, some four to five months before the outbreak, Council's State of the Environment Report for 1995-96 included passages on the topic of effluent disposal and the danger of seepage from septic systems into the waterways. The following passage appeared: "The evidence of failure of on-site systems is plentiful. The reasons underlying these failures relate more to the planning, operation and maintenance of systems rather than inherent design faults in the technology. If we are to protect the quality of water in our catchments, the basis upon which systems are selected, installed operated and maintained needs to be altered. Local authorities in many instances need to take a more active role and require support at the State level with the most current information on on-site wastewater management. …" (emphasis by primary Judge) Mr Brooker's recommendations to Mr Braybrooke dated 9 May 1996 189 The primary Judge observed that, notwithstanding this, Council officers decided to give up investigating complaints about septic tanks. On 9 May 1996, Mr Brooker sent a memorandum to his immediate superior, Adrian Braybrooke, which included the following: "Over the past months I have received a number of septic tank complaints which have remained outstanding. The reason these complaints have not been dealt with is that they cannot be effectively resolved without support and direction from Council. The difficulties with septic tank installations is that any rectification or constant maintenance, such as pumpouts, requires considerable financial resources and these installations tend to be in areas where occupants direct limited financial resources to other areas that they consider to be more appropriate. Another major problem is that the numbers of complaints are relatively small compared to the septic tank installations which are not operating in accordance with the environmental public health requirements and to focus in on those few areas of complaint appears to be discriminatory as many neighbouring properties have similar systems which do not operate satisfactorily. I recommend that no action be taken at this point and that complainants be advised of such as Council will, hopefully in the near future, be receiving a report from the Planning Services Division, with my comment, on the difficulties associated with septic tanks. I hope that this report receives favourable consideration from Council, which may permit the development of policies and community protocol so as to address the septic tank effluent problems as a whole rather than on an individual basis which is currently the practice. RECOMMENDATION 1. That the complainants be advised that a report is being presented to Council concerning septic tank disposal systems. 2. That these complaints be held pending the report to Council." (emphasis by primary Judge) 190 On 17 May 1996 Mr Braybrooke endorsed the memorandum: "Agreed. Please formally notify Mgr Bld Services that you are awaiting results of his report to Council. Careful wording of advice to complainants, we are interested in finding solutions. Schedule a review of the situation for 12 weeks time, let's look at the opportunities again then." (emphasis by primary Judge) 191 The foreshadowed "review of the situation" did not occur. 192 In cross-examination,Mr Brooker said that after he read Mr Braybrooke's comments, he realised that a policy of non-response "would be a ridiculous position to take and continued on dealing with complaints", although he did not inform Mr Braybrooke, at least in writing, of his change of mind and practice. He agreed, however, that he was unaware of any notice about defective septic tanks being issued by the Council to any property owner between that time and the hepatitis A epidemic in early 1997. He said: "We negotiate with owners rather than issue notices". But there was no evidence before his Honour of negotiation with any owner either. Mr Braybrooke did not testify. His Honour recorded that he did not believe Mr Brooker had changed his position at all from that expressed in his memorandum. Mr Tuxworth's report of 21 May 1996 193 His Honour noted that in stating that the review foreshadowed in Mr Brooker's memo of 9 May 1996 did not occur, he did not overlook a report dated 21 May 1996 twelve days later, prepared by Tony Tuxworth, Council's Manager, Building Assessment, with contributions by Mr Powell (a sewerage expert) and Mr Brooker, which addressed "a number of issues relating to the approval, operation and management of on-site effluent disposal systems within the Council area". The report noted that "on-site waste water management systems often fail[ed] to meet environmental and health protection standards which [would] have a detrimental impact on … waterways and surrounding environment and health of the community". Particular reference was made to "the spread of disease by bacteria, viruses, parasites and other organisms in the wastewater". Mr Tuxworth's report recorded that it was "not uncommon for premises with pump-out septic tank systems to divert grey water so that it does not discharge to the septic tank". He made recommendations directed to improving the position and Mr Powell commented in writing that he agreed with the thrust of the report. His comment included these passages: " … in the smaller villages and rural areas, very little control is exercised on liquid waste disposal. Many of the systems just do not work and localised pollution of the environment results. ……………………………………………………………………………………………. My own experience with both septic and aerated systems are that they can be a gross pollutant unless very carefully managed and maintained. This work can be undertaken at full cost recovery." 194 Mr Brooker's note on the report recorded his agreement that "the problems resulting from the defective septic systems demand action" and that Mr Tuxworth's recommendations had considerable merit. 195 Council's Director of Planning Services added a note recommending "the information be noted and actions resulting from the briefing be incorporated into a further report to Council" and Council resolved "that the Director bring back a more specific report". Mr Brooker's report of 8 October 1996 196 On 8 October 1996, Mr Brooker reported to the Works and Services Committee of Council relating to "the health and environmental problems associated with inappropriate and failing on-site waste water systems". The report contained a Table setting out the results of random sampling of street stormwater at ten non-sewered locations taken on 13 August 1996. The Table set out, in relation to each sample, figures for electrical conductivity, phosphate level and faecal coliform level. Most of the locations lay outside the Wallis Lake Catchment area but one was at Cooloongolook, the sample from which showed a faecal coliform reading of 3,780,000 cfu/100ml which Mr Brooker described as "grossly polluted with septic tank effluent", and of which he said "it indicated that the effluent is likely to be piped directly to thestreet gutter". 197 Mr Brooker's report of 8 October 1996 mentioned the formation of an "Effluent Group" comprising various Council officers which had the goal of ensuring that there were effective systems for the collection, treatment and disposal of sewage within the Shire of Great Lakes in order to "protect the environment and the health of the public". His report referred to other Australian studies that had "detailed public health risks resulting from defective effluent disposal systems". He mentioned the presence of viruses in sewerage including poliomyelitis, meningitis, pneumonia, acute gastroenteritis and hepatitis. Five of the ten samples taken on 13 August 1996 yielded faecal coliform levels above 10,000 cfu/100ml. Mr Brooker commented: "the disturbing aspect of these samples is that they were collected from street gutters which are within the public environment exposing the public to risk of disease". He warned Council of its potential legal liability and observed that "Council has no money allocated to this area and no effective policies to protect public health through ensuring appropriate installation of systems and appropriate maintenance". But neither he nor his supervisor, the Director of Community and Recreation Services, made any recommendation for action. 198 On the recommendation of that Director, Council merely resolved that it nominate representatives to the Effluent Group and that the issues of effluent treatment and disposal from premises with on-site waste water systems be addressed by the development of policies and systems in the future, and that the community be involved in that process. The primary Judge recorded that so far as the evidence revealed, no action was taken to meet the problems identified by Mr Brooker in his report of 8 October 1996 prior to the hepatitis A outbreak which occurred three months later. In particular, no inspection régime was put in place until after the epidemic became known. Mr Brooker agreed in cross-examination that discussion in the Effluent Group never "actually resulted in anybody going out into the field and doing anything", although he was aware that s 27 of the Clean Waters Act authorised a local government authority to enter premises and rectify problems causing any run-off of faecal matter that might enter the waterway and to recover the cost from the proprietor.

Part 7 - The 1996-1997 oyster season 199 Under normal conditions, the oyster harvesting season in the Lake extends from mid-October until April. Barclay Oysters started harvesting at the usual time. In the period 22-25 November 1996 there was heavy rainfall. At Forster the readings for the twenty-four hours to 9.00 am on the second of the following stated days were as follows: 21-22 November 4.00mm; 22-23 November 66.6mm; 23-24 November 39.8mm; 24-25 November 19.00mm. 200 Mr Barclay agreed that on these readings it would have been wrong for an oyster grower to harvest on 23 November and that it would be a risk to public health to do so. He maintained that Barclay Oysters did not do so, notwithstanding entries in its records indicating a harvesting of ninety-two bags of oysters on 23 November. When pressed, Mr Barclay asked that the question be referred to his company's Office Manager, Richard Ellery, who was to follow him in the witness box. Mr Ellery was responsible for quality assurance management but did not have this task in the 1996-97 season. At that time it was the responsibility of Gary Atkinson, the foreman. Mr Ellery did not remember 23 November but surmised that any harvesting would have taken place only after the making of a salinity test and a visual inspection of the water. He said: "… if it was still raining on the morning of the 23rd we would have started work at 5 o'clock in the morning, we would have removed trays till 9 o'clock [morning tea time] and that would have been it." 201 Although still employed by Barclay Oysters at the time of the trial, Mr Atkinson was not called to give evidence. 202 Whatever the position in relation to 23 November, it seems there was no further harvesting between that day and 27 November, some two days after the rain stopped. 203 Oysters taken from two Barclay leases and received by the laboratory on 26 November tested negative for E. coli. The sample consisted of about one dozen randomly selected oysters. A similar result occurred in relation to samples from two leases submitted on 3 December, samples from three leases submitted on 17 December, and samples from two leases submitted on 9 January 1997. During that time Barclay Oysters continued to harvest and to supply oysters, after depuration, to distributors for resupply to the public. 204 On 21 December 1996, Thomas Ryan, Mr Ryan's father, bought six dozen oysters from Barclay Distributors. He took them to his holiday home at Green Point and, subsequently, to his home in Sydney. The oysters were consumed on Christmas Day by members of his family, including Mr Ryan. 205 On 31 December, David Ryan, Mr Ryan's brother, bought a further ten dozen oysters from Barclay Distributors. He took them to Sydney the following day and gave about two dozen to Mr Ryan who consumed them a few nights later. 206 On 30 January 1997, Mr Ryan began to feel unwell, although he went to work as usual. The following day he felt more ill. On that day he attended hospital for the birth of his fourth child and felt faint. On 1 February 1997 he saw his general practitioner who arranged blood and urine tests. They disclosed that Mr Ryan was suffering from hepatitis A. 207 According to a subsequent report by the Department of Health, hepatitis A notifications increased in the week commencing 20 January and peaked on 3 February. 208 By about 10 February, the Department of Health established the probability of a connection between the hepatitis A epidemic and Wallis Lake oysters. His Honour noted that the existence of the causal link was not challenged before him and that all parties conducted their cases on the basis that it was correct. 209 Mr Barclay first became aware of the hepatitis A problem on about 11 February when his premises were visited by Mr Bird, an officer of the Tamworth Area Health Service, and Mr Brooker. He immediately recalled oysters from all his customers. On 14 February 1997 local growers met at Mr Barclay's premises and decided to cease harvesting. On 14 February 1997, Dr Kerry Jackson, the Co-ordinator of the State QAP, issued a notice to "Wallis Lake Claim A Aquaculture Permit Holders." It stated as follows: "Due to recent events in the Wallis Lake area the Wallis Lake Quality Assurance Program in consultation with the New South Wales Shellfish Quality Assurance Program (NSW SQAP) has undertaken that all growers will immediately cease the harvest of any shellfish from leases located within the confines of Wallis Lake. The cessation of harvesting will remain in force pending the results of further investigations by NSW Health and local industry. The harvest ban will be monitored by the local Quality Assurance Committee, NSW SQAP State Coordinator, NSW Health and NSW Fisheries." 210 Barclay Oysters did not resume harvesting until the commencement of the 1997-98 season. 211 Testing of sample oysters was carried out. The results showed that faecal contamination was widely dispersed in the estuary. 212 The Council organised a sanitary survey. There was a five-day intensive survey in which fourteen people participated. They were supplied by public agencies, chiefly the Council and the EPA. The sanitary survey was followed by inspections over the succeeding months of 319 residences, sixty-one boatsheds and oyster depuration sheds, thirty-one watercraft, and the Lake's islands and foreshore reserves. According to a report by the EPA, of the 319 residences, 154 required follow-up action and seven of these were classified as "clearly discharging to waterways", sixteen were rated as a "high risk" and forty-four were rated as "moderate risk". The EPA report also revealed that in the wake of the hepatitis A epidemic, Council had recommenced its water monitoring program and instituted a régime of compulsory pump-out of septic tanks in the Lake catchment area, including at Nabiac. 213 On 19 March 1997, the Minister for Fisheries approved the Wallis Lake Shellfish QAP as a local program under cl 12E(3) of the Fisheries Management (Aquaculture) Regulation. However, there was still no New South Wales Shellfish QAP to lay down general principles to be applied in local programs. Notwithstanding this, the Wallis Lake program dealt with such matters as the education of oyster farmers, "environmental survey of potential sources of pollution", monitoring for pollution (including water testing, pre-purification oyster meat testing and post-purification oyster meat testing), physical parameters for harvesting and purifying, a pollution early warning system, "collaboration with other stakeholders" (the Council, Health Department and Fisheries Department) and administrative arrangements, including rules concerning the closure and re-opening of harvesting after rain or a pollution incident. The local program noted that there had now been mapped "all known sources of pollution". Routine water testing was to be conducted on a weekly basis at sites designated by Council in association with oyster growers. The pre-purification oyster meat testing requirement was for a weekly test of five samples from each of the two zones into which the program divided the Lake; that is, ten samples in all. The post-purification tests were to be arranged by individual growers, each purification plant with a capacity of twenty-five bags or more being required to submit a sample from each batch of oysters purified, and smaller plants less frequently. 214 On 2 April 1997, Graham Clarke of the EPA reported to George Dodds (presumably also of the EPA) regarding a meeting of the Wallis Lake Working Group on 26 March 1997. The report included the following: "Council presented additional water quality monitoring results, in summary low levels of FC being detected in the lake/river with some 'spikes' recorded at random locations after rainfall. Viral sampling of sediments indicate hot spots around Nabiac and in the Wallamba River in the stretch where the caravan parks are located. Council suggested that FC results are difficult to interpret and future monitoring should focus on using one viral indicator. Anxious to scale down their monitoring and to be replaced by the 'program' under consideration by the task force, QAP and industry requested daily sampling to continue over Easter period. Council to sample water quality on one or two days over the period." (emphasis by primary Judge) 215 Immediately after the first reports suggesting a link between hepatitis A cases and the Lake, the New South Wales Department of Health formed two investigatory teams: an epidemiological team and a field team. The latter was led by Mr Bird and Greg Bell, Senior Environmental Health Officer in the New England Public Health Unit of the Department. Messrs Bird and Bell wrote a report, a copy of which they supplied to Council on 28 February 1997. Messrs Bird and Bell stated in their report: "A number of likely sewage sources discharging into the Wallamba River up to, including and climaxing in November 1996 resulted in sufficient HAV in sediments, water and oysters caused by a doubling of population which overloaded sewage disposal systems to become an infective dose. High rainfall in November and a ski speed boat competition over a week in November on the Wallamba River flushed sediments suspending high levels of HAV in the water column further polluting oysters and severely polluting the Wallamba River. Wallamba River out going tides flowed over oyster areas around Wallis Island on its way to the ocean. There was ineffective QAP monitoring oyster areas, no water monitoring program by Council of likely pollution sources and a number of purification plants were not operated properly. Peak harvesting of millions of Wallis Lake oysters occurred in the December/January holiday period providing increased numbers of oysters for public consumption." (emphasis by primary Judge) Although the views expressed in this passage were formed at a relatively early stage, there is nothing to suggest that Mr Bird or Mr Bell ever departed from them. Neither was called to give evidence supporting a different view. 216 Apparently the views of Messrs Bird and Bell were shared by other members of the Wallis Lake Oyster Crisis Strategic Working Party on which the Council was represented. 217 The opinion that there were multiple sources of the infection was supported by expert evidence led before the primary Judge. For example, Mr Murphy said in his statement: "For the level of virus in the lake to be high enough to contaminate some 260 people it is highly likely that the source of contamination would have been more than one infected person. This is because an extremely large number of virus particles must have been in the lake. The more infected people who are contributing to the source of contamination, the greater the level of viral particles in the water. It would be unlikely that one person would excrete enough virus particles to cause such widespread contamination. It is more likely than not that the HAV contamination came from the community sewerage facilities in the area. Coincident with such a significant amount of virus particles entering the estuary, it is very likely that there would have been markedly elevated levels of faecal coliforms."(emphasis by primary Judge) In oral evidence Mr Murphy explained that his expression "community sewerage facilities in the area" was intended to include septic tanks in caravan parks and private residences. He agreed that it was not feasible to eliminate the possibility that an infected casual polluter contributed to the problem, but emphasised that, as infected oysters came from a number of places, one polluter could not have been the sole cause of the infection. Professor King supported Mr Murphy's opinion from a hydrological point of view. 218 His Honour recorded that none of the experts challenged the "multiple source theory" and that by the end of the hearing it had become almost common ground. Nor has it been in issue on the appeal. 219 In an important passage, his Honour concluded on this issue as follows: "Although it is not possible to say the HAV contamination of the lake came from any particular source, in common with the experts I conclude it emanated from many sources. For multiple human faecal contamination to lead to multiple HAV contamination, there would need to be more than one infected person in the area at a relevant time. However, given the population of the district, I see no reason to reject that possibility. Again in company with the experts, I believe the contamination probably stemmed from land-based pollution sources. One or more boat people may have contributed to the problem, but the extent and distribution of the HAV contamination tells against this being its primary source." 220 His Honour rejected a challenge made by the Council to the assumption made by most of the expert witnesses that the HAV outbreak was associated with the November 1996 rain. Again, this has not been an issue on the appeal and I need not discuss the detail of Council's submission or his Honour's reasons for rejecting it. However, his conclusion on the matter is important background: "It is obviously not possible to be precise about the period of consumption of contaminated oysters; still less their dates of harvesting. However, it seems unlikely the contaminated oysters were harvested before the November rain. They could have been harvested at any time after the resumption of harvesting on about 27 November. I do not think it is correct to say the illness pattern is inconsistent with there being a causal relationship between the HAV outbreak and the November rain. On the contrary, it seems to me highly likely that the rain brought the HAV contamination into the lake. I note this view accords with that expressed by Council's hydrological expert, Mr Hurrell. He agreed with Mr Alton that 'human faecal material was/is impacting on Wallis Lake in sporadic high levels, with multiple sources, triggered during rainfall conditions'".

