Plaintiff v Firstnamed Defendant Secondnamed Defendant

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

2 In this proceeding, the plaintiff claims damages for loss of income suffered by it by reason of the diminished availability of wild abalone for commercial harvesting, and the loss of value of the plaintiff's Abalone Fishery Access Licence ("AFAL") suffered by reason of the diminished availability of wild abalone for commercial harvesting.[1] Pursuant to Part 4A of the Supreme Court Act 1986, the plaintiff brings this proceeding on its own behalf and on behalf of group members (individuals and companies) who are or were, in May 2006, involved in the commercial abalone industry and/or connected with it, and who have been affected by the outbreak of the disease. The class (group members) upon whose behalf the proceeding is brought is a closed class, all group members being identified by name in a schedule to the plaintiff's further amended statement of claim.

3 The plaintiff's case is that the outbreak of the disease was caused by various breaches of duty committed by the Minister for Agriculture ("the Minister"),[2] the Secretary ("the Secretary") to the Department of Primary Industries ("the DPI"),[3] the Chief Veterinary Officer of the State of Victoria (Dr Millar) and the Executive Director, Fisheries Victoria (Dr Appleford). The Minister is the minister in charge of the DPI. From late 2002, pursuant to an Administrative Arrangements Order,[4] the DPI has been the department responsible for abalone fisheries under the Fisheries Act 1995.[5] Further, the DPI is also responsible for the exercise of powers under the Livestock Diseases Control Act 1994 ("the LDC Act").[6] In addition to being the Chief Veterinary Officer of the State of Victoria at the relevant time, Dr Millar was also a livestock inspector under the LDC Act. In addition to these roles, Dr Millar was also a delegate of various of the Secretary's powers, and various of the Minister's powers, under the LDC Act.[7] Likewise, Dr Appleford was a delegate of various of the Minister's powers under the Fisheries Act (including the power to issue a fisheries notice under s 152 of that Act).[8]

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

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

5 Additionally, the plaintiff brings this proceeding pursuant to s 142 of the Fisheries Act 1995. Section 142 of the Fisheries Act provides:

(1) The Minister, the Secretary, a delegate or deputy of the Minister or the Secretary, an officer of the Department, an authorised officer, a member of the Commercial Fisheries Licensing Panel, a member or deputy of the Licensing Appeals Tribunal, a member or deputy of the Compensation Assessment Panel (established under Part 10) or a member or deputy of the Compensation Appeals Tribunal (established under Part 10) is not personally liable for anything done or omitted to be done in good faith-

(a) in the performance of a function or the exercise of a power under this Act; or

(b) in the reasonable belief that the act or omission was in the performance of a function under this Act.

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

6 In bringing this proceeding, the plaintiff did not attempt to place any reliance upon s 64 of the Judiciary Act 1903 (Cth).[9] At trial, the plaintiff's claim against the State was, subject to the additional operation of s 142 of the Fisheries Act, limited to the claim that the State was vicariously liable for the acts and omissions of the Minister, the Secretary, Dr Millar and Dr Appleford (described collectively by the plaintiff as "the State tortfeasors").[10]

7 Originally, in addition to suing the State (as first defendant), the plaintiff sued Southern Ocean Mariculture Pty Ltd (the second defendant), contending that the outbreak and spread of the virus and the disease were caused by the negligence of the second defendant in the operation of a farm from which it conducted an abalone aquaculture business, and from which farm the virus and the disease are alleged to have spread. However, the plaintiff and the second defendant compromised the dispute between themselves on terms approved by the Court pursuant to s 33V of the Supreme Court Act 1986. The compromise was approved on 18 September 2013. Paragraph 4 of the orders approving the compromise provided:

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

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

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

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

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

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

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

(a) by divers nominated under Abalone Fishery Access Licences ("AFALs") issued by the Secretary pursuant to the Fisheries Act and the Fisheries Regulations 1998 ("AFAL divers");

(b) by AFAL divers to harvest abalone quotas for the holders of units in AFALs ("AFAL holders") nominated in respect of each AFAL diver.[11]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(a) by no later than 16 January 2006, it was probable that a herpes-like virus was the cause of the abalone mortalities on the SOM farm;

(b) by no later than 22 March 2006, it was probable that the virus was causing abalone mortalities at the SOM farm; and

(c) by no later than 28 March 2006, the virus was causing further abalone mortalities at the farm.[13]

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

(1) An inspector may, in writing, order the owner of-

(a) livestock suffering from or suspected of suffering from disease;[14] or

(b) livestock which the inspector believes to have been in contact with diseased livestock-

to ensure that the livestock are kept in isolation from other livestock until the livestock have received proper treatment or been found by an inspector not to be suffering from disease.

(2) An inspector may, in writing, order the person in charge or having the custody or control of livestock referred to in sub-section (1) to ensure that the livestock are kept in isolation from other livestock for so long as they are in the person's charge, custody or control.

(3) A person must not fail or refuse to comply with an order under this section.

Penalty: 60 penalty units.

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

(1) If an inspector knows or reasonably suspects that-

(a) any livestock or livestock product is diseased or infected with a disease; or

(b) any livestock or a livestock product has been in contact with diseased livestock-

the inspector may-

(c) dispose of, or order to be disposed of, the livestock or livestock product; or

(d) destroy, or order to be destroyed, the livestock or livestock product.

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

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

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

(1) An inspector who believes on reasonable grounds that a vehicle or any premises or place where-

(a) livestock or livestock products are commonly exposed for sale;

(b) livestock are commonly exposed for exhibition, parade, racing or any other form of recreation or competition;

(c) livestock or livestock products are processed for human or animal consumption-

is infected with a disease may, by notice in writing to the owner or person in charge or apparent control of the premises, place or vehicle affected by the notice, require that person to disinfect-

(d) the place, premises or vehicle specified in the notice;

(e) any fodder, fitting or any other article within the premises, place or vehicle;

(f) any vehicle within the premises or place.

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

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

32 As to criminal sanctions for contravening notices issued under ss 110, 113 and 115, s 112 of the LDC Act made it an offence to contravene any provision of a quarantine notice issued under s 110;[15] s 114 of the LDC Act made it an offence to contravene any provision of a disinfection notice issued under s 113;[16] and s 115(2) of the LDC Act made it an offence to contravene any provision of a treatment notice issued under s 115(1).[17]

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

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

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

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

(1) If the Minister believes or suspects that there is a possibility that an exotic disease is present on or in or may be introduced into any land, premises, place or area, the Minister may by order-

(a) declare the land, premises, place or area to be a restricted area; and

(b) specify any prohibitions, restrictions and requirements which are to operate in the restricted area.

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

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

(1) The Minister, after consultation with the relevant consultative bodies, may by a fisheries notice in relation to any fishery-

(a) fix and enforce catch limits for any species of fish specified in the notice;

(aa) fix and enforce minimum or maximum size limits for any species of fish specified in the notice;

(b) fix periods during which any specified fishing activity in relation to fish is prohibited or allowed;

(c) provide for the management of a specified area of inland waters;

(d) close to harvesting for the period of time specified in the notice any shellfish beds or shellfish farms, where necessary in response to adverse environmental conditions;

(f) specify measures for the protection of any fishery, species, ecosystem or habitat;

(g) provide for any matter or thing relating to protected aquatic biota and noxious aquatic species in accordance with this Act;

(h) provide for any other matter or thing which this Act requires or permits to be done by a fisheries notice.

(2) Despite sub-section (1), the Minister need not consult with the relevant consultative bodes before making a fisheries notice if, in the opinion of the Minister, to consult those bodies would result in a delay that would significantly reduce the effectiveness of the notice.

(2A) ...

(3) If a provision of a fisheries notice is inconsistent with any regulations, management plan, Ministerial direction, licence or permit, the fisheries notice prevails to the extent of the inconsistency.

(4) ...

(5) A fisheries notice-

(a) must be published in the Government Gazette;

(b) must be sent to the relevant recognised peak bodies;

(c) if there are no relevant recognised peak bodies, must be published in a newspaper circulating in the area affected by the notice;

(d) comes into operation on the date it is published or on such later date as is specified in the fisheries notice;

(e) unless sooner revoked, is revoked by virtue of this section on the day which is 12 months after the date on which it came into operation.

(5A) ...

(6) A fisheries notice is a subordinate instrument for the purposes of the Interpretation of Legislation Act 1984.

(7) A fisheries notice-

(a) may be of general or limited application; and

(b) may make different provision according to differences in times, places, localities, circumstances, boats, persons, classes of persons or fish, whether or not any times, places, circumstances, boats, persons or fish are determined or ascertainable before, at or after the making of the notice; and

(c) may impose penalties not exceeding 50 penalty units for a contravention of or an offence under the notice; and

(d) ...

(e) may confer powers or impose duties in connection with the notice on any person or body; and

(f) may provide for the exemption of persons or things or a class of persons or things from any of the provisions of the fisheries notice, whether unconditionally or on specified conditions and either wholly or to such an extent as is specified.

38 The plaintiff's case is that the State tortfeasors (the Minister, the Secretary, Dr Millar and Dr Appleford) owed the plaintiff a duty of care because "[they] knew of the risk of harm to specific individuals, [they] had power to take particular steps to eliminate that risk and importantly, at an earlier stage, had given directions to eliminate the risk".[20] In making this submission, the plaintiff relied upon what it described as McHugh J's characterisation of Pyrenees Shire Council v Day[21] in Graham Barclay Oysters Pty Ltd v Ryan.[22]

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

(a) by not later than 23 March 2006 (alternatively 28 March 2006) declaring the grow-out sheds on the SOM farm to be an infected place under s 21 of the LDC Act;

(b) by not later than 23 March 2006 not requesting and/or advising SOM to immediately:

(i) cull and dispose of abalone in affected tanks (and in drains or ponds) in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;

(ii) decontaminate the affected tanks in the grow-out sheds on the SOM farm;

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

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

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

(a) by not later than 16 January 2006, issuing a Fisheries Notice under s 152 of the Fisheries Act directing SOM to immediately:

(i) cull and dispose of abalone in the weaning/brood stock shed and any abalone in drains or ponds on the farm in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;

(ii) decontaminate the weaning/brood stock shed on the farm;

(iii) cease the flow of effluent discharge from the weaning/brood stock shed on the farm;

(b) alternatively to (a), by not later than 16 January 2006, requesting and/or advising SOM to immediately undertake the actions referred to in (a);

(c) by not later than 23 March 2006, issuing a Fisheries Notice under s 152 of the Fisheries Act directing SOM to immediately:

(i) cull and dispose of all abalone in the affected tanks in the grow-out sheds, and any abalone in drains or ponds on the SOM farm in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;

(ii) decontaminate the affected tanks in the grow-out sheds on the SOM farm;

(d) further and alternatively to (c), by not later than 28 March 2006, issuing a Fisheries Notice directing SOM to immediately cease the flow of effluent discharge from the grow-out sheds on the SOM farm;

(e) by not later than 23 March 2006, declaring the grow-out sheds on the farm a restricted area under s 26(1)(a) of the LDC Act and further specifying prohibitions, restrictions and requirements which were to operate in the restricted area under s 26(1)(b) of the LDC Act, namely directing SOM to immediately:

(i) cull and dispose of all abalone in affected tanks in the grow-out sheds, and any abalone in drains or ponds, on the farm in accordance with the guidelines in the Aquavetplan Destruction Manual and the Aquavetplan Disposal Manual;

(ii) decontaminate the affected tanks in the grow-out sheds on the farm;

(f) further and alternatively to (e), by not later than 28 March 2006, not directing SOM to immediately cease the flow of effluent discharge from the grow-out sheds on the farm;

(g) alternatively to (e) and (f), by not later than 23 March 2006, not requesting and/or advising SOM to immediately undertake the actions referred to in paragraphs (e)(i) and (e)(ii) above;

(h) further and alternatively, by not later than 28 March 2006, not requesting and/or advising SOM to immediately cease the flow of effluent discharge from the grow-out sheds on the SOM farm.[25]

42 So far as common questions of law or fact are concerned in relation to group members, the plaintiff posited the following questions:[26]

(a) the Minister and/or Dr Appleford, was there a foreseeable and not insignificant risk on or after 16 January 2006,[27] and/or on or after 23 March 2006;

(b) the Secretary and/or Dr Miller, was there a foreseeable and not insignificant risk on or after 23 March 2006 -

that the virus would escape from the SOM farm into Drain Bay and cause the disease in wild abalone?

(2) With respect to each of the State tortfeasors, in the circumstances, would a reasonable person in each of their positions have taken the various precautions the plaintiff alleges that each of them should have taken, and which are described above?

(b) cause the disease in wild abalone in Drain Bay?

(c) cause the disease in wild abalone along the Victorian coast?

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

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

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

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

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

46 Under the heading "Abalone health", the management plan provided:

The transfer of disease or unwanted genetic material to the wild must be prevented. Notifiable diseases are specified in the Disease and Livestock Control Act 1968[31] and carry mandatory reporting requirements with powers of confiscation or eradication in the event of a significant disease outbreak. This legislation is also supported by the Fisheries Act 1995 but with additional powers relating to inspection and compliance. The EPA also requires notification of fish kills. The Victorian Fish Health Accreditation Scheme currently provides fish health monitoring and extension to the aquaculture industry, and may be extended to cover abalone grown in aquaculture.

To prevent the possible transfer of disease and genetic material to the wild, all coastal abalone aquaculture facilities (as well as commercial processing facilities holding live abalone but not necessarily associated with an aquaculture venture) with waste water outflows to the sea, are required to manage the possible transfer of disease and genetic material to the wild. Those facilities holding abalone received from another broodstock management collection zone must develop a code of practice that aims to prevent the possible transfer of disease and genetic material to the wild.[32]

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

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

During an aquatic animal disease emergency involving a declared exotic disease, areas may be declared under the [LDC] Act for disease control/eradication purposes:

• Infected Place (section 21);
• Restricted Area (section 26); and
• Control Area (section 29).