REVIEW OF AUTHORITIES RELEVANT TO THE LIABILITY OF THE COUNCIL AND THE STATE IN NEGLIGENCE 221 The learned trial Judge found that the negligence of the Council and the State consisted in a failure to exercise their statutory powers. The questions raised are whether the Council and the State owed a duty of care to consumers of oysters harvested from the Lake, and, if so, whether they breached that duty by failing to exercise their statutory powers, and, if so, whether that breach caused Mr Ryan's illness. 222 Before I consider the individual appeals, I will outline in chronological sequence the leading Australian authorities relevant to the issue of a negligent failure of a public authority to exercise its statutory powers. Liability of the present kind is a comparatively recent development and the applicable legal principles are not yet clearly and firmly established. Major Australian Authorities 223 A convenient starting point is Sutherland Shire Council v Heyman (1985) 157 CLR 424 ("Heyman"). The respondents in that case purchased a house in 1975. In 1976 structural defects appeared. These were caused by the subsidence of inadequate footings. The municipal council had approved plans and issued a building permit in 1968. Its officers had carried out inspections when the house was under construction but there was no evidence that they had inspected the footings. When the respondents purchased, they did not obtain from the council a certificate that the building was a complying one. Nor did they enquire of the council. Nonetheless, they claimed that the council owed them a duty of care and was liable to them in damages on the basis that the structural defects had flowed from the council's negligent inspection. 224 A finding by the trial Judge that the council was not negligent in approving the plans and issuing the building permit was not challenged on appeal. But his Honour found that a council officer had inspected the site after the foundation trenches were open and before the foundations were laid and that the council was negligent in the manner of inspection. 225 It was a condition of the building approval that the council be notified when foundation trenches were open and before foundations were laid. If the trenches had been inspected it would have been obvious that they were, and the proposed footings would be, inadequate. Searches of council files reveal a record of only one inspection, by which time the frame of the house had been erected. The record of the inspection read "Frame OK". 226 The trial Judge inferred that the builder had given the required notice to the council and that its officer had inspected the open trenches. The Court of Appeal held the inference insupportable but thought that the council had been negligent on the occasion of the frame inspection in not then detecting the inadequacy of the footings. 227 All five members of the High Court agreed that the council was not liable. Gibbs CJ, with whom Wilson J agreed, was of that view because the evidence did not establish that the council officer had inspected the foundations at all, a discretionary matter rather than an obligatory one, or that it would have been negligent for him to inspect the frame without inspecting the foundations. 228 Mason, Brennan and Deane JJ thought the council not liable because, in the absence of inquiry of it by the respondents, they had not relied on its having inspected the building and satisfied itself that the building complied with the law, and it owed them no duty of care (Deane J thought the absence of reliance indicative of the absence of the necessary element of proximity). Their Honours referred to the fact that, although s 317A of the Local Government Act 1919 (NSW) provided for applications to be made to councils for, and the issue by them of, certificates that buildings complied with that Act and the Ordinances made under it, the respondents had made no such application. 229 Mason J thought that it was "reliance" on a public authority to perform a function that gave rise to a duty to exercise a statutory power. His Honour distinguished between "specific reliance" (or "specific dependence") and "general reliance" (or "general dependence"), and said (at 463-464): "In the case of a public authority, the foreseeability of the plaintiff's reasonable reliance is a sufficient basis for finding a duty of care, subject to such dispensations as may arise from the special character of a public authority exercising statutory functions, a matter to be discussed shortly. If this be accepted, as in my opinion it should be, there will be cases in which the plaintiff's reasonable reliance will arise out of a general dependence on an authority's performance of its function with due care, without the need for contributing conduct on the part of a defendant or action to his detriment on the part of a plaintiff. Reliance or dependence in this sense is in general the product of the grant (and exercise) of powers designed to prevent or minimise a risk of personal injury or disability, recognised by the legislature as being of such magnitude or complexity that individuals cannot, or may not, take adequate steps for their own protection. This situation generates on one side (the individual) a general expectation that the power will be exercised and on the other side (the authority) a realization that there is a general reliance or dependence on its exercise of a power: … . The control of air traffic, the safety inspection of aircraft and the fighting of a fire in a building by a fire authority … may well be examples of this type of function. Whether the inspection of motor vehicles for registration purposes could generate such a general reliance is a more complex question: … ." 230 The absence of evidence of reliance was also emphasised by Brennan J and Deane J. Brennan J said that the legislation did not impose on the council a duty to inspect the foundations and that the only positive act by the council, its approval of the plans and the issue of the building permit, did not give rise to a duty to inspect. Deane J referred to the absence of any contact between the respondents and the council before the purchase and other circumstances as indicating an absence of "proximity" between them. 231 Heyman is important for present purposes because in it the High Court recongised that a public authority might incur liability founded in common law principles governing tortious liability for negligence arising out of a failure to exercise a statutory power, the exercise of which would have prevented the plaintiff suffering loss from the conduct of others, provided always the public authority had come under a duty to exercise the power. No member of the Court suggested that there was a general duty to exercise the power of inspection prior to the laying of foundations in the case of every building permission issued by the council, notwithstanding the fact that it was foreseeable that inadequacy of foundations might lead to injury to the person, damage to property and commercial loss. It did not matter that Parliament could hardly have intended councils to ignore their function of enforcing the statutory prohibition against construction of buildings otherwise than in accordance with the conditions of building permits and, to that end, the exercise of their power of inspection, or that councils should be at liberty to opt for a policy of never performing that function, or, to that end, exercising those powers. Nor did it matter that at least one purpose of the giving of the function and power must have been protection of the person and property. Some additional consideration had to be present giving rise to a positive duty to exercise the power of inspection. 232 Heyman was soon referred to in McDonogh v Commonwealth of Australia (1985) 73 ALR 148 (FCA/FC). The plaintiff was injured when the truck he was driving overturned on a road on unalienated Crown land. The Commonwealth maintained the road. The way in which it was maintained created the appearance that it was level and firm but in fact its outer portion was inadequate to support the truck. By majority, a Full Court of this Court held that while generally a highway authority is not liable to road users arising out of the state of disrepair of a road, it can be liable if, by the appearance of things resulting from its positive conduct, it induces drivers to believe that it is actively ensuring that the road is adequate. The circumstances were classified as misfeasance rather than non-feasance and the misfeasance extended to include the consequences of action. 233 Heyman was considered in Parramatta City Council v Lutz (1988) 12 NSWLR 293 (CA) ("Lutz"). The plaintiff had repeatedly complained to the local municipal council about the partly burnt, dilapidated, unoccupied property next door to her house, which attracted the attention of children, vandals and vagrants. Other residents in the same street also complained to the council. The council advised the plaintiff that it had the matter in hand and would take action. Eventually it issued a demolition order under s 317B of the Local Government Act 1919 (NSW), but before that order was executed a fire commenced in the property and spread to and destroyed the plaintiff's house. 234 The trial Judge held the council liable in damages for negligent failure to exercise its power under s 317B to order the owner of a building that is "in such a dilapidated or unsightly condition as to be prejudicial to the property in or inhabitants of the neighbourhood" to demolish the building or to re-erect it or put it in a satisfactory state of repair and condition, and in default to execute the order itself. The condition of the existence of the power was the existence of an objective state of affairs and there was no issue but that the state of affairs existed here. Accordingly, the council's powers had become presently exercisable. If the council had demolished the building after expiry of the period of the notice as it was empowered to do, the fire would not have occurred. 235 The New South Wales Court of Appeal dismissed the council's appeal. Kirby P held that a duty of care arose from the "relationship of proximity" between the plaintiff and the council in the "special circumstances" of the communications between her and the council. Mahoney JA thought that the council had come under a duty of care arising from "advice" it had given the plaintiff that it "was undertaking action with reasonable expedition to protect her" and her reliance on that advice by refraining herself to take steps to abate the nuisance. McHugh JA distinguished between two causes of action pleaded by the plaintiff: an action based on negligent informing or advising of the kind recognised in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, and negligence in relation to the exercise of a statutory power. As to the former, unlike Mahoney JA, his Honour thought that the plaintiff had not proved that reliance on the council's statements had caused her loss. As to the latter, his Honour spoke of actual or "ceded control of a social situation as the touchstone of liability for public authorities", that is, as giving rise to a common law duty on the part of a public authority to exercise a power to prevent a third party causing loss to the plaintiff. His Honour acknowledged that this concept had not been mentioned in Heyman and might even be inconsistent with the decision in that case, since the council in that case had taken upon itself control of building in its area. His Honour explained that "the general reliance concept depends upon the existence of a statutory power while, under the concept of actual or ceded control, the existence of a statutory power goes more to breach than to duty" (at 330B). His Honour thought that the Court should adopt the concept of "general reliance" which Mason J had expounded in Heyman, a concept "not far removed from the concept of control", as the foundation of a duty in a public authority to take affirmative action. His Honour concluded that although the plaintiff had not relied to her detriment on the council's statements, her case came within the concept of general reliance. As will be noted below, the "doctrine of general reliance" was later to fall into disfavour in the High Court. 236 Pyrenees Shire Council v Day (1998) 192 CLR 300 ("Pyrenees") was much referred to in submissions. The case concerned adjoining premises at 70 and 72 Neill Street, Beaufort. Beaufort was in the Shire of Ripon at the time of the fire that gave rise to the case but it later became part of the Pyrenees Shire ("the Shire" - an expression that I use also to refer to the party). In 1988, No 70 was owned by Mr and Mrs Nakos and let to Mr and Mrs Tzavaras. On 9 August 1988 the Country Fire Authority ("CFA") was summoned to the premises after Mr Tzavaras' assistant became alarmed by what he thought was a fire in the chimney. The fire or smoke was quickly doused but the attending CFA officer saw that some mortar was missing from bricks in the back and bottom of the fireplace. He advised the assistant that the fireplace was unsafe to use. The CFA notified the Shire. On 11 August 1988 Mr Walschots, a building and scaffolding inspector of the Shire, carried out an inspection and saw certain defects. He pointed these out to Mr Tzavaras and told him not to use the fireplace unless it was first repaired. On 12 August 1988 Mr Walschots wrote a letter to "P Tsavaros & S Nakos" at the address of the premises, describing the problem and stating that it was imperative that the fireplaces (there were actually two, back to back) not be used under any circumstances unless they were first repaired. 237 The trial Judge found that Mr Tzavaras received this letter but did not inform Mr Nakos of it or of the previous oral warning that Mr Walschots had given him. 238 In early 1990, Mr and Mrs Stamatopoulos negotiated to buy the business carried on in No 70 and the lease of those premises. Mr Tzavaras did not tell them about the Shire's letter. In fact, when Mr Stamatopoulos asked whether the fireplace was in use, Mr Tzavaras simply replied that it was. A Stamatopoulos family company, Eskimo Amber Pty Ltd ("Eskimo"), took from Mr and Mrs Tzavaras an assignment of their tenancy. 239 In May 1990 there was a fire in No 70 which destroyed those premises and damaged No 72 owned by Mr and Mrs Day. 240 The fire gave rise to three actions against Mr and Mrs Tzavaras and the Shire. Mr and Mrs Nakos sued Mr and Mrs Tzavaras, their former tenants, for damages for negligence and the Shire for damages for negligence and breach of statutory duty. At trial they succeeded against Mr Tzavaras but failed against the Shire. 241 In the action by Eskimo and the Stamatopouloses the result was the same. 242 Mr and Mrs Day succeeded against both Mr and Mrs Tzavaras and the Shire; against the Shire in negligence but not for breach of statutory duty. The trial Judge apportioned liability: Mr Tzavaras two thirds and the Shire one third. 243 The Shire appealed to the Court of Appeal of the Supreme Court of Victoria from the judgment against it in favour of the Days. The Nakoses and Eskimo and the Stamatopouloses appealed to that Court against the dismissal of their claims against the Shire. The Court of Appeal dismissed all three appeals. By special leave, the Shire, Eskimo and the Stamatopouloses appealed to the High Court. 244 Subsection 695(1A) of the Local Government Act 1958 (Vic) was as follows: "For the purpose of preventing fires the owner or occupier of any land upon which is erected any chimney or fire-place which is constructed of inflammable material or which is not adequately protected so as to prevent the ignition of other adjacent material of an inflammable nature may by notice in writing be directed by the council of the municipality within the municipal district (24) of which such land is situated to alter the fire-place or chimney so as to make it safe for use as a fire-place or chimney, as the case may be." The Act made it an offence not to comply with a notice issued under subs 695(1A) and subs 694(1) provided that if a notice was not complied with the council might "carry out or cause to be carried out any works or take any other measures for the prevention of fires". Accordingly, the Shire's powers were ample to ensure that the defect in the fireplace was remedied and that until it was remedied, no fire would be lit in it. There was no issue but that the Shire's powers had become presently exercisable. 245 The members of the High Court did not adopt a common approach to the issue whether the Shire owed a duty of care. 246 Brennan CJ thought that legislative intention, not community expectations or control of the area of social conduct in question, was the basis of liability in damages for a failure by a public authority to exercise a statutory power. The Chief Justice (at [21]) quoted with approval, inter alia, the following passage from the speech of Lord Hoffmann in Stovin v Wise [1996] AC 923 (discussed later) at 953: "In summary, therefore, I think that the minimum preconditions for basing a duty of care upon the existence of a statutory power, if it can be done at all, are, first, that it would in the circumstances have been irrational not to have exercised the power, so that there was in effect a public law duty to act, and secondly, that there are exceptional grounds for holding that the policy of the statute requires compensation to be paid to persons who suffer loss because the power was not exercised." (my emphasis) 247 Accordingly, the Chief Justice placed the Shire's liability for non-feasance in statutory public law rather than in the general principles of private law that govern tortious liability. His Honour stated (at [24], [25]): "… a duty to exercise a power may arise from particular circumstances, and may be enforceable by a public law remedy. Where a purpose for which a power is conferred is the protection of the person or property of a class of individuals and the circumstances are such that the repository of the power is under a public law duty to exercise the power, the duty is, or in relevant respects is analogous to, a statutory duty imposed for the benefit of a class, breach of which gives rise to an action for damages by a member of the class who suffers loss in consequence of a failure to discharge the duty. The general principles of public law establish the existence of the statutory duty to exercise the power and the statute prescribes the class of individuals for whose benefit the power is to be exercised. Where the power is a power to control 'conduct or activities which may foreseeably give rise to a risk of harm to an individual' … and the power is conferred for the purpose of avoiding such a risk, the awarding of compensation for loss caused by a failure to exercise the power when there is a duty to do so is in accordance with the policy of the statute." 248 The Chief Justice thought that there would be no liability in damages where a power was intended to be exercised "for the benefit of the public generally and not for the protection of the person or property of members of a particular class". However, his Honour thought that consistently with public law principles the Shire was under a duty to Eskimo and Mr and Mrs Stamatopoulos as well as to Mr and Mrs Day. He said (at [28]): "In the present case, although there was no public expectation that the Council would exercise its powers to enforce compliance with the requirements set out in Mr Walschots' letter, nor was any reliance placed by the respective plaintiffs on the Council's doing so, the Council was under a public law duty to enforce compliance with the requirements in Mr Walschots' letter. The risk of non-compliance was extreme for lives and property in the neighbourhood of the defective chimney and there was no reason which could have justified the Council's failure to follow up the letter, even to the extent of prosecuting for any default. It is unnecessary to determine whether the Council would have been under a duty itself to rectify the defects in the fireplace if the owners and occupiers all failed or refused to do so. The likelihood is that no more would have been needed to be done than to ensure that the owners and occupiers knew of the danger and to ensure that they knew of the request to remedy the latent defect which Mr Walschots' inspection had revealed." (my emphasis) 249 Toohey J thought that the cases warranted, if they did not compel, a conclusion that the concept of general reliance was the criterion of proximity in cases where the duty to exercise a statutory power was said to arise and where the danger was not created or contributed to by the public authority. His Honour also thought that the distinction between "operational" and "policy" decisions "not particularly appropriate or helpful in determining the present appeals" (at [68]), and that in any event no policy considerations were said to have explained the Shire's inactivity. 250 The decisive part of his Honour's reasons is as follows (at [81] and [82]): " … The Shire had statutory power to deal with the danger constituted by the defective chimney. Through the exercise of that power it could have ensured that the danger was removed. It was a danger, not only to 70 Neill Street but also to adjoining buildings. Indeed, if a fire broke out, it was almost certain to extend beyond 70 Neill Street, having regard to the age and construction of the buildings. The danger was necessarily unknown to adjoining owners and occupiers. In any event, had they known, the remedies available to them were, as Brooking JA said …, 'slow and expensive'. In those circumstances it is but a short step to hold that there was a general reliance by neighbours, such as the Days, that the Shire would take steps to remove the danger of which the Shire was aware and which it had the power to remove. Because the Shire did nothing further after the letter of 12 August 1988, there was a breach of the duty of care which the Shire owed to Mr and Mrs Day. No issue of causation arose on the arguments presented to the Court. However, Eskimo Amber and Mr and Mrs Stamatopoulos were in a different position, one which, in my view, did not point to any general reliance on their part. The company was in occupation as lessee by reason of the assignment from Mr and Mrs Tzavaras. It is true that Eskimo Amber and the Stamatopoulos' were not in occupation on 9 August 1988. But the company had responsibilities as assignee which extended to the condition of the premises. And, in respect of the premises, the company stood in a particular contractual relationship to the assignors of the lease and to the lessors. It is true that the trial judge described the defect in the premises at No 70 as 'latent'. However, notice of the danger had been given by the Shire to the owners, at any rate to one of the owners, and to the original lessees, at any rate to one of them. In those circumstances it is not appropriate to speak of general reliance as extending indefinitely to someone in occupation under an assignment of the lease, let alone someone in occupation by reason of their association with the assignee. And this is so even if the Shire was aware of a new tenant coming into the premises." (my emphasis) 251 McHugh J rejected criticisms of the doctrine of general reliance that had been formulated by Mason J in Heyman and applied by McHugh J himself when a member of the New South Wales Court of Appeal in Lutz, as noted above. His Honour observed that · the doctrine applied only in limited situations "of such magnitude or complexity that individuals cannot, or may not, take adequate steps for their own protection" (at [107], quoting from Mason J in Heyman at 464); · it is required that the public authority know or ought to know that the plaintiff will suffer damage unless the authority takes care (at [108]); and · the fact that the public authority owes a common law duty of care because it is invested with a function or power does not necessarily mean that the total or partial failure to exercise that function or power constitutes a breach of that duty (at [109]). 252 Like Toohey J, his Honour thought that the Shire owed a duty of care under the general reliance doctrine only to Mr and Mrs Day. Mr and Mrs Nakos, the owners of No 70, had rights of inspection and entry and it was not reasonable for them to rely on the Shire to exercise its powers to protect them from defects in their own premises. For generally similar reasons, his Honour did not think that the Shire owed Mr and Mrs Stamatopoulos or Eskimo a duty of care: it was not reasonable for them, as the occupiers of No 70, to rely on the Shire to protect them from defects in the premises. 253 Gummow J thought the "general reliance" doctrine not sound on the basis that it was a legal fiction without a solid theoretical foundation. His Honour pointed out that, as Hill v Van Erp (1997) 188 CLR 159 illustrated, reliance is not always an essential ingredient in a negligence case, and (at [158]) that: "The primary significance of reliance is in cases of alleged negligent provision of advice or information where reliance aids the formulation of a duty of care and detrimental reliance enters into the question of causation of loss." Of course, Pyrenees was not a case of that kind. His Honour thought that the supposed doctrine of general reliance "assumes too general a significance for reliance in the law of negligence and then adds further complexity" (at [163]). He noted that as a result of the speech of Lord Hoffmann in Stovin v Wise [1996] AC 923 at 953-955, the doctrine was now discarded in English law. 254 Nonetheless, Gummow J thought that the Shire owed a duty of care. His Honour said (at [168]): "In May 1990, the situation occupied in relation to this litigation by the Shire as the arm of local government gave it a significant and special measure of control over the safety from fire of persons and property in Neill Street. Such a situation of control is indicative of a duty of care (…). The Shire had statutory powers, exercisable from time to time, to pursue the prevention of fire at No 70. This statutory enablement of the Shire 'facilitate[d] the existence of a common law duty of care' ( … ), but the touchstone of what I would hold to be its duty was the Shire's measure of control of the situation including its knowledge, not shared by Mr and Mrs Stamatopoulos or by the Days, that, if the situation were not remedied, the possibility of fire was great and damage to the whole row of shops might ensue ( … ). The Shire had a duty of care 'to safeguard others from a grave danger of serious harm', in circumstances where it was 'responsible for its continued existence and [was] aware of the likelihood of others coming into proximity of the danger and [had] the means of preventing it or of averting the danger or of bringing it to their knowledge' ( … )." (my emphasis) In relation to the extent of the Shire's duty, his Honour said (at [172]): " … [t]he question then is what, as the acceptable minimum, in discharge of its duty of care, should have been done by the Shire before the second fire, bearing in mind the character in which the Shire would have acted and the nature of its duty. At the very least, the Shire was obliged to monitor the failure of Mr Tzavaras to carry out the repairs referred to in the letter of 12 August 1988 and to alert the new occupiers of No 70 of the serious but latent danger constituted by the fireplace in the living room." 255 Gummow J observed that the Shire did not discharge that duty. His Honour also noted that it was not contended that the necessary element of causation was lacking. Rather, the Shire relied on certain "control mechanisms". One of these turned on the distinction between misfeasance and non-feasance and between omission to exercise a statutory power and failure to discharge a statutory duty. Another was the "policy/operations" classification of the activities of public authorities. His Honour thought that neither negated liability. 256 His Honour considered that the circumstances did not involve "pure non-feasance" but rather an omission in the course of positive conduct. He stated (at [177]): "A public authority which enters upon the exercise of statutory powers with respect to a particular subject matter may place itself in a relationship to others which imports a common law duty to take care which is to be discharged by the continuation or additional exercise of those powers. An absence of further exercise of the interconnected statutory powers may be difficult to separate from the exercise which has already occurred and that exercise may then be said to have been performed negligently…." Gummow J also said that the case was not within the "core area" of policy making that has been said to be immune from any liability in negligence. (His Honour described the "policy/operational classification" as "not useful in this area"). 257 The result was, according to Gummow J, that the Shire's appeal should be dismissed but that the appeal by Eskimo and Mr and Mrs Stamatopoulos should be allowed. 258 The fifth member of the Court, Kirby J, thought, following Caparo Industries Plc v Dickman [1990] 2 AC 605 (HL) ("Caparo") at 617-618 per Lord Bridge of Harwich, that the approach which should be adopted in deciding whether a legal duty of care existed was to be found in the answering of the following three questions: "1. Was it reasonably foreseeable to the alleged wrong-doer that particular conduct or an omission on its part would be likely to cause harm to the person who had suffered damage or a person in the same position? … 2. Does there exist between the alleged wrong-doer and such person a relationship characterised by the law as one of 'proximity' or 'neighbourhood'? … 3. If so, is it fair, just and reasonable that the law should impose a duty of a given scope upon the alleged wrong-doer for the benefit of such person? …" His Honour thought that all three questions should be answered affirmatively in favour of all plaintiffs. In answering the third question in that way, he referred to the facts that the statutory power addressed the special risk of fire which, by its nature, can imperil identifiable life and property; that the case was one not of pure omission but the taking of some steps incompetently; that the Shire should have known that most people at risk were vulnerable, because they were ignorant of the danger disclosed by Mr Walschot's inspection and were unlikely or unable to discover it themselves; and that while the promotion of individual choice and the efficient use of resources is a proper concern of public authorities, so is the adoption of good administration and procedures for the proper use of statutory powers. His Honour also noted these considerations which were said to suggest that it would not be "fair, just and reasonable" that the law should impose a duty on the Shire but I will not summarize them. Like Gummow J, Kirby J found the doctrine of general reliance to be an unnecessary legal fiction which may often be indicative of a duty of care but which was not a criterion of universal application. In the result, his Honour concluded that the Shire's appeal should be dismissed and the appeal by Eskimo and Mr and Mrs Stamatopoulos should be allowed. 259 There are difficulties in extracting a ratio decidendi from the judgments in Pyrenees. Three judges (Brennan CJ, Gummow J and Kirby J) rejected, while two Judges (Toohey J and McHugh J) applied, the doctrine or concept of "general reliance" as the criterion of the existence of a duty to exercise a statutory power. Brennan CJ located the criteria for the existence of a duty of care in public law principles rather than in the common law of negligence, and emphasised that the purpose of the statutory power must be the protection of an individual or class of individuals. The other four Judges treated the case as raising the question in what circumstances tort law principles imposed a duty of care on the Shire. Toohey J and McHugh J concluded that the Shire owed a duty of care to the neighbouring shop owners (the Days) but not to the assignee-tenants (Eskimo and the Stamatopouloses), based on the general reliance test formulated by Mason J in Heyman. Gummow J concluded in favour of the assignee-tenants as well as the neighbours on the basis of a test of a "significant and special measure of control over … safety" from the particular risk in question, coupled with knowledge of that particular risk on the part of the Shire and ignorance of it on the part of the parties at risk. Kirby J concluded similarly to Gummow J, but on the basis of cumulative tests of foreseeability, proximity and an overriding test of "fairness, justness and reasonableness". 260 In Romeo v Conservation Commission (NT)(1998) 192 CLR 431("Romeo")a young woman was seriously injured when she fell at night from the edge of a cliff onto a beach. The land was part of a nature reserve managed by the defendant Commission. The Commission did not own or occupy the reserve but it had statutory powers of management and control of it. The plaintiff failed before the trial Judge, the Court of Appeal of the Supreme Court of Northern Territory and the High Court of Australia. 261 I need not discuss the facts of the case. Brennan CJ distinguished between cases in which a public authority was said to be liable on the basis that it owned, possessed or occupied property, and those in which it was said to be liable on the basis of statutory powers of control or management on the other. His Honour's reasoning was consistent with the public law approach that he had espoused in Pyrenees. He said (at [17]): " … in my respectful opinion, when the sole basis of liability of a public authority is its statutory power of management and control of premises, its liability for injury suffered by a danger in the premises is not founded in the common law of negligence but in a breach of a statutory duty to exercise its power and to do so reasonably having regard to the purpose to be served by an exercise of the power." The Chief Justice adhered (at [18]) to the view which he had expressed in Pyrenees: "no duty to exercise a statutory power and to exercise it with care can be imposed by the common law on the repository of the power when the statute, operating in the particular circumstances, leaves the repository with a discretion whether to exercise it or not. If it were otherwise, the common law would impose on the repository a duty to exercise the power when the legislature had intended the repository to decide for itself whether and in what manner the power should be exercised. But a public authority charged with the management and control of premises on which the public may enter as of right is given those powers for the purpose, inter alia, of protecting the person of those who enter. As that is a purpose for which the powers of management and control are conferred, the repository is obliged to exercise them and to exercise them reasonably to fulfil that purpose unless there be some contrary statutory direction …. Some public law justification must exist before a court can intervene to compel the exercise of a discretionary statutory power by a repository which has failed or refused to exercise the power." 262 The Chief Justice applied the test which Dixon J had formulated in Aiken v Kingborough Corporation (1939) 62 CLR 179 at 210, specifically in respect of persons who come onto property as of common right, to take reasonable care to prevent injury arising from dangers that would not be apparent to them and would be avoided by their exercise of reasonable care. 263 In a short joint judgment, Toohey and Gummow JJ concluded that the Commission was under a general duty of care to take reasonable steps to prevent persons entering the reserve from suffering injury, but that the taking of steps of that kind did not extend to fencing off an area of natural beauty where the presence of a cliff was obvious. 264 In separate dissenting judgments, Gaudron and McHugh JJ thought that the Commission owed the plaintiff a duty of reasonable care and that it was in breach of that duty, although it might be that the amount of damages to be awarded should be reduced on account of the plaintiff's contributory negligence. 265 Kirby J thought that the claim fell to be determined by the application of the tests accepted by the High Court in Nagle v Rottnest Island Authority (1993) 177 CLR 423 which his Honour said (at [115]), involved the following questions: "1. Is a duty of care established? (The duty of care issue.) 2. If so, what is the measure or scope of that duty in the circumstances? (The scope of duty issue.) 3. Has it been proved that the defendant is in breach of the duty so defined? (The breach issue.) 4. If so, was the breach the cause of the plaintiff's damage? (The causation issue.) 5. (Where relevant.) Were the defaults alleged on the part of the public authority within the area of the authority's legitimate discretion on questions of policy and allocation of resources so that there was no duty of care owed to the plaintiff? Or was any suggested breach a matter left by law to the authority whose decision the courts would respect and uphold against the plaintiff's complaint? (The policy/operations issue.) 6. (Where relevant.) Has contributory negligence on the part of the plaintiff been proved and, if so, with what consequence? (The contributory negligence issue.)" 266 His Honour adhered to the "three-criteria test" of the existence of a duty of care which he had formulated in Pyrenees and which I set out earlier. He concluded that although the elements of foreseeability and proximity were satisfied, it was not "fair, just and reasonable" to impose on the Commission a duty of the scope asserted by the plaintiff. 267 Hayne J said that the Commission's statutory power to "occupy, use, manage, and control" the reserve gave rise to a duty of care in favour of members of the public who entered as of right analogous to that of an occupier of private land, and that it was the management of the land that provides the necessary relationship of proximity in such a case. This approach made it unnecessary for his Honour to address the question of the duty of public authorities to exercise other kinds of statutory power. 268 In my respectful opinion, Romeo provides limited guidance in the present case. The case is distinct from the present one in the following significant respects: · Unlike the present case, Romeo is not concerned with the issue of the exercise of statutory powers to prevent harm befalling the plaintiff by reason of the conduct of other persons; · Although the Commission did not own or occupy the reserve, it, and it alone, had statutory powers of management and control over it; · The plaintiff's injury was said to result from a dangerous aspect of premises; · There was a body of law defining the scope of the duty of care owed to persons entering upon land by common right. For these reasons, I do not find great assistance in a conclusion that the Commission owed the plaintiff a duty of care. 269 It remains to consider two decisions delivered by the High Court since the primary Judge delivered judgment in the present case. 270 Pyrenees was referred to by the High Court in Perre v Apand Pty Ltd (1999) 164 ALR 606 ("Perre"). In this case, the respondent, a major participant in the Australian potato industry, supplied diseased seed to the Sparnons who were potato growers in South Australia. The seed caused the Sparnons' potato crop to be infected with bacterial wilt. The appellants grew and processed potatoes within 20 km from the Sparnons' property. They ordinarily exported most of the potatoes grown each year to Western Australia. That state, however, prohibited the entry of potatoes which had been grown, harvested, cleaned or packed within 20 km of a place where bacteria had occurred in the previous five years. As a consequence of the outbreak of bacterial wilt on the Sparnons' property, the appellants were unable to export their own potatoes to Western Australia and suffered financial loss. The appellants' own property and potatoes were not affected by the bacterial wilt at all. 271 The appellants sued the respondent for damages for negligence. A Judge of this Court dismissed their claim on the basis that the necessary relationship of proximity did not exist between the appellant and the respondent seed supplier. A Full Court dismissed the appellants' appeal from that decision. By a majority of five to two, the High Court allowed the appeal. 272 While Perre did not concern an allegedly negligent failure by a public authority to exercise a statutory power causing physical injury, the judgments include general observations on the law of negligence, including references to Pyrenees. 273 Gleeson CJ rejected the proposition that, in Caparo, Lord Bridge had purported to lay down a three-stage test that would provide the answer in all cases to the question whether a duty of care was owed. The Chief Justice emphasised "vulnerability" as "a significant factor in establishing a duty of care" (at [10]). His Honour thought, for the reasons given by Gummow J, that the respondent had owed the appellants a duty of care. 274 Gaudron J formulated (at [42]) the applicable test that as follows: "where a person knows or ought to know that his or her acts or omissions may cause the loss or impairment of legal rights possessed, enjoyed or exercised by another, whether as an individual or as a member of a class, and that that latter person is in no position to protect his or her own interests, there is a relationship such that the law should impose a duty of care on the former to take reasonable steps to avoid a foreseeable risk of economic loss resulting from the loss or impairment of those rights." Her Honour observed that while the law is concerned "to avoid the imposition of liability 'in an indeterminate amount for an indeterminate time to an indeterminate class'" (Ultramares Corporation v Touche 174 NE 441 at 444 (1931) per Cardozo CJ), it must be kept in mind that "this is a policy consideration, not a rule of law", and, accordingly, "it is not necessarily fatal to the recognition of a duty of care that the duty is owed to a class whose members cannot be identified with complete accuracy" (at [32]). Her Honour thought it important, however, that the appellants were in fact members of a particular class - those who grew potatoes within the 20km zone and sold them into the Western Australia market. In the present case the duty relied on by Mr Ryan is one owed to "consumers of oysters". 275 For McHugh J, none of "proximity", the "impairment of precise legal rights" and the "three-stage Caparo test" was capable of being supported as a determinant of the existence of the duty. His Honour favoured identification of established categories of case in which a duty of care has already been recognised, followed by incremental or analogical development of the law based on them. His Honour thought that in claims to recover damages for economic loss, "vulnerability" was ordinarily a prerequisite to imposing a duty and that reliance and assumption of responsibility were merely indicators of vulnerability (at [125]). His Honour considered that in Pyrenees the Court had concluded that the Shire owed a duty of care, partly because of the Shire's control (and knowledge) and the plaintiffs' inability to protect themselves. His Honour proposed (at [133]) that the test for establishing whether a duty of care existed on the facts of the present case was as follows: 1. Was the loss suffered by the appellants reasonably foreseeable? 2. If yes, would the imposition of a duty of care impose indeterminate liability on the respondent? 3. If no, would the imposition of a duty of care impose an unreasonable burden on the autonomy of the respondent? 4. If no, were the appellants vulnerable to loss from the conduct of the respondent? 5. Did the respondent know that its conduct could cause harm to individuals such as the appellants? With regard to the second question, his Honour emphasised that the respondent need have knowledge only of an ascertainable class not a defined and small class. If the defendant knows or has the means of knowing who are the members of an ascertainable class liable to be affected by its conduct and the nature of the likely losses to them, its liability is not indeterminate even though the number of the members of the class may be large: "Where the person or tangible property of the plaintiff is likely to be harmed by the conduct of the defendant, the common law has usually treated knowledge or reasonable foresight of harm as enough to impose a duty of care on the defendant. Where a person suffers pure economic loss, however, the law has not been so willing to impose a duty of care on the defendant." (at [70]). This passage is attracted by the present case in so far as it is concerned with harm to the person rather than pure economic loss (the Barclay companies' cross-claim against the Council is of the latter kind). But it is also concerned with harm to the person in the developing area of the duty of public authorities to exercise powers to prevent one person being caused harm by another, in which something beyond mere foreseeability of the harm is required (see below). 276 McHugh J concluded that the five questions he posed should be answered favourably to the appellants. 277 Gummow J considered that several factors combined to constitute a sufficiently close relationship between the appellants and the respondent to give rise to a duty of care for breach of which the appellants could recover damages for their economic loss. These included: · The respondent appreciated the consequences of the spread of disease by contaminated seed; · At the time of supply the respondent knew or should have known that the appellants grew and processed potatoes within 20 km of the first grower's property and the respondent knew of the special requirements of Western Australia with respect to importation of potatoes; · The respondent knew or should have known that the appellants exported potatoes to Western Australia; · The appellants had no way of appreciating the existence of the risk to which they were exposed by the respondent's conduct and had no way of protecting themselves against that risk. 278 Kirby J reiterated (at [259]) and applied the three-stage test of Caparo that he had applied in Pyrenees, leading his Honour to agree that the appeal should be allowed. 279 Hayne J concluded that the appellants were entitled to recover damages for their economic loss because the respondent knew of the existence of a limited class, which it transpired included the appellants, likely to suffer economic loss if it failed to take care. 280 For Callinan J, the decisive factor was that the respondent actually foresaw that the appellants were within a class of persons likely to be adversely affected by its negligent conduct. 281 It is not possible to identify in Perre a single approach to the question whether a duty of care is owed that commands the assent of a majority of the members of the Court. Moreover, the case was one of economic loss and the judgments recognise the well established distinction, on the duty of care issue, between cases of that kind and those, like the present one, in which damages are sought to be recovered in respect of personal injury. 282 The judgments do, however, demonstrate a concern with the question whether there was an ascertainable class of persons, including the appellants, who, it was foreseeable, would be likely to suffer economic loss if the respondent failed to take reasonable care. An important question in the present case is whether that limitation applies in the present circumstances which, while concerning harm to the person, also concern a novel category of legal liability. 283 The High Court has recently considered the question of the duty to exercise a statutory powerin Crimmins v Stevedoring Industry Finance Committee (1999) 167 ALR 1 ("Crimmins"). Between 1961 and 1965 the plaintiff was assigned by the predecessor of the defendant ("the Committee") to work with stevedoring companies. Occasionally the work involved the unloading of asbestos cargo. From the inhaling of asbestos fibres the plaintiff developed mesothelioma. He sued the Committee for damages for negligence. 284 The Australian Stevedoring Industry Authority ("the Authority"), which was established by the Stevedoring Industry Act 1956 (Cth), regulated stevedoring operations throughout Australia. In doing so, the Authority assigned workers for work in accordance with the needs of employers. The workers had no control over their placements for work. They were registered with the Authority pursuant to the Act and received pay and other employee benefits from the Authority, although they were not actually employed by it. Pursuant to the Act, the Authority registered employers and waterside workers and allocated the latter to the former (work on the waterfront at the time was casual and by the day) and appointed inspectors of stevedoring operations. 285 The plaintiff succeeded before a jury. The Committee appealed to the Court of Appeal of the Supreme Court of Victoria. Before it gave its decision, the plaintiff died. The Court of Appeal allowed the appeal. The plaintiff's widow and executrix appealed to the High Court. 286 There were two issues before the High Court: whether the Authority had owed a duty of care to the plaintiff and whether the Committee was answerable in respect of the liability of the Authority. I will not discuss the latter (on which the appellant succeeded). The judgments emphasised that issues of breach of duty and causation were not before the Court. 287 Section 8 of the Stevedoring Industry Act 1956 required the Authority to "perform its functions, and exercise its powers … with a view to securing the expeditious, safe and efficient performance of stevedoring operations" (my emphasis). The statutory functions of the Authority were stated in subs 17(1) to include the following: "(a) to regulate the performance of stevedoring operations; ……. (i) to regulate the conduct of waterside workers in and about … wharves and ships; … (k) to train, or arrange for the training of, persons in stevedoring operations; (l) to investigate means of improving, and to encourage employers to introduce methods and practices that will improve, the expedition, safety and efficiency with which stevedoring operations are performed; … (o) to encourage safe working in stevedoring operations and the use of articles and equipment, including clothing, designed for the protection of workers engaged in stevedoring operations and, where necessary, to provide waterside workers with articles and equipment designed for that purpose; (p) to obtain and publish information relating to the stevedoring industry." Subsection 18(1) empowered the Authority to "make such orders, and to do all such other things, as it sees fit" in performing its s 17 functions. Once made, such orders had the force of law. 288 The plaintiff claimed that the Authority had failed to warn of the dangers of asbestos, to instruct as to those dangers, to provide respiratory equipment, to encourage employers to introduce safety measures for the handling of asbestos, to ensure that employees knew of the risks of exposure to asbestos, and to inspect properly the conditions under which stevedoring operations were carried out. In effect, the plaintiff's claim was that the Authority had failed to take any positive step to avoid the risk of harm to which he had been exposed. 289 Gleeson CJ agreed, for the reasons given by McHugh J (summarised below), that the Authority owed a duty of care to the plaintiff. His Honour observed (at [5]): "Acceptance that a statutory authority, in the discharge of its functions, owed a duty of care to a person, or class of persons, is only the first step in an evaluation of the authority's conduct for the purpose of determining tortious liability. In some cases, the difficulty of formulating the practical content of a duty to take reasonable steps to avoid foreseeable risks of harm, for the purpose of measuring the performance of an authority against such a duty, may be a reason for denying the duty. In other cases, of which the present is an example, recognition of the existence of a duty is consistent with the need, when dealing with the question of breach, to take account of complex considerations, perhaps including matters of policy, resources, and industrial relations". 290 Gaudron J thought that the obligation imposed on the Authority by s 8 of the Act was consistent, rather than, as the Committee contended, inconsistent, with the existence of a general law duty of care to take reasonable positive steps to prevent a foreseeable risk of injury to waterside workers. Her Honour noted that the Authority was in a position to know of, and to alleviate, the risks of harm with respect to the deceased's exposure to asbestos. Her Honour based her conclusion that there existed a relationship which gave rise to a duty of care on: · the plaintiff's vulnerability and inability to protect his own interests, particularly because of the special circumstances touching the waterfront, in which employment was casual and workers were engaged by the day by different stevedoring companies on different ships; · the fact that the Authority knew of the danger of exposure to asbestos and knew or should have known of the risk of the plaintiff being exposed to it; and · the fact that the Authority had power "to control or minimise" that risk. 291 In a lengthy and detailed judgment, McHugh J analysed precedent similar cases to reveal their "bases in principle and policy" (at [73]). His Honour pointed out that there may be special factors applicable to a statutory authority which negative a duty of care that a private individual would owe in similar circumstances. His Honour stated (at [79]): "Common law courts have long been cautious in imposing affirmative common law duties of care on statutory authorities. Public authorities are often charged with responsibility for a number of statutory objects and given an array of powers to accomplish them. Performing their functions with limited budgetary resources often requires the making of difficult policy choices and discretionary judgments. Negligence law is often an inapposite vehicle for examining those choices and judgments. Situations which might call for the imposition of a duty of care where a private individual was concerned may not call for one where a statutory authority is involved. This does not mean that statutory authorities are above the law. But it does mean that there may be special factors applicable to a statutory authority which negative a duty of care that a private individual would owe in apparently similar circumstances. In many cases involving routine events, the statutory authority will be in no different position from ordinary citizens. But where the authority is alleged to have failed to exercise a power or function, more difficult questions arise." Later, his Honour elaborated as follows (at [91]-[94]): "[91] In his article 'Liability in Tort of Public Bodies', Professor Todd has argued that, despite the current conceptual uncertainty in the law in Australia relating to the common law liability of statutory authorities for a failure to act, 'as regards four of the judgments [in Pyrenees, Brennan CJ apart] there is arguably a measure of underlying agreement'. He then listed what in his view were the key elements that could be distilled from the recent decisions of this court: '(i) the imposition of a common law duty is consistent with and complementary to the performance by the public body of its statutory functions; (ii) the duty can be seen to arise specifically in relation to a known plaintiff rather than generally in relation to the public at large; (iii) the defendant is in a position of control and is under a statutory obligation, or at least has specific power, to protect the plaintiff from the danger; (iv) the plaintiff is in a position of special vulnerability or dependence on the defendant. He or she cannot reasonably be expected to safeguard himself or herself from the danger; (v) on a policy overview there is no good reason for giving the defendant an immunity from liability.' [92] I am in substantial agreement with this analysis. I would prefer, however, to subsume Professor Todd's first criterion into his fifth. I also think that it is necessary to add a further element - that the authority knew, or ought to have known, of the risk of injury to the plaintiff. [93] In my opinion, therefore, in a novel case where a plaintiff alleges that a statutory authority owed him or her a common law duty of care and breached that duty by failing to exercise a statutory power, the issue of duty should be determined by the following questions: 1. Was it reasonably foreseeable that an act or omission of the defendant, including a failure to exercise its statutory powers, would result in injury to the plaintiff or his or her interests? If no, then there is no duty. 2. By reason of the defendant's statutory or assumed obligations or control, did the defendant have the power to protect a specific class including the plaintiff (rather than the public at large) from a risk of harm? If no, then there is no duty. 3. Was the plaintiff or were the plaintiff's interests vulnerable in the sense that the plaintiff could not reasonably be expected to adequately safeguard himself or herself or those interests from harm? If no, then there is no duty. 4. Did the defendant know, or ought the defendant to have known, of the risk of harm to the specific class including the plaintiff if it did not exercise its powers? If no, then there is no duty. 5. Would such a duty impose liability with respect to the defendant's exercise of 'core policy-making' or 'quasi-legislative' functions? If yes, then there is no duty. 6. Are there any other supervening reasons in policy to deny the existence of a duty of care (for example, the imposition of a duty is inconsistent with the statutory scheme, or the case is concerned with pure economic loss and the application of principles in that field deny the existence of a duty)? If yes, then there is no duty. [94] If the first four questions are answered in the affirmative, and the last two in the negative, it would ordinarily be correct in principle to impose a duty of care on the statutory authority." (my emphasis) 292 His Honour stated (at [99]): "… some powers are conferred because the legislature expects that they will be exercised to protect the person or property of vulnerable individuals or specific classes of individuals. Where powers are given for the removal of risks to person or property, it will usually be difficult to exclude a duty on the ground that there is no specific class. The nature of the power will define the class - for example, an air traffic control authority is there to protect air travellers. Furthermore, a finding that the authority has powers of this type will often indicate that there is no supervening reason for refusing to impose a duty of care and that no core policy choice or truly quasi-legislative function is involved. 293 Finally, his Honour found nothing in the Act which forbade or was inconsistent with the imposition of a duty of care at common law; the Authority's quasi-legislative function of making orders did not exhaust its powers; and there were no policy factors denying a duty of care. 294 McHugh J found it a "compelling" factor in favour of the existence of a duty of care, that the Authority directed the plaintiff to places of work where there were risks of injury of which the Authority was or should have been aware, and in respect of which it also knew or should have known that the worker was specially vulnerable, that is, could not protect himself, in circumstances in which disobedience could lead to disciplinary action and even deregistration as a waterside worker. Like Gaudron J, McHugh J thought the special circumstances in which a person worked on the waterfront emphasised the plaintiff's vulnerability. 295 Gummow J agreed generally with the reasons of Hayne J for dismissing the widow's appeal. His Honour thought it inappropriate to posit a common law duty of care and to ask whether it is prohibited by, or inconsistent with, the relevant statute. Rather, his Honour said, the starting point must be the statute. And his Honour thought that: "the provision for the making of orders under s 18 provided the complete statement of the legislative provision for the regulation of the subject matter" (at [169]). For his Honour, the Authority lacked any power over safety of the kind possessed by the Shire in Pyrenees. 296 Kirby J applied the Caparo three-stage inquiry which he had applied in Pyrenees and Perre and concluded that the Authority had owed the plaintiff a duty of care to take reasonable steps to ensure that working conditions would be reasonably safe for him, and, to that end, to provide waterside workers with articles and equipment designed for their protection and to ensure that they were used. Among the policy considerations which informed his Honour's conclusion was, again, "[t]he specificity of the group of persons exposed to danger who constituted a defined and particular class much narrower than the community at large" (at [233]). 297 Hayne J closely analysed the statutory functions of the Authority and concluded that its powers were quasi-legislative. His Honour also thought that it was not in a position similar to that of an employer. He thought that there was no duty on the Authority to make an order requiring the use of respirators, to supply equipment, or to warn of the danger of asbestos. Although his Honour acknowledged that it was no bar to the existence of a particular duty that it duplicated a duty already incumbent on the waterside worker's employer, this was nonetheless one factor that led him to conclude that there was no such duty on the Authority, which he described as "peripheral" party. Unlike the plaintiff's succession of employers, the Authority was not in control of, or responsible for, the place and system of work to which the plaintiff was exposed, in his Honour's view. 298 Callinan J relied on the right to exercise control, and the actual exercise of control over waterside workers as to where and for which employer they should work, as important indicators of the existence of a duty of care. 299 There are differences between Crimmins and the present case. In Crimmins there was a direct and close relationship between the Authority and the waterside workers whom it had registered; it acted positively by directing them, under penalty, to work in, as it transpired, places that were dangerous to their health; and "registered waterside workers" represented an identified group of individuals as distinct from the public at large.

Uncertainty remaining in the Australian case law relating to the duty of care issue - an "incremental" approach

300 In a well known passage in Pyrenees, Kirby J noted (at 397) the uncertain nature of negligence law as it stands: "An optimistic view is that the difficulty arises because the law is 'developing'. A more realistic perspective may be that it is a category which is conceptually unsettled. The fundamental problem is that a single unifying principle for liability in negligence, easy to apply and predictable in outcome, has proved elusive." In Perre, McHugh J referred to the absence of "bright-line" rules in contemporary negligence law and said at (624): "since the fall of proximity, the court has not made any authoritative statement as to what is to be the correct approach for determining the duty of care question. Perhaps none is possible. At all events, the differing views of the members of this court in the present case suggest that the search for a unifying element may be a long one." By way of explanation and to signal a practical solution, his Honour stated (at 629): "Having rejected arbitrary exclusions, proximity, impairment of precise legal rights and Anns and Caparo as suitable determinants of duty, where does one find a conceptual framework that will promote predicability and continuity and at the same time facilitate change in the law when it is needed? … If a case falls outside an established category, but the defendant should reasonably have foreseen that its conduct would cause harm to the plaintiff, we have only to ask whether the reasons that called for or denied a duty in other (usually similar) cases require the imposition of a duty in the instant case. No doubt that may sometimes mean that, whether or not a duty is imposed at a particular time, will depend on the extent to which the case law has progressed to that time." 301 Similarly, in Pyrenees,Kirby J observed (at 397) that the best "cautionary advice [is] to study the cases in the hope of deriving guidance from analogies". 302 We are called upon to decide the Council's and the State's appeals at a time when there are no clear principles laid down by the High Court to guide us. The case raises legal issues that are novel in Australian case law in relation to the liability in negligence of public authorities for a failure to exercise statutory powers. In a sense, each such case is novel: the facts and the legislation are unique. But the novelty here resides in two specially relevant considerations. First, the duty propounded by Mr Ryan is one owed, not to identified or identifiable individuals or to an identified or identifiable class of individuals, but to the consuming public generally. Secondly, the duty propounded is not a duty to exercise powers in respect of one particular place (cf Pyrenees and Lutz) but, in the case of the Council, in respect of all places from which faecal matter might emanate to pollute the Lake, and in the case of the State, in respect of the oyster industry based on all the oyster leases in the Lake and, indeed, in the State. 303 In Heyman, at 481, Brennan J noted and supported the development in the area of negligence law of "novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable 'considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed' [his Honour was quoting from Lord Wilberforce in Anns v Merton London Borough Council [1978] AC 728 at 752]" (see also his Honour's judgment in Hawkins v Clayton (1988) 164 CLR 539 at 556). This observation was referred to with approval by Lord Bridge of Harwich in Caparo at 618, by Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 751, and by Hayne J in Crimmins at [272] and was adopted by the House of Lords in Murphy v Brentwood District Council [1991] 1 AC 398 at 461 (per Lord Keith of Kinkel with whom all other Law Lords agreed in separate judgments). 304 The predominant methodology of cautious incremental development of principle based on analogy with previous cases decided at authoritative appellate level was supported by Gleeson CJ, Gaudron, McHugh, Kirby, Hayne and Callinan JJ in Perre. Kirby J elaborated (at [232]): "It is not enough to say that this court's approach, in any development of the ambit of liability, should be cautious and incremental. Of course it should. It is necessary to express the content of the approach which is proper and the criteria that will distinguish (so far as possible) a cautious increment that conforms to legal authority from an incautious one which would take the law beyond its acceptable boundary. That boundary is set, ultimately, by the answer to the question: ought the alleged tortfeasor to be under a legal obligation to observe care for the protection of the plaintiff against the incidence of the risk which has in fact ensued?" 305 In Crimmins, McHugh J said (at [77]) that the incremental approach curtails the examination of policy factors and makes decisions in novel cases more confidently predicted by reference to a limited number of principles that are applicable by analogy with previous cases of the same type. His Honour said (at [73]): "The policy of developing novel cases incrementally by reference to analogous cases acknowledges that there is no general test for determining whether a duty of care exists. But that does not mean that duties in novel cases are determined by simply looking for factual similarities in decided cases or that neither principle nor policy has any part to play in the development of the law in this area. On the contrary, the precedent cases have to be examined to reveal their bases in principle and policy. Only then, if appropriate, can they be applied to the instant case. A judge cannot know whether fact A in the instant case is analogous to fact B in a precedent case unless he or she knows whether fact B was material in that case and, if so, why it was material. Only then can the judge determine whether the facts of the current case are sufficiently analogous to those in an apparently analogous precedent to treat the precedent as indicating whether a duty of care did or did not exist in the current case. By this means, reasons of principle and policy in precedent cases are adapted and used to determine new cases. Very often, the existence of additional facts in the current case will require the judge to explain or justify why they are or are not material. In this way, the reasons in each new case help to develop a body of coherent principles which can be used to determine whether a duty of care does or does not exist in novel cases and which also provide a measure of certainty and predicability as to the existence of duties of care." (my emphasis) His Honour said later ([78]): "Sometimes, as in Perre v Apand Pty Ltd [(1999) 164 ALR 606 at 630-631], no case will be found which can reasonably be regarded as analogous to the instant case. Where such novel cases arise, the existence of a duty can only be determined by reference to the few principles of general application that can be found in the duty cases." 306 "Incrementalism" has, however, attracted criticism. In the New Zealand Court of Appeal, Cooke P expressed the opinion that the "incremental" recognition of new classes or categories of liability by analogy, with nothing more than existing forms, represented an empty concept: South Pacific Manufacturing Co Ltd v New Zealand Security Consultants & Investigations Ltd [1992] 2 NZLR 282 at 296. And in Perre, Gummow J quoted (at [199]) the criticism by McCarthy J in the Irish Supreme Court, that the incremental approach "suffers from a temporal defect - that rights should be determined by the accident of birth" (Ward v McMaster [1988] IR 337 at 347). Gummow J found the incremental approach particularly problematic in the context of distinct statutory schemes which interact with the common law of negligence in the determination of the liability of statutory authorities. Determining cases by analogy with previous case law, in his Honour's view, would result in deciding the duty question by reference to the issue whether the legislature had enacted similar laws in the past, whereas "[t]he proper approach … is to give due accord to the distinct and particular statutory scheme which has been enacted, from which rules as to the ambit of the common law can be identified for future cases" (Crimmins at [160], my emphasis). 307 With respect, it seems to me that we should commence with a close examination of the relevant legislation in order to discern the nature of the powers in question and of the Parliament's expectations of the public authority to which it gave them; then, in so far as there may remain scope for doing so, we should apply an incremental approach of reasoning by analogy with authoritative judicial responses to similar issues in the past, in order to discern appropriate principles and policies relevant to the present case.

United Kingdom, New Zealand and Canadian cases relating to liability of public authorities for the non-exercise of their statutory powers 308 In the absence of clear Australian authority governing the duty of care issue which we are required to decide, I have referred to the following United Kingdom, New Zealand and Canadian cases (an actionable duty of care of public authorities requiring the exercise of statutory powers is more readily recognised in Canada than in the United Kingdom or, perhaps, in New Zealand): The United Kingdom Sheppard v Glossop Corporation [1921] 3 KB 132 (CA) East Suffolk Rivers Catchment Board v Kent [1941] AC 74 (HL) Anns v Merton London Borough Council [1978] AC 728 (HL) Dennis v Charnwood Borough Council [1982] 3 WLR 1064 (CA) Christchurch Drainage Board v Brown "The Times", 26 October 1987 Caparo Industries plc v Dickman [1990] 2 AC 605 (HL) X (Minors) v Bedfordshire County Council [1995] 2 AC 633 (HL) Stovin v Wise [1996] AC 923 (HL) Barrett v Enfield London Borough Council [1999] 3 All ER 193 (HL) New Zealand Morrison v Upper Hutt City Council [1998] 2 NZLR 331 (NZ/CA) Canada Barratt v District of North Vancouver (1980) 114 DLR (3d) 577 (SCC) City of Kamloops v Nielsen [1984] 2 SCR 2 (SCC) Laurentide Motels Ltd v City of Beauport [1989] 1 SCR 705 (SCC) Just v British Columbia [1990] 1 WWR 385 (SCC) Swanson and Peever v Canada (1991) 124 NR 218 (Fed CA) Swinamer v Nova Scotia (AG) (1991) 6 CCLT (2d) 270 (NSSC) Brown v British Columbia (Minister of Transportation and Highways) (1994) 112 DLR (4th) 1 309 I will not give an account of these cases with the exception of three United Kingdom cases that have referred to the Australian cases or been referred to in them. Three particular United Kingdom cases 310 Anns v Merton London Borough Council [1978] AC 728 was an "inspection of building foundations case". The House of Lords held that on the pleadings the council may have been under a duty of care to inspect foundations and to see that they complied with the building by-laws. Accordingly, the proceeding was not to be dismissed summarily. In a well known passage Lord Wilberforce stated (at 751-2): "Through the trilogy of cases in this House - Donoghue v. Stevenson [1932] A.C. 562, Hedley Byrne & Co Ltd. v. Heller & Partners Ltd. [1964] A.C. 465, and Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004, the position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter - in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise: see Dorset Yacht case [1970] A.C. 1004, per Lord Reid at p. 1027. Examples of this are Hedley Byrne's case [1964] A.C. 465 where the class of potential plaintiffs was reduced to those shown to have relied upon the correctness of statements made, and Weller & Co. v. Foot and Mouth Disease Research Institute [1966] 1 Q.B. 569; and I cite these merely as illustrations, without discussion) cases about 'economic loss' where, a duty having been held to exist, the nature of the recoverable damages was limited: see S.C.M. (United Kingdom) Ltd. v. W. J. Whittall & Son Ltd. [1971] 1 Q.B. 337 and Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd. [1971] 1 Q.B. 337 and Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd. [1973] Q.B. 27" This dictum has been often referred to, although Lord Bridge of Harwich stated in Caparo (at 617-618): " … since the Anns case a series of decisions of the Privy Council and of [the House of Lords], notably in judgments and speeches delivered by Lord Keith of Kinkel, have emphasised the inability of any single general principle to provide a practical test which can be applied to every situation to determine whether a duty of care is owed and, if so, what is its scope: see Governors of Peabody Donation Fund v. Sir Lindsay Parkinson & Co. Ltd. [1985] A.C. 210, 239F-241C; Yuen Kun Yeu v. Attorney-General of Hong Kong [1988] A.C. 175, 190E-194F; Rowling v. Takaro Properties Ltd. [1988] A.C. 473, 501D-G; Hill v. Chief Constable of West Yorkshire [1989] A.C. 53, 60B-D. What emerges is that, in addition to the foreseeability of damage, necessary ``ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of 'proximity' or 'neighbourhood' and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other." 311 Caparo was not a public authority case, but an action for damages for economic loss against auditors for negligent auditing and reporting. The plaintiff had taken over a company in reliance on an auditor's report, that had been made not to the plaintiff in connection with the takeover, but to the shareholders of the target company. 312 The House of Lords held that although it was foreseeable that the report might be relied on by a company placed as the plaintiff was, the auditors did not owe the plaintiff a duty of care. The reason was that in the case of economic loss caused by negligently given information or advice, a duty is owed only where the information or advice is furnished to an identified or identifiable person or class which includes the plaintiff for a specific purpose of which the giver of the information or advice is aware. Their Lordships held that, under the relevant legislation, the auditors' report was furnished to shareholders to enable them to exercise their rights as shareholders, not to enable them to form judgments about further investment in the company. Support is to be found in the speeches of Lord Bridge of Harwich, Lord Roskill, Lord Ackner and Lord Oliver of Aylmerton, for the following proposition taken from the headnote (at 606-607): "Whilst recognising the importance of the underlying general principles common to the whole field of negligence, the law has now moved in the direction of attaching greater significance to the more traditional categorisation of distinct and recognisable situations as guides to the existence, the scope and the limits of the varied duties of care which the law imposes." This passage suggests that in the present case we should look for any principles or policies that have been authoritatively established specifically in respect of the exercise of statutory powers, which would have prevented the harming of the plaintiff by the conduct of others, in preference to principles or policies of more general application in the law of negligence.The Caparo three stage test was applied by the House of Lords in X (Minors) v Bedfordshire County Council [1995] 2 AC 633 and Barrett v Enfield London Borough Council [1999] 3 All ER 193 (with different results). 313 Stovin v Wise [1996] AC 923 is one of the more important cases for present purposes. The plaintiff, when riding a motorcycle, collided with a motor vehicle driven by the defendant. The accident happened at a junction which was known by the county council (the highway authority) to be dangerous because of obstruction of view by a bank on adjoining land. In fact accidents had occurred there previously. In January 1988, after a site meeting, a divisional surveyor of the council recommended removal of part of the bank. The council accepted the recommendation provided the landowner agreed. The landowner did not respond to the council's proposal before the plaintiff's accident occurred, even though a further site meeting had taken place attended by representatives of the council and the owner. The plaintiff's claim against the driver was settled but this left on foot the driver's third party claim against the council alleging negligence and breach of statutory duty. The trial Judge held the council not in breach of statutory duty but in breach of a common law duty of care. An appeal to the Court of Appeal was dismissed. 314 By a three to two majority the House of Lords allowed the council's appeal. The majority speech was delivered by Lord Hoffmann. His Lordship thought the "policy/operations" dichotomy an inadequate tool with which to discover whether it is appropriate to impose a duty of care and characterised the "general reliance" doctrine expounded by Mason J in Heyman as a doctrine which had "little in common with the ordinary doctrine of reliance" (at 954C). In the event, his Lordship did not explore that doctrine because, for reasons which he gave, there were no grounds on which the case before the House could be brought within it. His Lordship applied the general principle of "no liability for failure to exercise a statutory power". It did not matter, his Lordship thought, that the council knew of the hazard to traffic, that two of its officers had agreed that the work needed to be done and was to be done, or that there was no budgetary obstacle to its being done. Like Brennan CJ in Pyrenees, his Lordship applied this public law test: if the council had considered the question whether to remove the hazard, would it have been bound to decide to do it because it would have been "irrational" for it to decide otherwise? His Lordship thought not. 315 His Lordship referred to the fact that the imposition of a duty would expose the council's budgetary decisions to judicial inquiry and that this would tend to distort the priorities of local authorities to the disadvantage of its other areas of responsibility. As appears later, I think that this consideration is directly applicable in the Council's and the State's appeals. 316 The earlier account of Parts 1 to 7 of the learned primary Judge's reasons and the above account of the relevant law enable me to address now the three appeals on liability, including his Honour's reasons for deciding against the respective appellants. Although I will deal with them separately, I will adopt by reference, in dealing with the State's appeal, much of what I am about to say in respect of the Council's appeal.

Conclusions of primary Judge on Mr Ryan's personal and representative claims against the Council 317 Mr Ryan's claim was that the Council was liable to him for breach of a common law duty of care which could be discharged only by exercise of its statutory powers. 318 The learned trial Judge accepted the Council's submissions in relation to Mr Ryan's "test and warn" case, considered in isolation. "Test and warn" means "test [the quality of the water in the Lake] and warn [growers if faecal coliform pollution was at a dangerous level]". Of the "test and warn" case his Honour stated (at [288-289]): "I do not think the evidence establishes that a water testing program along 1989-93 lines 'would have imposed a significant cost' on Council, …. Mr Brooker said the testing program undertaken between 1989 and 1993 involved the labour of one person (usually a trainee) for 4˝ days per month. That cannot be regarded as a major burden, having regard to the contribution of the Wallis Lake oyster industry to the economy of the Shire, the significance of a 'clean water' image to the Shire's extensive tourist and recreational fishing industries, and the importance of safe-guarding the health of local residents and visitors. But I agree that a 1989-93 type water testing program conducted in 1996 would have told growers only what they already knew: that faecal coliform levels increased quickly and dramatically after rain and dropped within days. Such a testing program would not have identified the sources of the faecal coliforms or given growers any information about the presence of viruses. This does not mean water testing is valueless. Although a negative coliform test does not establish the absence of viruses, the expert evidence indicates it is an essential feature of an acceptable oyster management regime. Water testing can be used for the purpose of detecting points of pollution. It follows, I think, that the question whether the Council had a duty to test water samples is related to the question whether the Council had any obligation in relation to minimising pollution of the lake." (my emphasis) 319 On the question whether the Council had any obligation in relation to minimising pollution of the Lake, his Honour said that he found useful the "pragmatic approach to the matter of proximity" taken by Priestley JA in the New South Wales Court of Appeal in Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1. In that case, subdividers claimed damages for economic loss arising out of a council's failure to process their plan of subdivision with due diligence and within a reasonable time. Priestley JA, accepting the appropriateness of a test formulated by Professor Fleming, concluded (at 8F): "Courts … decide, in case after case, whether or not a duty of care exists in new situations. Consideration of all the cases of authority to date leads me to the view that the position in Australia, at least in May 1998, has returned to (or recognised the continuing applicability of) what it was immediately after the decision in Donoghue v Stevenson; that is, that the courts make decisions by first asking the question 'is the relationship between plaintiff and defendant in the instant case so close that a duty arose?' and then answering 'yes' or 'no' in light of the court's own experience-based judgment." 320 The primary Judge noted that the Council had no direct responsibility for the operation of the oyster industry or the quality or safety of oysters harvested from the Lake. On the other hand, his Honour stated that the Council knew that (at [291]): "(i) the waters of Wallis Lake were used for the growing of oysters for human consumption; (ii) within the lake catchment area, there were numerous facilities (septic tanks, pit toilets, pumping stations, watercraft and the like) that constituted potential sources of human faecal contamination of the waters of the lake; (iii) the HAV virus (like other viruses) is commonly transmitted in the faeces of infected persons; (iv) the HAV virus is capable of surviving for many weeks (even months) in estuarine waters and may be concentrated by oysters; (v) no procedure is available (whether by depuration or testing) to prevent HAV contaminated oysters being consumed by humans; (vi) an HAV contaminated oyster might cause its consumer to become seriously ill; and (vii) Council had extensive statutory powers to control pollution from the facilities mentioned in (ii)." In an important passage, the primary Judge stated as follows (at [292]): "I accept the submission that Council was not under an absolute duty to prevent pollution of the lake; prevention could never be guaranteed. Any duty must be confined to a duty to take those steps that were reasonably open to the Council in order to minimise human faecal contamination of the lake. But I do not accept Council did not have even that duty. Having regard to the facts listed above - none of which is a matter of dispute in this case - the Council knew, or should have known, that oyster consumers were likely to be adversely affected by any failure by it to take reasonable steps to minimise human faecal contamination of the lake; in particular by the emission of faecal effluent from any of the facilities mentioned in (ii) above. That being so, it seems to me Council came under an obligation to oyster consumers to take those steps." (my emphasis) 321 His Honour went on to explain why he did not think that anything said by the High Court in Pyrenees pointed to a different conclusion. 322 The learned primary Judge then addressed a matter which Council has pressed on the appeal: that the evidence did not establish that the pollution came from any particular source. His Honour said (at [297]): "The applicant need not prove the particular source or sources of the HAV contamination. The HAV oyster contamination came from human faecal pollution of the lake. The expert evidence establishes the probability that this pollution came from multiple points, predominantly land-based. All of those points were subject to Council control. The pollution occurred because the Council did not exercise its powers in a responsible manner; although it knew there was a problem, the Council allowed the continuation of pollution from those points. It does not matter that it is impossible to say which of those pollution points introduced the HAV contaminated faeces into the lake." (my emphasis) 323 Having held that Council owed a duty of care to oyster consumers, his Honour went on to find that the duty was breached. He referred to various steps which the Council could have taken. He said that it could have taken steps to identify the pollution sources. Moreover, he found that the Council "was aware of serious sewage effluent problems in the villages (Nabiac and Cooloongolook) draining to the lakes' tributaries". He said: "Anybody who gave the matter thought would have realised there was a possibility that viruses in that effluent might reach the lake and contaminate the oysters." As well, his Honour referred to the two caravan parks, the Little Street public toilet, the toilets on the Islands and the houseboats on the Lakes as potential sources of pollution and said that if Council did not know about these problems, "that was because it chose not to look." 324 In a passage which is attacked by Council, his Honour said (at [301]): "The responsible reaction to such knowledge would have been to institute a sanitary survey, especially of premises that drained to estuarine waters. Astonishingly, in May 1996 Council's officers took the opposite course, determining not even to respond to complaints. It may not be coincidence that the HAV outbreak occurred shortly after the first heavy rain of the next oyster season." 325 The primary Judge rejected a submission that the Court should not review the Council's decisions about the exercise of its powers, that its decision not to inspect regularly was not "shown to be other than bona fide and rational" and that "Council's failure to have a water monitoring program for Wallis Lake oysters was based on policy judgments and financial constraints". His Honour thought that the evidence did not support this last submission and that the contemporaneous material suggested that an upgraded water testing program was not seen by Council as imposing an unreasonable burden on its resources. 326 Finally, his Honour did not accept that the sewage came from boats on the Lake. He noted that the consensus of expert opinion was that the pollution was substantially land-based. But he thought, in any event, that Council would not have been absolved from responsibility if the boats did contribute. The 1994 Wallis Lake Oyster Management Plan had warned Council of the risk of contamination from boats and had suggested that it install "environmentally friendly" toilets at strategic points and undertake an education campaign. Council took neither step. His Honour observed that no suggestion was made in the evidence that this was for want of resources. In relation to larger boats, "ships" or "vessels", including houseboats, fell within the definition of "premises" in the Local Government Act 1993 (NSW) so that in respect of them, at least, Council had the same powers of inspection, giving of abatement notices and direct abatement as it had in relation to houses, caravan parks and other on-shore facilities. His Honour said (at [312]): "If there were tourist boats or houseboats on the lake with unsatisfactory or inadequate toilet facilities, it was within the power of Council to do something about that; and given their proximity to the oyster leases, there was every reason to exercise that power."

Outline of Council's submissions on its appeal 327 On Council's appeal, not only did Council and Mr Ryan make submissions: so did the State, the Barclay companies, Georges Oysters, Sciacca and Tadeven. Although I have studied them all, in what follows I will refer only to those of the Council and Mr Ryan. Some of the following submissions are also relevant to the State's appeal, and those relevant to the duty found by his Honour to take steps reasonably to minimise faecal contamination of the Lake are relevant to all three appeals. 328 Council's submissions proceeded along the following lines. Council emphasised the diversity and spread of the potential sources of faecal contamination of the Lake, the difficulty of eliminating it and the fact that some human faecal contamination must have been a feature of the Lake for a long time. Council submitted as follows: "(a) Wallis Lake is 85 square kilometres in area. The Lake itself has approximately 225 kilometres of shoreline. The catchment area is 1,300 square kilometres, of which approximately 65% is in the Great Lakes council area, 30% being located in the Greater Taree City Council area and 5% in the Gloucester Council area. (b) The Wallis Lake catchment contains the major towns of Forster and Tuncurry; various smaller townships (Pacific Palms, Nabiac, Green Point, Coomba Park); and various other homes built along the rivers and in the countryside which are not part of any town or township. (c) There are hundreds of points within the Wallis Lake catchment at which there is the potential for the escape of human faecal waste. There are two reticulated sewerage systems, one serving Forster/Pacific Palms/etc and the other serving Tuncurry. Each system has hundreds of kilometres of pipes and numerous pumping stations. Breakages, blockages and pump failures in the system can result in discharge of raw sewage… There are also hundreds of private landowners' septic tank and other on-site treatment systems. Such privately owned systems are, of course, vulnerable to failure or even abuse on the part of their owners, eg: by pumping out the contents of a tank into a drain or onto the ground so as to avoid the pump-out charges …. (d) There are also hundreds of potential pathways by which human faecal waste, if released, could enter the Lake system. Apart from direct deposition (ie: people boating, camping or bathing who defecate directly into the water), there are scores of stormwater outlets to the Lake [see e.g. map of Forster/Tuncurry stormwater systems]. Each outlet has its own catchment, which may (depending on its size) be quite complex and drain scores or even hundreds of houses. Faecal waste released at any point in a catchment has the potential to travel down the stormwater drains to the Lake. This is particularly, but not exclusively, if there is run-off from rain. (e) Once released into the Lake system, contaminants can spread under the influence of wind and tide. The mechanisms involved are complex, and there was considerable evidence in the proceedings before His Honour from rival consulting engineers called on behalf of the Applicant and the Council on this issue. (f) Faecal contamination (including but not limited to human faecal contamination) can be detected with fairly standard water testing. However, detecting faecal contamination in the Lake itself will not identify where such contamination entered the Lake, much less its source. Testing stormwater outlets and other places where contamination could enter the Lake presents its own problems: first, there are a large number of points; second, flow is intermittent, so unless the testing is done during rain events, there is little chance of detecting anything; and third, even if a positive result is detected, tracing back to the source may be a very difficult exercise, particularly if the source is only intermittent (and, in the case of deliberate discharge, clandestine as well). … (h) By late 1996, it had long been known that there was intermittent faecal contamination (including, no doubt, on occasion human faecal contamination) of Wallis Lake, particularly after heavy rain. As has been pointed out, faecal contamination was detected in water testing carried out during various surveys. But in fact one would not need water testing to know that after heavy rain there is a probability of faecal contamination of the Lake …. (i) For a considerable period, therefore, the oyster industry operated in an environment of occasional faecal contamination with no apparent ill-effects. No doubt this was due to the basic precautions taken by the growers, under which they suspended harvesting during a 'fresh', only resuming their harvesting when the water had cleared." (my emphasis) 329 It is safe to assume that human faecal contamination, to varying extents, has been a feature of the Lake for a long time, probably for as long as there has been significant settlement in the area. Such occasional contamination was detected in water testing carried out by the Council in 1989-1993, and in other studies. It was still being detected in 1998, despite the clean-up efforts which followed the outbreak. 330 Council submits that the supposed duty to "minimise" pollution is without content. Since no particular site was identified as a source of the pollution, it is impossible to specify the scope of a duty to take steps reasonably open which would have "minimised" faecal contamination generally and prevented that which in fact occurred here. For this reason, the duty would not be imposed. 331 Council submits that the most that can be said is that its inactivity increased the risk of illness but that this is insufficient to found liability. In this respect, Council refers to Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 at 316-317 per Mason P. Inthat case the plaintiff was awarded damages in the Dust Diseases Tribunalfor mesothelioma which was found to have been caused by the defendants' negligence in exposing him to asbestos. The defendants variously employed the plaintiff in the period 1962 to 1985. But he was also exposed to asbestos during earlier service with the Royal Navy. Leave to proceed against the United Kingdom Ministry of Defence had been refused. Mason P and Beazley JA thought that the appellant employers succeeded on the issue of causation, while Stein JA would have dismissed the appeal. Beazley JA considered that the onus on a plaintiff to prove causation on the balance of probabilities was not discharged by proof that a particular matter cannot be excluded as a cause (at 339A). Mason P emphasised that material contribution to injury is not established by proof that the defendant materially increased the risk of it (at 316G). 332 Council submits that Pyrenees is distinguishable from the present case on the facts. In Pyrenees the evidence proved that a fire was caused by the use of a particular fireplace in premises which adjoined those occupied by the plaintiffs. The Shire actually knew of the specific dangerous site, had statutory power to eliminate the danger, and had sent, but not followed up, a letter. In contrast, the present case is not concerned with a specific source which threatened to cause, and is now known to have caused, the contamination of the Lake and Mr Ryan's illness. In addition, the danger was posed, not to an identifiable person, but to consumers generally. 333 Council submits that his Honour erroneously found it liable without analysis of any particular risk or site, of the magnitude of the risk, or of such matters as the expense, difficulty and inconvenience of remedial action, or of any conflicting responsibilities of Council. 334 The evidence established that Council had taken various steps "[o]n the general environmental front", in particular in relation to the installation, operation, maintenance and improvement of the water and sewerage system. The effect of his Honour's conclusion, so Council's submission goes, was that Council should have given priority to preventing faecal contamination of the Lake at the expense of other activities. 335 Council submits that apportionment should have been nil to the Council and an equal sharing by the State and the Barclay companies. His Honour's equal three-way apportionment did not recognise that the State had control of, and responsibility for, the waterways, or that the Barclay companies undertook the cultivation, harvesting and sale of the oysters. The true cause of the harm was the failure of the State and the Barclay companies to prevent the oysters from being harvested and sold at all.