49 Under the heading "Initiating a response", VAMAADE provides:

The initial notification of a suspected aquatic animal disease emergency is likely to be received by district staff, who collect as much information as possible for the Senior Veterinary Officer (SVO) at regional level. The SVO, if necessary, notifies the CVO and the relevant Police District Emergency Response Coordinator (DERC), Regional Fisheries Manager, local government authority and relevant aquaculture, service and catchment management industries and authorities.

...

Subsequent action including the possible location and opening of a Local Disease Control Centre (LDCC) and activation of the State Disease Control Headquarters (SDCHQ), is determined by the CVO.

50 Under the heading "Activating the arrangements",[33] three phases of activation are described. Under the heading "Phase 1 - Investigation", the following appears:

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

51 Under the heading "Phase 2 - Operations", the following appears:

The operational phase exists when the existence of an aquatic animal disease emergency is confirmed, and continues until the disease and its related risks are controlled or eradicated, or it is determined control or eradication is no longer feasible.

During this phase the SDCHQ is established, and one or more LDCCs may be established ... .

The SDCHQ evolves from the incident management team appointed by the CVO in the investigation phase, which forms the core of the SDCHQ and manages the response strategy. An LDCC controls response activities in a designated [restricted area].

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

65 On 20 January 2006, Mr Forbes dived reef code 3.07 (Water Tower).[43] Within each reef code there may be many individual reefs with suitable habitats for abalone. Some reef codes will have almost continuous good habitat and others will have patchy suitable habitat. In cross-examination, Mr Forbes agreed with the proposition that the two reef codes outside the SOM farm (Burnet's and Water Tower), by and large, were continuously good abalone habitat. He also agreed that within each reef there might be many pockets where you will find abalone: under ledges; in crevices; and even under rocks for very small ones.

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

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

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

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

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

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

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

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

Two abalone farms located in the south-west of Victoria have reported unusual levels of mortality over this summer period. The mortalities were first noticed in early December and have been the subject of investigation by a private veterinarian and, more recently, by the Department of Primary Industries. One farm has experienced significant mortality in farmed green lip abalone over the past few weeks.

The investigations have focused on the possible cause of the mortality and have considered issues such as environmental stress, farming practices and infectious agents (endemic and exotic). As a precautionary response, all affected farms have agreed to a voluntary quarantine on movement of live abalone and equipment between farms and the wild. All affected farms have demonstrated a high degree of willingness to cooperate with DPI in its investigation.

...

Abalone divers and processors are asked to report to Fisheries Victoria, unusual behaviour in abalone, signs of disease, or evidence of unusual mortality in wild and pre-processed abalone as soon as possible. DPI is willing to test samples of abalone associated with mortality events at no charge.

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

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

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

All members,

Yesterday Peter Riddle dived in Water Tower Bay and found it full of infected Abs. Drain Bay was also in the same state. Samples were taken and given to Fisheries for analysis. I immediately notified Peter Appleford and the Minister's advisor of the extreme seriousness of the situation.

Last night a meeting was held in Port Fairy with Graeme Hanel. Many concerns were expressed to him. It was arranged that the director and chief vet would be coming to Port Fairy for a briefing early in the week. However following our calls to the Minister and action taken by the central and eastern zones actions to be taken by Fisheries have ramped up considerably. [The email then set out steps that were to occur].

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

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

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

Dear Harry,

The first of our surveys on the Abalone populations at the virus affected sites was conducted on the 12th, 13th and 14th of September.

I would like to make the following comments on my observations in order that they may shed some light on the current situation. They are however my observations, comments and assumptions and obviously not scientifically proven fact.

Lady Julia Percy Island (4 sites)

All sites surveyed were healthy, with no sign of the virus observed. The populations look very good with high numbers of all sizes ranges of abalone visible.

Light House Reef (2 sites)

Both sites surveyed were healthy, with no sign of the virus observed.

Mills Reef (2 sites)

Both sites surveyed were healthy, with no sign of the virus observed. The usual high numbers of abalone were encountered, growth up to and beyond the increased size limit still appears very slow.

Killarney (2 sites)

Both sites surveyed were healthy, with no sign of the virus observed.

The Cutting (1 site)

This site was very healthy with the population density and in particular the size of the abalone being the best I have seen it. No signs of the virus were observed.

Leavy's Beach (2 sites)

Both sites surveyed were very healthy, with no sign of the virus observed. The size and numbers of abalone seen at these two sites would be the best I have seen them.

The Craggs (5 sites)

The first site we completed was "Outside Craggs", with good visibility I was half way to the bottom (14 meters) when I first saw dead and dying fish all over the bottom. This was my first encounter with the effects of the virus and it literally left me feeling sick in the stomach. The situation at all five sites was the same and therefore the following general comments apply to all.

• There was evidence of the virus encountered on every transect at every site.
• There were dead and dying abalone in all stages ranging from,
  • individuals that were "acting strangely" that is they had moved away from their home site and were sitting in strange places on the reef, almost "trying to run away from something".
  • individuals that were sliding off their home site and down the reef, (loosing (sic) muscle function)
  • individuals that were living underneath ledges had fallen off and were lying on there (sic) shell on the bottom, some still moving their foot awkwardly
  • groups of dead and dying abalone clustered together at the bottom of gutters and in between rocks.
  • individuals that still had sand sticking to the mucous on their foot as they laid on their shell on the bottom
  • individuals that had began decomposing, some to the stage that only the white foot was left, with the gut having decomposed or been eaten.
  • And finally very freshly dead shell that were very shiny and showing no signs of aging.
• Dead shell and remaining live abalone were of all size classes, although the larger ones were more obvious, no dead juvenile shells were found.
• Surveys underneath boulders and rocks did yield normal numbers of juvenile abalone.
• The Wrasse and other fin fish that are normally prevalent at this site were absent. There were no species found scavenging the dead and dying abalone.
• There was a large amount of "mucous" in the water column, clear and sticky in appearance with gas bubbles contained in it.

My best guess would be that around 30% of the emergent populations was effected by the virus at this stage.

Of interest, there was another group also surveying on the same days that apparently found no or very little sign of the virus at The Craggs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Hi All

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

After 30 min in the water I abandoned fishing for the day and transferred what I had to the virus dive contractors for disposal.

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

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

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

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

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

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

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

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

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

97 In reply submissions, Senior Counsel for the State made complaint about this attack on Dr Millar - saying that it constituted a breach of the rule in Browne v Dunn.[58] In my view, there was some force in this complaint. While Dr Millar was subjected to close and detailed questioning during cross-examination, I did not think that the attack made upon him in final submissions was justified having regard to what was actually put to Dr Millar in cross-examination. That said, notwithstanding the plaintiff's submissions in final address as to the care that should be taken when considering Dr Millar's evidence (and accepting that care should be taken when considering the evidence of all witnesses), I remain of the view that Dr Millar was a witness who was basically doing his best, in difficult circumstances,[59] to give accurate and honest answers to all questions put to him.

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

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

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

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

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

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

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

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

Just a heads up to inform you that there is currently under way an investigation into significant mortalities of farmed abalone near Portland.

Samples have been sent to Attwood (and AAHL)[62] to determine whether infectious disease may be the cause. Results are not expected until the end of this week at the earliest. While the incident was first handled by a private veterinary consultant, DPI animal health staff in the SW region are now involved in the investigation, which is good.

Dr Doroudi has prepared the attached brief for Fisheries Victoria/Minister.

All the right people are involved/communicating, and the correct actions have been taken. Really just another disease investigation at this point.

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

Significant mortality in aquaculture-reared abalone has been reported at Coastal Sea Farms (CSF), a coastal abalone farm near Portland. Approximately 25% of tanks have been affected, with mortality in each tank ranging from 10 to 60%. The one-year age class (F1) appears to be more affected than others. Another coastal abalone farm, Southern Ocean Mariculture, located near Port Fairy has also experienced a slight increase in mortality, with mainly broodstock impacted.

The farms have commissioned Dr Paul Hardy-Smith to investigate the mortalities. Dr Smith is also assisting DPI in its investigations. The Chief Veterinary Office is coordinating DPI's response.

Initial histological samples indicate evidence of degeneration of abalone nerve cells. A preliminary diagnosis has not yet been made, however, there is some suggestion that the cause may be either an infectious agent, eg. viral pathogen, or nutrition-related, eg. mould feed. Further samples have been taken today for further analysis by the Australian Animal Health Laboratories (AAHL).

The two farms affected have agreed to employ a voluntary closure at least until the outcomes of the fish health investigation are known.

On 15 and 16 December 2005, 10,000 juvenile abalone were moved from CSF to another abalone offshore farm (Abonex P/L) located in Western Port. The operator has, at this stage, not been able to be contacted and it is unclear as to whether that stock is also experiencing unusual mortality.

A preliminary diagnosis of the cause of the mortality is expected either later this week or early next week.

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

SOM is taking a precautionary view to an infection similar although not confirmed to be the same as hat (sic) affecting the stock at Coastal Seafarms (CS).

On the 29th of December, mortality occurred in 2 of our greenlip broodstock tanks, which are located in our weaning/broodstock shed. The abalone had originated from several locations, including South Australia and Tasmania. Both of these tanks had spawned, so it was initially thought that the problem was due to a build-up of bacteria/poor water quality. However, on the 31st of December it was noted that the moribund and dead abalone displayed unusual characteristics. The mouths of sick and dead abalone were enlarged, with many abalone displaying a protruded radula. In sick abalone, the foot was often curled, even to the point that both sides of the foot would meet.

The mortality rate in 1 tank was approximately 95% (approx 100 abs), and 2nd, 50% (approx 90 abs). Abalone that showed no obvious signs of the disease were placed into a separate tank, however, within 3 days all showed signs of infection. These were buried, and the tanks chlorinated. The broodstock area was considered to be infected and cautions were taken to prevent the potential spread of the disease.

On the 10th of January after noting that 2 other broodstock tanks had several (up to 7) abalone showing signs of the disease, all abalone in the broodstock section were destroyed. The tanks, all broodstock equipment and the drains were chlorinated. The area is now under strict quarantine, with only 2 persons having access to this part of the farm, in case the disease has spread to other abalone in the weaning section.

The only other tank to have been affected was a small weaner tank with 1500 one year olds in it, located in the same building as the broodstock but about 10m away and next to an aisle. Infection was shown on 7th January 2006 and the decision to chlorinate the whole tank was made immediately. All abalone were subsequently buried and the tank rechlorinated.

To date no sign of infection has been found in the rest of the farm but precautionary measures have been put in place for cleaning of tanks, mortality collection etc. Discussions have been held on 11th January 2005 with Paul Hardy-Smith the management team at CS and Fisheries officers from Portland. These were to try and pinpoint the path of infection, to discuss preventative measures and to keep Fisheries informed of the situation.

Samples of infected fish have been fixed in formalin and will be sent to Gribbles or Attwood, this will verify if the infection at SOM is the same as that at CS.

Notification of any further outbreaks at SOM will be made to Fisheries if they occur.

If you have any further requests for information please do not hesitate to call.

106 On 11 January 2006, Bronwyn Murdoch, Duty Pathologist at Attwood, took delivery of five boxes of abalone from CSF. The following day, she reported to Dr Millar as follows:

From a previous investigation carried out by Dr Celia Hooper (Gribbles Pathology) and reviewed by Dr Handlinger it is suspected that this may be a herpes-like viral disease. We are proceeding with in-house histopathology examination and will be submitting material to AAHL for Electron Microscopy.

I anticipate having histopathology sections to examine tomorrow 13/01/06 and acting on Dr Handlinger's advice will submit material to AAHL for EM from those abalone that have lesions on H&E.

Dr Hardy-Smith has contacted me this morning to say that [SOM] (an in contact farm) have previously collected, fixed and stored abalone samples which may be relevant. Dr Hardy-Smith is now arranging for these samples to be submitted to Attwood.

107 On or prior to 16 January 2006, there was a discussion between Dr Doroudi and Dr Malcolm Lancaster, a Senior Veterinary Pathologist at Fisheries Victoria. The discussion concerned a paper that dealt with the outbreak of a herpes-like virus infection in abalone in Taiwan: Chang et al, "Herpes-like virus infection causing mortality of cultured abalone Haliotis diversicolor supertexta in Taiwan" ("the Chang paper"). Dr Millar was provided with a copy of the Chang paper by email on 16 January 2006. The abstract of the Chang paper was in the following terms:

ABSTRACT: A herpes-like virus is demonstrated for the first time to be associated with high mortality rates in maricultured abalone Haliotis diversicolor supertexta in Taiwan. Histopathology of moribund abalone indicated that the nerve system was the primary target tissue. The lesions were characterised by tissue necrosis accompanied with infiltration of haemocytes. Electron microscopic examination demonstrated viral particles within the degenerated cerebral ganglion cells. The viruses were hexagonal, approximately 100 nm in diameter and had a single coat. Some viral particles contained a dense nucleoid, while others were empty. The ultrastructure and morphogenesis of the virus particles were consistent with those of the herpesvirus described from the oyster Crassostrea virginica. Experimental infection using supernatant collected from minced visceral organs and muscle of moribund abalone induced 100% mortality through both intramuscular injection and bath treatments.

108 At 11.30am on 16 January 2006, there was a teleconference between, amongst others, Dr Doroudi, Dr Appleford and Dr Jeffers. Dr Millar was an apology for that meeting. The notes of the meeting record:

1. Histopathology testing has detected a viral infection in the affected abalone - possibly a herpes-type virus such as was seen in Taiwan last year. Currently awaiting the electron microscopy (EM) results which are due this afternoon. Malcolm Lancaster coordinating these results.
2. Given this possible positive result there is a need for a coordinated approach through the development of a Working Team (Martin Roche, Ray Gilby, Peter Lawson, Mike Jeffers, Graeme Hanel) and a State Team (Hugh Miller (scil Millar), Peter Appleford, Alison Lee, Mehdi Doroudi, Anthony Forster).