Outline of Mr Ryan's submissions on Council's appeal 336 Mr Ryan's submissions proceeded along the following lines. In relation to Council's submission that his Honour formulated Council's duty in such general terms that it is without content and does not permit specification of the scope of Council's duty, Mr Ryan points out that the primary Judge made the following findings: "(a) there was a duty to take reasonable steps to minimize human faecal contamination of the lake from the identified likely point sources of pollution which were under Council control …; (b) in the context of (a), water testing was useful and could and ought to have been used for the purpose of detecting points of pollution …; (i) the Council ought to have done E-Coli testing of the water which would have indicated sources of pollution … including from stormwater drains thereby allowing tracing back; (j) the Council ought to have instituted a sanitary survey of premises that drained to estuarine waters …; (k) the sanitary survey could have been as simple as an initial shoreline survey, and a lesser number of days in subsequent years for update surveys …; (l) each of the steps in (a) - (e) would have identified particular point sources of pollution from particular premises, with specific statutory powers being then able to be used in relation to particular premises to deal with the issue." 337 Mr Ryan submits that the steps described above were those that the Shoalhaven Council had taken and that the Council itself took after the event, when it undertook a detailed sanitary survey, identified and dealt with sources of pollution, recommenced its water monitoring program and instituted a régime of compulsory pump-out of septic tanks in the catchment area, including at Nabiac. 338 Contrary to Council's submission, his Honour did not conclude that the Council was not obliged to test water quality. In fact he considered that this was a necessary step in the identification of point sources of pollution. His Honour merely rejected a "test and warn" program as sufficient in itself to satisfy the Council's duty of care. 339 Mr Ryan submits that the fact that there were many and varied potential pollution sources is not to the point: what is important is that his Honour described them as the likely sources of the HAV contamination and that they were all under Council control. Mr Ryan submits that for these reasons the duty of care found by his Honour was consistent with Pyrenees. The nature of the powers conferred and their objective of the protection of public health and the identity of the intended beneficiaries gave rise to that duty. 340 While Council had competing claims on its resources, Mr Ryan submits that the "policy"/"operations" dichotomy has no application because, in particular, of his Honour's finding that a sanitary survey and inspection régime would have created little additional burden. 341 According to Mr Ryan, the case is not simply one of non-feasance. This is because Council materially contributed to the contamination because of the Little Street public toilet, the pit toilets on the islands and the sewerage pumping stations and stormwater drains, as well as its having undertaken some testing and regulation of pollution sources. 342 Mr Ryan submits: "This is not a case where the Council did something meaningful with the debate being about the reasonableness of the steps. The Council did nothing." He submits that at the relevant time, Council: (a) had no water testing program to identify point sources of pollution; (b) had undertaken no sanitary survey; (c) had done nothing about pollution from the caravan parks, the islands, the Little Street public toilet or Nabiac; and (d) had done nothing about stormwater drains or the monitoring of them. Mr Ryan suggests that Council was only reactive in that it responded to specific complaints and then only in a limited fashion. 343 According to Mr Ryan, it was not necessary for him to establish that the pollution was caused by a particular pollution source because his Honour found that each potential source of the contamination that in fact occurred was under Council's control. He submits: "The actual contamination from points under the control of the Council or the responsibility of the Council not only increased the risk to which, ultimately, [Mr Ryan]was exposed but was the source of and material contribution to or cause of [Mr Ryan's] injury."

Council's statutory powers 344 The relative functions and powers of the Council appear, in summary, below. 345 The Local Government Act 1993 (NSW) included the following provisions: · One of the purposes of the Act was (par 7(a)): "to provide the legal framework for an … environmental responsible… system of local government in New South Wales." · Council was empowered to carry out activities appropriate to the current and future needs within the local community and of the wider public (s 24). · Council was charged with the care and management of sewerage works constructed by or on behalf of the Minister, and the expression "sewerage work" was defined in the Act's Dictionary (s 3) to mean: "the construction, alteration, extension, disconnection, removal, ventilation, flushing or cleansing of any sewerage service pipes or fittings or fixtures communicating or intended to communicate, directly or indirectly, with: (a) a septic tank, an effluent or a sullage disposal system, or (b) any sewer of a council, and includes work of sanitary plumbing and work of house drainage." · Section 62 empowered the Minister for Public Works to direct a council to take measures specified in the direction with respect to, inter alia, such sewerage works if "of the opinion that an emergency exists that constitutes a threat to public health or public safety…" · Section 63 provided that if a council did not comply with such a direction within a reasonable time, the Minister might do the work required and recover the cost from the council. · Section 68 provided, relevantly, that a person might carry out an activity specified in a Table in the section only with the approval of the council. Two of the activities were the carrying out of "sewerage works" (the Act's definition of which I set out above) and the connection of a private sewer with a public sewer. · Section 124 is important. It empowered the Council to order a person to do or refrain from doing a thing specified in Column 1 of a Table contained in the section, if the circumstances specified opposite it in Column 2 of the Table existed and the person came within the description opposite it in Column 3 of the Table. The following entries in the Table are of present relevance. (I need not set out the entries from Column 3): Table

Orders requiring or prohibiting the doing of things to or on premises Column 1 Column 2 To do what? In what circumstances? 5. To take such action as is necessary to bring into compliance with relevant standards or requirements set or made by or under this Act: Failure to comply with relevant standards or requirements set or made by or under this Act (a) a camping ground, caravan park or manufactured home estate. ……………………………………………………….. (h) a…sewerage system on premises.

Orders requiring that premises be used or not used in specified ways 15. Not to conduct, or to cease conducting, an activity on premises (whether or not the activity is approved under this Act). The activity constitutes or is likely to constitute: (a) … (b) a threat to public health or public safety and is not regulated or controlled under any other Act by a public authority.

Orders requiring the preservation of healthy conditions 24. To connect premises with a sewerage system by a specified date. The premises are situated within 75 metres of a sewer of the council.

30. To comply with an approval The approval is not being complied with.

(The expression "premises" was defined in the Act's Dictionary to included "a ship or vessel of any description (including a houseboat)"). · Section 125 empowered the Council to abate a public nuisance or to order a person responsible for a public nuisance to abate it. · Division 2 (ss 129-135) of Part 2 of Ch 7 of the Act required the Council to observe certain procedures of a "natural justice" kind before making an order under s 124, but this did not apply to an order in terms of order No 15 in the Table or to orders given, and expressed to be given, in an emergency. · Part 2 (ss 191-201) of Ch 8 of the Act provided for the Council to enter onto land. Section 191 provided that for the purpose of enabling the Council to exercise its functions, a Council employee (or other person) authorised by the Council might enter any premises, and s 192 gave such a person wide powers of inspection and associated powers. Section 197 provided that if as a result of an entry and inspection, the Council required work to be carried out, the Council might recover the cost of the entry and inspection from the owner. · Section 673 empowered a Council to bring proceedings in the Land and Environment Court or such other court as might be specified in the Act for the purpose, for an order to remedy and restrain a breach of the Act. 346 The Local Government (Water, Sewerage and Drainage) Regulation 1993 (NSW) included provisions such as: · Part 3 (clauses 33-44) of this Regulation was headed "Sewerage and Drainage" and dealt with such matters as connection to a council's sewerage system. Clause 44 provided that the discharge of pan contents or septic tank effluent from premises was a disposal of waste for which approval was required under s 68 of the Local Government Act 1993. · Part 4 (clauses 45- 55) contained provisions applicable to, inter alia, sewerage works. Clause 45 provided: "(1) In determing an application for the purposes of section 68 of the Act for an approval to do any of the activities to which this clause applies, the council must have regard to the following considerations: (a) the protection and promotion of public health; (b) the protection of the environment; (c) the safety of its employees; (d) the safeguarding of its assets; (e) any other matter that it considers to be relevant in the circumstances. (2) This clause applies to the following activities: (a)…;(b)…;(c)…; (d) carrying out sewerage work;…" · Clause 46 made it a condition of an approval (required by s 68 of the Act) of the carrying out of sewerage work that it comply with all applicable standards. 347 The Clean Waters Act 1970 (NSW) included the following provisions: · Section 16 of this Act prohibited a person from polluting any waters or causing any waters to be polluted, whether intentionally or not, or permitting any waters to be polluted (there were statutory exceptions not presently relevant). Contravention was made an offence against the Environmental Offences and Penalties Act 1989 (NSW). · Section 27 provided that where any waters were polluted by any person, any statutory authority or local authority might, and must if directed to do so by the EPA, take such action as was necessary to remove, disperse, destroy or mitigate the pollution, and might recover all costs and expenses of doing so from that person. The same section provided that the cost and expenses might be recovered as a debt in a court of competent jurisdiction. · (Section 27A empowered the EPA, by a written notice, to direct an occupier of premises from which the pollution of any waters had been caused, or a person who had caused the pollution of any waters, to take such measures to remove, disperse, destroy or mitigate the pollution as were specified in the notice.) · Section 29 gave an "authorised officer" wide powers of entry on premises and associated powers. An "authorised officer" was a person authorised in writing by the EPA to act as an authorised officer for the purposes of s 29. It will be recalled that Council's employee, Mr Brooker, was an "authorised officer". 348 The statutory powers of local government authorities described above do not include a power to prohibit the harvesting of oysters. As will be noted later, that power was given to the Minister under the Fisheries Management Act 1994 (NSW). In particular, subss 8(1) and 189(1)(b) empowered the Minister to prohibit the taking of, relevantly, oysters cultivated under aquaculture permits if the Minister was satisfied that they were likely to be unfit for human consumption.

General 349 In the following respects the present case, although novel, is similar to Pyrenees, Lutz and Crimmins in which public authorities were held liable for the non-exercise of statutory powers. · The above powers are expressed in general terms and have objects which include the protection of public health, and given the lakes, rivers and estuaries that are within local government areas throughout the State, it is reasonable to suppose that the Parliament would have envisaged that those powers would be exercised, at least to some extent, to protect swimmers and consumers of fish (including oysters) from the effects of faecal pollution of those waters. · Power over the relevant area of social activity, faecal contamination of the Lake, was ceded by the legislature, at least in part, to the Council, although it was also ceded to the EPA. · Mr Ryan was vulnerable in that he could not take steps to ensure that the oysters he ate were free of the HAV and he had to depend on someone else having done so. · The steps which it is said the Council should have taken are not quasi-legislative as Gummow and Hayne JJ thought the powers of the Authority in Crimmins to be. · Council knew that some problems of discharge of faecal matter which entered the Lake had been experienced, whereas the consumers of oysters grown there would not have known this. 350 But the case is unlike Pyrenees, Lutz and Crimmins in the following other respects which suggest that a duty of care should not be imposed on the Council: · The duty posited is one owed to the consuming public generally, not to identified or identifiable individuals or an identified or identifiable class of individuals. · In Crimmins McHugh J (at [91]-[94]) and Kirby J (at [233]) suggested that a duty of care requiring a public authority affirmatively to exercise a statutory power should not be imposed in favour of the public at large. It is true that McHugh J added that where powers are given for the removal of risk to person or property, it will usually be difficult to exclude a duty on the ground that there is no specific class otherwise indicated as the intended beneficiaries of the power and that the nature of the power will define the class. But I do not think that in saying this, his Honour had in mind powers of the kind in question here. All those members of the public who consume oysters grown in the Lake are no more specific a class than are all those members of the public who swim in the Lake or use public roads. And the suffering of injury or illness is not the unifying feature of a particular class any more than, to borrow from another field of discourse, the suffering of persecution constitutes the unifying feature of a "particular social group" for the purposes of the definition of "refugee" in Article 1A(2) of the Convention Relating to the Status of Refugees (see Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 263-264 per McHugh J). It is true also that Kirby J's reference in Crimmins to the specificity of the group of persons exposed to danger as distinct from the community at large was given only as a policy consideration relevant to the question whether a duty of care should be imposed. Nonetheless, what his Honour said tells against the imposition of such a duty on the Council in this case. · The problem did not exist in respect to a known problem site (cf Pyrenees and Lutz) or known problem sites (cf Crimmins) but in respect of many unknown sites on the lengthy shoreline of the Lake, the identity of which changed from time to time. · Because the faecal contamination came from many unidentified and changing sources, the Council was not in a position to "prevent" it and could at best "minimise" it, whereas in Pyrenees, Lutz and Crimmins the relevant public authority had the power definitely to prevent the risk from materialising, that is, the damage, loss or injury from being suffered. · Similarly, in Pyrenees and Lutz the issue of breach presented no special difficulty but the issue of breach of a duty to take steps reasonably open to minimise the risk of faecal contamination of the Lake poses extraordinary problems because it raises complex issues as to the priority of allocation of Council's resources, the magnitude of the risk and the cost of the reasonable steps (see below). · In Pyrenees, Lutz and Crimmins, causation presented no peculiar problem but it is impossible to say whether viral contamination of an oyster grown in the Lake is attributable to a particular source of faecal discharge and therefore to prove that if Council had taken reasonable steps open to it to minimise faecal contamination of the Lake, and even eliminated particular sources of contamination, a person would not have suffered illness. · In Pyrenees, Lutz and Crimmins, there was no peculiar problem relating to the financial burden of discharging the duty of care posited, but the cost of identifying and keeping identified all point sources of pollution and exercising Council's powers to the extent necessary to eliminate them and keep them eliminated might be too onerous financially for the Council (see below). Foreseeability 351 It was foreseeable that if Council did not exercise its powers at all, the actions of others might cause consumers of oysters taken from the Lake to fall ill. The "others" were at least the polluters and the oyster growers (I refer to the role of the Statelater). Illness would not, however, ordinarily befall consumers because of the combined effect of the oyster growers' practices of depuration and not harvesting after a "fresh" until the danger period had elapsed. But it was forseeable that good practice might not be adhered to by one or more growers on one or more occasions. 352 It is also possible that the extent of faecal contamination might increase so that industry practices that sufficed in the past would not do so for the future or for particular occasions in the future. The assessment of the magnitude of the risk is complicated by the interposition of the growers and of the Minister administrating the Fisheries Management Act 1994. There had not, after all, been an outbreak of hepatitis A attributable to the Lake's oysters previously. Apparently the measures mentioned had been effective in the past. But increasing population could only increase the risk, as the Council knew. 353 In my opinion, it was foreseeable that if Council did not exercise its powers with sufficient effectiveness, faecal matter might pollute the Lake, and in particular, the oyster-growing areas of it, and that consumers would contract hepatitis A. 354 But foreseeability, alone, does not establish duty of care on the Council (the present case is not one of a positive act that causes physical injury; cf Wyong Shire Council v Shirt (1980) 146 CLR 40).

Proximity and other considerations 355 Since Hill v Van Erp (1997)188 CLR 159, the element of proximity or neighbourhood or closeness is not a necessary element to be insisted upon in all cases of negligence. But this does not mean that this has no role to play in any kind of negligence case. Proximity has been found a useful concept to facilitate expansion of the law of negligence by enabling it to extend to new situations on a gradual basis. For example, proximity was invoked when the liability of manufacturers to consumers was recognised in Donoghue v Stevenson [1932] AC 562. Proximity, or more precisely the requirement that the loss sufferer must be an ascertained individual or a member of an ascertained class of individuals whom the wrong-doer should have in contemplation, was invoked when the courts recognised liability for the negligent provision of information or advice causing pure economic loss in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, and liability for negligent acts causing pure economic loss in Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529. 356 In Pyrenees, Lutz and Crimmins the relationship between the public authority and the loss sufferer was much closer than it was between the Council and Mr Ryan in this case. In Pyrenees and Lutz the loss sufferers were physically close to the offending structures. In Crimmins the Authority directed the plaintiff as to where he was to work. 357 In the present case, the relationship between the Council and oyster consumers is indirect. The position can be contrasted with that in Donoghue v Stevenson in which a manufacturer bottled the ginger beer so that it was destined for consumption without any intervening safeguard. In the present case the ultimate wrong-doer was the polluter. Viruses would reach swimmers in the Lake without protective intervention but in the case of consumers of oysters the position was different. First, there was the intervention on the grower. Secondly there was the possibility of intervention by the Minister under the Fisheries Management Act 1994. In my respectful opinion, there is not a relationship of sufficient proximity or neighbourhood or closeness between the Council and consumers of oysters to warrant the imposition of an actionable duty of care on the Council which would require it to exercise its powers. 358 As noted earlier, Kirby J, alone of the current members of the High Court, has consistently applied the Caparo three-stage test of the existence of a duty of care. But it seems to me that in various ways other members of the Court have taken into account considerations of the kind to which his Honour has referred when addressing the question "[I]s it fair, just and reasonable that the law should impose a duty of a given scope upon the [alleged wrong-doer] for the benefit of [a person in the same position as the applicant]?" To my mind, several considerations make it not "fair, just and reasonable" to impose a duty of care on the Council. · The class of persons to whom Council would owe the duty would be indeterminate since the Council had no control over the number of oysters grown and sold, whereas, for example, the ginger beer manufacturer in Donoghue v Stevenson was in control of the number of bottles of ginger beer it manufactured. As noted earlier, on one view, in Crimmins, McHugh J (at [93]), with whom Gleeson CJ agreed, and Kirby J (at [233]) said that a duty to take affirmative action by way of the exercise of a statutory power is not to be imposed upon a public authority in favour of the public at large. · The duty which the primary Judge found, that is, a duty to take reasonable steps that were available to the Council to minimise faecal contamination of the Lake, will be effective only if "minimisation" results in "sufficiently pure" growing waters for the oyster industry, but it was unreasonable to require the Council to make that assessment when those more directly involved, the growers and the Minister, had, so far as the Council knew, effective alternative courses available to them, namely, depuration and suspension of harvesting for a sufficiently long period after a "fresh" and the ordering of a fishing closure. · The notion of "minimisation" is too vague and uncertain a concept to found a duty. It would give rise to great problems for a council to know what a duty to minimise required of it and for a court to determine whether the duty had been breached. It is no answer that in this particular case the problem would not arise at the breach stage because the Council did nothing: the question being considered at present is whether the duty as formulated by his Honour should be imposed in the first place. · The non-specificity of the sources of the faecal contamination that occurred highlights the indeterminate nature of the burden that the suggested duty to minimise would impose. In Pyrenees and Lutz the problem was a particular building, and in Crimmins, the assigning of particular workers to particular employers and sites. In the present case the Minister's powers would relate to the particular, albeit very numerous, sites the subject of identified oyster leases and aquacultural licences. But the extent of the burden imposed on the Council depended on the extent of wrongdoing of others - something beyond the Council's control. An effective exercise of Council's powers would have required it to carry out a sanitary survey; to identify every source of faecal pollution of the Lake; to exercise, where necessary to the fullest extent possible, its powers in relation to the sources identified; and to maintain that system by taking those steps sufficiently frequently and promptly. · The learned primary Judge seems to have thought that these measures would not have imposed an undue financial burden on Council, but, with respect, I think this overlooks an important matter. The particular powers cannot properly be considered in isolation. According to my understanding, a reason for the judicial reluctance to impose a duty affirmatively to exercise statutory powers is the question of cost and the related one of ordering of a public authority's priorities. In this regard, it is not amiss to note in passing "powers to order" referred to in s 124 of the Local Government Act 1993 which can be regarded as powers to remove, or to require the removal of, sources of danger to human health and safety, which are in addition to those related to faecal contamination of the Lake referred to earlier:

Table Orders Orders requiring or prohibiting the doing of things to or on premises Column 1 Column 2 To do what? In what circumstances?

1. To demolish or remove a building. (d) Building is erected in a catchment district and causes or is likely to cause pollution of the water supply.
2. To repair or make structural alterations to a building. (c) Building is erected in a catchment district and causes or is likely to cause pollution of the water supply.
3. To fence land. Public health, safety or convenience renders it necessary or expedient to do so and there is no adequate fence between the land and a public place.
4. To fence, empty, fill in or cover up a hole or waterhole in the manner specified in the order. Hole or water hole is or may become dangerous to life.
5. To do such things as are necessary to control the flow of surface water across land. Other land, or a building on the land or other land, is being damaged or is likely to be damaged.
6. To cease the use of premises or to evacuate premises. The person to whom order No 15 is given has failed to comply with the order.
7. To leave premises or not to enter premises A person to whom order No 15 is given has failed to comply with the order.

Orders requiring the preservation of healthy condition 20. To do such things as are specified in the order to put premises, vehicles or articles used for the manufacture, preparation, storage, sale, transportation or other handling or use of or in relation to food into a clean or sanitary condition. The premises, vehicle or article is not in a clean or sanitary condition. 21. To do or refrain from doing such things as are specified in the order to ensure that land is, or premises are, placed or kept in a safe or healthy condition. The land or premises are not in a safe or healthy condition. 23. To connect premises to the council's water supply by a specified date. The premises are situated within 225 metres of a water pipe of the council. 25. Not to use or permit the use of a human waste storage facility on premises after a specified date. It is necessary for the purpose of protecting public health.

Orders requiring the protection of repair of public places 27. To remove an object or matter from a public place or prevent any object or matter being deposited there. The object or matter: (a) is causing or is likely to cause an obstruction or encroachment of or on the public place and the obstruction or encroachment is not authorised by or under any Act, or (b) is causing or is likely to cause danger, annoyance or inconvenience to the public. There is actual or likely damage: 28. To take whatever steps are necessary to prevent damage to a public place and to repair damage to a public place. (a) by excavation or removal of material from or adjacent to the public place, or (b) by a work or structure, or (c) by surface drainage or irrigation. 29. To alter or repair a work or structure on, over or under a public place. It is in the public interest to do so.

359 Other Acts also gave powers to local government councils to give orders, notices or directions. For example, the Roads Act 1993 (NSW) empowered a council to order the removal of an obstruction or encroachment on a road and the Swimming Pools Act 1992 (NSW) empowered a council to order the owner of a swimming pool to bring it into compliance with that Act. 360 In all these instances, it is reasonably foreseeable that if councils do not effectively exercise the power in question, members of the public (in some cases the foreseeable class of injury sufferers is more limited) may well be injured and the councils know or should know this. 361 But I do not accept that a council comes under a duty to exercise these multifarious powers throughout its area merely because, in addition, (a) the council knows or should know that there are many instances of the particular kind of danger throughout its area; and (b) the cost of effectively exercising the power would, in the case of each exercise of it considered in isolation, not impose an undue financial burden on the council. Yet to hold the Council liable in the present case requires acceptance of such a view. 362 It may seem reasonable to impose on councils a duty to exercise any one of the above powers considered in isolation, at least where there is a forseeable risk of injury to public health. The financial burden in each case considered in isolation may not appear onerous. But taken together, the cost may be considerable. 363 In order to know that it was fair, just and reasonable to impose on the Council the posited duty of care, it would be necessary to have evidence of the Council's finances, the cost of all the activities in which in engaged, the cost of those in which it was under a duty to engage, and the magnitude of all the respective risks in question. Yet this is the very invidious kind of inquiry which the common law treats as inappropriate by its general principle of "no liability of public authorities for the non-exercise of discretionary statutory powers".

Breach of duty 364 If I am wrong in thinking that Council did not owe to consumers of the Lake's oysters a duty of care, the question is whether the Council took all steps reasonably within its power to perform the duty as formulated by his Honour. Inevitably, Council could have done more than it did, since it could have made minimisation of faecal contamination of the Lake its top priority it terms of allocation of resources and allocated resources to no other task until the contamination was minimised. But the question raised by the duty as formulated is whether Council took all steps reasonably open to minimise the faecal contamination of the Lake. Again, this formulation raises non-justiciable issues as to the priority that Council should reasonably have given to the task. But since Council did not address at all some particular complaints of faecal pollution made to it, it is easy to conclude, and I do so, that Council did not take all steps reasonably open to it directed to minimisation of faecal contamination of the Lake. That is, it breached at least to some extent its supposed duty, as formulated by the learned primary Judge, although the particular failures to respond to complaints are not shown to have been causally linked to the outbreak. 365 A different approach from that which I have taken above is to hold that the Council owed to consumers of the Lake's oysters a duty of care leaving the question what was required of the Council to discharge its duty to be considered in the context of the issue of breach. As Gleeson CJ observed in Crimmins (see [289] above), the difficulty of formulating the practical content of the duty of care may be a reason for denying the existence of the duty or for denying that the duty has been breached. Many, if not all, of the considerations to which I have referred in support of my view that Council did not owe the duty as formulated by his Honour (a duty to take such steps as were reasonably open to minimise faecal contamination of the Lake) would then be relevant to the scope of what the duty required of Council and whether Council breached the duty, and would be reasons why I would hold that it did not do so. 366 In this respect, it is important to recall that a "duty of care" means a duty of reasonable care and the concept of reasonableness makes relevant the oft cited passage in the judgment of Mason J in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48: "In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position. The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors." 367 The circumstances of the present case called for a consideration of factors of the kind referred to by Mason J before it could be held that the Council was in a breach of duty of care. That is, on this approach, I would hold that the Council was not shown to be in breach of its hypothesised duty of care merely because it did not take all steps that were reasonably opened to it to minimise the faecal contamination of the Lake.

Causation 368 In my view, it is not shown that Council's failure to take all steps that were reasonably open to minimise the faecal contamination of the Lake caused Mr Ryan's illness. This is not because what is at issue is a failure to prevent a train of events for which other persons are directly responsible, but because some faecal contamination of the Lake is consistent with Council's discharge of its supposed duty. In my view, it is not shown that Mr Ryan would not have contracted hepatitis A if Council had "minimised" the pollution. No doubt the risk of a consumer's doing so was increased or decreased according to how lax or vigorous Council was in exercising its powers, but an increase in the risk (or, more precisely in this case, a failure to reduce the risk) of another's sustaining loss or injury is not to cause that loss or injury: cf Bendix, above, of which I say more below. Misfeasance or non-feasance 369 The learned primary Judge held as an alternative ground of his decision, that by reason of the Little Street public toilet, the pit toilets on the islands and the stormwater drains, the case was one of misfeasance rather than non-feasance. With respect, I do not agree. There was not, and no doubt could not be, a finding that these sources contributed to the pollution which actually caused the outbreak of hepatitis A. It may, for example, have been caused by the septic tanks at Nabiac. Nor do I think that the work which Council carried out on the Little Street public toilet converted all the many potential sources of the faecal contamination of the Lake into instances of misfeasance, any more than repair work carelessly carried out by a highway authority on one part of a public road converts conditions of disrepair at other scattered locations, on what may be a road of many kilometres in length, into instances of misfeasance also. If circumstances are to constitute misfeasance, it is necessary to show some causal connection between the misfeasance, even if coupled with non-feasance, and the injury suffered. Council's past monitoring of water quality 370 In Pyrenees, Kirby and Gummow JJ accepted that that case was neither a simple one of positive action nor a case where the Shire's response to the risk of fire was "entirely passive" (at 423), but was a hybrid case; "an omission in the course of positive conduct" (per Gummow J at 392, adopting Lord Atkin's formulation in Donoghue v Stevenson). It was a case in which the absence of exercise of interconnected powers was difficult to separate from the exercise of powers which had already occurred. 371 But I do not think that the monitoring of water quality of the Lake which Council had carried out from 1989 to 1993 converted its inactivity in late 1986 into misfeasance. There was no connection between the two. As at late 1996, the Council was "entirely passive" and the outbreak was not attributable to "an omission in the course of positive conduct". The various documents to which his Honour referred (Mr Brooker's recommendation to Mr Braybrooke of 9 May 1996, Mr Braybrooke's endorsement of 17 May 1996, Mr Tuxworth's report of 21 May 1996 and Mr Brooker's report of 8 October 1996) as showing that Council was aware of a problem in 1996 did not, in my view, establish "positive conduct" by the Council either. Mr Ryan's notice of contention 372 It remains to refer to Mr Ryan's notice of contention in so far as it relates to the Council. Only one contention in the notice relates to the Council, as it does also to the State and the Barclay companies. It is that his Honour ought to have found that as a matter of law, causation was established if there was conduct of the appellants "which materially increased the risk of HAV contamination as distinct from materially contributed to such contamination". His Honour said that it was "clear" that Council's "breach occasioned damage to the applicant". I have said already that I respectfully disagree. As in Bendix, the most that can be shown here is that Council's inaction increased the risk of injury to some indeterminate extent. I would follow Mason P and Beazley JA in Bendix in holding that this does not provide a basis for liability. 373 Mr Ryan does not contend that the learned primary Judge erred in thinking that the Council was not in a position to eliminate the possibility of faecal contamination of the Lake. No doubt the more money and resources Council devoted to the exercise of the relevant powers, the greater the reduction in that pollution. It is true that the learned primary Judge found that the Council did nothing, that is, did not exercise its relevant powers at all. But it is not enough, in my respectful opinion, that to do something obviously must have reduced to some extent the risk of faecal pollution of the Lake and therefore to some extent the risk of his suffering illness. Mr Ryan must prove that if Council had taken particular steps he probably would not have contracted hepatitis A and that the taking of those steps was no more than what reasonable care required. He did not discharge this onus, in my view.

Highway authorities 374 In Australia (Buckle v Bayswater Road Board (1937) 57 CLR 259) and in England (Stovin v Wise, above) a highway authority is not under an actionable duty of care which requires it to exercise its power to repair a public road. That is, it is not liable for pure non-feasance. To my mind, the present case has more in common with Stovin v Wise than with Pyrenees, Lutz or Crimmins. In a non-feasance highway case such as Stovin v Wise, the highway authority is held to owe no duty of care to members of the public to do work on part of a highway even though · it knows of a danger spot on the highway; · it has embarked on repairing an unrelated danger spot or unrelated danger spots elsewhere; and · it would not be financially burdensome to repair the one that has caused the injury in question. Indeed, such a case is arguably stronger that the present one in favour of the imposition of a duty to act: it is known that a particular danger spot caused the injury and that work on it would have eliminated the danger entirely, whereas in the present case, unidentified, although identifiable, danger spots (sources of pollution) contribute to indefinable extents to the pollution of the waters in which the oysters are grown, so that it cannot be known what effect elimination of anything less than all of the danger spots will have, other than to reduce the risk to some indefinable extent. 375 Nor do I think a highway authority case such as Stovin v Wise distinguishable on the ground that drivers know that public highways are apt to have some danger spots. The driver who has an accident has no foreknowledge of the particular danger spot that caused it and is therefore relevantly in the same position as the consumer of oysters. Conclusion on Council's appeal on liability 376 In my respectful opinion, it would be not an incremental development but a major change of direction in the law if we were to hold that the Council owed an actionable duty of care to the oyster consuming public in the circumstances of this case. 377 The Council would be under a duty to exercise each of its powers where injury to members of the public was foreseeable if it did not do so, even if, as here, the exercise of the power could do no more than reduce the risk of the injury. The Council would have to take all steps reasonably available to it in respect of all of the powers or be subject to the risk of indeterminate and potentially huge liabilities, the extent of which was beyond its control. 378 In my view, it is for the High Court, not this Court, to take the step of recognising a liability in these circumstances. 379 For the reasons given above, in my opinion the Council's appeal should be allowed.

THE STATE'S APPEAL ON LIABILITY (N 298 OF 1999) Conclusions of primary Judge on Mr Ryan's personal and representative claims against the State 380 The learned primary Judge considered that the only case against the State that seemed open to Mr Ryan was not unlike that which his Honour had upheld against the Council: "that the State failed to exercise its management powers in such a way as to minimise the risk of HAV infection of oyster consumers." 381 His Honour did not accept that the State had been negligent by reason of the Minister's not having approved a QAP by the time of the rainfall event of 23 to 25 November 1996. Although the Fisheries Management Act 1994 (NSW) and the Fisheries Management (Aquaculture) Regulation 1995 (Reg 12 of 1995) commenced to operate on 16 January 1995, it was not until 1 May 1995 when Regulation No 92 of 1995, which amended that Regulation, commenced to operate, that there was a legislative basis for the establishment of the local QAP régime. His Honour was not prepared to find that the period from 1 May 1995 to late November 1996 was unreasonably long, particularly having regard to the fact that consultation with the industry and the public was required. 382 His Honour thought that the State was under a legal duty of care, performance of which demanded that it carry out a sanitary survey, require that harvesting cease after a "fresh", and exercise caution before it permitted a resumption of harvesting, by reason of the following matters: "(a) the State owned, and had powers of control over, the lake; (b) through the Department of Fisheries, it established, and supervised the operations of, a mosaic of oyster leases; (c) through the Department of Fisheries, it issued, and enforced the provisions of, aquaculture permits; (d) through the Department of Health, the State supervised the depuration process, including the nature and location of water intake points and the design, construction and maintenance of depuration tanks and ultra-violet facilities; (e) through the EPA, the State had powers under the Clean Waters Act to remove, disperse, destroy or mitigate pollution of waters (s27) and to carry out inspections and investigations of premises (s29); (f) through a number of agencies, the State was a participant in the Wallis Lake Estuary Management Committee, one of whose objectives was to prepare a management plan designed 'to sustain a healthy, productive and attractive estuary'; and, most importantly, (g) through the Minister for Fisheries, it had the power - at any time, to prohibit the taking of oysters from the lake [his Honour referred to subs 8(1) of the Fisheries Management Act 1994 (NSW) set out earlier]" 383 The learned primary Judge said that the case was not one of a failure to legislate, or one dependent on policy as distinct from operational factors. His Honour said: "Although the State cannot be made liable for failing to make a general prescription for sanitary surveys, it may be made liable for ignoring the necessity of a sanitary survey in relation to its management of a particular oyster growing area. In the present case, the State did more than lay down rules and leave the industry to manage itself. Through various agencies, the State actively involved itself in the management of the Wallis Lake oyster industry. This is understandable. The State had a direct financial interest in the industry, as a lessor of oyster leases, as well as indirect financial interests and (presumably) social and political concerns. The determination by the Fisheries Department of the areas to be leased to oyster growers, and the supervision of their use, were activities within the operational area; as were the depuration activities of the Health Department and any decisions by the Minister as to the closure or non-closure of the fishery. The EPA was involved in inspections and directions in relation to premises in the Wallis Lake catchment area. Decisions by EPA regarding the necessity to inspect premises for the purpose of determining whether they were sources of water pollution were decisions in the operational area. In sum total, through various agencies, the New South Wales government exercised substantial managerial control over the Wallis Lake oyster industry. It exercised that control by day-to-day operational decisions." 384 The notion of the State's "managerial role" in connection with Lake's oyster fishery was central to its duty of care, according to his Honour's view. He stated (at [336]): "It seems to me the State's involvement in the management of the Wallis Lake oyster fishery was so extensive and significant as to warrant the conclusion that it gave rise to a duty of care to oyster consumers. As with the Council, the State was not obliged to undertake a quality assurance role or guarantee the safety of the oysters harvested in the lake. But it was under a duty to take those steps that were reasonably open to it to minimise the risk of consumers contracting a viral infection from the oysters." 385 Passing on to the question of breach, his Honour thought that if the State was under a duty of care, breach was clear. He referred to the "overwhelming evidence as to the desirability of investigation of possible sources of pollution of a shellfish growing area". He referred to the fact that regular sanitary surveys are required in Europe and the United States of America because depuration cannot be relied on to remove viruses from shellfish. His Honour stated (at [337]): "The only way of safeguarding consumers is to prevent the shellfish becoming contaminated in the first place; that means preventing human faecal contamination of growing area waters. Although it may rarely be possible to eliminate the possibility of water contamination, a thorough initial shoreline survey will go a long way towards this, provided it is supplemented by regular subsequent surveys." (emphasis by primary Judge) 386 Where there is an existing commercial oyster-growing operation, the question arises whether harvesting must cease until a sanitary survey is completed. His Honour thought that it may be reasonable for the managers of an oyster fishery to permit continuation of production during such time as is necessary to enable them to undertake, or arrange for others to undertake, the required comprehensive sanitary survey, but that a point must arise after which, if the survey has still not been carried out, production must cease. 387 His Honour noted that officers of the State, and, in particular, Mr Bird, knew of the danger of harvesting without a comprehensive sanitary survey. I will refer to some of the evidence in this respect below. 388 His Honour concluded (at [340]): "Long before November 1996, the stage had been reached by which the State, as the ultimate manager of the fishery, should either have ensured the making of a comprehensive and competent sanitary survey or closed the fishery. It was negligent of the State to have failed to do one or other of these things." 389 His Honour noted that meat testing, like depuration, was not a guarantee of non-contamination, as the State well knew. Facts having special relevance to the State's appeal 390 On the appeal, the State made much of what it said was a determined policy of non-intervention and of leaving the oyster industry to self-regulation. Because this formed such an important part of its submissions, I will give a somewhat detailed account of the evidence on which the State relied in support of it. The background to the development of that policy was the nature and scope of the State's oyster industry. The oyster industry in New South Wales 391 In a document dated April 1992 titled "New South Wales Oyster Quality Assurance Program" prepared for the Minister for Health Services Management by an Advisory Committee, the rock oyster industry in New South Wales was described as follows: "Currently there are some 3,900 leases covering approximately 1,500 hectares distributed across 42 estuaries the length of the New South Wales coastline. Although there are 1,100 individual lease holders, the majority of commercial oyster production comes from a few hundred only and of these less than fifty growers product 80% of the annual total. Production reached a peak of 150,000 bags in the late 1970's but has been falling since and latest figures suggest it is now in the order of 90,000 bags per annum (1 bag = approx 100 dozen 'plate-size' oysters), with a farm gate value of about $34 million. Nonetheless, the rock oyster industry in New South Wales still constitutes the largest and most valuable aquaculture in Australia second to pearl production and has a gross value to the economy of close to $200 million a year. Under the NSW Food Act and Food Standards Code, the purification of all oysters produced and sold in New South Wales is a statutory requirement. Currently there are 306 oyster purification plants distributed between Wonboyn Lake near Eden in the south to the Tweed River in the north, a distance of just over 1,050 km. The majority of commercial growers of rock oysters are members of the NSW Oyster Farmers' Association." 392 It was common ground that it was impossible to guarantee that every oyster harvested in the State would be free of the HAV. That is, it was accepted that consistently with the absence of negligence, such an oyster might carry the virus. The reason, of course, is that it is impossible to guarantee that at all times all water anywhere in the State where oysters are grown will be free of faecal contamination. 393 The State emphasises that it had to deal with a situation of established oyster-growing areas, as distinct from a situation in which the issue was whether oyster-growing should be permitted to commence, and if so, subject to what conditions. I will discuss the implications of this distinction later.

Development of the State's policy in relation to the State's oyster industry down to the introduction in late 1994/early 1995 of the legislative framework for State and local QAPs. 394 The State submits that over a period leading up to 1994 and culminating in that year, the State government made a considered socio-economic decision in favour of a statutory framework which would place the financial and administrative responsibility for "on the ground" control of oyster production in the State's estuaries on the local growers. The decision was that the State would refrain from exercising its statutory powers as an adjunct to the day to day operational management of oyster-growing. In short, the submission is that his Honour mischaracterised the State's role as managerial: rather, the State facilitated management by the industry. 395 In 1981, following viral food poisoning in 1978 from New South Wales-grown oysters, a State Government Inter-Departmental Committee was established to consider the implications of the outbreak for public health, and the future role of the New South Wales oyster industry. The result was the introduction, in stages from 1981 to 1983, of compulsory depuration. The requirement was introduced as reg 19B of the regulations made under the Pure Food Act 1908 (NSW). The Department of Fisheries (later the Department of Agriculture and Fisheries) was responsible for the issuing of depuration plant permits and monitoring depuration plants. Food inspectors of the Department of Health monitored the processing of oysters at the wholesale and retail levels, that is, after depuration. In February 1989, responsibility in relation to the plants was also transferred to the Department of Health. 396 In 1987, the NHMRC adopted a "Code of Hygienic Practice for Oysters and Mussels for Sale for Human Consumption". This NHMRC Code reflected the possibility of the sale of non-depurated oysters - a possibility not relevant to New South Wales. 397 The Food Act 1989 (NSW) repealed and replaced the Pure Food Act 1908. The Food (General) Regulation 1992 was made under that Act. Clause 79A provided that a person who, in New South Wales, produced oysters for sale must ensure that they were treated in a purification plant in accordance with the conditions of a permit issued by the Director-General. The New South Wales Health Department adopted a "Code of Practice for New South Wales Oysters" with effect from 1 July 1991. Permits to operate oyster purification plants issued under cl 79A were expressed to be subject to conditions, including a condition that the permit holder must comply with that Code. Permits issued to Barclay Oysters on 1 July 1996 with an expiry date of 30 June 1997 were in that form. It is not suggested that Barclay Oysters' depuration plant was non-complying. 398 As noted earlier, in April 1992, an Advisory Committee drafted for the Minister for Health Services Management a report called "New South Wales Oyster Quality Assurance Program", which recommended the introduction of State and local QAPs. There was to be a State Committee and Co-ordinator and local area committees and local area coordinators. The Report stated (at 11): "While the establishment of local committees within existing oyster farmers' associations is desirable in the long term, initially they may have to be constituted independently of such associations in order to attract participation by all farmers, irrespective of their affiliations. The Advisory Committee recommends nomination of zone monitors for different areas of an estuary and this is certainly desirable to share the workload and gain comprehensive coverage particularly of the large areas (eg Port Stephens, Wallis Lake, etc)." 399 The Report addressed such issues as the "Development of Local Quality Assurance Programs", "Basic program requirements", procedures to be implemented in the event of a pollution emergency situation, the problem of growers who did not participate in the local QAP, and, as an incentive to the industry to meet the cost, identification in the market of oysters produced under a QAP. The local QAPs were to be organised, funded and administered by the oyster industry. The report stated (par 3.6, at 14): "Each local quality assurance program participant should understand very clearly from the outset that although adoption of a program represents a major step towards self regulation it is voluntary and has no statutory or legal status (at least in the initial stages)." (emphasis in original) 400 The Report recommended that in the event of a pollution emergency situation, the coordinator of the local QAP be notified. That coordinator would alert growers to suspend harvesting, arrange for samples to be collected and delivered to the testing facility, and ensure that the Health Department was notified of the event and of "action taken by industry". The report recommended that in the light of favourable sample results from the affected area, the coordinator, in consultation with the Health Department, would lift "closure/suspension". 401 The Report contained the following passages (at 24-25): " … inherent in the move towards industry self regulation is a consideration of the role of government agencies, particularly the NSW Health Department because the Minister for Health is charged with a responsibility for protecting the public's health and has appropriate regulations under the Food Act to ensure that foods which reach the consumer are indeed fit for consumption. In short, irrespective of any industry endeavours it is the NSW Health Department that makes the final judgement about the product and has the powers to impose penalties. ……………………………………………………………………………………………. … if the industry can achieve via self regulation a situation whereby its product meets the desired standards and offers a high degree of assurance to the public then the active role of government must be greatly reduced with consequent savings to the public purse. It is hoped that government will recognise this and respond accordingly by fostering the quality assurance objective. In the Advisory Committee's view, non-participants however few or many they may be, negate the whole concept of a quality control program and will almost certainly compromise its integrity at some stage. It is recommended therefore that the government amends purification plant permit conditions so that all oysters treated in plants be cultivated, harvested and purified in accordance with an approved quality assurance program. ……………………………………………………………………………………………. As an incentive for industry to meet the costs of quality assurance programs, oysters produced under a quality assurance program could be appropriately endorsed. The endorsement is made through the quality assurance program and not the NSW Health Department, enhancing industry self-regulation and quality assurance program integrity. Amendments to the Fisheries and Oyster Farms Act now in train should include provision for an aquaculture licence. One of the qualifications for such a licence could be that oyster farmers must be members of an approved or accredited quality assurance program." 402 On 9 December 1992, the Wallis Lake Oyster Farmers Association resolved to form a QAP committee. This was long before the commencement on 1 May 1995 of the regulation amendments that provided for QAPs. According to the minutes of the meeting, the committee comprised "Senior Health Surveyor", "Water and Sewerage Engineer", "Fisheries Inspector" and "4 oyster farmers from strategic areas of the lake". The first two officers were Council officers and the Fisheries Inspector was an employee of the State. The State's Department of Fisheries had an office at Tuncurry. Accordingly, both the Council and the State were, at that time, involving themselves in a growers' initiative, apparently to provide advice and information from their perspectives to assist the growers. 403 This Wallis Lake QAP Committee, in the early months of its existence, appears to have concerned itself with collecting levies from growers and making arrangements with a company to provide testing services to them. These arrangements were concluded in July 1993. On 9 August 1993, the Committee resolved that sampling should commence on or about 23 August with the dispatch of ten random samples from racks and that "samples on a weekly basis be sent or as required in September or when the 'shipping' season commenced." 404 On 26 August 1993, the Hon Ian Causley, Minister for Agriculture and Fisheries, wrote to the Premier, the Hon J J Fahey MP, requesting inclusion on the agenda for the Cabinet meeting on 31 August 1993 of the question of amendment of the Fisheries and Oyster Farms Act 1935 (NSW) to include provisions for QAPs for oysters. Minister Causley stated: "In essence, these programs are designed to provide greater assurance of product safety for the consumers of NSW. The programs are an initiative of the oyster industry and will be operated and fully funded by the oyster industry." 405 In February 1994, the State Advisory Committee previously referred to submitted its Final Report, again headed "New South Wales Oyster Quality Program". The Advisory Committee at the time comprised Mr Bird of the Department of Health, Mr Paul O'Connor of the Department of Fisheries and three oyster industry representatives. The "Executive Summary" section of the Report recorded that the Advisory Committee had developed, with the assistance of a consultant and in consultation with industry, a self-regulatory QAP that could be implemented in all commercial oyster farming estuaries in the State. According to the Executive Summary, a Guide detailing the QAP and including a Model QAP, as well as a Methods and Procedures Manual had been published and widely distributed. The Report makes clear that what was being advocated was an industry-controlled and industry-funded system. The Report stated (at 4): "The NSW Oyster Quality Assurance Program is based on a concept of industry self-regulation at the estuary level, with a minimum of central supervision." 406 The Report bemoaned the recalcitrant oyster growers the Advisory Committee had encountered and observed that local QAPs could be undermined by non-participants. The Report stated (at 5): "It is the view of the Advisory Committee, that for an Oyster Quality Assurance Program to function effectively it is essential that membership of the program be made compulsory for all oyster lease holders. This view is also supported by most commercial oyster growers, many of whom regard compulsory membership to be the lynchpin [sic] for the success of a Program." 407 The Report recommended a co-ordinated approach on a state-wide basis and the appointment of a permanent committee, with legislative backing, to oversee and administer the Program with the assistance of a State Coordinator. The Report stated (at 5): "Unfortunately, due to present industry politics, the issue of a Permanent Committee remains contentious. A faction of industry do not favour statewide co-ordination through a Permanent Committee and would prefer each Program to be administered solely at the local estuary level. … " 408 The Advisory Committee made the following recommendations (at 1): "1. Membership of an Oyster Quality Assurance Program be made compulsory for all oyster leaseholders either by a condition of oyster lease ownership or oyster sale. 2. A Permanent Committee comprising 3 elected oyster industry representatives, 1 Health representative, 1 Fisheries representative and 1 independent Chairperson be established to administer and oversee the Program. 3. A state Co-ordinator be appointed, responsible to the Permanent Committee, to; [sic] co-ordinate individual programs; maintain a state-wide data base; liaise with government, academic, research and industry groups; and organise seminars, audits, reports and educational programs. 4. The Government take the appropriate action to legally indemnify local committees and co-ordinators who voluntarily and in good faith, carry out their duties as specified by the Program." 409 In November 1994, Cabinet gave approval to the introduction of an industry funded "Shellfish Quality Assurance Program" for New South Wales. The role of the proposal was stated to Cabinet to be as follows: "2.2 The proposed QAP will complement the existing requirement (under the Pure Food Regulation) to purify oysters and will provide the community with a greater guarantee of product safety when they buy oysters." 410 Minister Causley, and the Honourable Ron Phillips, Minister for Health, recommended that Cabinet approve the introduction of the QAP and note that: "(i) The proposal will involve the establishment of separate QAPs on each shellfish producing estuary and that these estuary-based programs will be co-ordinated at a state level to ensure standards are achieved; (ii) membership of the QAP program will be made compulsory for all shellfish growers, as a condition on their aquaculture permit; (iii) the proposal will involve three levels of funding, namely: · funding for microbiological testing of individual oysters (to be met by the grower - as now); · funding for environmental testing (the level of testing required, which will vary from one estuary to the next, will be specified in the QAP; the costs will be met collectively by the growers on that estuary); · funding for the state wide co-ordination of estuary-based programs and for other costs associated with the QAP (to be met by a compulsory charge on all oyster farmers)." 411 The Ministers also recommended that Cabinet approve the introduction of a regulation under s 156 of the Fisheries Management Act 1994 requiring all shellfish farmers to pay an annual contribution to fund state-wide coordination of the estuary based programs. Finally, they recommended that Cabinet approve of the QAPs' being administered by "NSW Fisheries". Accordingly, the proposal was that the State bear the responsibility and cost of administering the QAPs, but that otherwise they be run and funded by the industry. 412 The Ministers' supporting paper for Cabinet noted, by way of background, that the Sydney rock oyster industry comprised some 980 lessees growing oysters on 3,580 leases spanning 4,800 hectares of Crown land in forty-one estuaries and that in recent years production had averaged 120,000,000 oysters per year valued at $28,000,000 to $35,000,000 - one quarter of the value of fisheries production in the State. (These figures were somewhat different from those in the April 1992 report drafted by the Advisory Committee noted earlier, but the differences are not presently material. It is of some interest that the Report of April 1992 had stated that although there were 1100 individual lease holders, "the majority of commercial oyster production [came] from a few hundred only and of these less than fifty growers produce[d] 80% of the annual total"). 413 The Ministers' paper for Cabinet noted that · since 1981 all oysters grown and sold in the State had been required to be purified by being held in clean (sterilised) water for thirty-six hours to allow them to cleanse themselves; · the United States and most other Australian states and an increasing number of Asian countries, on the other hand, classified their growing areas according to pollution levels and most use the United States FDA classification system; · Europe took a different approach again, testing oyster meat for contamination; and · purification alone was not sufficient to guarantee product safety and was not effective in removing the viruses commonly found in human sewage which were known to be the major causes of disease associated with the consumption of raw shellfish. The paper referred to the work conducted by representatives of the oyster industry, New South Wales Health and New South Wales Fisheries to: " … develop a program for water and meat sampling that [would] identify those times when contamination is such that the oysters should not be harvested." 414 Paragraph 4.10 of the paper is important and was as follows: "4.10 The QAP committee recognised the advantages of NSW adopting the same system [a program for water and meat sampling], but recognised that the U.S. FDA system would involve comprehensive water sampling for several years in each estuary to allow classification of the growing areas, and involve ongoing sampling thereafter. The sampling would have to be carried out by a Government agency and, because of the diffuse nature of the oyster industry in NSW, would be extremely expensive to introduce. For this reason, the committee developed a compromise option (the QAP program) which should meet the basic need (product safety) and yet impose much lower costs on industry." 415 This paragraph expressed a policy decision. Rightly or wrongly, what was recommended was rejection of alternative systems of safeguards used elsewhere in the world in favour of a system of local estuary-based QAPs and a State "master" QAP, all, in substance, funded and controlled by oyster growers. 416 The Ministers' paper continued by noting that the Advisory Committee's proposal would entail developing individual programs for the forty-one estuaries in which shellfish were commercially grown, based on a model program developed by the State QAP Committee. Paragraph 4.14 was as follows: "4.14 The QAP is to be industry run and industry funded. Funding for the program is required at three levels: (i) to pay for meat testing prior to marketing the oysters - this is required now and, as now, will be funded by the individual oyster farmer; (ii) to pay for the environmental testing required by, and any other costs associated with, the estuary-based program - it is proposed that these funds will be collected at the local level by the local committee responsible for developing and implementing the program; (iii) to pay for statewide co-ordination of the estuary based programs and other costs associated with the QAP - it is proposed that this requirement would be met through an 'annual contribution' required from all oyster farmers by Regulation made under Section 156 of the Fisheries Management Act 1994." 417 Finally, pars 4.25 and 4.26 were as follows: "4.25 Industry (all factions), NSW Fisheries and NSW Health all support the introduction of a Shellfish Quality Assurance Program. The program will require minimal government involvement, although NSW Fisheries and NSW Health may from time to time have back-up enforcement roles (as they do now). 4.26 NSW Health are keen to separate their enforcement role (in closing rivers to harvesting or in prosecutions) from the education function and as a result do not want to administer the QAP program. It is proposed, therefore, that the statewide co-ordinator will be employed (using industry funding) by NSW Fisheries and that NSW Fisheries will have administrative responsibility for the program." (my emphasis) 418 The Ministers' paper thus reflects a view of the QAPs as having an "education function". The reference seems to be to the notion that the industry would encourage its members to conform to QAP standards. The Health Department was taking the view that it might be compromised in its "enforcement role" if it also administered the QAPs, no doubt thereby developing a close relationship with oyster growers and their representatives.

419 The Minister's paper noted that the QAP would "essentially be an industry run and industry funded program" and that, although New South Wales Fisheries would employ the state-wide coordinator, it would use industry funds for the purpose. Cabinet adopted the Minister's recommendations.

Legislative powers of State government 420 It is convenient at this stage of this chronological account to refer to the relevant legislative powers of the State government. 421 As at the date of the Ministers' paper (November 1994) the Fisheries Management Act 1994 had already been assented to (on 2 June 1994). It commenced to operate on 16 January 1995. It introduced the "aquaculture permit" system. The Fisheries Management (Aquaculture) Regulation (Reg No 12 of 1995), which was gazetted on 13 January 1995 and commenced on the commencement of the Act, that is, on 16 January 1995, provided for such matters as aquaculture permits and aquaculture leases. It was Regulation No 92 of 1995 gazetted on 3 March 1995, which commenced on 1 May 1995 and amended the Fisheries Management (Aquaculture) Regulation, that provided for the New South Wales Shellfish QAP and for the local estuary based QAPs, and so gave effect to the Cabinet's adoption of the Ministers' recommendations. It was thus as from 1 May 1995 that there was a legislative basis for imposing a condition on aquaculture licences requiring the holder to comply with a local QAP. 422 Section 8 of the Fisheries Management Act 1994 (NSW) empowering the Minister, by a "fishing closure" to prohibit the taking of, relevantly, oysters, was set out earlier. Section 10 provided that such a "fishing closure" remained in force, subject to the Act, for a period (not exceeding five years) specified in the notification. Section 14 provided that a person who took fish, or, subject to a defence, was in possession of fish taken, in contravention of a fishing closure, was guilty of an offence. 423 Section 143 empowered the Minister to determine "plans for the development of the commercial aquaculture industry" called "development plans" and provided that a development plan might relate to any aspect of the industry. Section 144 prohibited a person from undertaking aquaculture except under the authority of an "aquaculture permit" and provided that aquaculture permits might be of such different classes as were prescribed by the regulations. Section 145 provided for the making to the Minister of applications for aquaculture permits which were required to be accompanied by a commercial farm development plan describing the manner in which the applicant proposed to undertake the aquaculture. 424 Section 156 provided that a permit holder must, if the regulations so required, pay to the Minister an annual contribution to "costs relating to the aquaculture industry". 425 Section 160 empowered the Minister to cancel or suspend aquaculture permits. Section 183 empowered him, by order, to declare any area to be a quarantine area because of the presence or suspected presence of a declared disease. The same section provided that such an order might prohibit the taking of fish or specified fish in or from the quarantine area, and, in the case of an area subject to an aquaculture permit, require the permit-holder to take such action as was specified in the order or directed by a fisheries officer (including the destruction or treatment of fish cultivated or located in the area). 426 I set out earlier the provision of subs 189(1) that the Minister might, by a fishing closure, prohibit, relevantly, the taking of oysters cultivated under an aquaculture permit from the aquaculture permit area if the Minister was satisfied that the oysters are or are likely to be unfit for human consumption. This provision, to which I will return later, made it clear that the fishing closure provision was not displaced by the issue of an aquaculture permit, at least where the Minister was satisfied that oysters from the permit area were or were likely to be unfit for human consumption. 427 The Fisheries Management (Aquaculture) Regulation 1995, as amended by Regulation No 92 of 1995 with effect from 1 May 1995, provided for local QAPs and an overarching New South Wales QAP. Clause 12B of the amended Regulation was as follows: "(1) The Minister is required to determine as a commercial aquaculture industry development plan a program to assure the quality of shellfish taken from estuarine waters for sale for human consumption. (2) The plan is to consist of the New South Wales Shellfish Quality Assurance Program, which is to include local shellfish quality assurance programs for those estuarine waters where holders of class A permits operate aquaculture farms. (3) The objective of the New South Wales Program is: (a) to ensure that shellfish are taken from estuarine waters to be sold for human consumption only if: (i) the shellfish meet the quality standards specified in or under the program, and (ii) those waters meet environmental standards so specified, and (b) to supervise the co-ordination of local programs, and (c) to ensure that local programs meet the objectives specified in paragraph (a). (4) The Minister is responsible for establishing the New South Wales Program in consultation with the New South Wales Committee. (5) If there is an inconsistency between the New South Wales Program and a local program, the New South Wales Program is to prevail." (my emphasis). (The "New South Wales Shellfish Quality Assurance Program" was the program established under cl 12B itself and was called the "New South Wales Program". As noted earlier, the Lake's oyster farmers all held class A permits.) 428 Regulation 12C required the Minister to appoint "an advisory committee" to be called the "New South Wales Shellfish Quality Assurance Committee" (called the "New South Wales Committee") comprising six members, one of whom was to be appointed by the Minister as chairperson, four of whom were to be, in effect, oyster growers, and the remaining one of whom was to be the Director of Fisheries or his or her nominee. In addition, cl 12C required the Minister to appoint a local shellfish quality assurance committee for each area or group of areas of estuarine waters to which the New South Wales Program related. The clause also provided that in appointing the members of a local committee, the Minister was required to consult the New South Wales Committee and representatives of, in effect, oyster growers whose aquaculture farms were located within the relevant estuarine waters, and that he might only appoint such growers as members of the local committee. Subclause 12C(5) was as follows: "Neither the New South Wales Committee or a local committee is subject to the control or direction of the Minister, but the Minister may require it to reconsider any decision that it has made." Subclause 12C(6) empowered the Minister to remove from office all or any of the members of the New South Wales Committee or of a local committee. 429 In substance, cl 12D made the New South Wales Committee responsible for supervising the administration of the New South Wales Program and advising the Minister on certain matters and developing and implementing programs for the education of aquaculture farmers and the general community in public health and environmental misuse. Clause 12E made the local committee responsible for establishing or administering the local QAP for the estuarine waters for which it was appointed. A local program was required to include any minimum standard specified in the New South Wales Program for the quality of shellfish cultivated in the relevant estuarine waters and for the purity of those waters. Subclause 12E(4) provided that if a local committee failed to submit a draft local program to the Minister for approval within three months after the committee's appointment, or, having submitted a draft program, failed to comply with the Minister's conditions for approval of it within one month after being notified of those conditions, the Minister might determine a local QAP for the area or areas of estuarine waters concerned. 430 Clause 12G made it a condition of Class A permits (clause 4 provided for nine classes of permit but as noted earlier, all those permitting the cultivation of oysters in the Lake were class A permits) that the holder comply with the requirements of the New South Wales Program and of the applicable local program, that the permit holder pay to the relevant local committee such charges as were from time to time fixed by it and levied on, and notified in writing to, the permit holder, and pay for any relevant test required to be conducted under the local program on shellfish located within the aquaculture farm or farms operated by the permit holder. 431 I turn now to the Clean Waters Act 1970 (NSW). Subsection 16(1) of that Act provided simply: "A person shall not pollute any waters." There were related prohibitions in following subsections of s 16. Section 5 defined "pollute" widely. But subs 16(6) provided that notwithstanding the earlier prohibitions in s 16, it was not an offence for a person to pollute waters if he held a licence and did not pollute in contravention of its conditions. Section 27 empowered the EPA to direct, inter alia, any local authority (such as the Council) to exercise its powers under that section described in [347] above. Section 27A empowered the EPA, by written notice, to direct an occupier of premises from which the pollution of any waters was caused, or a person who caused the pollution of any waters, to take such measures to remove, disperse, destroy or mitigate the pollution as were specified in the notice. Section 29 gave wide powers of entry and inspection and associated powers to an "authorised officer" (defined to mean a person authorised in writing by the EPA to act as an authorised officer for the purposes of s 29). 432 Section 17A of the Pollution Control Act 1970 (NSW) provided that a person might apply to the EPA for a licence in respect of, inter alia, the pollution of waters within the meaning of the Clean Waters Act 1970. Section 17D of the Pollution Control Act empowered the EPA to grant applications for licences to pollute, either subject to conditions or unconditionally. The section also empowered the EPA, during the currency of a licence to pollute, by notice in writing served on the licence-holder, to revoke or suspend the licence or any conditions attached to it or to attach new conditions to it. 433 Section 17I provided that a person might apply to the EPA for pollution control approval to do anything specified in, inter alia, par 19(1)(a) of the Clean Waters Act 1970. Paragraph 19(1)(a) provided that a person was not to install, construct or modify any apparatus, equipment or works for, relevantly, the discharge of pollutants into any waters or the treatment of pollutants prior to, and for the purpose of, their discharge into any waters. 434 Section 24 of the Pollution Control Act gave an "authorised officer" (a person authorised in writing for the purpose by the EPA) wide powers of entry and inspection and associated powers. 435 The Clean Waters Regulations 1972 were made under the Clean Waters Act 1970. Regulation 21 provided that where pollutants were being or were likely to be discharged into waters from any premises, the EPA might require the occupier to take any one or more of specified courses of action, including courses of action directed to causing the pollution to cease. 436 There was other legislation relevant to the State's role. The Food Act 1989 (NSW) provided that where the Director-General of the Department of Health had reasonable grounds to believe that it was necessary to do so "in order to prevent or mitigate a serious danger to public health", he might make various kinds of orders, including an order prohibiting the cultivation, taking, harvesting or obtaining, from an area specified in the order, of any food or of any food of a class or description so specified (ss 44, 45(1)(b)). 437 The Public Health Act 1991 (NSW) provided (in s 5) that if the Minister considered on reasonable grounds that a situation had arisen under which the health of the public was, or was likely to be, at risk, and certain other conditions were satisfied, the Minister might take such action and give such directions as he or she considered necessary to deal with the risk or its consequences. 438 Section 7 provided that if the Minister suspected on reasonable grounds that a risk to public health had arisen or was likely to arise because of water in, or flowing from, any source, the Minister might take such action and give such orders as he or she considered necessary to restrict or prevent the use of the water and bring the water as nearly as practicable to a satisfactory condition. 439 Section 10 provided that if the Minister considered on reasonable grounds that a public authority had failed to exercise a function and the failure was likely to endanger the health of the public, the Minister might require it to exercise the function. 440 The Protection of the Environment Administration Act 1991 (NSW) constituted the EPA and gave it a wide environment protection function and responsibility, and wide related powers. Subsection 12(1) empowered the EPA, after consultation with the public authority in question (such as a local government authority) to "direct any further authority to do anything within the powers of the public authority which [would], in the opinion of the [EPA], contribute to environment protection." 441 The Environmental Offences and Penalties Act 1989 (NSW) provided for offences and penalties for a range of contraventions of environment protection legislation. Development of the State's policy in relation to the State's oyster industry after the introduction in late 1994/early 1995 of the legislative framework for State and local QAPs. 442 On 10 October 1995 the Oyster Farmers' Association of New South Wales Ltd wrote to the Minister for Fisheries expressing concern over what it perceived to be delay in the introduction of the QAP. The Minister replied on 6 November explaining that some delay had been experienced in finding a suitable person to chair the NSW Committee. He also advised that his Department had been preparing aquaculture permits for oyster farmers and had indicated that accounts for their QAP contributions would be mailed in December 1995. 443 The first meeting of the State Committee was held on 15 December 1995. The chairperson was Annette Fordham. Other members present were four representatives of the New South Wales shellfish industry and Damian Ogburn of the Department of Fisheries. Steve McOrrie, also of that Department, attended as an observer. There was discussion of the Committee's task of establishing the State QAP; the possibility that there might be no volunteers for membership of the local committees so that they could not be constituted; the appointment of a State coordinator; and the State coordinator's level of salary. 444 No doubt there were further meetings throughout 1996. At the meeting on 6 September 1996, some two months before "the rainfall event", Dr Kerry Jackson was introduced as "the recently appointed State Coordinator". It was agreed that she would work for three days from her home and two days at an office in the Department of Fisheries. 445 The chairperson summarised what was known of the Tweed River problem and there was discussion of the procedures according to which the estuary there could be safely re-opened for harvesting. The minutes contain the following passage: "During the course of the meeting the Chairman was notified of various growers in different estuaries who were that very day, apparently harvesting oysters during periods of heavy rain. Efforts were made by various committee members to contact these people and to convince them of the disasters which would result from such action." This appears to be an illustration of the "education function" of the QAP system mentioned earlier - the industry encouraging its members to conform to safety standards. 446 Dr Jackson was asked to prepare a "pro forma for the gathering of water quality data". The local QAP for the Manning River estuary was presented and members were asked to read it and to consider it as "the first [local QAP] for presentation to the Minister for ratification". No doubt, the reference was to cl 12E of the Fisheries Management (Aquaculture) Regulation 1995 noted above. 447 At the meeting of the State Committee on 26 September 1996, Dr Jackson updated information on the situation in the Tweed River estuary. She reported that pre-depuration bacteriology and virology tests gave satisfactory results and that the plan was to re-open the estuary. The minutes of the meeting record that all present agreed. 448 On 2 October 1996, Dr Jackson prepared a paper addressed to the State QAP Committee stating that she had been employed as State Coordinator of the QAP on a full time basis since 2 September 1996 and had identified several major problems, which, if not rectified, would render the position of State Coordinator untenable. She said that her major concern was that the State Program was yet to be written. She pointed out that under the Fisheries Management (Aquaculture) Regulation 1995 the State Program was to be developed by the Minister in consultation with the Committee. Her paper stated: "My concern is that until the State Program is written the position of State Coordinator will be very difficult, as illustrated by the problem with implementing a QAP closure in the Tweed. To permit a legal QAP closure in the Tweed River the permit conditions of the five growers concerned had to be amended. It needs to be established who will write the State Program, and minimum standards need to be established for that program. In my opinion this is a priority - how can we demand a QAP from estuaries when the State Program has not been written and maintain any form of credibility?" Dr Jackson also complained that there was uncertainty as to whether the State Coordinator was to work for the Department of Fisheries on the one hand or the Committee and the State's oyster growers on the other hand. 449 On 6 November 1996, Mr Bird, as Manager, "NSW Oyster Program and Public Health Consultant, Oysters", to the Health Department prepared a report on the outbreak in August and September 1996 of gastroenteritis affecting a large number of people who had consumed raw oysters harvested from the Tweed River. According to the report, growing areas were suspected of being polluted by sewage from the sewerage system, septic tanks and boats. Oysters harvested over a period of about a month were suspected. According to Mr Bird's report, purification had not been conducted in accordance with permit conditions and was inadequate according to an examination of implicated oysters. Moreover, oysters had not been opened hygienically. According to Mr Bird's report, the Tweed River estuary was closed by NSW Fisheries on 4 September 1996 and the smaller harvesting area of Chinderah was re-opened on 18 September 1996, although the major oyster-growing area was still closed as at 6 November 1996. The abstract in Mr Bird's report concluded: "A quality assurance program was established to monitor the public health safety of oysters and water in growing areas and indicates a continuing water quality problem. Sewage from the sewerage system, septic tanks and boats are suspected. This incident raises a number of problems requiring solutions: an effective oyster quality assurance program, greater compliance by purification plant operators, hygienic oyster processing, an adequate trace-back system, a more effective public health network, a modern government virology laboratory and greater community and government involvement in addressing sewage pollution of our rivers." 450 A copy of Mr Bird's report was forwarded to Dr Jackson on 12 May 1997 in response to a request by her dated 15 January 1997, the latter date being just before the outbreak of hepatitis A caused by the consumption of oysters from the Lake, but long after the rainfall event of 23-25 November 1996 and Mr Ryan's consumption of the oysters. 451 There was a further meeting of the State QAP Committee on 12 November 1996, chaired by Ms Fordham and attended by three representatives of the industry, Damian Ogburn of NSW Fisheries and Dr Jackson. It was reported that investigation revealed that oysters harvested from the Tweed River estuary were involved in the outbreak of 160 reported cases of gastroenteritis in northern New South Wales and southern Queensland, but that the Report on the outbreak was not yet finalised. 452 The heavy rainfall event in the area of the Lake occurred from 23 November 1996 to 25 November 1996. 453 After the outbreak, Dr Jackson wrote as follows on 14 February 1997 on the letterhead of "NSW Shellfish Quality Assurance Program" "WALLIS LAKE CLASS A AQUACULTURE PERMIT HOLDERS Due to recent events in the Wallis Lake area the Wallis Lake Quality Assurance Program in consultation with the New South Wales Shellfish Quality Assurance Program (NSW SQAP) has undertaken that all growers will immediately cease the harvest of any shellfish from leases located within the confines of Wallis Lake. The cessation of harvesting will remain in force pending the results of further investigations by NSW Health and local industry. The harvest ban will be monitored by the local Quality Assurance Committee, NSW SQAP State Coordinator, NSW Health and NSW Fisheries." I assume that the letter was distributed to the Class A aquaculture permit holders, that is, all of the Lake's oyster growers.