1. The Local Working Team will act as the 'Local Disease Control Centre' if the results of EM are positive.

109 On 16 January 2006, PIRVic reported on the histopathology examinations conducted on abalone collected from SOM and CSF on 11 January 2006. The diagnosis in both cases was ganglioneuritis. In respect of the CSF abalone, the comment was:

This lesion is consistent with the lesions reported in Taiwanese abalone in association with a herpes-like virus.

Viral particles have NOT been seen in electron microscopic examination of pleuropedal ganglion sections from these Victorian abalone, but this does not rule out a viral aetiology.

110 In respect of the SOM abalone tested, the comment was:

This lesion is very similar to that seen in abalone from CSF, and similar to the lesions reported in association with a herpes-like virus in Taiwan.

111 The next day, there was a further teleconference. The teleconference was attended by, amongst others, Dr Doroudi, Dr Appleford, Dr Millar and Dr Lancaster. The notes of the meeting record the following:

1. Histopathology testing revealed cerebral ganglia, pleuropedal ganglia: peripheral infiltration by moderate number of haemocytes, with occasional nuclear fragments present. Diagnosis was Ganglioneuritis, Abalone - the lesion is consistent with the lesions reported in Taiwanese abalone, which was associated with a herpes-like virus. Through electron microscopic examination viral particles were not seen - but this does not rule out a viral aetiology at this stage.
2. As this is an unusual/unknown incident of high mortality in abalone the next step would be for Malcolm Lancaster to send samples to AAHL (contact Mark Crane) for testing including the background history. It was determine (sic) that there should be sufficient samples for AAHL to conduct the testing, otherwise additional samples could be sought from the affected farms.
3. Apart from the Taiwanese herpes-like viral infection, there have also been outbreaks in the last few years in China which was caused by an unknown infection, and Japan, which was presented in a withering syndrome. There was a similar incident last year - which raises the question of whether this unknown infection is seasonal.
4. No similar incidents have been reported recently in South Australia or Tasmania however Fisheries Victoria have notified both SA and Tasmania Fisheries staff to be aware of the situation which is being experience (sic) in Victoria. Anthony Forster is to ensure that Fisheries staff in SA and Tas are kept up to date with this incident.
5. Further sampling and surveillance will be required in the future at the affected farms. A reasonable amount of sampling will be paid for by Biosecurity Victoria - Chief Veterinary Office, with lab work being done at Attwood. Fisheries Victoria will work with the farm owners for the collection of samples. Mehdi to advise on the locations and number of samples. Other abalone farmers not affected can submit samples to Attwood of any suspect abalone for free testing.
6. Given that this infection is not listed in the Livestock Disease Control Act officially there is no legislative powers to require the destroying of stocks. Should they be required alternatives could include calling the infection a 'Suspect Known Disease' or to declare it and have this ratified by the Governor-in-Council. The first approach is to take one of voluntary cooperation.
7. Biosecurity Victoria will manage the communications of the incident to DAFF to Eva-Maria Bernoth (Senior Principal Research Scientist Manager Aquatic Animal Health). Biosecurity Victoria will inform the Chief Veterinary Officers in both South Australia and Tasmania. Also a report will be made to Primesafe Victoria in relation to this incident.
8. Fisheries Victoria have provided a briefing through an Emerging Issues brief. Biosecurity Victoria to provide a full Ministerial briefing to be signed off by Peter Bailey and cc: Peter Appleford.
9. Fisheries Victoria to brief industry contacts on the current situation when the Minister is briefed.

1. Malcolm Lancaster to send samples of abalone to AAHL (contact Mark Crane) for further testing
2. Fisheries Victoria to work with farm owners and Mehdi Doroudi to obtain additional samples for testing
3. Biosecurity Victoria to notify Tuesday 17th January:

- DAFF - Eva-Maria Bernoth

- Chief Veterinary Officers in South Australia and Tasmania

- Primesafe Victoria

1. Anthony Forster to keep Fisheries staff in South Australia and Tasmania informed of this situation
2. Biosecurity Victoria to provide a full Ministerial Briefing
3. Fisheries Victoria to brief industry contracts on the current situation

112 On the same day, Dr Millar sent an email to his counterparts in Tasmania and South Australia as follows:

DPI Victoria has been investigating unusual mortalities of abalone on several related Victorian farms.

The aetiology is still obscure, but initial epidemiological evidence suggests an infectious process. There is no similarity to any of the prescribed notifiable diseases of abalone or molluscs.

While not necessarily implicated as the source, abalone has been imported to these farms from farmed and wild stocks in Tasmania, South Australia and WA. Fisheries Victoria personnel have been in touch with Fisheries staff in other States over the past week or so, I believe.

For your information at this time.

113 This email was copied to, amongst others, Dr Appleford, Dr Doroudi and Dr Cameron. The email had attached to it a copy of a report containing a more detailed description of the outbreak to this time and subsequent investigations - although the identity of the relevant abalone farms was anonymised to AF1, AF2, AF3 and AF4. However, as was known to Dr Millar and relevant Victorian officers, these farms were, respectively, CSF, SOM, Abonex at Flinders and Great Southern Waters at Indented Head.

114 On 18 January 2006, Mark Gervis (General Manager SOM) reported to Dr Doroudi in the following terms:

Just a quick update for you.

We have chlorinated one more weaner tank at the farm. There were low numbers of mortalities starting on Friday 13th, 20 abalone, Saturday 14th 35 and Sunday 15th 25 then on Monday 16th about 100. When we saw that the whole tank was becoming infected we decided to chlorinate and therefore destroyed 17,500 animals. We have still had no signs through the main part of the farm and only allow two staff members to the weaning area. We are hopeful that we have got the situation under control now.

115 On 25 January 2006, PIRVic reported on histopathology from abalone samples taken at Great Southern Waters. The report was that the histological examination was negative for ganglioneuritis. Dr Millar gave evidence that at no time subsequent to this report was the virus ever detected at Great Southern Waters.[63]

116 On the same day (25 January 2006), there was communication within the DPI concerning the possibility of increased mortalities being related to imported feed from Taiwan. Dr Doroudi sent an email, which was copied to Dr Appleford, Dr Millar and Dr Cameron, in the following terms:

As discussed, there are increased mortalities in some abalone farms which may be related to the imported feed from Taiwan. Until further investigation is completed, I would recommend the industry:

• to put abalone off the imported feed;
• to quarantine the feed until confirmatory pathological examinations are done;
• to report any unexplained mortality.

117 At 4.43pm on 25 January 2006, Dr Doroudi received an email from Dr Mark Crane at AAHL. Later that night, Dr Doroudi forwarded this email to, amongst others, Dr Millar and Dr Appleford. The email provided:

As promised here are AAHL's preliminary findings on the submitted abalone samples:

Alex Hyatt has undertaken preliminary examination by electron microscopy and has observed herpes-like virus particles (based on size and morphology) in the nucleus of host cells. Examination will continue in an attempt to observe virus particles budding through the nuclear membrane and in the cytoplasm. A full and formal diagnostic report will be prepared following completion of the examination by electron microscopy.

118 On 26 January 2006, Dr Hardy-Smith completed his report entitled "Report on the events surrounding unusually high mortalities of farmed abalone in Victoria December 2005 - January 2006". The Hardy-Smith report summarised the affected farms in the following terms:

• Currently there are two abalone farms that have been confirmed by histopathology as affected[64]: Coastal Seafarms (CS), located near Portland and Southern Ocean Mariculture (SOM), located near Port Fairy. Abanex,[65] located near Flinders has suffered mortalities but the author is not aware whether histopathology confirmed the presence of nerve damage in abalone from this farm[66]. It is probable though that this farm is affected.
• A fourth farm, Great Southern Waters (GSW) located near Geelong received live abalone from affected farms on November 18, 2005. It is likely this movement occurred before the initial case at CS or SOM. GSW has at this time not suffered any unusual mortalities.
• CS, SOM and GSW pump water directly from the ocean into tanks on land. Water passes once through the tanks then back out into the ocean through settling ponds. Abanex has barrels floating in the ocean.

119 Amongst other observations and conclusions, the Hardy-Smith report contained the following:

• Abalone located in the settlement ponds at CS which are not being fed any commercial feed and are exposed only to effluent water from the farm are also dying with clinical signs.
• There are wild abalone within approximately 80-100m of the effluent water discharge points of CS and SOM and it is likely that there are wild abalone in the vicinity of Abanex. It is understood that PIRVIC is sampling wild abalone from these areas. The closest wild abalone to GSW is approximately 1.5km from the outlet.
• There have been reports of recent wild abalone deaths near Port Macdonald, South Australia, 2 abalone were collected from this area and brought back to CS on December 6, 2005. South Australian authorities are currently attempting to sample wild abalone populations in this area.
• While an exotic disease cannot be discounted at this point, it is considered a less likely scenario than an endemic agent, resident in wild abalone populations becoming visibly pathogenic when introduced into farmed abalone.

120 The reference to wild abalone deaths near Port Macdonald in the Hardy-Smith report was almost certainly meant to be a reference to a then rumoured mortality incident in wild abalone off Port MacDonnell in South Australia - a matter which was the subject of email correspondence between Dr Millar and his South Australian counterpart at 9.48pm on 26 January 2006.

121 On 27 January 2006, Dr Millar sent an email to Shaun Green dealing with the "need to declare a new exotic disease of abalone that had been detected in Victoria". The email went on:

It is extremely important that this disease be declared as soon as practicable because, until this occurs, we have no powers or authority under the Livestock Disease Control Act to contain or control/eradicate this disease.

I understand that it would be problematical getting this to GIC by next Tuesday, but would be OK for Tuesday week, 7 February. I can probably accept that on this occasion, but if this was a more serious situation that could have massive health or economic impact we would need to be able to act much more quickly!

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

123 On 27 January 2006, Dr Millar received a response from South Australia in relation to the Port MacDonnell issue in the following terms:

PIRSA received information on January 23 from DPI Victoria that equipment used to take abalone recreationally was found on one of the affected farms in Victoria. The fisher who used the equipment reported to Victorian authorities that there were dead abalone on the reef near Port MacDonnell where he was fishing. SARDI researchers observed some dead blacklip abalone during stock assessment work in the Southern Zone. Mortalities were observed near Port MacDonnell. No other dead shellfish were observed and in all areas where dead abalone were found more animals were observed alive than dead. Water temperatures in the South-East have been 3°C+ higher than normal and abalone are highly sensitive to high water temperatures. PIRSA Fishwatch received further reports from professional fishers of dying abalone on reefs at Lighthouse Bay (Port MacDonnell) and Douglas Bay (15km West of Port MacDonnell) in the South-East on 23 January. Some material has been collected for analysis and further material will be collected on 25-26 January, weather permitting. The Director of Fisheries is not at this overly (sic) concerned regarding this incident as there have been historical die-offs in that area due to adverse environmental factors (temperature).

124 On the same day, an update in respect of the situation at Abonex was provided in the following terms to (amongst others) Dr Millar and Dr Appleford:

Mr Lillie [of Abonex] agrees that it is sensible to cull any surviving juvenile greenlip stock or any old stock that was mixed with this stock (we both estimate no more than 50 small abalone all up).

Culled stock to go to landfill.

Based on this mornings (sic) discussions the isolated blacklip stock is to remain for surveillance purposes. I have heard verbally that this stock has been negative in sampling. Estimates of the amount of this stock are only around 100-150 abalone at 50-65mm. If in future it is deemed necessary to destroy this stock it would not be a major financial loss. However, it needs to be based on definitive results/updated information and may set a precedent that could have implications for any culling on the other farms.

I asked when the cull would be able to be undertaken and there is a slight possibility of the weekend, but more likely early next week. There are weather and tide considerations.

Mr Lillie still has some Vircon S for disinfection of the equipment used in culling and to clean the vessel decks, etc. Based on information this morning from animal health regarding the fragile nature of the suspected virus, as agreed the cages themselves would not be required to be disinfected.

Mr Lillie has been advised not to look at re-stocking any cages until further notice and no stock (other than the culled stock) is to be removed from the site. He has no problem with this.

As discussed surveillance of wild stocks in the area to be determined in the near future.

125 As to isolated blacklip stock remaining in the sea for surveillance purposes, Dr Millar gave evidence that he directed this to occur. Dr Millar said that this was an important matter because Abonex was a farm that was entirely in the sea and it was the first opportunity the DPI had to observe the disease in the sea. Dr Millar went on:

The information to this point was that every cage of abalone on that farm that received abalone from CSF, most of the abalone in the cage died. The only cage which there was no mortality was the cage that didn't receive abalone from CSF and, indeed, that cage was in close proximity to the others, washed by the same tides in the same body of water. I felt that this was an opportunity you would rarely be able to set up to study closely those abalone and see if, notwithstanding the fact that 10,000 or more abalone had died in close proximity to them in the same body of water, would they become ill?[67]

126 On 27 January 2006, Dr Millar sent an email to Eva-Maria Bernoth of the Aquatic Animal Health Unit at the Commonwealth Department of Agriculture. In this email, Dr Millar said:

Current epidemiological assessment would point to two possibilities with respect to the source of a virus (if that's what it is) - one from wild populations, which are used extensively as the source of broodstock, or two, associated with imported feed - last year Taiwanese food was used in the abalone industry.

A report from AAHL is not expected till Monday. I am preparing a written update which I will forward to you once AAHL results to hand.

127 On the same day, there was a teleconference chaired by Dr Doroudi, and attended by (amongst others) Dr Appleford, Dr Jeffers, Dr Lancaster and Dr Millar. The notes of this meeting record that CSF was still experiencing significant disease. Further, it was recorded that there was no ability to enforce movement controls by use of the LDC Act unless and until the disease was "scheduled" by an order of the Governor-in-Council. Additionally, the notes recorded a discussion about exploring the potential to "use a Fisheries Notice to enforce any movement controls deemed necessary". Under the heading "Actions", the following was recorded:

Visual inspection and sampling from wild stock outlets (CSF, SOM and near the Portland cannery) is to commence on 31 January 2006, and to be carried out by Fisheries Victoria staff in conjunction with AH staff.