General 454 In my respectful opinion the State was not liable to Mr Ryan on the ground on which his Honour held that he was. Lee J and Kiefel J conclude that the State's appeal should be dismissed and their view will prevail. For this reason I will not state my own reasons as amply as I might otherwise have done. 455 I do not think that the State had a duty to take steps that were reasonably open to minimise faecal contamination of the Lake for the reasons that I gave for reaching that conclusion in respect of the Council. 456 At the outset, certain aspects of the State's position are noteworthy. 457 First, the State had statutory power to prevent the actual harvesting of oysters in the interests of public health under ss 8 and 189 of the Fisheries Management Act 1994 and ss 44 and 45 of the Food Act 1989, whereas the Council's powers enabled it to reduce the risk of viral contamination of the waters of the Lake and therefore of the oysters growing in it. But the Minister was not in fact satisfied that the oysters were, or were unlikely to be, unfit for human consumption (cf par 189(1)(b) of the Fisheries Management Act 1994) and the Director-General of the Department of Health did not in fact have before him reasonable grounds to believe that the making of an order under s 45 of the Food Act 1989 was necessary in order to prevent or mitigate a serious danger to public health (cf s 44 of the Food Act 1989). In this respect, the position may be contrasted with that in Pyrenees and Lutz. In both of those cases the power to eliminate the danger was exercisable upon the existence of a certain objective state of affairs and that objective state of affairs had in fact arisen to the knowledge of the Shire and the council respectively. In the present case, there had not previously been an outbreak of hepatitis A caused by the Lake's oysters and the State, through its various emanations, did not in fact believe or in fact have reason to believe that one was imminent on the occasion of the rainfall event of late November 1996. In so far as the duty posited is based on these powers, it would have to be formulated in the first instance as a duty to investigate and to become "satisfied" or acquire "reasonable grounds". This highlights the difficulty of constructing a duty to act out of statutory powers of this kind. 458 Secondly, the State had a measure of control over the oyster industry in the respects mentioned by the learned primary Judge, mentioned above, that was not available to the Council. In particular, by its control over the granting of oyster leases and aquaculture licences, it could limit the number of oysters placed in the market and therefore the potential extent of its liability in a way that the Council could not do. On the other hand, the State did not have carte blanche: the industry was well and long established by November 1996. Some idea of the dimension of the industry can be gained from the Advisory Committee's paper of April 1992 and the Ministers' report to Cabinet of November 1994, both noted earlier. 459 Thirdly, the State's measure of control was in respect of identified sites, whereas the duty posited in respect of the Council related to numerous unidentified sources of discharge that would change from time to time and could be identified only by a sanitary survey which was updated with sufficient frequency. It is true that the "identified sites" might increase or decrease in number over time but the identity of the lease and aquaculture permit sites was at any time known to the State. Again, however, the number of the sites was great. 460 As in the case of the Council's appeal, the duty posited is one to exercise statutory powers owed to the public at large, not in respect of a particular known source of danger which later materialised, causing an adjoining neighbour loss (as in Pyrenees and Lutz), but, in the case of the State, in respect, apparently, of all oyster-growing estuaries where there was human faecal contamination, the State's measure of control being the same throughout the State. 461 As in the case of the Council, there is no discussion in the learned primary Judge's reasons for decision of all the other statutory powers given to the State government, the exercise of which might minimise the risk of injury or illness. Take, for example, the power to maintain State highways. Assume that there are highways at various places throughout the State that have fallen into disrepair so as to pose a risk of injury to highway users. Is it to be said that there is a duty of care to keep them in repair and also to minimise the risk of faecal contamination of all oyster-growing estuaries or even only of the Lake? What if available funds to exercise all relevantly similar powers throughout the State prove inadequate? Who is to determine priorities? Is a court to do so? Pyrenees and Lutz are distinguishable for the reasons given earlier. Unless a case is exceptional, such as Pyrenees, Lutz and Crimmins, the general principle that there is no liability of public authorities for non-feasance fulfils the policy of excluding the invidious intrusion of the courts into questions of this kind which the common law has treated as appropriately reserved for elected political representatives. 462 Lest it be thought that the highway analogy is the only one available, I refer to the following. The Public Health Act 1991 (NSW) empowers the Minister to take a variety of courses of action where the health of the public is or is likely to be subjected to risks of various kinds. The Food Act 1989 (NSW), previously referred to, empowers the Director-General of the Department of Health to make various kinds of orders when he or she has reasonable grounds to believe that the making of an order is necessary to prevent or mitigate a serious danger to public health (see Part 4 (ss 44-56) of that Act). The Food Production (Safety) Act 1998 (NSW) establishes a body corporate called "Safe Food Production NSW" and Part 5 (ss 23-54) of the Act empowers it and officers authorised by it to exercise a range of enforcement powers in the interests of public health. 463 My conclusion that the State was not shown to be liable is, I think, supported by various approaches to the issue. First, I do not think that the array of statutory powers referred to, including the power given by subs 189(1) of the Fisheries Management Act 1994 to close an oyster fishery where the Minister was satisfied that, relevantly, oysters were, or were likely to be, unfit for human consumption, gave rise to the duty. A duty to exercise that power would, in my view, in accordance with Pyrenees and Lutz, not arise unless, at least, the State knew that the oysters to be harvested would be, or would be likely to be, unfit for human consumption. But there had not previously been an outbreak of hepatitis A arising from the consumption of oysters harvested from the Lake. The Lake's growers' practices of depuration and suspension of harvesting for a sufficient period following a "fresh" had apparently worked in the past. Of course, the possibility of the irresponsible grower was always of general concern, but this did not rise to the required level to impose a duty to exercise statutory powers. Similarly, although, no doubt, instances of faecal contamination over time can be pointed to, the evidence did not establish that the standard of purity of the Lake's water was known to the State to be dangerous by being, for example, significantly lower than that of the water in which oysters were satisfactorily grown and harvested elsewhere in the State or overseas. 464 But let it be assumed that the standard throughout the State was lower than the standard insisted upon in Europe and the United States of America. It may be said that the State government failed in its duty to the public in this respect. That is, it may be said that in the interests of public health the State should have adopted a different régime from that which it did adopt. In particular, it may be said that the State should have adopted a system involving sanitary surveys of the estuaries or flesh testing or both. I do not think, however, that a failure of that kind, which I would characterise as a failure of policy, necessarily indicates breach of an actionable duty of care to those members of the public who consume oysters. 465 A further point in relation to "fishing closures" under s 189 of the Fisheries Management Act 1994 is that the duty proposed would have to be understood as one requiring the Minister to consider the question whether he should be satisfied that the Lake's oysters were or were to be likely to be unfit for human consumption. To my mind this highlights, at least in relation to that particular power, the fact that what is involved is a question of priorities and allocation of resources. 466 I accept the State's submission that, rightly or wrongly, the government of the day took a policy decision in 1994-95 to the effect that the State would distance itself from the day to day management of the oyster industry in favour of a system of industry-based control to be implemented through two bodies representative of the industry: a State QAP Committee and local estuary-based QAP committees. I do not mean to suggest that by merely recording a policy of "non-involvement", a public authority can necessarily avoid incurring legal liability. It is hard to accept that the formal adoption of a policy of non-intervention would have saved the Shire in Pyrenees or the council in Lutz. The nature of their legislative powers and the facts and circumstances of their knowledge of the particular danger and the steps taken in relation to it would have prevailed to render them liable nonetheless. But in the present case the State did act consistently with its policy. It did not, for example, embark upon testing the growing waters of the Lake's oyster fishery or the flesh of oysters taken from it. There is no scope for saying that partial action gave rise to "a common law duty to take care which is to be discharged by the continuation or additional exercise of [partially exercised] powers": Pyrenees at [177] per Gummow J. 467 The State's policy is to be contrasted with the learned primary Judge's finding that the State "managed" the oyster fishery in the Lake. A question arises as to the meaning of the notion of "management" in the present context. The State had ultimate control but this is not management of a kind that would generate a duty of care. Moreover, I do not think the State's roles of licensing and inspecting depuration facilities, inspecting premises from an environmental viewpoint through the EPA, granting oyster leases, issuing aquaculture permits, participating in the Lake's Oyster Quality Assurance Committee as from 14 December 1992, or providing the State's employee, Dr Kerry Jackson, to co-ordinate the State QAP as from 2 September 1996, constituted "management" of the day to day oyster and harvesting activity of a kind that would give rise to a duty of care. 468 I do not accept Mr Ryan's submission that his Honour should have found that the State owed him a duty to ensure that the local QAP was in place by November 1996. His Honour felt unable to reach that conclusion on the evidence and I do not think it is shown that this was a finding of fact at which he was not entitled to arrive. 469 Mr Ryan submits that control of the fishery was "ceded" to the State. But in one sense, so is virtually every aspect of the control of the production of food. The individual consumer cannot protect himself or herself and so is "vulnerable" and hopes that someone will have taken steps to minimise the risk to his or her health. But is it to be said that in every case of "food poisoning", the State must be liable for having failed to exercise its statutory powers? It seems to me that as a matter of policy the law refrains from imposing the kind of duty on which Mr Ryan is obliged to rely. 470 I would not conclude, so far as it may remain relevant, that Mr Ryan "specifically relied on" the State to protect him. There was no dealing between the State and Mr Ryan before he consumed the oysters. As noted earlier, the doctrine of "general reliance" no longer enjoys support in the High Court as a touchstone of the existence of a duty of care of a public authority to exercise statutory powers. 471 In my view, on the evidence the State did not "manage" the shellfish industry in the Lake in any way that might have given rise to a duty of care in favour of Mr Ryan.

Breach of duty 472 If I had thought that the State owed a duty of care to Mr Ryan, I would have held that the State was not shown to have breached it. The case would have called for consideration of what steps the State, acting reasonably, would have taken. This would have immediately raised considerations of the kind referred to by Mason J in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48 set out earlier, as discussed in the context of breach in relation to the Council's appeal. I have referred to some of these considerations as relevant to the State in the context of my treatment of the duty issue above. In the case of the State, questions of the magnitude of the risk, the fact that the Lake's oysters had not previously caused a problem and the cost to the State of taking (and maintaining) the course of action described by his Honour in all of the State's oyster-growing estuaries would have arisen.

Causation 473 For the reasons I gave for allowing the Council's appeal, it is not shown that the course of action that his Honour decided was required (the taking of the steps that were reasonably open to minimise faecal contamination of the Lake) would have prevented Mr Ryan from contracting hepatitis A.

A suggested alternative ground of the State's liability 474 Because I have held that the State did not owe Mr Ryan a duty of care at all, I need not consider whether it was required to exercise its power to close the fishery (exercise of that power would have prevented Mr Ryan from contracting hepatitis A). But I would not have been prepared to find on the hearing of this appeal that it was required to do so. The issue is one that would call for the making of findings by the primary Judge, particularly as to the reasonableness of the State's being required to monitor pollution at the shoreline of all its oyster-growing estuaries and closing oyster-growing businesses from time to time, in the light of the magnitude of the risk in question.

Mr Ryan's notice of contention 475 This leaves to be dealt with Mr Ryan's notice of contention in so far as it relates to the State's appeal. 476 I gave reasons for not accepting Mr Ryan's contention relating to causation based upon a duty to minimise faecal contamination of the Lake when dealing with the Council's appeal. 477 Another contention relating to the State is that his Honour should have found the State owed to Mr Ryan a duty of care to implement a specific local QAP which required: (i) a comprehensive and competent sanitary survey of the Lake's oyster fishery "and surrounding area"; and (ii) in the absence of such a survey, a closure of the fishery, particularly after a heavy rainfall episode, until such a survey was carried out and it was then safe to re-open the fishery. 478 I would not accept the contention. For the reasons given above, it was not incumbent upon the State to exercise its powers at all, in my view. 479 The remaining contention relating to the State is that his Honour should have found that the State, through the EPA, breached a pleaded duty to ensure that, relevantly, "the relevant caravan parks" did not pollute the Lake. His Honour rejected the submission by reference to Bendix, that is, because although the escape of sewage effluent from caravan parks increased the risk, this was not enough: it would have to be shown that it materially contributed to the actual suffering of the illness by Mr Ryan. With respect, I agree with his Honour.

THE BARCLAY COMPANIES' APPEAL ON LIABILITY AND MR RYAN'S CROSS-APPEAL (N 219 OF 1999) Conclusions of primary Judge on liability on Mr Ryan's personal and representative claims against the Barclay companies, except to the claims under the TP Act 480 The Barclay companies acknowledged before the primary Judge that they owed a duty of care to consumers of their oysters. They denied breach and causation. Mr Barclay knew that depuration was not adequate to ensure the removal of viruses and that E. coli oyster meat testing would not necessarily reveal viruses, even in the oysters tested, let alone in other oysters growing nearby. 481 His Honour was not persuaded that there was a causal connection between the HAV epidemic and the harvesting undertaken by Barclay Oysters on the morning of 23 November 1996 or on 27 November after salinity testing and flesh testing was performed. His Honour said: "The cause of the epidemic was the widespread HAV contamination of the lake. I see no reason to believe the date of harvesting was a critical factor in relation to any particular consumer contracting the disease." Moreover, his Honour accepted Mr Barclay's evidence that at all times he endeavoured to implement the requirements set out in Mr Bird's 1991 booklet, Purification Technology for New South Wales Oysters, and he accepted that there was no evidence of any deficiency in Barclay Oysters' depuration plant in design, construction or maintenance or the manner of its operation. 482 The breach of the duty of care which his Honour found was based on Mr Barclay's knowledge of "the existence of potential sources of viral pollution of the lake". His Honour thought that a prudent oyster grower needed to do more than to depurate and to rely on E. coli flesh tests. The primary Judge did not accept the State's submission that Barclay Oysters' omission lay in its failure to defer harvesting after the rain event of November 1996 and to carry out PCR flesh testing and faecal coliform water testing, because, although these measures may have been useful, they would not necessarily have protected consumers. His Honour observed that viruses could have remained in the water, or in unharvested oysters, for many weeks after cessation of the rain, and after faecal coliform levels had dropped back to normal limits and that their existence would not necessarily have been revealed by PCR testing. 483 His Honour thought that in order to discharge its duty of care, Barclay Oysters was required to do something about the quality of the water of the Lake if it was to grow and harvest oysters in it. He said: "The only real protection to consumers was to prevent viral contamination in the first place. As is the case with the Council and the State, Barclay Oysters was not obliged to ensure the absence of viruses, but it was obliged to take the steps reasonably open to it to obtain a virus-free growing environment and, if this was impossible, to refrain from selling oysters for human consumption, except perhaps with a warning about the risk in eating them. ……………………………………………………………………………………………. … The Barclay companies could have made a significant contribution to risk reduction by having a few men walk that part of the foreshores of the lake, rivers and islands that is publicly accessible - and that is most of it - and list all items of apparent concern. However, a satisfactory sanitary survey required access to all premises and possession of enforcement powers. Governmental or local governmental involvement was essential. This does not let the Barclay companies off the hook; neither they nor any of the committees with which they were associated attempted to procure governmental or local governmental involvement. The evidence does not reveal any approach to the Council or a State agency for the making of a sanitary survey, with or without support (manpower or financial) from the local industry. The Barclay companies (and, apparently, the other local oyster producers) were as oblivious to the need for a sanitary survey as was the State. Given that they actually produced the product that put consumers at risk, they cannot escape some responsibility for the lack of a sanitary survey. If the oyster producers had endeavoured, and failed, to persuade the Council or the State to undertake a proper sanitary survey, they would have needed to consider other options. One option - presumably expensive - might have been to relay the oysters in other waters for a period before sale. There may have been other possibilities. It is not necessary to go into them. It is enough to say it was not sufficient for the Barclay companies (or any other producer) to shrug off their knowledge of the possible pollution of the lake by saying this was someone else's responsibility. In my opinion, in selling without warning oysters grown in waters known to be subject to possible undetectable viral contamination, both Barclay companies breached their duty of care to ultimate consumers of the oysters. Because it is apparent that the viral infection sustained by Mr Ryan, and the group members who became ill after consuming Barclay oysters, stemmed from the contamination of the lake, there is a clear causal connection between the breach and the damage." (emphasis in original) 484 His Honour noted that it did not follow from his conclusion that all distributors were liable but observed that Barclay Distributors was in the unusual position of being controlled by a person (Mr Barclay) who was also the controller of a grower company. Barclay Distributors was therefore fixed with an unusual degree of knowledge about the circumstances of production of the oysters it distributed - knowledge which might exceed that of distributors based elsewhere and, even more so, people such as restauranteurs who purchased for commercial purposes without knowledge of the circumstances or even the location of oyster production.

My conclusions on the Barclay companies' appeal on liability except as to the claims under the TP Act 485 Lee J and Kiefel J are of the view that the Barclay companies' appeal in relation to the learned primary Judge's finding that they were liable in negligence should be dismissed. I conclude below that Barclay Oysters is liable to compensate Mr Ryan under the TP Act. For these reasons I will not state in as ample a form, as I might otherwise have done, my reasons for differing from the learned primary Judge, Lee J and Kiefel J, in thinking that the Barclay companies were not shown to be liable in negligence. 486 Georges Oyster, Tadeven and Sciacca made submissions in support of those of Barclay Oysters. I have read them all but, for convenience, will refer to the Barclay companies alone, treating them as having made the submissions in fact made by all the companies.

General 487 Senior counsel for the Barclay companies emphasised that his Honour's finding that Mr Barclay agreed he was aware of "the existence of potential sources of viral pollution of the Lake" was ambiguous. If his Honour meant that Mr Barclay agreed he was aware of actual discharges of faecal matter into the Lake, senior counsel submitted that the evidence did not support the finding. If, however, his Honour meant only that Mr Barclay was aware that there existed septic tanks, stormwater drains and other facilities which, if defective, could give rise to such discharges, senior counsel accepted that the evidence showed that Mr Barclay did have that knowledge. I think it clear that his Honour meant the latter. 488 Senior counsel for the Barclay companies emphasised that it was important to understand the state of Mr Barclay's knowledge in relation to the state of purity of the water of the Lake. He referred to certain Council documents, such as Mr Brooker's report dated 11 June 1991, of which Mr Barclay was not aware. On the other hand, Mr Barclay did receive a copy of Professor Brown's documents of August 1994, Wallis Lake Mariculture Assessment and Wallis Lake Oyster Management Plan (copies were also supplied at the time to the Ministers for Fisheries and Public Works and the Council). Senior counsel referred to the following passage: "Compared to other areas, there is little sewage dumped into Wallis Lake per se, however with increasing development unless adequate safeguards are taken, there are real dangers of effluent and stormwater contaminants entering the Lake. There still appears to be a problem with the Bungwahl Creek site, an old sewage depot. Licences to discharge issued by the New South Wales EPA need to be examined carefully to safeguard the interests of the growers and other Lake users. Sewage from boats should be eliminated with better education and enforcement." 489 According to the submission, it should be accepted that so far as Mr Barclay knew from Professor Brown's reports, as at August 1994 the Lake was "alright or more or less alright" but the authorities would need to safeguard against the arising of a problem associated with an increase in population. 490 The Barclay companies submit that although that problem did eventuate, as is shown by the complaints made to Council, Mr Barclay was unaware of this development. They refer to Council's State of the Environment Report for 1995-96 published in September 1996, and, in particular, to its references to the problem of effluent disposal; Mr Brooker's memorandum to his superior, Mr Braybrooke, of 9 May 1996; and Mr Braybrooke's endorsement of 17 May 1996. I have referred to these documents earlier. 491 Following the rainfall event of 23-25 November 1996, the oyster growers conducted salinity tests to ensure that the water was not "contaminated" by excessive fresh water, or, to express the matter differently, to ensure that the water contained sufficient salt water. Once there was a satisfactory result, oyster testing took place, and once this was also satisfactory, harvesting resumed. (Apparently, in the case of Barclay Oysters, harvesting took place early on the morning of 23 November, from 5.00 am to morning tea time at 9.00 am, then ceased and did not resume until 27 November, two days after the rain stopped.) But, as always, a satisfactory result did not necessarily signify an absence of viruses. 492 After the outbreak, a sanitary survey was conducted as described earlier.

Breach 493 Whether the Barclay companies' duty of care was breached is a question of fact and depends on the circumstances: see Thomson v Johnson & Johnson Pty Ltd [1991] 2 VR 449 in which the Appeal Division of the Supreme Court of Victoria stated as follows (at 490-491): "… the duty of care cannot be categorised in the circumstances of a case such as this as being merely a duty to warn or alternatively a duty to withdraw the product from the market. The duty is a duty to take reasonable care in the Donoghue v Stevenson sense to avoid injury or harm being suffered by those using the product as intended. In some circumstances a discharge of such duty of care might require and demand that the product be withdrawn from the market so as to prevent it being used. In other circumstances in order to discharge the duty it might be necessary to give adequate warning as to the risks involved in its use. It does not follow that the failure to warn with respect to those risks will necessarily constitute a breach of duty. In each case it will be necessary for the tribunal of fact to determine whether in all the circumstances those marketing the goods failed to take reasonable care and whether that failure was a cause of the injury suffered by the user." (my emphasis) Their Honours referred to the well known passage from the judgment of Mason J in Wyong Shire Council v Shirt, above, at 47-48 set out earlier. 494 Having regard to the fact that it is not possible anywhere where human beings are to guarantee that purity of the water, it seems to me that the critical question in the present case is whether, as a result of what Mr Barclay knew or should have known about the quality of the water in the Lake, the Barclay companies' duty of care required then to do more than simply to suspend harvesting following a "fresh", to depurate in accordance with Mr Bird's booklet and to test the flesh of sample oysters before and after depuration. 495 So far as Mr Barclay in fact knew, subject to the necessity of ceasing harvesting following a "fresh", the water of the Lake was safe water in which to grow oysters. The Lake's oysters had never previously given rise to an outbreak of hepatitis A or of any other oyster-related disease, although no doubt there had previously been rainfall events similar to that of 23-25 November 1996. Mr Barclay testified that over the four year period from 1989 to 1993, he had regularly taken the Council's Mr Brooker out in his boat to test the water in the Lake at twelve locations and that the results were satisfactory. He said that in the "paddock" where virtually all Barclay Oysters' harvesting was done, the results were always excellent. Apparently, depuration and suspension of harvesting following a "fresh" had proved sufficient measures for the Lake's oyster growers to take in the past. 496 Although it was not required to do so, Barclay Oysters had samples of its oysters tested for E. coli by EMI Consulting Services Pty Ltd, a private laboratory at Parramatta. As well, such testing was carried out as part of the local QAP for the Lake, at the end of 1996, both before and immediately after the "fresh". As a result, sample oysters from Barclay Oysters' leases were tested every couple of weeks. By having sample oyster flesh tested, Barclay Oysters was taking a precaution that went beyond the régime recommended in Mr Bird's booklet, which Mr Barclay treated as his "Bible". Barclay Oysters did not depurate or resume harvesting after a "fresh" until flesh testing proved satisfactory. Mr Bird's 59-page boklet, which was kept at Barclay Oysters' premises and referred to from time to time as a "manual", informed Mr Barclay: "Purification is the only current viable alternative today in New South Wales for the economic production of raw oysters which affords the least risk to public health. It is not a perfect system and will not guarantee the absolute public health safety of raw oysters, however, on a cost-risk basis it is the only alternative." But the shortcomings of flesh testing have been mentioned previously. In any event, the fact that Mr Barclay was conforming to or even bettering industry practice does not establish the absence of negligence. 497 Mr Barclay knew that in August 1994, Professor Brown had warned that increasing development was apt to give rise to an effluent problem. Mr Barclay was also aware that the Council had ceased testing the water of the Lake in 1993. He knew, therefore, as at November 1996, that monitoring of the safety of the water for oyster-growing had not being performed by Council for some three years. But even in the absence of water testing, there would not be a problem if the authorities were effectively exercising their powers to prevent faecal contamination of the Lake. 498 Mr Barclay did not know or have any means of knowing what the position was in this respect and testified that he regarded the matter of the testing of the quality of the water as the responsibility of the Council. He assumed that the quality of the water in the "paddock" was still as it had been when water testing by Council ceased in 1993. Moreover, Mr Barclay had been involved in the oyster industry since 1957 and intensively since about 1966. Accordingly, the three year period of Council testing is itself to be seen as a small fraction of the period of safe oyster growing in which Mr Barclay had been engaged. 499 Depuration, suspension of harvesting and flesh testing cannot guarantee that an oyster is safe to eat. As his Honour observed, the starting point was to attack faecal contamination of the Lake at source. Whether it was reasonable for the Barclay companies to involve themselves in that activity requires "a consideration of the magnitude of the risk and the degree of the probability of its occurrence along with the expense, difficulty, and inconvenience of taking alleviating action…"(Wyong Shire Council v Shirt, above, at 47, per Mason J) 500 His Honour thought that their duty of care required the Barclay companies to conduct their own sanitary survey of that part of the shoreline of the Lake, the rivers and islands that was publicly accessible, then attempt to procure governmental or local governmental involvement to ensure that any faecal contamination revealed by the survey was rectified. 501 But, with respect, his Honour did not consider the matters referred to in the passage from Wyong Shire Council v Shirt set out above from the viewpoint of the Barclay companies. Other particular questions arise. What about the future, would the Barclay companies be obliged to update their sanitary survey frequently and regularly? At what point, if any, would they become entitled to assume that the issue of faecal contamination of the Lake could be left to the authorities? If it is accepted that they would become entitled to make that assumption at some time, why was Mr Barclay not entitled to make it in November 1996? 502 His Honour had regard to the difficulty that there was no assurance that the authorities would act, saying that if they did not do so, Barclay Oysters should have re-laid the oysters in other waters for a period before sale. But this possibility was not put to any witness and the whereabouts of the other waters and the cost of relaying the oysters were matters not explored in the evidence. I think it appropriate, on the evidence, to regard the alternative as simply one of ceasing business entirely or of marketing the oysters with an effective warning that effectively brought home the risk that the oysters might carry the HAV. But such a warning would have put the Barclay companies out of business. Accordingly, in substance, the true alternative to the course of conduct in fact pursued was to cease business. 503 It seems to me that on the evidence of the lack of any previous outbreak of health problems arising from the consumption of oysters grown in the Lake and the lack of knowledge otherwise of Mr Barclay of the existence of an actual problem as distinct from potential sources of faecal contamination of the Lake, the Barclay companies' duty of care did not reasonably require them either to take the course that his Honour outlined or to suffer a closure of their business until somehow they could be completely assured that they were putting into the market a product that was free of defects.