Fisheries Victoria staff to encourage the owner of Abonex to de-stock remaining abalone. Note there is no power to require this. Fisheries Victoria to supervise, and if possible to collect samples and arrange appropriate disinfection (if feasible).

128 Again on the same day (27 January 2006), a briefing paper was prepared for the Minister. The briefing paper set out the history of the matter, noting that at the present time the cause of the disease was unknown. The briefing paper advised that further investigative work was planned to determine the nature of the disease "and the source and likely scope of the present incident". The briefing paper went on to identify the further action that was then planned before noting:

The Chief Veterinary Officer is liaising closely with the Commonwealth Government Department of Agriculture, Fisheries and Forestry and with counterparts in other jurisdictions.

129 On Saturday 28 January 2006, there was further email correspondence between Dr Doroudi and his counterpart in South Australia concerning the sampling of wild abalone in the Port MacDonnell region. On the same day, Dr Hardy-Smith sent his report to Dr Doroudi. The report was sent as an attachment to an email containing the following:

As for the current situation, it is:

Coastal Seafarms: (Portland)

• Total population on farm around 2 million (including 1 million spat).
• Not losing any spat.
• Still losing approximately 5000 abalone per day, of which 3000 are one year old stock.

• Currently no unexplained mortalities occurring on this property.
• Daily mortality rate is extremely low.

• Have never experienced any unusual mortalities and this still continues.

• I believe most, if not all of the abalone have been removed from the ocean at this site. You will need to check this with Fisheries.

130 On the same day, Dr Millar saw a report from Peter Lawson (a Senior Fisheries Management Officer) concerning his inspection and sampling at Abonex on 19 January 2006. The report contained the following details:

The type of culture system employed is to use a surface longline, with a few line droppers. Attached to the droppers are bunches of mesh cages of varying sizes. These are suspended in the water column and stabilised using a weight attached to the bottom of the dropper.

The 10,000 abalone from CSF on 15 December were placed either on their own in small cages or mixed with existing blacklip stock from previous stockings years ago. In all the cages that had greenlip abalone in them the mortality was severe. Difficult to estimate exact numbers, however looking at percent mortality in the high 90s. There were no fresh mortalities, only clean dead shell remained. Hard to determine when the last mortality occurred, as the sea lice can 'clean-up' the flesh in a day or so. The surviving abalone sampled appeared to look OK. I have not seen any photos of affected stock from the SW farms, so difficult to be sure. As well as the potential infectious agent, there is a need to keep in mind that the CSF greenlip abalone that were apparently 'runt' stock, would have been highly stressed in the travel from CSF and losses are not uncommon, but not to this extent. However, when the abalone die the water quality in the cages would deteriorate which could contribute to losses. A variety of samples were taken and these details have been provided on the lab submission forms. Call me if you want more specifics. Samples included:

- greenlip from CSF stocked on their own.

- greenlip from CSF and existing blacklip that were mixed.

- an existing greenlip that had been mixed with CSF greenlip.

- existing blacklip that had no mixing with CSF greenlip.

There was only one main cage that did not have greenlip from CSF mixed with it. These 'control' animals were in good condition and no mortalities were evident.

It should be noted that the 'control' blacklip are located approximately 30 - 40m south of cages with high CSF greenlip mortality and during an outgoing tide would be directly in line, yet these abalone appeared fine.

131 Of significance in this report was the reference to the cage which did not have abalone from CSF in it. Notwithstanding the mortalities at Abonex in the area of this cage, these abalone appeared unaffected. As Dr Millar said in evidence, this was relevant to the issue of transmissibility of the disease in water in the wild.

132 On 30 January 2006, AAHL[68] confirmed in writing the presence of a herpes-like virus in the samples taken from CSF. The report described the viruses observed as similar to that described in the Chang paper. On the same day, Dr Millar sent emails within the DPI as to his preparation of a report for DAFF.[69] In a second email (sent to Dr Tristan Jubb), Dr Millar said:

The heat may come on us at the national level to take some sort of regulatory disease control measures at [CSF]. Without compensation mechanisms we should resist this. I'll keep you posted.

133 Much was made by the plaintiff in this case in respect of Dr Millar's reference to resisting taking regulatory disease control measures without compensation mechanisms in place for the affected farms. I will return to this topic later.

134 On 1 February 2006, a bulletin for distribution to the abalone industry was circulated in various draft forms. One version of the bulletin contained the following:

The disease in Victoria is now confined to one farm only [CSF], where it has caused mortalities of over 5% in about one third of the farm's tanks. The virus appears to be spread by direct contact and is highly contagious.

Two other farms experienced mortalities following the receiving of abalone from this farm [SOM and Abonex], but the disease is highly likely to have been contained and eradicated from these farms - all affected or in-contact abalone have died or been culled and disposed of by the farm, and no further cases have been experienced.

There is no evidence that the disease is occurring on any other Victorian farm or in wild abalone. As a precaution, samples of wild abalone are being collected this week from the vicinity of the affected farm to check for any signs of the disease.

The source of the infection is unknown at this time. It is possible that the virus is normally present in wild abalone but only manifests as clinical disease under conditions of intense farming.

135 Upon circulation amongst relevant DPI officers, some changes were made to the bulletin - but the substance of the bulletin remained largely the same.

136 Dr Millar was asked and answered a series of questions about his understanding of matters as they were at the beginning of February 2006. In summary, Dr Millar gave evidence that, as at the beginning of February 2006:

(b) Other than the sentinel abalone that were being monitored at Abonex, there were no other abalone on that farm.

(c) There had been no further disease or mortality or unusual events seen at the SOM farm since the last tank had been culled and disinfected earlier in January 2006.

(d) Despite Great Southern Waters having received abalone from CSF during the relevant period, no disease had manifested itself at that farm.

(e) Dr Millar's view about possible sources of infection was that the infection had been introduced in live abalone collected from various parts of Victoria, South Australia, Tasmania and Western Australia.

(f) Dr Millar's view as to the possible modes of transmission of the infection was:

Well, it was clear that the disease spread locally within tanks, in between tanks in a way that could be explained by contact, and I don't mean necessarily one abalone directly with another in every case, but close contact with either - either between abalone or abalone and fomite[70] and abalone. So close contact and fomite movement within a farm certainly appeared to be at work. The question - the theoretical possibility of spread by water was there, it was clear but what was the actual means of transmission through water, what was the - how many viruses are shed by abalone into the water? What's the survival of that virus in the water? Does it, both in terms of time and environmental insults, are there other influences on it? The impact of dilution. The question of water transmission to me was not about something that might happen in an aquarium tank or whatever, it was about the risk of effluent at the point at which it comes in contact, assuming it does, with wild abalone.[71]

(g) Dr Millar's view about the risk that wild populations of abalone might become affected by the virus which was at that time on CSF was "I accepted that there was a risk that wild abalone might become infected". As to the magnitude of the risk, Dr Millar said:

I had no way of estimating that. We were - although we were doing as much as we could in a practical sense to try and provide - to shed light on that question and provide information which was missing through trials and through observations, observations of abalone adjacent to the farms, observations of abalone at Abonex that had been so closely associated in water with diseased abalone, and yes, in particular the fact that we were setting up trials ultimately designed to try and shed light on that question.[72]

(h) As to the outbreak at CSF at that time, Dr Millar said:

I believed that at that point in time the situation was sufficiently stable, that there was no more that we could do except things which I felt were completely unjustified at that point. In fact, there was really only one more thing we could do and that was to close the place and at that point in time, there was - I was nowhere near, in my mind, having the pieces that I needed to have and the information that I needed to make such a decision. I was a long way from that but the remaining - a key remaining issue was to try to get a handle on any risk to wild abalone, and indeed, pointers about management of this disease on farms.[73]

137 Dr Appleford was asked about his understanding at the end of January 2006 in relation to herpes-like viruses. He was asked and answered the following questions:

At the end of January 2006, around that time, what was your understanding of herpes-like viruses?---At the end of January it was that herpes-like viruses were host specific, ... likely to have latency traits, were very fragile, so they were easily removed by disinfection if they were outside the host but if they did get outside the host they didn't last very long and the most likely form of transfer was via direct contact.

...

What was your understanding of direct contact, what did that mean to you?

---Direct contact to me was either direct animal to animal contact or something that would touch one abalone and take something from that abalone ... and then make contact with another abalone.[74]

138 On 1 February 2006, Dr Appleford received an email from Peter Lawson dealing with the question of whether a Fisheries Notice under s 152 of the Fisheries Act could be used until the disease was declared so as to enable the various powers in the LDC Act to be used. The advice Dr Appleford received was that a Fisheries Notice "if needed appears to be an option". The issue for Dr Appleford at this point in time was whether it was legitimate to attempt to control the movement of diseased stock using the general power of a Fisheries Notice, when there were specific powers in relation to such matters provided for in the LDC Act. In any event, no relevant Fisheries Notice was ever issued, and the disease was declared by the Governor-in-Council eight days after Dr Appleford received this advice.

139 On 2 February 2006, Dr Millar, Dr Doroudi and Dr Cameron went to CSF. Dr Millar said he went to familiarise and orientate himself in relation to the farm. He said it was important for him to see how the farm operated and "to get a sense of its design, its dimension, its complexity or not, and an opportunity to see in situ the diseased abalone on the farm".[75] On the same day, Dr Millar sent an email to Eva-Maria Bernoth at the Commonwealth expressing his opinion that he was now "even more comfortable" that the virus was not transmissible between animals and humans.

140 On 3 February 2006, there was a teleconference meeting of the Aquatic Consultative Committee on Emergency Animal Diseases (AqCCEAD). There were some 25 attendees, including Dr Millar, Dr Doroudi, Dr Lancaster, Dr Colin Johnston from South Australia, Dr Judith Handlinger from Tasmania, Dr Mark Crane (AAHL), attendees from AQIS, Biosecurity Australia and other relevant departments - including Dr Brian Jones (one of the plaintiff's expert witnesses in this proceeding).

141 Dr Millar outlined the then current situation to the meeting as follows:

• The disease has a characteristic clinical presentation, with affected animals showing swollen mouthparts and a curled foot. Histopathology findings in affected animals are also characteristic (detailed in Section 2.2, Laboratory findings/further testing, of this report). A herpes-like virus has been identified in association with affected tissues. Clinical and pathological findings are consistent with those described in a disease outbreak in abalone in Taiwan in 2003, as described by Chang et al (2006) (article circulated with meeting papers). Victoria commented that the disease appears to require close contact between abalone, or with heavily contaminated fomites, for transmission.
• The disease now appears confined to the index farm (AF1) near Portland. The mortality rate on this farm is decreasing and is now approaching the industry average rate. Recent mortalities from all causes have been approximately 1.4 million animals (-0.1 - 0.2% per day). This farm's cumulative stock loss from this incident is approximately 40%, with the one-year age group most affected. The farm has agreed to continue voluntary movement restrictions on live abalone to other farms but continues to harvest market-sized abalone for freezing and canning for human consumption.
• Trace forward investigations have identified two additional affected farms, AF2 near Port Fairy and AF3 near Flinders. Affected abalone on both farms have been de-stocked and equipment cleaned and disinfected. There is no further evidence of disease on these properties, although surveillance is on-going. These farms have also agreed to voluntarily cease movement of abalone to other farms, pending confirmation that infection is no longer present.
• Victoria is undertaking continued surveillance of wild abalone populations near the affected farms. To date, there has been no evidence of infection or disease in either wild abalone populations or in any other farms.
• Victoria advised that a trace back to Western Australia had been linked to movement of abalone from Bremer Bay to one of the affected farms, but not to AF1.
• Victoria agreed to provide AqCCEAD, out-of-session, with advice of further developments in their investigation into the abalone mortalities.

142 Various action items were agreed to during the course of this meeting. None of these involved the exercising of a statutory power or the directing of any particular activity to be taken with respect to CSF or the SOM farm. Further, the minutes of this meeting do not record any criticism, made by anyone who attended it, of the way in which the outbreak was being managed at that time - although see now the opinion of Dr Brian Jones as given in evidence in this proceeding.[76]

143 On 20 February 2006, Dr Doroudi received an email from Dr Ken McColl reporting some preliminary results of testing by AAHL. The preliminary results were reported as follows:

By the end of this w/e (just completed, ie, about 4-5dpi), we've got the following results:

Negative controls (no treatment): no mortalities

Negative controls (2 tanks; about 16 abalone in each; all abs inoculated I/M with tissue-culture media): no mortalities

Treatment group 1 (2 tanks; about 16 in each tank; all inoculated with fresh material from Portland abalone): all dead or moribund

Treatment group 2 (2 tanks; about 16 in each tank; all inoculated with frozen material from an earlier outbreak): all dead or moribund.

Treatment group 3 (2 tanks; about 16 in each tank; healthy abs co-habited with 5 moribund abs from Portland): only one healthy ab remaining in each tank; all others dead or moribund

Tissues have been collected for histo, E/M, PCR and attempted virus isolation.

Still a lot of processing of samples to be done, but it certainly looks like something is happening!

144 On the following day (21 February 2006), Dr Doroudi forwarded this email to Dr Millar and Dr Appleford, together with his own suggestions in the following terms:

The preliminary results of experiments conducted at AAHL are below for your information.

I had further discussions with Mark Crane, AAHL in terms of the continuation of experiments to work on the effects of diluted water (containing virus) on healthy abalone based on what I have already discussed with both of you during last two days. They are after some financial support to conduct the additional experiments.

My suggestions are:

1 - In short term, if we are after a better understanding of the impacts of this virus on wild fishery, we should either fund this additional work at AAHL (about $6-8,000 - I have to double check on this figure) or develop a solid surveillance program for the wild fishery close to CSF.

2 - In long term, PIRVic and CSIRO could develop a proposal to further investigate the effects of diluted water (virus), temperature, age etc through a FRDC project if it is supported by relevant stakeholders. We may require co-investments from BV[77] or FV[78] on this project.

Your thoughts.

145 In evidence, Dr Millar described these results as:

the first round of results from AAHL and these were very preliminary and these results confirmed that animals inoculated with material from diseased abalone contracted the disease and that animals that cohabitated in a tank with sick abalone also succumbed to the disease.[79]

146 On 23 February 2006, Mr Lawson[80] sent an email to Dr Jeffers and Dr Doroudi, copied to (amongst others) Dr Millar. Attached to the email was a document headed "Update on abalone mortality incident - Port Phillip 23/2/06". The attachment noted that at Abonex, "the remaining isolated blacklip abalone were left on site in a cage". These abalone were checked on 23 February by Mr Lillie, who reported that "they appear in good health [with] no mortalities evident". Dr Millar said this information was significant and informed his thinking,[81] presumably because it showed that these "sentinel" abalone[82] had not been infected, even though they were in the water in close proximity to where other dying or dead abalone had previously been located.

147 On 25 February 2006, PIRVic reported on the histopathology in respect of six abalone taken from the SOM farm on 31 January 2006. The diagnosis was "Normal abalone". On the same day, the same report (normal abalone) was made by PIRVic in respect of abalone collected on 31 January 2006 in the vicinity of the SOM pump inlets and outlets in Taylors Bay and Drain Bay, and in respect of abalone collected on the same day in the vicinity of the pump inlet and outlets at CSF. The short point about this sampling is that it did not disclose the existence of the virus or disease in or around the inlets and the outlets at CSF and the SOM farm as at 31 January 2006.

148 On 8 March 2006, Dr Lancaster put a proposal to Dr Millar (copied to Dr Doroudi) in relation to additional transmission studies of the abalone herpes-like virus. The proposal was for additional studies, said to have two aims -namely:

(1) to establish if the virus can transmit through the water column; and

(2) to determine if dilution of contaminated water can be used as a means of disease control.

149 Methods to be used in the proposed studies were said to include the use of negative control animals, positive control animals and six groups of test animals. The test animals were divided into two groups of three: the first group of three using static water from affected abalone held at AAHL; and the second group of three using water from SOM. In respect of each group of test animals, it was proposed that there be varying dilutions of one in ten, one in a thousand, and one in a hundred thousand respectively.

150 Dr Millar was cross-examined in relation to the first aim of the proposed study (that is, "to establish if the virus can transmit through the water column") by reference to an email from Dr Serge Corbeil (a research scientist at CSIRO (AAHL)) which was sent to Dr Lancaster, Dr Doroudi and Bronwyn Murdoch of the DPI on 6 March 2006. Dr Corbeil's email made two comments, the first of which was:

Aim 1: We already have demonstrated that the virus can be transmitted through the water column. Despite the fact that some abalone climbed on the wall of the tanks they did not touch the basket which stands slightly away from the side. Furthermore, most abalone stayed at the bottom clumped at the same place during the course of the experiment (in fact I noticed that after 24 hours the abalone that climbed on the wall had chosen a spot and stayed there) and all the abalone from the cohabitation trial exhibited morbidity and mortality pretty much at the same timeframe suggesting that the virus spreads through the water.

151 Dr Millar said in cross-examination that no-one in his Department advised him of Dr Corbeil's comment.[83] It was put to Dr Millar that if VAMAADE had been applied and information conveyed to him, he would have received that information. Dr Millar's answer was, "Not necessarily". However, Dr Millar went on to agree that this was "very important information because [he was] thinking direct contact is the most likely means of transmission of the disease".[84]

152 On 15 March 2006, PIRVic reported on abalone collected from Abonex on 6 March 2006. Again there was "no evidence of ganglioneuritis". Dr Millar gave evidence that the continued health or otherwise of these abalone was very important information.[85] Again, the point was that the lack of infection in these abalone told against water transmissibility (or at least significant water transmissibility).

153 On 15 March 2006, Dr Lancaster reported to Dr Millar and Dr Cameron that histological examination of CSF lagoon abalone did not disclose any ganglioneuritis.

154 On 16 March 2006, there was a further conference between, amongst others, Dr Millar, Dr Appleford, Dr Doroudi, Dr Cameron, Dr Jeffers and Dr Lancaster. Dr Lancaster reported on the initial transmission trial conducted by AAHL as follows:

An initial transmission trial has been carried out at AAHL. Minced fresh ganglia IM caused mortality in two days. Stored frozen materials caused death in three days. Naïve abalone housed in the same water as sick abalone died in four days. This experiment did not preclude a possibility of direct contact as the half dozen diseased abalone were in a wire cage - not a double cage.

155 Under the heading "Further Research to have a better understanding of the risks involved", the minutes of the meeting contained the following:

AAHL is seeking $15,000 for a project (overall cost to AAHL of ca $25,000) to better elaborate transmission risk. [Biosecurity Victoria] may be prepared to pay the bulk of this, but an industry contribution would be appropriate ([Anthony Forster] to approach abalone sectors; [Dr Millar] to approach DAFF).

Stage one of the proposed trial would expose naïve abalone to dilutions of outlet water from CSF (neat, 1/10, 1/1000 and 1/100,000). Stage two will involve exposing naïve abalone to the same or similar dilutions of water that has bathed infected abalone housed in tanks at AAHL.

156 Then, on 22 March 2006, the DPI learnt for the first time of the second outbreak at SOM. On that day, Hamish Ebery, the production manager at SOM, sent an email to Dr Millar (copied to Dr Doroudi and Mr Forster) as follows:

Gents,

As everyone will be aware C.S.F has had a major virus threat affect their farm, and Southern Ocean Mariculture had a scare in early January, but thought that the threat had passed.

Well, sad to say that after 2 months of no viral activity, (that is no mortalities with viral symptoms present), on 17/3 a tank of 1-year old hybrids (tank#13) were thought to look suspicious.

This tank was immediately isolated and cleaned daily over that weekend.

By Sunday (19/3) it was obvious that the virus was present with around half of the mortalities present exhibited symptoms, and around 300 mortalities per day, compared to almost 0 mortalities for the previous 3 months.

By Monday (20/3) the tank next to #13; tank #12, was also exhibiting symptoms, with around 200 mortalities present, one-third of which exhibited symptoms. This was a tank of mixed 2-year old greens, blacks and hybrids, and was subsequently culled on Tuesday 21/3.

On Tuesday 21/3 another tank of 2-year old hybrids, (tank A31) exhibited symptoms in a totally separate shed, with around 100 mortalities, half of which showed symptoms. This tank was immediately isolated.

On Wednesday 22/3 another 3 tanks were exhibiting symptoms; tank#16, (3-year old hybrids in same shed as #12 and #13), tank#6, (1-year old hybrids in same shed also), and tank B30, (3-year old hybrids in a separate shed to tanks#12,#13,#16&#6, but nearly directly opposite tank A31.

All tanks have been isolated and full quarantine procedures are in place.

The 3-year old abalone will be sold almost immediately to a cannery, and the 1 & 2 year-olds will be cleaned daily and mortalities removed. The mortalities do not seem as prolific as what has been seen at C.S.F, but symptoms are definitely there.

It must be noted that no viral activity has been noted since mid January, and all tanks affected have been in place with no abalone transfer for well over 4 months. There has been no contact with other farms and especially no abalone transfer between farms. Harvesting has only been done through Sou-West Seafoods, but C.S.F may have also been using them for canning. I need to research harvest dates and type of abalone (frozen/live) before any conclusions can be drawn there. Also the samples taken by Dr Martin Roche with Fisheries and N.R.E have all come back clear.

Keeping all informed; don't hesitate to contact me for further information.

157 Two things may immediately be said about Mr Ebery's notification on 22 March 2006 in respect of the second outbreak at SOM. First, the notification came five days after the second outbreak was first detected. Secondly, the actions taken by SOM to deal with the second outbreak were different from the actions SOM took in respect of the first outbreak. In the first outbreak, SOM removed and killed all affected abalone, and then disinfected the tanks in which they had been housed. As Mr Ebery's notification discloses, with respect to the second outbreak, the course taken by SOM was merely to clean and remove only the mortalities. Dr Millar was challenged about this in cross-examination. He was asked and answered the following question:

They [SOM] are not doing it as they did before, removing all infected abalone and disinfecting the tanks in which they were found?---That's correct.

So they are taking a less rigorous approach when there's a more virulent outbreak, correct?---A more extensive affected number of tanks, yes, that's correct.

So they are taking a less rigorous approach when there are more tanks affected?---That's correct.

Did that concern you?---That was the approach that had been used at CSF at Portland that had been infected for many months to this point.[86]

158 On 23 March 2006, Mr Ebery's report was forwarded by Dr Doroudi to Dr Appleford.[87] The email that forwarded Mr Ebery's notification was also sent to Dr Millar, Dr Cameron, Mr Forster, Mr Hanel, Dr Jeffers and Dr Lancaster. The email finished with Dr Doroudi saying:

I am not sure if there will be anything else that we could do with SOM at this stage. Any comments.

159 On 27 March 2006, there was email correspondence between Mr Ebery and Mark Gervis (the General Manager of SOM). This email exchange discloses an apparent suggestion made by Dr Doroudi to SOM that "maybe the best way for [SOM] to deal with [the second outbreak] would be to cull any tank that becomes infected immediately, as it appears that quarantine protocol does not seem to be halting the spread down at CSF". This suggestion was said in the email exchange to be "a pretty big call ... because the mortalities in infected tanks [were] not [then] outrageous". Mr Ebery's opinion (again, as disclosed in these emails) was that if mortalities increased to in excess of 1,000 abalone per day in the one year old tanks and in excess of 500 per day in the two year old tanks, then those tanks should be culled. However, at that time (late March 2006) the mortalities in those tanks were said to be around 300 to 400 per day and 100 per day respectively.

160 Dr Millar was taken to this email exchange in cross-examination. He agreed that if Dr Doroudi did advise that the best way for SOM to deal with the second outbreak was to cull any tank that becomes infected immediately, then that advice was, self-evidently, not being followed at the time.[88]

161 In early April 2006, a situation report as at 30 March 2006 was prepared for Dr Millar. It ultimately went out under his hand on or about 12 April. Dr Millar gave evidence that he endorsed it in its final form. The situation report provided:

Herpes-like Virus disease of abalone

Situation Report - 30 March 2006

Abalone farm 1 (AF1), Portland[89]

Disease and mortality continue to occur on the index farm AF1, although at reduced rates. Approximately 50.170 tanks are experiencing disease and mortalities.

Abalone farm 2 (AF2), Port Fairy

On AF2 the disease appeared in late December 2005, in a small number of tanks, and the owner promptly took steps to cull and decontaminate affected tanks and implemented biosecurity procedures and monitoring of dead abalone.

The disease appeared to have been contained, with no significant disease or mortality apparent for over two months, and negative tests (ie histopathology) on 20 abalone collected on 1 February and 2 March 2006.

On 22 March 2006 the owner reported that clinical signs and mortalities had reappeared in 6 tanks in two buildings, with suspicions (sic) signs noticed on 19 March 2006. PIRVic has confirmed the characteristic ganglioneuritis on histopathological examination of diseased abalone.

It is not clear whether this is recrudescence of reintroduction of disease, but epidemiological investigations are continuing.

Abalone farm 3, Flinders

This sea-based farm was completely destocked except for one separate group of approximately 100 unaffected black-lip abalone. Vessels, cages, and equipment were disinfected with Virkon. Monitoring (by histopathology of 13 abalone on two occasions in February and March 2006) shows no sign of infection in the remaining abalone.

Wild Stock Abalone

Monitoring of wild stock populations in the vicinity of AF1, AF2 and AF3, and cannery outlets has failed to detect any suspicion of disease.

Research - Transmission trial

An initial transmission trial has been carried out at AAHL. Minced fresh ganglia (IM injection) caused mortality in 2 days. Stored frozen materials caused death in 3 days. Naïve abalone housed in the same water as sick abalone died in 4 days. This experiment did not preclude a possibility of direct contact as the half dozen diseased abalone were in a wire cage - not a double cage. Controls all survived. Koch's postulates have not been completed yet (dead abalone have histological lesions, but presence of virus by EM has not been confirmed, and is pending).

162 The situation report then set out proposed monitoring, surveillance and controls. With respect to CSF, the proposed action was ongoing voluntary quarantine and quarterly outlet monitoring. With respect to SOM, the proposed action was ongoing voluntary quarantine, quarterly outlet monitoring and "enhanced monitoring to evaluate effectiveness of controls". With respect to the wild stocks around CSF and SOM (which were recorded as "provisionally clear"), the proposed action was quarterly monitoring. In fact, the only relevant surveillance ever conducted after 31 January 2006, was on 1 March 2006. Dr Appleford was asked about this in cross-examination as follows:

When there was what has been described by Dr Millar as an explosive outbreak at SOM, the only surveillance ever conducted after 31 January was 1 March. There was no - when the second outbreak occurred no further surveillance at SOM?---Not that I'm aware of, no.

That's a grievous oversight, isn't it, not in hindsight but in management of the risk of disease?---That's a good question, it's an oversight, yes, we should have kept monitoring.[90]

163 Dr Millar was asked and answered another series of questions about his understanding of matters - this time as they were at the end of March 2006. In summary, Dr Millar gave evidence that, as at the end of March 2006:

(a) CSF remained affected by the disease. The disease was reasonably widespread - although the daily incidence of new cases may have settled down.

(b) Sampling of wild abalone adjacent to CSF had failed to find evidence of the disease, and testing of abalone in the effluent ponds of CSF had failed to detect evidence of the disease.

(c) The disease had reappeared at SOM and was occurring in a number of tanks and a number of sheds. Perhaps the prevalence of affected abalone was lower than had been experienced at CSF. Like at CSF, the disease appeared progressive. The reason for the reappearance of the disease at CSF was unknown.