Mr Ryan's notice of contention 504 I gave reasons for rejecting Mr Ryan's contention in respect of causation based on a supposed duty to take reasonable steps to minimise faecal contamination of the Lake, when dealing with Council's appeal. 505 Mr Ryan also contends that his Honour ought to have found (if it is not otherwise implicit in his reasons for decision) that the Barclay companies breached their duty of care by selling oysters which were not fit for consumption and not of merchantable quality. I do not accept the contention. If accepted, the contention would convert the Barclay companies' common law duty of care into a strict liability at common law. There is no warrant for the Court's taking that step. The case is not one in which the maxim res ipsa loquitur applies: harvesting and distributing in the market-place oysters which carry a virus can be consistent with the absence of negligence on the part of the grower or distributor of the oysters as well as with its presence. I deal below with the stricter form of liability imposed on Barclay Oysters by the TP Act. 506 For the above reasons, in my opinion the Barclay companies' appeal should succeed in so far as the Barclay companies were found liable to Mr Ryan in negligence. My conclusions on the Barclay companies' appeal on liability under the TP Act 507 Mr Ryan's first three claims under the TP Act arose out of Division 2A of Part V of that Act providing for actions against manufacturers and importers of goods. Section 74B deals with fitness for purpose, s 74C with non-correspondence with description, and s 74D with unmerchantable quality. 508 Mr Ryan brought three further claims under the TP Act against the Barclay companies: one under s 75AD in respect of manufactured defective goods causing injury; one under s 52 based on an alleged implied representation that the oysters were fit for human consumption; and the remaining one based on s 71 for breach of implied contractual conditions of merchantable quality and fitness for purpose. 509 Only the claims under ss 74B, 74D and 75AD (s 75AK must be considered with s 75AD) call for discussion, the first two on the Barclay companies' appeal and the third on Mr Ryan's cross-appeal (his Honour found against Mr Ryan on his claims based on ss 52, 71 and 74C and there is no appeal in any of these respects). Section 74B 510 Section 74B of the TP Act provided as follows: "(1) Where - (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any antecedent negotiations in connexion with the acquisition of the goods were conducted; (d) the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied; and (e) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose; the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Subsection (1) does not apply: (a) ………………………………………………………………………… (b) where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the corporation." (my emphasis) 511 Section 74A defines the word "manufactured" for the purposes of Division 2A of Part V, as including "grown, extracted, produced, processed and assembled". Clearly, the definition encompasses the activities of Barclay Oysters in growing and harvesting oysters, then cleaning, depurating and packing them for distribution. 512 The primary Judge analysed how, he thought, s 74B applied in the circumstances of the case. His Honour recorded that the Barclay companies did not dispute his analysis and relied only on par (2)(b). That paragraph has two limbs: "non-reliance" and "unreasonable reliance". Barclay Oysters did not plead non-reliance in its defence but argued it before his Honour nonetheless. Barclay Oysters' amended notice of appeal raises only the ground that his Honour erred in failing to find that it was unreasonable for Mr Ryan to have relied on the skill or judgment of Barclay Oysters. In its written submissions on the appeal Barclay Oysters expressly accepted his Honour's analysis of s 74B and its meaning but, as it had done in its written submissions at trial, submitted in terms of par (2)(b) that Mr Ryan did not in fact rely on Barclay Oysters' skill or judgment, as well as that it was unreasonable for him to have done so. Barclay Oysters' written submission on non‑reliance on the appeal is itself, with respect, unclear. It is as follows: "There was no actual reliance. Even by way of imputed reliance, the best that could be said of the first defendant [sic - first respondent: Mr Ryan] is that the oyster [sic] was not fit for human consumption in an absolute sense. Looked at realistically, the oyster [sic] was as fit for human consumption as it was possible to achieve." 513 In his own written submissions on the appeal Mr Ryan responded to Barclay Oysters' arguments in relation to both limbs ("non-reliance" and "unreasonable reliance"). In oral submissions on the appeal, however, Barclay Oysters accepted that there was "a finding in favour of Mr Ryan that he was never challenged as to his reliance [so that Barclay Oysters could not] rely upon that". Accordingly, in its oral submissions, Barclay Oysters stated that the only point it wished to address was the issue of the reasonableness of Mr Ryan's reliance. 514 In the circumstances, it is clear that I am not called upon to decide whether I agree with his Honour's general analysis of s 74B and I expressly refrain from doing so, and will concern myself only with par (2)(b). Further, the amended notice of appeal and the position taken by Barclay Oysters in its oral submissions on the appeal also suggest that I need not concern myself with the first limb of par (2)(b) (non-reliance), but since both parties addressed that limb in their written submissions and I can deal with it briefly, I will do so. 515 Reliance is not referred to in subs 74B(1): it is not expressed as an element that Mr Ryan had to prove in order to establish that Barclay Oysters was "liable to compensate" him under that subsection. Rather, non-reliance goes to displace the operation of subs (1), that is, to render it inapplicable. In these circumstances, the burden of proving non-reliance rested on Barclay Oysters: cf Cavalier Marketing (Australia) Pty Ltd v Rasell (1990) 96 ALR 375 (Qld/FC) ("Cavalier Marketing") at 392 per Cooper J. 516 Mr Ryan testified that when he consumed the oysters, he assumed that they would not cause him illness and that if he had thought they would do so, he would not have eaten them. There was no cross-examination of Mr Ryan or of the buyers of the oysters, his father Thomas John Ryan or his brother David Ryan, directed to showing that they or any of them understood that there could be no assurance that the oysters were fit to eat. Both the father and the brother testified that they bought the oysters direct from Barclay Oysters in Forster (his Honour assumed that the purchase had in fact been from Barclay Distributors in view of the respective roles played by the two companies) and gave some to Mr Ryan. In the circumstances, I think that the learned primary Judge was entitled to conclude, as he did, that non-reliance had not been proved, and also to infer, as he did, that Mr Ryan had in fact relied on the skill and judgment of Barclay Oysters. 517 In relation to the second limb of par 74B(2)(b) (unreasonable reliance), his Honour stated (at [366]-[369]): "I accept it would not have been possible for Barclay Oysters to test the particular oysters sold to the applicant's father and brother. I also accept it is impossible to ensure that a particular oyster is free from viral contamination, although it is possible to minimise the risk of the oyster being contaminated at the time of sale. However, as counsel for the applicant submit in reply, the question is not whether the grower could reasonably have discovered the defect; the issue is the reasonableness of the consumer's reliance, not the reasonableness of the manufacturer's behaviour. The right of action created by s74B is a statutory cause of action. Its elements must be taken from the statute itself, free of any preconceptions that might arise by reference to principles governing common law negligence. As counsel point out, neither of the Barclay companies gave any warning of the possibility that the oysters might contain a virus they could not detect. It seems none of the Messrs Ryan was in fact aware of this possibility. That is not surprising. Probably many people are aware that, if hygienic procedures are not maintained, the consumption of oysters may result in gastroenteritis or other illnesses. However, I think most people would assume there are procedures and tests that enable a grower to ensure its product is fit to eat. I believe it would come as a surprise to most members of the public, as it has come as a surprise to me, to learn this is not necessarily so. In the absence of a warning, each of the Messrs Ryan was entitled to rely on the skill and judgment of the grower. The applicant is entitled to succeed under s74B as against Barclay Oysters in respect of his personal claim. I cannot make any concluded finding in relation to the applicant's representative claim under s74B against Barclay Oysters; it is conceivable - although, perhaps, unlikely - that something was said or done, at the time of the supply of oysters to a particular consumer, to make it unreasonable for that consumer to rely on the skill or judgment of Barclay Oysters. The application of s74B to group members must be left for future determination, if that should prove necessary. Section 74B has no application against Barclay Distributors, for two reasons. First, that company did not 'manufacture' the goods, even within the expanded definition of that term; second, it is not shown that either Mr Thomas Ryan or Mr David Ryan acquired the unfit oyster or oysters for re-supply. The evidence suggests the oysters given to Mr Grant Ryan were simply part of a larger batch acquired for the family generally." (emphasis by primary Judge) 518 Barclay Oysters submits that the phrase "unreasonable for the consumer to rely on the skill or judgment of the corporation" imports an objective element so that one must hypothesise a consumer who knew all relevant facts, such as, what the manufacturer (grower) knew or should have known, the circumstances in which the manufacture (growing) took place, and the steps available and not available to be taken by the manufacturer (grower) to ensure that the goods were reasonably fit for the purpose made known to it. Barclay Oysters submits that it would have been unreasonable for a hypothetical consumer, possessed of all this knowledge, to rely on the skill or judgment of Barclay Oysters to guarantee a virus-free oyster. 519 Mr Ryan, on the other hand, submits that reasonableness is to be measured by reference to the particular consumer with his or her actual knowledge or lack of knowledge. 520 Certain matters are clear: • The expression "the consumer" in par (2)(b) refers to the particular actual consumer referred to in subs (1). • The reliance to which par (2)(b) refers is reliance on the skill or judgment of the manufacturer (here, Barclay Oysters) in supplying the goods in the face of its having been apprised of the particular purpose of that consumer, that is, on the skill or judgment of the manufacturer as to the fitness of the goods for the particular purpose of that consumer made known to it. • The expression "unreasonable for the consumer to rely" is, in terms, directed to the reasonableness or unreasonableness of the particular consumer's reliance, not the reasonableness or unreasonableness of the method or course of manufacture followed. 521 To apply a totally subjective test would enlarge or diminish the protection given by the section according to the idiosyncrasies of the particular consumer. It is possible, but perhaps unlikely, that Parliament intended the provision to operate in this way. On the other hand, according to Barclay Oysters' submissions, understood literally, the provision would operate to defeat a consumer even where a manufacturer put a product which it knew to be defective into the market place, since, being deemed to know what the particular manufacturer knew, the consumer would rely on the skill or judgment of the manufacturer, unreasonably. 522 It is important to appreciate the roles of the two limbs of par (b). The consumer's actual knowledge is addressed in the first limb (non-reliance). If the particular consumer knew that the manufacturer could not reasonably be understood to be accepting responsibility for the fitness of the goods for the particular purpose made known to it, the consumer would not in fact have relied on its skill or judgment. 523 The second limb (unreasonable reliance) must be construed against the background of earlier parts of s 74B. It assumes:

(a) that the consumer made known to the manufacturer, whether directly or through the person from whom the consumer acquired the goods, the particular purpose for which the consumer acquired them (par (1)(c) - as noted earlier there is a concession by Barclay Oysters in this respect in the present case); and

(b) that the consumer did in fact rely on the manufacturer's skill or judgment as to the fitness of the goods for that particular purpose (first limb of par (2)(b)).

524 Against this background, in what circumstances, it may be asked, might the consumer's actual reliance on the skill or judgment of the manufacturer have been unreasonable? It might be if, for example, the manufacturer had notified the particular consumer that it could not guarantee the goods' fitness for the consumer's particular purpose or if the particular consumer's knowledge or means of knowledge was equal to or exceeded that of the manufacturer. Perhaps, in addition, for the purpose of the application of the provision, there should be imputed to the particular consumer the knowledge that "a reasonable consumer" would have. Perhaps the particular consumer should also be treated as having taken any steps for his or her own protection that "a reasonable consumer" would have taken, having regard to the nature of the goods and the circumstances of the case. Be this as it may, in my view, ordinarily, there should not be imputed to the consumer special technical knowledge touching the process of manufacture of the goods. Yet it is knowledge of that kind that Barclay Oysters contends should be imputed to Mr Ryan. 525 The evidence before the learned primary Judge did not establish circumstances as to Mr Ryan's knowledge or that of the consumers generally that might have provided a basis for a finding that it was in fact unreasonable for Mr Ryan or for a reasonable consumer placed as he was, in accepting that the oysters were fit to eat, to rely on the skill or judgment of Barclay Oysters. 526 In my opinion, the construction of the unreasonable reliance limb of par 74B(2)(b) advanced by Barclay Oysters should not be accepted. Section 74D 527 Section 74D of the TP Act was relevantly as follows: "(1) Where: (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are not of merchantable quality; and (d) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not of merchantable quality; the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) …………………………………………………………………………………… (3) s of any kind are of merchantable quality within the meaning of this section if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to: (a) any description applied to the goods by the corporation; (b) the price received by the corporation for the goods (if relevant); and (c) all the other relevant circumstances." (my emphasis) 528 Barclay Oysters accepted his Honour's analysis of s 74D and it is necessary for me to address only the issue that was debated on the appeal. This concerned the effect of the words emphasised above. Barclay Oysters' amended notice of appeal is to the effect that his Honour should have found that the oysters consumed by Mr Ryan satisfied those words (Barclay Oysters had not pleaded this matter in its defence, although submissions were put to his Honour on it and he dealt with them). 529 Barclay Oysters submits that "all the other relevant circumstances" referred to in par (c) set out above included: "(a) The practical impossibility of testing the oysters for the presence of viruses. (b) The grower's inability to know that his oyster leases had been subjected to viral contamination. (c) The grower's inability to control the environment in which the oysters grow - in particular the entry of contaminants from private land or council stormwater drains, etc into the estuary water." 530 The learned primary Judge stated: "The error in this approach is similar to that in relation to s74B. The issue posed by s74D(3) is not whether it was possible for the grower to ensure the oysters were free of viruses, but whether a purchaser would act reasonably in expecting they were. Unlike s74B(2)(b), which directs attention to the acts and omissions of the particular consumer, s74D(3) imposes an objective standard ('as it is reasonable to expect'), though that standard must be applied having regard to all relevant circumstances. In the present case those circumstances include the absence of any warning by the Barclay companies of the possibility of a virus in the oysters. Of course, this would not matter if it was well known to members of the public that viruses can survive even proper processing and depuration, but the evidence does not suggest it was. The s74D claim should be determined in the same way as that arising under s74B: the applicant is entitled to succeed on his own behalf against Barclay Oysters, although not Barclay Distributors. His representative claim against Barclay Oysters should be reserved." 531 With respect, I agree with his Honour's conclusion, and, in substance, with his reasons. 532 The legislative origin and analogues of the definition of "merchantable quantity" in subs 74D(3) were traced by Cooper J in Cavalier Marketing, above, at 396. 533 The words "as it is reasonable to expect" suggests a question as to the identity of the person or persons, the reasonableness of whose expectation is in question and is to be determined by the court. Possible contenders are: (1) the consumer or other person who suffers loss or damage; (2) a reasonable consumer placed as that actual consumer or other person was; (3) a reasonable bystander (in effect, the court). 534 In my opinion consistently with both the objective nature of the standard aimed for and the consumer protection purpose of the provision, it is the second or third category of person whose reasonable expectation is called into service by the statute, and in my opinion a reasonable bystander would seek to put himself or herself in the position of a reasonable consumer placed as the actual consumer or other person was. Accordingly, it is right to inquire into the reasonable expectations of a category (2) person. 535 In Cavalier Marketing, above, Cooper J also suggested (at 403) that the test to be applied was the reasonable expectation of a reasonable consumer placed as the actual consumer or other sufferer of loss or damage (the person described in class (2) above) was. 536 As in the case of s 74B discussed above, the provision is to be construed as a consumer protection measure (cf Cavalier Marketing, above, at 400) and it would be wrong to measure the reasonable expectations of the hypothetical reasonable consumer against the specialist technical knowledge of oyster growers that it is impossible to be sure that the oysters they put into the market for the one and only purpose of being eaten, are in fact safe for that purpose. 537 I discussed at [516] above the evidence that was before his Honour as to Mr Ryan's assumption about the quality of oysters he ate. There was no evidence before his Honour that consumers of oysters understood that there could be no assurance that they did not harbour the HAV. Barclay Oysters issued no warning to accompany its oysters and Mr Ryan ate them without having been apprised of the risk involved in doing so. He assumed that they were safe to eat. The absence of any warning was a circumstance that would lead a reasonable consumer, placed as Mr Ryan was, to assume that those responsible, that is, the growers, had satisfied themselves that this was so. 538 I see nothing unreasonable in my construction of the provision. It is not unreasonable for the legislature to adopt a policy of requiring a manufacturer to meet the reasonable expectations of consumers as to the fitness of the manufacturer's goods for their purpose or purposes. Consistently with that policy, if the manufacturer knows that it cannot be sure to meet those expectations, it must cease manufacturing, or, if possible, ensure that the consumer has agreed to bear the risk (perhaps by an appropriate warning with the result that the consumer's otherwise reasonable expectations are made unreasonable). Section 75AD (and s 75AK) 539 Section 75AD appears in Part VA of the TP Act which was inserted in 1992 to provide remedies against manufacturers and importers of defective goods. The section reads as follows: "If: (a) a corporation, in trade or commerce, supplies goods manufactured by it; and (b) they have a defect; and (c) because of the defect, an individual suffers injuries; then: (d) the corporation is liable to compensate the individual for the amount of the individual's loss suffered as a result of the injuries; and (e) the individual may recover that amount by action against the corporation; …" Paragraph 75AK(1)(c) provides that it is a defence if it is established, relevantly, that: "the state of scientific or technical knowledge at the time when [the goods] were supplied by their actual manufacturer was not such as to enable [the] defect to be discovered." His Honour stated (at [377]): "The term 'manufactured' is defined in s75AA, for the purposes of s75AD, in the same terms as in s74A. Section 75AC(1) explains that 'goods have a defect if their safety is not such as persons generally are entitled to expect'. Consistently with what I have already said, it seems to me the elements stipulated by s75AD are satisfied in this case. However, s75AK(1)(c) provides a defence to an action under s75AD (amongst other sections) 'if it is established that … the state of scientific or technical knowledge at the time when they were supplied by their actual manufacturer was not such as to enable that defect to be discovered'. The paragraph obviously intends the defence be unavailable if the goods were supplied notwithstanding the possibility of discovery of the defect. Conversely, the defence is available if the defect was not capable of discovery before supply. In the present case, discovery and supply were mutually exclusive; the only test that would reveal the defect would destroy the goods. Accordingly, it seems to me the defence applies and the s75AD claim fails." 540 Mr Ryan cross-appeals, complaining that his Honour erred in sustaining Barclay Oysters' defence under s 75AK(1)(c). 541 His Honour treated "the goods" as referring to the individual oysters: if an individual oyster were tested, it would be destroyed in the process and so supply of it to an individual would have become an impossibility. 542 In my opinion his Honour was entitled to find that Barclay Oysters had discharged the onus of establishing that in December 1996, when it supplied the oysters, the state of scientific or technical knowledge was not such as to enable the presence of the HAV in them to be discovered. 543 His Honour's statement that discovery of the defect and supply were mutually exclusive and that the only test that would reveal the defect would destroy the goods, assumes two other findings which I think his Honour must also be taken to have made and for which there was ample evidence: · that it is legitimate to extrapolate from the result of the sample test only where there is relevant homogeneity between the total population from which the sample is taken and that this cannot be assumed to be so in relation to HAV and oysters; · PCR gives false negatives, that is, while it is appropriate to rely on a positive test result, a negative one does not establish the absence of the HAV virus and in fact establishes no more than that the test did not establish its presence in the oyster actually tested. 544 Counsel for Mr Ryan suggested that his Honour erred by construing the expression "to be discovered" as referring to nothing except "a physical verification in each and every oyster". They suggested an analogy: "Thus His Honour's approach was to give a meaning to the expression 'to be discovered' which was too narrow and inconsistent with a purposive approach to the construction of Section 75AK(1)(c). It did not mean physical verification in each and every oyster. That would have been impossible. None would have been supplied. One can test His Honour's construction of S.75AK(1)(c) by taking the example of a bag of sugar and stipulating a scenario where to test for a contaminant one needed to take several sugar grains, dissolve them and test the liquid, with a positive result demonstrating that the bag of sugar contained a defect. One would assume that the Section 75AK(1)(c) defence could not be made out. But that example is no different to the present case. One has destroyed part of the goods (the several grains). Further, to be definitive one would need to dissolve all of the sugar. But that would destroy all sugar and none would be supplied. On His Honour's construction the Section 75AK(1)(c) defence would be made out. But that would enable the sugar manufacturer to supply sugar which was defective with the ready scientific and technical knowledge to identify the defect and avoid supply." 545 In my respectful opinion the sugar analogy is a false one. It assumes the possibility of extrapolating from the individual grains of sugar to all the grains in the bag. But his Honour found that extrapolation was impossible in the case of the oysters. If it were impossible to make the extrapolation from the grains of sugar tested to all other grains in the bag, it would be true to say in that instance also that the testing and supply were mutually exclusive. 546 The present issue was addressed to varying extents by Mr Alan Murphy, Dr Nicholas Ashbolt, Mr David Alton, Professor Kenneth Brown and Dr Christopher Rodgers who were called on behalf Mr Ryan, Dr Gerhard S Grohmann who was called on behalf of Tadeven and Sciacca, and Dr Christopher Burke who was called on behalf of the Barclay Oysters. There was expert evidence in support of the following propositions: · PCR testing was a sophisticated research tool in its infancy in 1996, was available in few laboratories and was unsuitable as a test to be carried out by persons, such as oyster growers, who had not had considerable laboratory training and experience; · PCR testing had to be performed under laboratory conditions by skilled personnel and cost between $50 and $200 per sample; · there was no routine test for detecting the presence of viruses in shellfish used anywhere in the world; · because PCR testing gave false negatives, negative results could not be relied on, even in 1998; · because of the propensity of viruses to cluster together, there might be one contaminated oyster in a bed of otherwise uncontaminated ones, yet because of the tiny quantity of the virus needed to infect a consumer, that one contaminated oyster might do so; · as at November 1996, PCR had no role to play in the routine monitoring of viral contamination of oysters; · reliable testing of oysters for viruses was not available in 1996; · E. coli was not an effective indication of the presence of viruses in oysters. 547 If scientific and technical knowledge had enabled the fact that an oyster being put into the market did or did not carry the HAV to be discovered without destruction of that oyster, the defence under s 75AK(1)(c) would not have been available to Barclay Oysters (subject to what I say below). But his Honour found otherwise on the evidence and was entitled to do so, in my view. 548 For the above reasons, Mr Ryan's cross-appeal should be dismissed. 549 If the problem of the "false negative" had not existed and if it had been appropriate to test by sample, an interesting question would have arisen as to whether the expression "such as to enable that defect to be discovered" in s 75AK(1)(c) was to be construed as importing a modifying notion of reasonableness or practicability. Let it be assumed that extrapolation from sample to bulk was valid, but that the testing of the sample had to take place at a laboratory a considerable distance from the grower's establishment, the cost of the testing was great and the results could not be known for some days. A question would have arisen whether it could be truly said in these circumstances that the state of scientific or technical knowledge enabled the defect to be discovered. Because of the conclusions which I reached earlier, I need not explore this issue.

Barclay Oysters' cross-claim against the Council 550 Barclay Oysters (I now put to one side Barclay Distributors because I have concluded that it was not liable) cross-claimed against the Council (not against the State) seeking to recover damages for its economic loss arising from any judgment Mr Ryan might obtain against it. The learned primary Judge thought it not necessary to determine whether the Council owed and breached a duty of care to Barclay Oysters. In the light of my conclusions above, the question raised by the cross-claim is whether the Council was liable in damages to Barclay Oysters in respect of its economic loss arising from its liability to Mr Ryan. 551 Much of my reasoning for concluding that the Council is not liable to Mr Ryan is applicable to the issue of its liability to Barclay Oysters, but one aspect of it is not. Whereas Mr Ryan was simply an unidentifiable member of the public at the time when the Council's (and the other appellants') duty of care was said to be owed to him and breached, Barclay Oysters was an identified entitity: to the Council's knowledge it farmed oysters at specific places in the Lake. 552 Should the cross-claim be remitted to the learned primary Judge or decided by this Court? In their written submissions, the Barclay companies invite us to refer the issue back to his Honour for decision or to determine it on this appeal, as we see fit. In oral submissions, senior counsel for the Barclay companies invited us to take the former course, stating that he would wish to make further submissions based on Perre, above. The parties seemed to have understood that in the result that I have reached, the cross-claim would be remitted to his Honour and for that reason I would favour taking that course. 553 Barclay Oysters has submitted that it was misled by representations made by the Council's Mr Brooker as to the results of the Council's water testing from 1989 to 1993 and that if it had been made aware of the results, it would have stopped harvesting. This submission may suggest a cross-claim founded on positive misrepresentations. A case of this kind was not pleaded or addressed by his Honour, but Barclay Oysters may wish to seek leave to amend or to argue that it was relevant to their case as pleaded. Unless we can be confident that no findings remain to be made on the cross-claim, we should remit it to his Honour; cf Sanders v Snell (1998) 196 CLR 329 at [47] - [49]. I am not confident to the required level. For this additional reason, the cross-claim should be remitted to his Honour.

THE APPEALS ON QUANTUM OF DAMAGES 554 All three appellants, the Council, the State and the Barclay companies make common cause in appealing in respect of the quantum of damages totalling $30,000 awarded to Mr Ryan. His Honour awarded Mr Ryan $20,000 for general damages. The Council, the State and the Barclay companies submit that this figure was so high as to betray an erroneous approach to the assessment. This Court should not interfere unless satisfied that the primary Judge applied a wrong principle of law or that the amount was inordinately high "that it must be a wholly erroneous estimate of the damage", and it is immaterial, as is virtually certain, that we would have awarded some amount other than $20,000; cf Miller v Jennings (1954) 92 CLR 190 at 194-5 per Dixon CJ and Kitto J. 555 I do not think it necessary to repeat his Honour's account of the sufferings of Mr Ryan. The State submits as follows: " … A fair reading of all the evidence shows that he had a 3 week illness with a further recovery period in which he complained of some tiredness. Notwithstanding this short and unremarkable period of illness, the judge awarded general damages of $20,000. The judge seems to have acted on the basis that Mr Ryan had suffered significant physical effects of hepatitis over a period of several months and had suffered consequential stress and inconvenience. This is a wholly erroneous assessment of the Applicant's condition." 556 This submission makes no reference to the fact that it was some six months before Mr Ryan felt fully fit. It is true that it was only a period of three weeks for which he was totally unable to work. But as the primary Judge noted, upon returning to work he was still very unwell, weak and lethargic and found strenuous physical work almost impossible and was only able to perform lighter duties and to work reduced hours. Upon returning home, he would go straight to bed and sleep, then wake up for dinner and return to bed. He continued to depend on his wife to take care of the household duties and to look after the children. Mr Ryan testified: "It was a number of months before I started to eat more normally and feel stronger. After about 6 months I had regained the weight I had lost and was able to perform my normal work duties." 557 An attack is made on his Honour's characterisation of Mr Ryan's illness as having been "fairly typical". His Honour stated: "The suggestions made by counsel about the appropriate general damages figure range from $3,000 to $45,000. The former figure seriously under-appreciates the significant physical effects of a bout of hepatitis A, suffered over a period of several months, and the stress and inconvenience this must cause any sufferer. The latter figure seems too high, given the absence of any residual disability. In my view the appropriate figure in this, fairly typical, case is $20,000. (emphasis mine) 558 His Honour was saying that his appreciation of Mr Ryan's sufferings were that they were not of the most trifling or most serious kind but were between these two extremes and perhaps around the middle of the "severity range". He was referring to a range of severity of suffering, not a range of awards. 559 In its submissions, the State referred to Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118 at 124, in which Barwick CJ, Kitto and Menzies JJ "emphatically" rejected a submission that they should test an award of general damages by comparison with "a norm or standard of the amount to be awarded for general damages in the case of injuries and disabilities of the kind experienced by the plaintiff". But the learned primary Judge here did not assess damages by reference to any normal or standard amount awarded for the suffering of hepatitis A. Rather, his Honour had in mind Professor Boughton's description of the typical case of the disease (set out at [87] earlier) his appreciation, based on the expert evidence referred to at [85] to [87], of more and less severe forms of the disease. No doubt any judge assessing general damages for pain and suffering will have in mind such considerations, whether or not they are spelt out, and there is nothing untoward in this. 560 I would not disturb the award of general damages of $20,000. 561 His Honour awarded "a round figure of $4,000 for loss of income and medical expenses". The medical expenses amounted to $554.05. Accordingly, although as a result of a rounding off exercise, his Honour's award for loss of income becomes $3,445.95. Mr Ryan operated a family company, Grant Ryan Plumbing Pty Ltd. He said in evidence that the company's gross receipts, through his labour, were about $1,000 per week. In relation to the question what deductions from that amount should be made, his Honour said this: "Some costs were fixed costs, incurred regardless of whether or not Mr Ryan was working; others would not have been incurred during his absence from work. It is also necessary to make some allowance for the effect on his earnings of being obliged to work short days for some months. Taking everything into account, it would be reasonable to allow a round figure of $4,000 for loss of income and medical expenses [$554.05 as noted above]." 562 The State submits that an estimate of Mr Ryan's gross trading margin (revenue less cost of goods sold) and additional operating expenses, such as fuel, derived from his evidence is shown by the following table: per week Total estimated gross income 1000 3000 cost of goods sold @ 50% 500 1500 gross income forgone 500 1500

expenses avoided (fuel) 100 300 net pre tax income foregone 400 1200 tax at 20% 80 240

563 Mr Ryan does not challenge these figures but submits that what falls to be assessed is the loss of earning capacity, not the loss of wages or salary, and refers to Paff v Speed (1961) 105 CLR 549 at 566 per Windeyer J. Accordingly, he submits that it is erroneous to suggest that his Honour awarded an amount some three and a half times larger than the amount of loss claimed on Mr Ryan's own evidence. 564 It is not in dispute that Mr Ryan is entitled to be compensated for a loss of earning capacity and that his actual loss of earnings can be some evidence relevant to the assessment of that loss. 565 Mr Ryan said that when he returned to work, he was able to work only an eight hour day rather than a ten hour day as previously, because he felt weak and lethargic. Over the full six months, and on the basis of a five day working week, Mr Ryan would have lost 260 hours of work (26 weeks x 5 working days = 130 working days x 2 hours = 260 hours). Two hundred and sixty working hours equals 26 ten-hour working days. Accordingly, one way of considering matters is to think that instead of being off work for only three weeks, Mr Ryan was off work for eight weeks and one day. On the State's figures, if one assumes that the figure of $960 represents the loss over fifteen working days, the rate of loss is $64 per day. At this rate the additional twenty-six days lost gives an additional figure of $1664, which, with the original amount of $960, gives a total of $2,624. This amount is approaching the sum of $3,000 which was his Honour's starting point. 566 Probably towards the end of the six month period, Mr Ryan was not finding it necessary to go home a full two hours early. On the other hand, during the early part of that period he may well have found it necessary to go home somewhat more than two hours early. Moreover, throughout the six month period, even during the reduced working hours, he "found strenuous physical work almost impossible and … was only able to perform light duties." That is, he was experiencing a reduction in working capacity, even while engaged in work. 567 All these considerations point to a loss of earning capacity that lay outside that represented by the initial three weeks of work. 568 I do not think it is shown that the sum of $3,445.95 awarded to Mr Ryan for loss of earning capacity betrays legal error or is inordinately high. 569 Attack is made on his Honour's allowing interest at the rate of 10 per cent per annum over the two year period from the accrual of the cause of action to date of judgment. It is common ground, by reference to the High Court's decision in MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657, that interest in this case should be calculated at 4 per cent rather than 10 per cent. This would reduce pre‑judgment interest from $5,000 to $2,000 and the total amount awarded to Mr Ryan from $30,000 to $27,000. 570 It is submitted for the appellants, however, that a sum of $1,000 which was included for the value of the nursing services which Mr Ryan received from his wife should bear interest at the yet lower rate of 2 per cent per annum. Mr Ryan, on the other hand, submits that those Griffiths v Kerkemeyer damages (cf Griffiths v Kerkemeyer (1977) 139 CLR 161) should bear interest at the same rate as the other elements in his award, that is, 4 per cent. In support of its submission, the State refers to Grincelis v House (1998) 84 FCR 190 at 201 per Foster J, at 203 per Hill and Kiefel JJ. Their Honours in that case halved the rate of interest otherwise to be awarded to take into account the fact that the nursing services were not all rendered at the time when the cause of action accrued but were rendered and so were received and notionally paid for progressively over time. Their Honours did not, however, purport to rule that the rate of interest applicable to Griffiths v Kerkemeyer damages should always be one half of the rate of interest applicable to general damages otherwise. 571 In the present case, the nursing services were rendered over a period of three weeks, apparently in February 1997. This was an extremely short period by comparison with the 5.8 years of Grincelis v House, above (and the 10.43 years of Arvind v Greco [1995] Aust Torts Reports 62,622). Accordingly, the interest to be awarded was "fully earned" by the end of February 1997 - long before his Honour's judgment of 5 March 1999. In the circumstances, I do not think that a reduction in the rate of interest on the Griffiths v Kerkemeyer damages from 4 per cent to 2 per cent is called for. 572 Since the last two paragraphs were written, the High Court, on 3 August 2000, by a five to two majority, allowed an appeal from the Full Court in Grincelis v House ([2000] HCA 42). Nothing said by their Honours causes me to change the views expressed in the two paragraphs mentioned. Indeed, the High Court gave effect to the parties' agreement that interest on the Griffiths v Kerkemeyer damages should be assessed at one half of whatever rate was otherwise applied. The High Court allowed the appeal on the basis that in the circumstances of Grincelis v House, the "reduction" of the rate of interest from 10 per cent to 4 per cent in accordance with Gogic should not have been made. As noted earlier, in the present appeals the parties agreed that the rate should be 4 per cent by reference to Gogic.