(d) As to the most likely source of infection, Dr Millar said:

The most plausible source of infection for CSF was the wild abalone broodstock brought into the farm from various sources in December [2005] and for SOM, we had no understanding at the end of March of the reason for the reappearance of that disease, given that it had appeared to be absent for close to two months.[91]

(e) As to possible modes of transmission, Dr Millar said:

Clearly it was very evident that direct contact between abalone and fomites in the context of a farm would affect transmission. Even in the sea at Abonex, each cage that had received infected abalone, most of the abalone in that cage died because they were in very close contact with each other but then a cage adjacent to them in the sea in which abalone were not translocated remained alive and healthy. So we had failed to find evidence of disease in the abalone in CSF's effluent pond or in samples collected in the wild. So in my mind at that stage, the transmission of AVG through water was clearly possible but I had no information on the real risks of transmission through farm effluent water into the ocean.[92]

(f) As to whether wild populations might become affected by the infection, Dr Millar said:

Yes, wild populations might become infected was an issue we identified very early on [and as to the magnitude of the risk as at the end of March 2006] I guess my view was that that was a very difficult thing - may be a very difficult thing to predict. The most probable and plausible hypothesis was that this disease or this infection existed in wild abalone in south eastern Australia, off the coast, and that if that were so, in the absence of any obvious reports of large epidemics in wild abalone ... it was one of the possibilities that if the infection got into wild abalone adjacent to these farms, that indeed the conditions - the environment of the wild, the wild environment may actually not particularly be one which results in large scale epidemics. It could be that it did. So it was very difficult to know but it was a consideration in my mind that we might be looking at a virus from the wild going back to the wild and it was difficult to know what that might mean.[93]

(g) As to what might occur if the virus was transmitted into the wild, Dr Millar said:

Well, I think we considered that the full range of possibilities could be in play from very little impact at all right through to disease outbreaks not unlike on the farm. I would have to say in my mind, the latter seemed very unlikely. This was a disease, like a lot of disease expressing in intensive farming, this appeared to be a disease which was expressing in that particular way because of the intensive nature of that farming.[94]

(h) As to Dr Millar's views about whether anything needed to be done in relation to the situations at CSF and SOM as at the end of March 2006, Dr Millar was asked and answered the following questions:

Did you have a view about whether you needed to do anything in relation to the situation at Coastal Seafarms as at the end of March 2006?---My view was that the infection - the transmission trials were underway at AAHL, soon to be underway that were designed to provide us with a much sharper indication of the risk of farm effluent water, that the sampling of wild abalone hadn't indicated that to that point the farm had transmitted infection to the wild, and so at the end of March it was my view that specific action at CSF, or further action wasn't warranted.

What about SOM as at the end of March?---At the end of March, I was looking at this in the context of the whole incident. We had one reasonably and heavily infected farm and now we had a second farm, the appearance on a second farm. It appeared to be behaving similar to the disease on the first farm and in that respect, whilst it was now a second farm, it had not changed what we knew or what we didn't know. It certainly highlighted the imperative of getting much better information about transmission through farm effluent water and that part of the knowledge gaps may be filled and assisted if we had an understanding of why this disease reoccurred on SOM after two months of being apparently absent.[95]

164 On 4 April 2006, a bulletin for the abalone industry was released by the DPI. Such bulletins were generally drafted within the Department and "run past" Dr Millar and Dr Appleford. The 4 April 2006 bulletin provided:

The virus appears to be spread by direct contact. Research work has been commissioned, and will be undertaken shortly to assess how transmission occurs, in particular the risk of spread by contaminated water.

Ongoing precautionary surveillance of wild abalone in the vicinity of the two affected farms, and the offshore research farm, has not detected the presence or likelihood of disease in wild stock.

The source of the infection remains unknown at this time. It is possible that the herpes-like virus is normally present in wild abalone but only manifests as clinical disease under conditions of intensive farming. The virus has not been described before in abalone in Australia. Herpes-like virus of abalone have been described and caused mortalities of farmed abalone in Taiwan in 2003.

While ongoing surveillance continues to indicate that this disease is not occurring on any other farm in Victoria or other State, it highlights the importance of adhering to good biosecurity procedures on all abalone farms.

165 On 6 April 2006, a background paper was prepared for the Minister. The background paper was approved by Dr Millar.[96] The background paper contained the following:

Preliminary transmission trials carried out at AAHL indicate that the disease can be spread by contact between abalone (or possibly by water). Further research is proposed in the short term on transmission, particularly to better define any potential risk to wild stocks posed by outflows from infected farms.

166 On 7 April 2006, Mr Anthony Forster (Senior Manager Inland Fisheries and Aquaculture) sent an email to South Australia in the following terms:

Despite significant monitoring of wild stock in proximity to affected farms, there has been no detected incidents of unusual mortality or clinical signs of the disease in wild stock.

167 On 12 April 2006, Dr Millar sent an email to Tasmania. In this email, Dr Millar said:

The long and the short of it is that the disease continues to be confined to two farms, with no evidence of the disease in wild populations or other farms. We have conducted (and this is continuing) surveillance of wild populations adjacent to affected farms and associated canneries with negative results.

I understand the wild abalone harvesting sector is stirring the pot about their industry being put at risk, but there is no evidence that this is so.[97]

168 On 12 April 2006, a report in respect of the disease at SOM was prepared by Dr David Champness (District Veterinary Officer Hamilton). The report was addressed to Dr Jeffers. Dr Millar believes he received a copy of the report (referred to by the parties as "the Champness report") a day or two after 12 April.[98] Dr Appleford was unable to recall specifically when he received a copy of the Champness report.[99]

169 The Champness report noted that while disease had initially spread at SOM in only the one, two and three year old abalone, disease had now been discovered in the four-five month old abalone spawned in late November 2005. The report went on to say that the disease had spread to all sheds of SOM, including the nursery tanks. Dr Millar said that he was not aware that the disease had spread to all sheds on SOM until he received the Champness report.[100]

170 The Champness report discussed the possible sources of the second outbreak at SOM as follows:

1. Possible sources of Herpes-like virus of Abalone causing the second incident at the SOM farm are (not a complete list and not in order of risk):
   • ➢ Water introduction via ocean inlet supply.
   • ➢ Contaminated abalone crates returning from processing/canning factories.
   • ➢ Abalone shells returned from Sou-West Seafoods processing factory, which are stored on farm for drying.
   • ➢ Personnel
   • ➢ Other unknown sources eg snails, other aquatic animals
   • ➢ Virus which was endemic on the farm without visible disease expression.
2. In our opinion, the most likely source of virus of the second disease outbreak was expression of an already endemic viral infection following a dormancy period. Herpes type viral diseases are known to have a 'dormancy' state and express disease under physiological stressful conditions.
3. Expression of viral disease may have been compounded by stress factors. Sources of stress affecting farmed abalone include:
   • ➢ High stocking density. SOM farmed abalone have been stocked at increasingly higher densities in recent years. The abalone are being grown out to a larger size.
   • ➢ Water temperature: abalone start to stress when water temperature reaches > 17.5 - 18° C.
   • ➢ Harvesting and stock movement between tanks.
   • ➢ Spawning.
   • ➢ Concurrent diseases eg Vibrio.

All of these factors have been present to some degree in the past few months.

171 The report went on to say that currently the mode of viral transmission and whether fomites were a possible viral spread risk, was not known. Direct abalone contact, water transmission and abalone mucus were all considered to be possible or probable modes of viral transmission. The report recommended that "sound basic farm biosecurity measures" were necessary to minimise risk. Under the heading "Recommendation", the following appeared:

1. Further epidemiological investigation including CSF and other sources of abalone.
2. Improved monitoring - water temp, disease, animal movements, personnel movements.
3. Improved farm biosecurity measures.
4. Further research into Herpes-like Virus of abalone including mode of viral transmission and effective disinfection/decontamination procedures on farm to manage and eradicate or contain the disease. Does the virus have a dormancy period?
5. Heightened disease surveillance of wild stock abalone by fisheries and licensed abalone divers. Licensed divers to notify fisheries of suspicion of disease and collect immediately any suspect diseased abalone for laboratory analysis.

172 Dr Millar was asked whether, as a result of reading the Champness report, he had any opinion about the possible reasons why the virus had reappeared on SOM. He said that he did. He went on:

What were your opinions?---My opinions were that I was satisfied there was no evidence the disease had been introduced through the movement of live abalone onto the farm, unlike the first outbreak. The possibility that the disease had been latent or that the infection had been latent on the farm for two months and there was some form of recrudescence was certainly plausible given the nature of herpes viruses although I did have a little bit of discomfort about that and the other possibility was it had entered the farm through a different source and that may be the intake water.[101]

173 Dr Millar gave evidence that upon receiving the Champness report, his opinion about the risks to wild abalone stock did not really change. He said there were still critical knowledge gaps. He went on:

To the extent that we were monitoring the impact on wild abalone, we had not been able to find direct or positive evidence of spread through water from the farms. The imminent, within weeks of receiving this report, I was comfortable we would receive the trial results from AAHL. These were all factors that to me meant that - I guess my view of the situation was not specifically changed by this report.[102]

174 On or about 20 April 2006, Dr Millar received a report from AAHL in respect of the trial commissioned in March to establish if virus could transmit through the water column, and whether dilution of contaminated water could be used as a means of disease control. The report's conclusion was:

There is currently no assay available to detect the aetiological agent (a suspect herpes virus) causing the outbreak of disease in the abalone farms. Therefore, we are unable to confirm the presence of the virus in the farm water that was transported from Portland to AAHL for use in the infection trial. Consequently, the following possibilities for the absence of morbidity and mortality of abalone exposed to dilutions of the Portland farm water are as follows:

(1) There was no (or little) virus present in the water at the time of sampling (virus titres may fluctuate in a farm setting, particularly in flow-through systems).

and/or

(2) The transportation of water to AAHL affected the viability of the virus present in the water.

and/or

(3) The virus in the water was present at a titre that was too low to cause a productive infection in the abalone.

Because there is no evidence that the virus was present in the water at the start of the experiment, we cannot draw any conclusions on the potential impact of the farm effluent to the local wild molluscs.

With regards to the dilution experiment carried out using water contained from cohabitation of healthy and sick abalone (LAF room C6), the results indicated that the virus can be transmitted to abalone through the water column. In addition, the water remained infectious to animals even after a 1/100 dilution (although only one of the duplicate tanks was affected at this dilution compared with both tanks affected at 100% and 10% levels). As the experiment is still ongoing, we do not yet know if the abalone exposed to water containing a higher virus dilution will develop disease after day 17 post-exposure.

175 In cross-examination about these results, Dr Millar was asked and answered the following questions:

So that analysis gave you no comfort at all in relation to the risk to the wild?

---Well, unfortunately or otherwise, the fact was it did not provide positive evidence that the effluent water was capable of infecting abalone.

That's right, so it gave you no comfort about that?---No, indeed, it failed to provide evidence.[103]

176 On 24 April 2006, there was a meeting at the Attwood Campus of the DPI. The attendees included Dr Millar, Dr Jeffers, Dr Doroudi, Dr Lancaster, Mr Forster and a number of people interested in both the wild abalone and the farmed abalone sectors (stakeholders). Dr Lancaster gave a Powerpoint presentation in which he indicated the results of the transmission trials which had been recently completed. Dr Millar gave evidence as to the substance of the transmission trial results and their significance as follows:

What was the substance of what he said about the results?---The substance of what he said about the results is that with respect to the dilution trials, that - this was using water from tanks at AAHL that had infected abalone in them, so this wasn't the farm water, but with respect to the dilution trials, undiluted water caused abalone mortality. Water diluted at 10 per cent caused abalone mortality and at 1 per cent 100 fold dilution, mortality continued but there were two tanks of abalone in the experiment and some abalone died in one tank and no abalone died in another despite it being a duplicate study. Clearly - that indicated that by 1 in 100 the effects of dilution may have been starting to have an impact. The subsequent dilutions in the trial beyond 1 in 100, no abalone died from AVG at those subsequent dilutions.

That's dilution, what about the other aspect of the trials?---The second aspect of the trial was the use of the actual effluent pond water from Coastal Seafarms collected in March or early April when the disease was still quite prevalent on that farm and no abalone died from AVG exposed to that water at either undiluted or at any other dilution.

Dr Millar, did those results inform your thinking in any way?---Well, yes, in the sense that they gave important information about the impact of dilution, they confirmed that transmission through water in the context of this trial in tanks certainly occurred, but that the impact of dilution or that dilution changed the infectivity of that water to a point where it was no longer infectious at some dilution beyond 1 in 100.

What about the farm water trial?---The farm water trial - well, it failed to provide me with any evidence that I could reliably use to demonstrate that the Portland CSF effluent pond water was infectious to abalone.[104]

177 On 24 April 2006, an update was given to AqCCEAD[105] members. The update included updates on previous action items from Victoria, South Australia and AQIS arising from the AqCCEAD meeting on 3 February 2006. On the same day (24 April 2006), Dr Millar sent an email to Tasmania in which he said that studies to date on water from an infected farm had failed to indicate infectivity via water.

178 On 5 May 2006, a situation report dealing with CSF, SOM, Abonex, Great Southern Waters, wild abalone and transmission trials was completed. In respect of transmission trials, the situation report provided:

Three transmission trials have been carried out at AAHL. Preliminary findings are summarised below.

Trial 1

This trial was set up to establish the infectious nature of the disease. Minced fresh ganglia (IM injection) caused mortality in 2 days. Stored frozen materials caused death in 3 days. Naïve abalone housed in the same water as sick abalone died in 4 days. This experiment did not preclude a possibility of direct contact as the half dozen diseased abalone were in a wire cage - not a double cage. Controls all survived.

Trial 2

This trial was set up to establish whether the virus transmits through water and the affect of dilution on infectivity. Normal abalone were place (sic) in water (at various dilutions) collected from tanks at AAHL that housed sick abalone. 100% of abalone exposed to undiluted water died (first death occurred in 3 days). 43% of abalone (comprising all abalone in one of two exposure groups, and none in the other) exposed to water at a dilution of 1 in 100 died (first death occurred in 8 days). No deaths occurred in groups of abalone exposed to dilutions of 1/10,000 and 1/100,000.

Trial 3

This trial was set up to establish whether water leaving infected farms is infectious. Normal abalone were placed in water (at various dilutions) collected from the holding pond (ie prior to discharge to the sea) of an infected farm. 8% of abalone exposed to undiluted water died (first death occurred in 8 days). 4% of abalone exposed to water at a dilution of 1 in 10 died (first death occurred in 12 days). No deaths occurred in abalone groups exposed to dilutions of 1/1000 and 1/100,000.

Conclusions

From the trials it is concluded that herpes-like virus is transmissible through water, and dilution reduces infectivity.

Given the trial results, and the fragile nature of herpes virus, spread by water over other than short distances must be considered highly unlikely.

179 As to proposed monitoring, surveillance and controls, it was suggested in the situation report of 5 May 2006, with respect to SOM, "ongoing voluntary quarantine" and "voluntary destocking?". With respect to wild stocks around SOM, it was suggested "DPI to carry out further surveillance, around inflow and outflow areas, and more broadly".

180 Before proceeding further, it is necessary to deal with an issue between the parties relevant to the question of causation. As I have already said, the evidence of the divers given in this trial was that disease was not seen in the wild until 25 May 2006 - when Mr Riddle observed dead abalone in Drain Bay. However, the State contends that diseased abalone were first observed in the wild either in late April 2006 or early May 2006.

181 The relevance of this issue is that the later the disease was observed in the wild, the more likely the disease was caused by the ever-increasing amounts of virus being discharged from the SOM farm on and after 17 March 2006. Clearly, the earlier the disease was observed in the wild, the less likely that disease could be attributed to a discharge of virus from the SOM farm in late March 2006.

182 In support of its contention that the disease was observed in the wild in late April or early May 2006, the State sought to tender a number of documents in which various representations were made supportive of this proposition. These documents included:

(a) The situation report dated 5 May 2006 in which it was stated:

However, some wild abalone collected (in late April 2006) by the owner of AF2 [SOM] from close to the water inflow area to AF2, have been confirmed as positive for ganglioneuritis. DPI is planning surveillance in the vicinity of AF2 to confirm, and evaluate the significance of this finding.[106]

(b) A diary entry of Mark Gervis of 2 May 2006 in which is recorded, "Diving for wild abs - confirmed sighting of infected fish in Taylors Bay".

(c) A PIRVic request for laboratory examination which on its face appears to show that two jars of wild abalone were collected near the pump inlet at SOM on 2 May 2006, and that "divers noted clin[ical] signs consistent with herpes infection".

(d) PIRVic histopathology reports in respect of abalone collected near SOM on 2 May 2006 which record a diagnosis of ganglioneuritis.

(e) A board minute of SOM dated 5 May 2006 in which it is recorded:

It is becoming clearer that the cause of the disease at SOM is through the intake of viral particles from diseased stock at our intakes.

183 While the plaintiff objected to the receipt of these documents, it did not resist the tender of them in their entirety. The plaintiff's objection to the tender of the documents was limited to use being made of them to prove the truth of a representation that infected abalone were found in Taylors Bay (near the SOM inlet) either in late April 2006 or early May 2006.

184 The State sought to have the documents admitted as business records - contending that there was no basis for excluding their admission either under s 135 of the Evidence Act 2008 or at all. Additionally, the State contended there was no basis for limiting the use of the documents in the way contended for by the plaintiff pursuant to s 136 of the Evidence Act. The dispute between the parties as to the use of these documents occurred just before final addresses. In the circumstances the parties were content for me to defer ruling on the admissibility of the documents (or more correctly, their permitted use) until after final addresses.

185 In support of its submissions that the documents should not be admitted as proof of the truth of a representation as to the existence of diseased abalone in Taylors Bay in late April/early May 2006, the plaintiff contended that the admission of such evidence would be unfairly prejudicial to the plaintiff within the meaning of ss 135 and 136 of the Evidence Act. The plaintiff asserted (correctly) that there was no suggestion that the makers of the various statements (and in particular Mr Gervis) were unavailable to give evidence. The plaintiff then relied upon the considerations relevant to "unfair prejudice" set out by Sperling J in Roach v Page (No 11).[107] Specifically, the plaintiff relied upon the following passage:

Inability to test the truth of the representation is a legitimate ground for rejecting or limiting the use of evidence which is covered by an exception to the hearsay rule. Thus, whether the maker of the representation will be called as a witness is a relevant consideration.

However, where hearsay evidence is admissible under an exception to the hearsay rule because of the unavailability of the maker of the representation, there is a special reason for not disallowing the evidence or limiting its use on the ground that the evidence cannot be tested by cross-examination. That is because the legislature has made the evidence admissible notwithstanding that consideration.

Conversely, where the maker of the representation is available or is not shown to be unavailable and the party tendering the evidence does not call the person, that is a legitimate consideration in favour of a finding of unfair prejudice.[108]

186 I do not accept that there is a danger that the admission of the documents to which I have referred, for the purpose of establishing that diseased abalone were found in Taylors Bay on 2 May 2006, might be unfairly prejudicial to the plaintiff. As the State noted in its submissions, in paragraph 55 of the plaintiff's second further amended statement of claim,[109] the plaintiff pleads:

In or about late April or early May 2006, the virus and [the] disease escaped from the [SOM] farm in the effluent discharges and infected wild abalone with the virus and caused [the] disease in wild abalone in Taylors Bay and Drain Bay.

187 Further, up until shortly before trial, the documents filed in this proceeding did not disclose any dispute between the plaintiff and the State as to the existence of diseased abalone in Taylors Bay or Drain Bay in late April or early May 2006. Indeed, in briefing its relevant experts, the plaintiff asked its experts specifically to assume the discovery of infected abalone on 2 May 2006. For example, in briefing Associate Professor Gilkerson, in a letter dated 7 February 2013, the plaintiff's solicitors asked Associate Professor Gilkerson to assume that all the facts referred to in a schedule of assumptions were true. The schedule of assumptions contained assumption 148 in the following terms:

which PIRVic later reported were positive for ganglioneuritis.[110]

188 In its submissions objecting to the tender of documents showing that diseased abalone were found in Taylors Bay on or about 2 May 2006, the plaintiff said:

Thirdly, a reference to some of these documents in previous versions of the plaintiff's tender list is not an admission of the truth of the representations. The original tender list was prepared when SOM was still a party. The plaintiff expected at that time to cross-examine Gervis. This also applies to references to some of these documents in instructions and the assumptions in the retainer of the plaintiff's experts. Further, it is prudent practice for a party to brief its experts on the case least favourable to it.[111]

189 It may be accepted that the mere reference to documents in previous versions of tender lists does not necessarily constitute an admission of the truth of representations contained in those documents. Much depends upon the circumstances of the case. It may also be accepted that it is prudent practice for a party to brief its experts on the case least favourable to it. Again, depending upon the circumstances of the case, nothing may be capable of being inferred from such a practice.

190 That said, while briefing experts on the case least favourable to a party might be prudent practice, ordinarily one might expect those experts to be briefed on any relevant alternative case if there are underlying facts which are sensibly capable of being disputed. The plaintiff took no such course in this case. A proper consideration of all of the documentary material tendered and exchanged between the parties suggests to me that there was no sensible alternative case of the kind the plaintiff wished to posit before me on the issue of when and where diseased or dead abalone were first discovered outside SOM after 22 March 2006..

191 As I have said above, at no time prior to trial were any of the plaintiff's experts asked to assume some alternative hypothesis involving the infection of wild abalone at some later point in May 2006. Additionally, at least one of the documents containing the representation which the State sought to establish was, at the commencement of the trial, in the plaintiff's tender bundle. Specifically, although the plaintiff submitted that there was no way of knowing that the diary page for 2 May 2006 belonged to Mark Gervis, the fact that the page was a page of Mr Gervis' diary for May 2006 could not seriously be disputed in the light of the plaintiff's own description of that document in those terms in the plaintiff's own tender bundle at the commencement of the trial.

192 While the plaintiff now seeks to resist the tendering of documents which show that diseased abalone were found in Taylors Bay on 2 May 2006, an examination of the plaintiff's pleadings, the bases upon which its experts were retained and the material which it put forward as admissible under the descriptions given by it (and not disputed by the State) shows that, far from there being a risk of unfair prejudice to the plaintiff in admitting the documents for the purpose sought by the State, the matter in issue was not (or has not been) genuinely in dispute.[112] It follows that I accept that abalone infected with the virus were first seen in Taylors Bay on 2 May 2006. Whether diseased abalone being found in Taylors Bay on 2 May 2006 on the one hand, as compared to dead abalone being found in Drain Bay on 25 May 2006 on the other hand, makes any difference so far as causation is concerned in this case is a matter I will deal with below.

193 I turn now to consider whether any of the four State tortfeasors (Dr Millar, Dr Appleford, the Minister and/or the Secretary) owed the plaintiff a duty of care.

Did the State tortfeasors owe the plaintiff a duty of care?

194 The duty pleaded against the State tortfeasors is a duty to take reasonable care to protect the plaintiff from economic losses caused by an escape of the virus and the disease from the SOM farm. In conventional terms, the duty alleged is a duty to take reasonable care to prevent the plaintiff from suffering pure economic loss.[113]

195 While the plaintiff pleads only that the alleged duty of care was owed to it, and while the group members on behalf of whom this proceeding is brought are all named in a schedule to the plaintiff's second further amended statement of claim,[114] this proceeding (based solely in breach of duty) is said to be brought on behalf of group members who are or were in May 2006:

(a) divers nominated under AFALs issued for the western or central zones of the Victorian Abalone Fishery;

(b) AFAL holders of AFALs issued for the western or central zones of the Victorian Abalone Fishery;

(c) abalone receivers - being people permitted to receive or store wild abalone pursuant to a Fish Receivers (Abalone) Licence or Fish Receiver (Abalone) Storer Licence issued by the Secretary in respect of abalone harvested under western or central zone AFALs;

(d) holders of quota units in AFALs issued for the western or central zones; and

(e) holders of legal or equitable rights to the economic benefit of such licences, quota units, and/or nominations.

196 The plaintiff further particularises the persons or bodies referred to in paragraph (e) as follows:

(i) Persons legally or equitably entitled to the economic benefits of quota units are entities and people who are not the holder of a particular individual abalone quota unit but who have a 'financial interest' within the meaning of section 59A(1) of the Fisheries Act 1995 in that quota, whether or not that financial interest is or has been registered, and this includes:

(1) people who immediately before the commencement of section 5 of the Fisheries (Abalone) Act 2005 were a holder of a registered financial interest in an Abalone Fishery Licence, and who are deemed pursuant to section 59A(2) of the Fisheries Act 1995 to have a registered financial interest in the individual blacklip abalone quota units and individual greenlip abalone quota units initially allocated to the holder of that Licence by the initial quota unit;

(2) people who have been assigned by way of contract some or part of the financial benefit of a particular individual abalone quota unit; and

(3) beneficiaries of trusts where the holder of a particular individual abalone quota holds the quota as trustee for the trust.

(ii) Persons legally or equitably entitled to the economic benefits of Abalone Fishery Access Licences are people and entities who are not the holder of a particular Abalone Fishery Access Licence but who have a 'financial interest' within the meaning of section 59(1) of the Fisheries Act 1995 in the licence, whether or not that financial interest is or has been registered, and this includes:

(1) people who have been assigned by way of contract some or part of the financial benefit of a particular access licence;

(2) beneficiaries of trusts where the holder of a particular access licence holds the licence as trustee for the trust.

(iii) Persons legally or equitably entitled to the economic benefits of nominations are people or entities who are not nominated under a particular Abalone Fishery Access Licences but who have a financial interest in the nomination and this includes:

(1) people who have been assigned by way of contract some or part of the financial benefit of the nomination;

(2) beneficiaries of trusts where the nominee is the trustee for the trust.

(iv) Persons legally or equitably entitled to the economic benefits [of] a Fish Receivers (Abalone) Licence or Fish Receivers (Abalone Storer) License are people and entities who are not holders of either licence but who have a financial interest in one or both of such licences and this includes:

(1) entities who have been assigned by way of contract some or part of the financial benefit of one or both licences;

(2) beneficiaries of trusts where the holder of one or both of such licences holds a licence as trustee for the trust.[115]

197 On the issue of the existence of a duty of care, the plaintiff places significant reliance upon the High Court's decision in Pyrenees Shire Council v Day ("Pyrenees").[116] It is therefore necessary to examine in some detail both the facts and the different reasons for judgment in Pyrenees.

198 Pyrenees concerned a claim against a council for failing to exercise powers under s 694(1) or s 695(1A) of the Local Government Act 1958. Section 694(1) provided that the council of any municipality "may carry out or cause to be carried out any works or take any other measures for the prevention of fires". Section 695(1A) provided:

For the purposes 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 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.

199 The facts in Pyrenees were, as stated in the judgment of McHugh J, as follows:

At all relevant times, Mr and Mrs Nakos were the owners of premises situated at 70 Neill Street, Beaufort. These premises consisted of a fish and chip shop with an attached residence. Beaufort is a small town in rural Victoria. At the time of the events that give rise to these appeals, Beaufort was part of the Shire of Ripon which had a population of about 3,300 people and about 2,500 rateable properties. In 1994, the Shire of Ripon was dissolved as the result of a reorganisation of local government in Victoria and the Council assumed its responsibilities.