CONCLUSION 573 For the above reasons, in my opinion the appeals of the Council, the State and Barclay Distributors should be allowed and that of Barclay Oysters succeeds in so far as it relates to the finding that it was liable in negligence but fails in so far as it relates to its liability under the TP Act. Barclay Oysters' cross-claim against the Council should be remitted to the primary Judge. 574 For the reasons given by Lee J, I agree that the other cross-claims should also be remitted and that, having regard to the conclusions reached respectively by the three members of the Court, orders, including the costs orders, proposed by his Honour should be made. I certify that the preceding four hundred and ninety-three (493) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

AND: GRANT RYAN, SCOTT CALLAGHAN, KEVIN GOWER, DAVID HOLNESS, GEOFFREY BENNETT, BRYAN HOCKING, BROSOW HARDY

AND: GRANT RYAN, SCOTT CALLAGHAN, KEVIN GOWER, DAVID HOLNESS, GEOFFREY BENNETT, BRYAN HOCKING, BROSOW HARDY

THE OYSTER FARMERS ASSOCIATION OF NEW SOUTH WALES PTY LIMITED

SHONID PTY LIMITED (TRADING AS "TIM & TERRY OYSTER SUPPLY PTY LIMITED")

VICTORIAN FROZEN FOOD DISTRIBUTORS PTY LIMITED (TRADING AS "RICHMOND OYSTERS")

KIEFEL J: 575 I have had the considerable advantage of the summary by Lindgren J of the reasons given by his Honour the primary Judge and of recent cases concerning the liability of public authorities for failing to exercise statutory powers and the principles to be applied to determine, generally, whether a duty of care arises. As his Honour points out, there is no agreed statement of principle on the latter question. The High Court may no longer be taken to endorse the notion of "proximity" as the determinant of a duty of care, nor to favour the use of reliance as a basis for liability, save in areas such as negligent advice, where it does not have the fictional quality which is now the subject of criticism but provides a basis for determining both duty and causation. I will refer only to aspects of the findings and evidence.

Duty of Care 576 In a context such as the present, where there is an absence of principle to be applied in a new case, McHugh J in Perre v Apand Pty Ltd (1999) 164 ALR 606, 630 and in Crimmins v Stevedoring Industry Finance Committee (1999) 74 ALJR 1, 19 suggested that where it is alleged that a statutory authority owed a common law duty of care and breached it, the issue of duty should be determined by a series of questions commencing with one as to whether it was reasonably foreseeable that a failure to exercise the powers in question would result in injury to the plaintiff; and if so, then by reason of the defendant's statutory obligations, whether it had the power to protect a specific class of persons, which class included the plaintiff. It is not necessary to list the remaining questions. McHugh J (Perre v Apand, 630) and other members of the High Court, have cautioned that, in the circumstances referred to above, the law should be developed incrementally and by analogy with decided cases. Hart, "The Concept of Law" 2nd edn, 274-5, considered that courts, when deciding unregulated cases proceed by analogy, and attach importance to ensuring that any new law made is in accordance with principles or follows underpinning reasons recognised as having a footing in the existing law. In any case, however, different principles supporting competing analogies may present themselves, and a judge will often have to choose between them, relying on the judge's sense of what is best and not upon any established order of priorities prescribed by law. 577 A view has been expressed by Professor Todd ("Liability in Tort of Public Bodies in Mullany and Linden (eds) Torts Tomorrow - a Tribute to John Fleming (1998) 36, 47) that there is, arguably, a measure of underlying agreement between four of the judgments in Pyrenees Shire Council v Day (1998) 192 CLR 330 (see McHugh J, Crimmins, 18-19). Of the key elements which Professor Todd distils from that case and more recent decisions, two are important in the resolution of these appeals: in connexion with the imposition of a common law duty, that it be consistent with and complimentary to the performance by the public body of its statutory function; and that the defendant be under a statutory obligation (or at least possess a specific power) and in a position of control so as to be able to protect the plaintiff from the danger in question. These considerations are, in my view, the key to the cases against the Council and the State. 578 As a general rule, the ordinary rules of negligence will apply to public authorities: Sutherland Shire Council v Heyman (1985) 157 CLR 424. Whilst at common law there can be no liability for mere inaction, a public authority will be liable for its failure to act when it has come under a duty to act. From a consideration of cases which follow, it would seem to me that whether it has come under a duty will depend largely upon the statutory powers given to it; the connexion the powers have with the risk in question and the person or class of persons exposed to it; the extent to which those powers reasonably permit it to deal with the risk; whether it was intended that that action be undertaken when the risk was present; and generally whether the imposition of a duty of care is inconsistent with the statute in question. 579 Pyrenees Shire Council v Day (1998) 192 CLR 330, whilst not a case of complete inaction on the part of the local authority, was one where the purpose of the statutory power given to the authority was to avoid the very risk which arose, damage by fire. Brennan CJ considered that where the power given was one to control activities which may foreseeably give rise to a risk of harm to an individual, and the power was conferred for the purpose of avoiding such a risk, compensation for loss by failure to exercise the power may be said to be consistent with the policy of the statute (347). Further, given the stated purpose of the powers, difficulties were then not encountered on the basis of some discretion, on the part of the authority, as to whether to exercise the power (345, 346). The measure of the duty was, consistently, no greater than that arising under the public law (347). Gummow J, (377), considered that the primary requirement in such cases was the analysis of any legislation in point, together with the positions of the parties (and in Crimmins, 31-32). The statutory powers given to the Shire facilitated the existence of a common law duty of care, and the touchstone of its duty was the measure of control (389). Two other matters were adverted to by his Honour. With respect to cases which required some kind of quasi-legislative activity on the part of public authorities: such were unrecognisable by the tort of negligence. The policy/operational dichotomy was not however useful in this area of the law (see also McHugh J in Crimmins, 17). In relation to the scope of the duty, questions of resource allocation and the like, matters relevant to an authority's ability to act would fall for consideration along with other facts which were to be "balanced out" when determining what should have been done to discharge any duty of care (393-4). 580 The importance of whether the statute was the source of the power to control or manage the area of risk, and therefore of the duty to take care, had been referred to in earlier cases including Schiller v Mulgrave Shire Council (No 2) (1972) 129 CLR 116 (by Barwick CJ, 120). The distinction between statutory powers conferred for the purpose of attaining statutory objects and in respect of which an obligation to act was created and the situation where an authority had a choice whether to exercise powers was discussed by Mason J in Heyman 457, although his Honour went on to conclude that there might then be a public expectation that they would be exercised. It has since been recognised that reference to expectations, or reliance, is unnecessary to a determination as to whether a duty to act arises. 581 In Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431, the existence of a duty of care on the part of the authority, which had statutory powers of control or management, was not in dispute. The principal issue to which the judgments were directed was what was necessary to be undertaken to fulfil the duty. Brennan CJ again equated the scope of the duty with the purpose of the statutory power, so that where it was one to protect persons, what was required was that which would reasonably fulfil that purpose, unless there was some contrary statutory direction. The manner of its exercise was, however, one for the authority to determine (443). 582 It follows in my view that with respect to the cases against the Council and the State, the principal focus must be upon the statutes which confer power on those entities to determine what they were directed to and the objects sought to be achieved or the protection afforded by them; and consider what measure of control was given to them to effect those purposes. It may also be relevant to consider the relationship or connexion between the Council and the State on the one hand and the applicant, Mr Ryan.

Aspects of the Evidence and Findings 583 Wallis Lake had been known to be subject to contamination from human faecal material for some time. There had not, however, been an outbreak of any virus attributed to it, although the prospect of that occurring had been adverted to and available scientific knowledge would have confirmed that. The lake and its catchment were, in particular, exposed to contamination from urban run-off. The risk of such contamination carried with it the risk of viral infection, as had been experienced elsewhere. Viruses such as the Hepatitis A virus ("HAV") were carried in human faeces. The risk of contamination was significantly higher after periods of heavy rainfall. Heavy rainfall occurred between 22 and 25 November 1996. Consistent with its practice adopted in light of the risk, that human faecal material would be brought into the catchment in larger quantities than usual by run-off waters, the grower Barclay Oysters suspended its harvesting between 23 and 27 November. On 26 November, the results of laboratory tests of flesh from a dozen of its oysters, chosen randomly were negative for E. coli. bacteria. It continued to harvest and supply, after a process of cleansing (depuration). It supplied through its distributor, Barclay Distributors. Purchases of oysters from that distributor were made by members of Mr Ryan's family on 21 December 1996 and 31 December 1996, and he consumed some oysters from each purchase. He became ill on 30 January 1997, and was later diagnosed as suffering from the HAV. There were subsequent notifications of similar diagnoses sufficient to characterise the occurrence as an outbreak of HAV, attributable to the consumption of oysters from Wallis Lake. 584 A considerable part of the evidence concerned better management practices conducted elsewhere in Australia and overseas. The expert evidence supported the initial undertaking of a sanitary survey of waters in which shellfish were grown, followed by further surveys and water testing to monitor changes in water quality and the presence of bacteria, indicative of the presence of faecal contamination and therefore also of possibly known viruses. It was accepted that it was not possible, on the current state of scientific or technical knowledge, to test directly for HAV. Flesh testing of oysters, whilst direct, was not reliable in a number of respects. The risk of the presence of the virus was ascertained by testing the water for bacteria, and in particular E.coli., and the extent of such contamination. Depuration generally was not considered effective to cleanse oysters of a virus and certainly not depuration undertaken for a period of 36 hours or less. A negative result for bacteria in the water was also understood to be undeterminative of the absence of the virus, as the virus could survive longer than the bacteria. Various ranges were provided, from weeks to three months or longer. In some instances, it had been discovered some years after a pollution event. The latter evidence was given in the context of the possibility that the virus could have survived elsewhere in the catchment area and be redistributed by water flow. 585 The principal purpose of a sanitary survey appears to be the classification of the waters according to the extent of any pollution first found and the establishment of a data base with which it was possible to monitor changes in water quality. Just what was involved in such a survey, and how variable the information sought and recovered might be, was a matter with which the Council took issue on the appeal; as was the conclusion, drawn by his Honour, that the sources of pollution might be identified by a survey. Where high levels of pollution were discovered in an area surveyed, harvesting from it was generally not permitted, or permitted only after the oysters grown there were relayed to approved waters for a period, or subjected to depuration which was proved to be effective. Where pollution conditions were present but beyond those conditions which formed the basis for a growing area's classification, it would be closed and re-opening would not occur until the area returned to normal for a sufficient time to allow the shellfish to reduce the coliform group of indicator organisms or reduce other deleterious substances that may be present in the shellfish meat. Growing areas subject to predictable pollution events would have criteria for closure and re-opening. 586 No sanitary survey, or any extensive testing, had been undertaken in Wallis Lake. Heavy rainfall and run-off however occurred on a regular, if not frequent, basis. The expert evidence was that, in the absence of information to indicate the likely impact of pollution sources; with knowledge of the increase in the risk of human viral contamination after pollution events, such as heavy rainfall; and cognisant of the limits on the effectiveness of depuration; the only option which a prudent person would take would be to close the growing area to harvest until such time as testing confirmed oysters were likely to be fit for human consumption. One expert expressed the view that, for an oyster farmer, the cessation of harvesting after such an event was not just good management, but a necessity. 587 Testing conducted in early 1997 after receipt of notifications that the virus had been contracted, revealed faecal contamination which was widely dispersed throughout the estuary. It was accepted by his Honour that no one source or even sources could be pointed to and multiple HAV contamination required more than one infected person in the area. His Honour considered that the contamination came from a number of sources, probably land-based.

The case against the Council 588 No issue can be taken with his Honour's findings of the Council's knowledge of the potential for human faecal contamination of the lake and of the possible effects of that upon the oysters grown there. The Council had commenced some limited water testing for faecal coliforms in about 1989 and became aware that levels of contamination in some stormwater drains exceeded the accepted standard. It was also aware of an adverse effect upon the quality of the water at times of high rainfall and that this was attributable to a number of sources, as earlier mentioned. It was in fact aware of problems relating to septic and sewerage effluent. Some specific possible sources of this pollution such as public toilets and caravan parks could be identified, and some complaints in particular areas pointed to the overflow of septic effluent onto the ground. Other possible sources of this pollution were more general, being identified by reference to activities or areas. 589 No source or sources for the contamination in question could be identified, although it was accepted by the Council in submissions that the period of rainfall referred to above probably brought the contaminants into the lake. The Council took issue with his Honour's findings as to what the Council should have done. Its principal submission was that a duty of care could hardly be said to arise if its content could not be specified. Further, the difficulty encountered in defining the content of the duty was that no measures could be pointed to which would have been effective to prevent the viral contamination. The duty, described by his Honour as that to take reasonable steps to "minimise" contamination, or the risk of it, was, in the Council's submission, inconsistent with his Honour's findings that if any of the three alleged tortfeasors - the Council, the State and the grower - had fulfilled their duty, the HAV outbreak would not have occurred. 590 It is clear from his Honour's reasons that it was considered that there was much that the Council could have done. So much can, I think be accepted. That does not however, in my respectful view, answer the question whether it came under a duty to take action. 591 The Council's submissions pointed to the lack of efficacy in what his Honour considered was necessary to be undertaken and to other evidence which highlighted the magnitude of any attempt to determine all sources of the pollution in question. His Honour considered that a sanitary survey could first be undertaken and thereafter the water quality monitored. In addition to the possible sources listed by his Honour, those of which the Council knew or ought to have known, it was submitted that the evidence disclosed that there were hundreds of points, in the very large catchment for the lake, which were potential sources for human faecal contamination. In addition to the difficulty of identifying all sources, the evidence clearly showed that water testing, whilst able to detect faecal contamination, could not detect the virus and that an absence of bacteria from the faecal contamination was not conclusive of the absence of the virus. 592 His Honour's view was that, nevertheless, water testing was useful and should have been undertaken in conjunction with a sanitary survey. The duty that the Council came under was described as one to "take those steps that were reasonably open to the Council in order to minimise human faecal contamination of the lake". The description seems to me necessarily to accept that the Council may not have been able to find all sources and that it may not have been able to prevent any outbreak. Some action, in the nature of good management practice, should however have been undertaken and this could have reduced the risk. In what follows, it would appear that his Honour considered that knowledge of a risk of harm gave rise to a duty to act, when it was within the Council's power to do so. 593 A conclusion that the Council was under an obligation to use the powers it had to protect oyster consumers from injury cannot, in my view, be reached without ascertaining the nature of those statutory powers and what they were directed to. It will be recalled that in Pyrenees there was coincidence between the action which was necessary to prevent the fire, the powers given to the Council and the purpose for which they were given. In my view the provisions here referable to water pollution and public health, whilst no doubt sufficient to authorise the undertaking of surveys or water testing, were not such as to place the Council in a position where it was obliged to prevent the risk of injury, assuming for present purposes that it could have done so effectively. His Honour set out the relevant statutory provisions. The Local Government Act 1993 (NSW), pursuant to which the Council obtained its wider powers, had amongst its stated purposes the provision of the legal framework for an effective and environmentally responsible local government. More specifically, the Council had the power to approve the carrying out of "sewerage work", which was defined to include works relating to septic tanks or effluent systems and Council sewers. In that connexion, it was to have regard to "the protection and promotion of public health". It had power to require compliance to "relevant standards" relating to sewerage systems and to require that owners or occupiers of premises (a term widely defined) do or refrain from doing, specified things "to prevent environmental damage" or to cease an activity which was a threat to public health. It had the power to abate a nuisance, or to require that it be abated. It had powers of entry into premises in aid of its other powers. It had a general power to remove, disperse, destroy or mitigate the pollution of water, at the direction of the Environmental Protection Authority. There was, however, no statutory provision which had as its apparent purpose the prevention of contamination of oysters, the water in which they were grown, or the protection of consumers, and which required the Council to use one or more of its powers in a given circumstance to achieve those ends. The powers given to the Council, referred to above, which allowed it to undertake some action and which might have had some effect upon the risk in question may be contrasted with those in Pyrenees, by which the Council could be said to have been obliged to act so as to ensure the defective fireplace was remedied or not used. It may also be observed that the Council's argument, concerning the lack of definition of the content of any alleged duty, reflects the lack of an obligation directed to a specific end. 594 On the view I have taken of the issue, whether the Council was under a relevant duty of care, it is not necessary for me to deal with other questions raised by the Council in submissions, which challenged the finding by his Honour that any surveys or testing it should have undertaken were not, apparently, beyond its financial capability. If the Council was under a duty to undertake a programme of a kind which could be reasonably identified, and it could not be said to have a choice whether to do so, any reasons it may have for not doing so, or deferring it, would need to be taken into account in considering whether its inaction constituted a breach of duty. This was not, the Council submitted, a matter specifically addressed at trial for the reason that what was necessary to be undertaken was not pleaded. Whether the Council was sufficiently appraised of the point during the questioning of witnesses does not need to be determined. In my view, such a duty did not arise. It is, however, necessary for me to refer briefly to the question of causation. 595 Had the Council undertaken the management strategies referred to by his Honour it would follow from the evidence that the best outcome would have been a reduction of the risk. A finding that it would actually "minimise" is not, with respect, apparent and in any event the Council could not have acted such as to prevent the viral contamination and the injury in question. 596 In order to involve liability, action or inaction must be sufficiently important and closely connected with the incident in question so as to make it reasonable, on a broad commonsense view, to regard its author as responsible for it in law: Fitzgerald v Penn (1954) 91 CLR 268, 275-6. As to the possibility that any inaction on the Council's part could be said to have materially increased the risk of injury, the Council referred to the decision of Mason P in Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307, where his Honour held that the law did not equate that situation with one where it could be said the defendant materially contributed to it (as to which see March v Stramare (1991) 171 CLR 506, 532). It does not seem to me that the Council's position is to be determined by such considerations, for in my view any general omission on its part could only be said to have left oyster consumers exposed to the same risk. The only relevant increase in risk arose not from its conduct, but from the effect of heavy rainfall. Tested another way, one could not say, on balance, that the performance of the duty identified would have averted the harm (Heyman's case, 467, Mason J). 597 In my respectful view, the case against the Council should have been dismissed.

The case against the State 598 A substantial part of the argument relating to the State's liability concerned its obligations to effectively undertake and enforce an Oyster Quality Assurance Programme for the area and in particular, whether what would be involved on its part was a quasi-legislative activity; by which was meant that it was "operational" in the public law sense. The need for it to take this and other action was said to arise because of the extent of knowledge it had acquired over some years about the risk of faecal contamination of the water and of viral contamination in oysters, including that acquired through various committees set up under State legislation, and also because of the extent of its involvement in the management and practice of the oyster industry. Issue was taken by the State with some of his Honour's findings in this regard. 599 Once again, his Honour's finding as to the State's knowledge of the foreseeability of the risk of harm through the viral contamination of oysters could not, in my view, be attacked and the State rightly conceded this in its submissions. It pointed out, however, that the risk was one which was not very likely, since it had not occurred in the area despite oyster production over many years. The risk of faecal, and therefore viral contamination, was however known to be higher after heavy rainfall. As earlier indicated, this knowledge, combined with the State's statutory powers and duties, is in my view, determinative of the existence of a duty of care and its breach. His Honour's reasons disclose a primary concern with the State's exercise of its management powers, although not to the extent contended for by the applicant. In that process his Honour also found that it had important responsibilities, one to prohibit the taking of oysters from the lake. 600 His Honour held that the State, like the Council, had a duty to exercise its powers of management in such a way as to minimise the risk of HAV infection of oyster consumers. His Honour, at an earlier point in his reasons, had determined that the State had responsibilities which its counsel had identified as matters which could have been dealt with in a local Oyster Quality Assurance Program, namely that sanitary surveys be undertaken; that harvesting cease after heavy rainfall, and that there be extreme caution in re-opening after closure. The latter two assume particular importance in my view. 601 His Honour accepted certain limitations upon the content and timing of such a programme. It is not necessary to detail those findings. His Honour considered that the responsibilities arose by reference to a number of facts, including the State's statutory powers as well as those given to its agencies; its participation in management and committees involved in management planning relating to the environment and the health of the estuary; and its day to day control over the oyster industry. "Most importantly", his Honour added, through the Minister for Fisheries the State had the power, at any time, to prohibit the taking of oysters from the lake. 602 Clause 12B(3)(a) of Div 4 of the regulations to the Fisheries Management Act 1994 (NSW) provided that an objective of the Quality Assurance Programs to be undertaken was to ensure that shellfish taken from estuarine waters was only sold for human consumption if the shellfish and surrounding waters met certain standards. The Act contained even more direct powers, cast in terms which suggest an obligation to act in certain circumstances. Pursuant to s 8 of the Act, the Minister was given power to prevent the taking of fish (including oysters) from any waters and to close fisheries. Other sections permitted the prohibition on the taking of oysters during a specified period if satisfied that they were likely to be unfit for human consumption and the declaration of quarantine areas (ss 189 and 183). There were other powers with respect to the pollution of waters provided by the Clean Waters Act 1970 (NSW) but it is not necessary to list them. Reference can however be made to the Food Act 1989 (NSW), which entitled the Director-General of the Department of Health to prevent the cultivation of oysters and to prevent damage generally to public health (ss 44 and 45). The assumption that the Fisheries Department, and not the Health Department, would act with respect to fish production and harvesting was addressed in evidence and submissions. In any event, the latter's statutory powers are not addressed to a particular risk or a group of consumers, as I consider the provisions of the Fisheries Management Act to be. 603 The rainfall in the catchment in November 1996 created a known and significant risk of faecal contamination of oysters, carrying with it a risk of viral infection including HAV. The purpose of the powers given to the Minister to prohibit the harvesting of oysters from an area for a specified period clearly had, as its purpose, the protection of members of the public who might be consumers of oysters, where the Minister had reason to be concerned about the fitness of the oysters for human consumption, as he must have had here if properly informed. In my view, the State thereby came under a duty to exercise its powers and prohibit harvesting until the Minister could be assured of the likelihood of the oysters' fitness for consumption. It was reasonably able to do so, as the letter from the NSW Shellfish Quality Assurance Program affecting a ban, after reports of the diagnosis of HAV in persons, shows. 604 In submissions the State complained that, in some respects, his Honour's findings towards a conclusion of negligence went beyond the case as pleaded by its opponents. The power of the State to effect a closure was, however, squarely raised. There was, in any event, little by way of evidence which could have been addressed to it. 605 The State's appeal should be dismissed. The case(s) against the Barclay Companies

Negligence 606 A finding of a duty of care on the part of an oyster grower in the area requires considerations of the closeness of the relationship between it and consumers, and of any measures open to the consumers to protect themselves, in addition to the grower's knowledge of the risk (Perre v Apand, 631; 659; 664). A duty not to expose consumers to the risk of virus is readily satisfied. The existence of a duty of care was conceded at trial. It was submitted on the appeal that this did not, however, spell out the content of the duty. In my view, the above statement of duty is self-explanatory and the means by which it was to be achieved clearly available. 607 His Honour the primary Judge referred to the evidence of Mr Barclay, that he was aware of the existence of potential sources of viral pollution of the lake; that depuration was not adequate to remove viruses; and that flesh testing would not necessarily detect viruses. His Honour referred to what the Barclays companies should have done and focussed, principally, upon the "significant contribution to risk reduction" it could have made. For the reasons I have given with respect to steps which his Honour found might have been undertaken by others, but which were not likely to amount to prevention or detection, I am respectfully unable to agree that this was the proper measure of the duty owed by the Barclays companies. His Honour however also identified, as an alternative to attempts to prevent contamination, and in the event that it proved impossible to obtain a virus-free growing environment, the requirement that the Barclays companies refrain from selling oysters for human consumption, except perhaps with a warning about the risk in eating them. Ultimately, it was the absence of warning when selling which his Honour held to constitute negligence. 608 It follows from the view I have expressed above concerning the State's duty, and the basis for it, that even if the harvesting of oysters had not been prohibited in the circumstances prevailing, as it should have been, the Barclays companies should not have supplied oysters for sale until a sufficient period had elapsed by which the risk of contamination could be regarded as acceptable or tests sufficiently indicated that to be the case. That was the effect of the expert evidence. A cessation of harvesting and supply during and up to a few days after the rainfall could never suffice; nor could 36 hours of depuration thereafter. His Honour determined liability, ultimately, on the basis that a warning was not given of the danger which remained in consuming oysters from the area. The requirement of a warning would of course render nugatory the supply of oysters for sale.

Trade Practices Act Claims 609 His Honour's conclusions and reasoning with respect to the claim against Barclays Oysters based upon provisions of the Trade Practices Act 1974 (Cth) are set out in the summary of Lindgren J, and it is not necessary for me to restate them. I propose only to state my views shortly. 610 His Honour found that ss 74B and 74D were further sources of liability in Barclay Oysters. Section 74B(1) provides that a corporation is liable to compensate a consumer who suffers loss as a result of goods manufactured (which may include produce grown) not being reasonably fit for their purpose, which purpose was made known to the corporation. The purpose here was of course human consumption, of which the grower was aware. Submissions on behalf of Barclay Oysters and some other growers focussed upon s 74B(2)(b), which provides that subsection (1) is not applicable to a circumstance where the consumer did not rely, or it was unreasonable for it to rely, on the skill or judgment of the corporation. In their submission, the question of reliance on the part of consumers cannot be assumed, as his Honour approached the matter. 611 In my view, it is plain that a consumer will necessarily rely upon the judgment of an oyster grower that oysters are fit for consumption. In the case of oysters, more so than other foods, it may be considered even more likely that consumers will harbour concerns but expect that the goods would not be available for sale if there was a real risk that they were contaminated. It follows from my reasons relating to liability for negligence, that the judgment Barclays Oysters exercised was when to return to harvesting. In my view, his Honour was correct in holding Barclay Oysters (but not Barclay Distributors) liable on this basis and under s 74D. That provision concerns the merchantable quality of goods and whether a purchaser would act reasonably in expecting that they met such standards. 612 In my view, Barclay Oysters' appeal should be dismissed. So far as concerns the Barclays companies' cross-claim against the Council, it should be determined by the primary Judge. As Lindgren J points out, that appears to have been accepted by those parties on the appeal.

The cross-appeal against Barclay Oysters 613 Section 75AD Trade Practices Act 1974 (Cth) provides a liability for compensation in a corporation which supplies defective goods manufactured by it and a person suffers injury as a result of the defect. Section 75AK(1)(c), however. provides that it is a defence to such a claim if it is established that the defect could not be discovered, having regard to the state of scientific or technical knowledge at the time of supply. His Honour held that the defence was available, since the only test capable of detecting the virus - flesh testing - would destroy the oyster. Discovery and supply were therefore mutually exclusive. 614 I would respectfully agree with his Honour's conclusion that the defence was available. The evidence relating to flesh testing was that it was problematic; it often failed to detect a virus; it frequently gave false negatives; and it could only be undertaken by samples which, so far as concerned oysters, could not be assumed to be representative. It is in that latter sense that I understand his Honour to say that the only effective test was to destroy each oyster to be offered for sale. The test could not in any sense be regarded as a proper or sufficient means of detection. In my view, therefore, it could not be said that scientific knowledge was such as to enable the virus to be detected within the meaning of s 75AK. Quantum and Apportionment 615 The simple answer, in my view, to the submission with respect to the award of $20,000 for general damages is that it could not be characterised as excessive, given the seriousness and potential outcomes of the virus; the stress associated with those factors; and the debilitating nature of the illness associated with the infection. So far as concerns the interest awarded, I agree with Lindgren J that the period over which the nursing care was provided would not require a further reduction from the agreed rate of 4 per cent. His Honour allowed interest on all heads of claim at 10 per cent and a reduction of $3,000 is necessary. 616 His Honour, the primary Judge, held that each of the respondents found to be liable should share the burden equally and, in principle, I can see no reason to doubt such an approach. That may, however, be affected by outstanding claims for contribution or indemnity, as Lee J has pointed out.

Conclusion 617 The appeal by the Council should be allowed on the basis that it was under no duty to prevent the injury suffered. The State and the grower Barclay Oysters were, however, obliged to act to ensure oysters potentially affected were not released to the public and so far as concerned the grower, the applicant can be taken to have relied upon its judgment and expected that oysters sold by it were fit for human consumption. Their appeals are allowed only to correct the amount allowed for pre-judgment interest. 618 I agree with the orders proposed by Lee J with respect to costs for the reasons given by his Honour; and with the other orders set out in the minute of orders. I certify that the preceding forty four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

N 219 of 1999 Counsel for the Appellants (the Barclay Mr C R R Hoeben SC and Mr A Coleman Companies) and the Cross-Respondent:

Solicitors for the Appellants Dunhill Madden Butler (the Barclay companies):

Counsel for the First Respondents Mr T K Tobin QC and Mr J B R Beach (Grant Ryan and the representative parties) and for Grant Ryan as Cross-Appellant:

Solicitors for the First Respondents Slater & Gordon (Grant Ryan and the representative parties) and for Grant Ryan as Cross-Appellant:

Counsel for the Second Respondent Mr W H Nicholas QC and (the Council): Mr T G R Parker

Solicitors for the Second Respondent Coudert Brothers (the Council):

Counsel for the Third Respondent Mr P W Taylor SC and Mr M J Windsor (the State of New South Wales):

Solicitors for the Third Respondent Crown Solicitor's Office (the State of New South Wales): N 234 of 1999 Counsel for the Appellant (the Council): Mr W H Nicholas QC and Mr T G R Parker

Solicitors for the Appellant (the Council): Coudert Brothers

Counsel for the First Respondent Mr T K Tobin QC and Mr J B R Beach (Grant Ryan):

Solicitors for the First Respondent Slater & Gordon (Grant Ryan):

Counsel for the Second and Third Mr C R R Hoeben SC and Mr A Coleman Respondents (the Barclay companies):

Solicitors for the Second and Third Dunhill Madden Butler Respondents (the Barclay companies):

Counsel for the Fourth Respondent Mr P W Taylor SC and Mr M J Windsor (the State of New Wales):

Solicitors for the Fourth Respondent Crown Solicitor's Office (the State of New Wales):

N 298 of 1999 Counsel for the Appellant Mr P W Taylor SC and Mr M J Windsor (the State of New South Wales):

Solicitors for the Appellant Crown Solicitor's Office (the State of New Wales):

Counsel for the First Respondents Mr T K Tobin QC and Mr J B R Beach (Grant Ryan and the representative parties):

Solicitors for the First Respondents Slater & Gordon (Grant Ryan and the representative parties):

Counsel for the Second Respondent Mr W H Nicholas QC and (the Council): Mr T G R Parker

Solicitors for the Second Respondent Coudert Brothers (the Council):

Counsel for the Third and Fourth Mr C R R Hoeben SC and Mr A Coleman Respondents (the Barclay companies):

Solicitors for the Third and Fourth Dunhill Madden Butler Respondents (the Barclay companies):

Counsel for the Sixth and Seventh Mr D J Fagan SC Respondents (MW & EA Sciacca Pty Ltd and Tadeven Pty Ltd):

Solicitors for the Sixth and Seventh Minter Ellison Respondents (MW & EA Sciacca Pty Ltd and Tadeven Pty Ltd):

Counsel for the Fourteenth Respondent Mr K P Rewell and Ms S Thode (Georges Oysters Pty Ltd):

Solicitors for the Fourteenth Respondent Henry Davis York (Georges Oysters Pty Ltd):

Date of Hearing: 30, 31 August 1999; and 1, 2, 3 September 1999

Date Last Submission Received: 17 September 1999

Date of Judgment: 9 August 2000