In July 1986, Mr and Mrs Nakos leased 70 Neill Street to Mr and Mrs Tzavaras. Mr and Mrs Tzavaras continued to run the shop and live in the premises. On 9 August 1988, a Mr Rayne, who assisted Mr and Mrs Tzavaras in the running of the fish and chip shop and lived on the premises, lit a fire in the fireplace. The fireplace was a double fireplace; Mr Rayne lit a fire in the half of the fireplace in the residential part of the premises. The other half of the fireplace was in a corner of the part of the premises used as a fish and chip shop. This half of the fireplace was never used. Apparently, it was sealed up. Sometime later that evening, Mr Rayne thought that there was a fire in the chimney. He summoned the local Country Fire Authority ('the CFA'). Officers of the CFA attended the premises but found no fire. One of them, however, concluded that the fireplace was unsafe for lighting fires. He told Mr Rayne (Mr and Mrs Tzavaras were absent from the premises) that it was unsafe for use. A few days later, a building and scaffolding inspector ('the inspector') employed by the Council examined the premises at the request of the Shire Engineer. The inspector also concluded that the fireplace was unsafe for lighting fires. He thought that, if the fireplace was used, the possibility of fire was 'great' and that the entire row of shops adjoining 70 Neill Street would be at risk. He told Mr Tzavaras, who introduced himself as 'in charge', not to use the fireplace until it was repaired. Mr Tzavaras agreed not to do so. The inspector told Mr Tzavaras that he would 'be hearing' from the Council.

By letter dated 12 August 1988, the inspector wrote to Mr Tzavaras and Mr Nakos at 70 Neill Street. The letter set out the defects in the fireplace and continued as follows: 'Smoke can now enter the main shop area and the possibility of fire and health risk is great.

It is therefore imperative that the ... fireplaces be not used under any circumstances unless:-

(a) Structurally sound repairs are made to make the chimneys and fireplaces safe.

(b) General repairs are made to mortar and brickwork to make the walls heat resistant and prevent smoke leakage.

(c) Alternatively repair the fireplaces structurally and seal both fireplace openings permanently and discontinue use.'

The trial judge found that only Mr Tzavaras saw the letter and that Mr Nakos never knew of the defective chimney. Mr Tzavaras ignored the Council's warning. He continued to use the fireplace without having it repaired. Following the delivery of the letter, the Council made no further enquiries or inspections to ascertain whether the fireplace was being used or the repairs had been carried out.

In January 1990, Mr and Mrs Tzavaras, with the agreement of Mr and Mrs Nakos, assigned the lease over 70 Neill Street to Eskimo, the company effectively owned and controlled by Mr and Mrs Stamatopoulos. Mr and Mrs Stamatopoulos continued to operate the business and reside in the premises. Before the assignment, Mr Stamatopoulos asked Mr Tzavaras if he was using the fireplace. Mr Tzavaras replied that he was. Furthermore, he did not mention the 1988 fire in his discussions with Mr Stamatopoulos.

After the assignment of the tenancy, Mr and Mrs Stamatopoulos regularly used the fireplace. On 22 May 1990 that use led to a substantial fire which caused serious property damage to both 70 and 72 Neill Street. At all relevant times, the latter premises were owned by Mr and Mrs Day, who operated a video hire business from the premises.[117]

200 The appeal in Pyrenees was resolved in favour of Mr and Mrs Day, Mr and Mrs Stamatopoulos and Eskimo.[118] Brennan CJ held that the Council was liable to pay damages to the shop owners and the tenants on the ground that it was under a public law duty to exercise its statutory powers. Toohey, McHugh, Gummow and Kirby JJ held that the Council was liable to pay damages to the shop owners on the ground that it was in breach of a duty of care owed to them. Additionally, Gummow and Kirby JJ held the Council to be liable to the tenants on the ground that the Council was in breach of a duty of care owed to them. Toohey and McHugh JJ dissented on the issue of the Council's liability to the tenants.

201 On the issue of whether a duty of care was owed, Toohey J said:

Recognition of a concept of 'general reliance' brings within the notion of proximity another category of case in which a duty of care may arise. This category acknowledges that a duty of care may be owed in circumstances where an omission to act on the part of a local authority or statutory body has resulted in loss to certain members of the public. The duty is to those members who would generally rely upon an authority in circumstances where they are particularly vulnerable and the authority exists and is empowered to protect them from the very loss that occurred. It is fair and reasonable for general reliance to form the basis of a duty of care where the omission by the authority is not a result of policy considerations such as lack of funds or resources, but is more properly viewed as within the 'operational' sphere of that authority's activities. A further policy consideration militating in favour of a duty of care where general reliance is reposed in a public authority lies in the fact that the liability is not at large. The members of the public who could be said to 'generally rely' upon a local authority are in an ascertainable class, namely, ratepayers, though the position of those in occupation of defective premises raises other considerations.[119]

202 On the issue of a duty owed to the shop owners, McHugh J said:

Given the extensive powers of the Council, its entry into the field of inspection on this occasion, if not other occasions, its actual knowledge of the danger to the health and property of the occupiers of Neill Street and, at the least, its imputed knowledge that residents of the shire generally relied on it to protect them from the dangers arising from the use or condition of premises, the Council owed a duty of care to Mr and Mrs Day.[120]

203 On the question of the existence and extent of the duty of care, Gummow J said:

What then was the situation occupied by the Shire, or the circumstances in which it was placed, with reference to the condition of the fireplace and chimney at 70 Neill Street at the time of the second fire? 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'.[121]

204 Finally, on the question of whether a duty of care was owed to the shop owners and tenants, Kirby J, having discussed the failure of the attempts by the High Court to use the criteria of foreseeability, proximity and reliance as precise and predictable concepts in the determination of the question of whether a duty is owed, said:

I would therefore adopt as the approach to be taken in Australia the three-stage test expressed by the House of Lords in Caparo. To decide whether a legal duty of care exists the decision-maker must ask 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 has 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?

The answer to the first question may often be a relatively easy one. This is because the law usually affords its answer with the wisdom of hindsight, knowing that harm has occurred, the risk of which could have been avoided by the exercise of reasonable care. The answer to the second question will depend upon an analysis of the spectrum of 'proximity factors' advanced to define the relationship between the parties out of which a duty is said to arise. Sometimes, but not always, an element of reliance will give content to that relationship. The answer to the third question, which will be necessary only if the first two have been decided in the affirmative, will require the decision-maker to weigh any competing considerations of legal policy in order to determine whether, notwithstanding the proof of foreseeability and proximity, the law should not impose a duty at all or a duty of a scope which the injured party needs in order to succeed. In conformity with the incremental approach accepted by this Court, each of the three questions will be answered with the guidance of the responses given, in analogous circumstances in earlier cases, where a duty of care has been asserted and either found to exist or rejected.[122]

205 The conclusion of Toohey J in relation to the existence of a duty of care in Pyrenees was, at least in part, based upon the concepts of general reliance and proximity. Similarly, the reasoning of McHugh J contains within it the finding of an imputed knowledge that residents of the Shire "generally relied" on the Shire to protect them from dangers arising from the use or condition of premises. However, notions of proximity and general reliance are no longer considered to provide the answer to the question of whether an authority should be considered to have been obliged to exercise its powers.[123] Indeed, general reliance has for a number of years been described as a fiction.[124]

206 Further, the three stage test first enunciated in Caparo Industries PLC v Dickman[125] relied upon by Kirby J, until his Honour reluctantly[126] relinquished it in Graham Barclay Oysters Pty Ltd v Ryan ("Graham Barclay Oysters"),[127] has never commanded majority support in the High Court.[128]

207 In Graham Barclay Oysters, Pyrenees was dealt with by McHugh J in the following terms:

But most important of all, the Authority had used its powers to direct waterside workers to places of work that contained reasonably foreseeable risks of injury to the workers. This last point alone was sufficient to create a duty of care although the case was not conducted on that basis. I do not regard Pyrenees as a 'control' case. Rather, it is a case where the council came under a duty of care because it knew of the risk of harm to specific individuals, it had power to take steps to eliminate the risk and importantly, at an earlier stage, had given directions to eliminate the risk.

In my opinion, the State had no relationship with the consumers of oysters that imposed on the State an affirmative duty to protect those consumers from harm created by the growers and distributors of oysters. That is so, even though the State ought to have reasonably foreseen that, unless it acted, oyster consumers might suffer harm. Knowledge or imputed knowledge that harm may result from a failure to take affirmative action is not itself sufficient to create an affirmative duty of care.[129]

208 In Stuart v Kirkland-Veenstra ("Kirkland-Veenstra"),[130] Gummow, Hayne and Heydon JJ referred to Graham Barclay Oysters,[131] Crimmins v Stevedoring Industry Finance Committee ("Crimmins")[132] and Pyrenees[133] in the following terms:

There can be no duty to act in a particular way unless there is authority to do so. Power is therefore a necessary condition of liability but it is not a sufficient condition. Statutory power to act in a particular way, coupled with the fact that, if action is not taken, it is reasonably foreseeable that harm will ensue, is not sufficient to establish a duty to take that action. Rather, as was pointed out in Graham Barclay Oysters Pty Ltd v Ryan, the existence or otherwise of a common law duty of care owed by a statutory authority (or in this case the holder of statutory power) 'turns on a close examination of the terms, scope and purpose of the relevant statutory regime'. Does that regime erect or facilitate 'a relationship between the authority [here the holder of statutory power] and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence'?

Evaluation of the relationship between the holder of the power and the person or persons to whom it is said that a duty of care is owed will require examination of the degree and nature of control exercised over the risk of harm that has eventuated, the degree of vulnerability of those who depend on the proper exercise of the relevant power, and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. Other considerations may be relevant.

In the present matter, as in a number of cases about the exercise of statutory power, it is the factor of control that is of critical significance. It was not the officers who controlled the source of the risk of harm to Mr Veenstra; it was Mr Veenstra alone who was the source of that risk. For the reasons that have been expressed in connection with consideration of the value of personal autonomy, this factor is of predominant importance.

The present case stands in sharp contrast to Crimmins v Stevedoring Industry Finance Committee. In that case the court held that the Australian Stevedoring Industry Authority owed a waterside worker a common law duty to take reasonable care to protect him from reasonably foreseeable risks of injury arising from his employment by registered stevedores. The conclusion reached by the majority of the court was founded on considerations that were identified as finding close analogy with those which lead to an employer being responsible for providing a safe system of work and a safe place of work. The Authority had or should have had knowledge of the special risks to which the workers were subject and could control (or at least minimise) those risks by the exercise of its statutory powers. And it was the Authority that put the workers at risk of harm because it was the Authority that assigned the workers to particular stevedores. The Authority was held to control the source of the risk of harm to the workers.

No similar analogy with existing relationships giving rise to a duty of care can be drawn in the present case. More particularly, the police officers did not control the source of the risk to Mr Veenstra as would have been the case if he had been a prisoner in custody. No doubt it can be said that the police officers knew of the particular risk to Mr Veenstra. They had, after all, observed the preparations Mr Veenstra had made at the car park. No doubt it can also be said that they were in a position to control or minimise the occurrence of the observed risk (in this case because they had the power given by s 10 of the Mental Health Act). But considerations of the same kind will almost always be present when a passer-by observes a person in danger. The passer-by can see there is danger; the passer-by can almost always do something that would reduce the risk of harm. Yet there is no general duty to rescue. And unlike the case in Crimmins, it was not the officers who put Mr Veenstra in harm's way. They came upon the scene which Mr Veenstra had created. Were they to intervene to prevent his conduct? That question is not answered by pointing to what was decided in Crimmins.

Contrary to the plaintiff's submissions, this was not a case in which principles of the kind examined in Pyrenees Shire Council v Day are engaged. In that case, a public authority had entered upon the exercise of its statutory powers with respect to a particular subject-matter (fire prevention). The authority was held to have owed a duty to take reasonable care in exercising those powers. But the case was a particular example of the general proposition that 'when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned, and was likely to be occasioned, by their exercise, damages for negligence may be recovered'.

In the present matter, the complaint is not about the care with which a statutory power was exercised; it is a complaint that the power was not exercised. That is, the submission in the present case is that the existence of the statutory power, coupled with proof of the existence of facts that would have warranted its exercise, should be held to give the plaintiff a cause of action for the damage occasioned as a result of the power not being exercised. For the reasons that have been given, the characteristics of the relationship between the police officers (as holders of the power given by s 10 of the Mental Health Act) and Mr Veenstra (as the person against whom the power would be exercised) do not answer the criteria for intervention by the tort of negligence.[134]

209 Putting to one side the concepts of proximity and general reliance (which are no longer considered determinative of whether a duty of care exists), and putting to one side the now discarded Caparo test, Pyrenees falls now to be regarded as a particular example of the general proposition that when statutory powers are conferred, they must be exercised with reasonable care - so that if the relevant function is performed negligently, a cause of action may arise. In its submissions on this point, the State contended that the present case was analogous to the facts in Modbury Triangle Shopping Centre Pty Ltd v Anzil ("Modbury Triangle")[135] as discussed by Gleeson CJ.[136]

210 The facts in Modbury Triangle may be briefly stated as follows. A suburban shopping centre in which shops were leased to tenants had a large outdoor car-park. A tenant operated a video shop business until 10.00pm. One night, an employee of the tenant was attacked and badly injured while walking to his car in the car-park. The shopping centre's floodlights had been turned off by the landowner at about the time the shop closed and there was no other direct lighting in the car-park. The tenant sued the landowner. At first instance, the tenant was successful. An appeal to the Full Court of the Supreme Court of South Australia was dismissed. The landowner then appealed to the High Court pursuant to a grant of special leave. The High Court held that the landowner's duty as an occupier of the land did not extend to taking reasonable care to prevent physical injury to the injured employee resulting from the criminal behaviour of third parties on that land.[137]

The fact that, as occupier of the car park, the appellant had the capacity to decide when, and to what extent, it would be lit at night, does not mean that the appellant assumed a particular responsibility to protect anyone who might lawfully be in the car park against attack by criminals. The policy adopted by the appellant as to the hour at which the lights went off suggests that the purpose of the lights was to attract customers, rather than deter criminals. Whether or not that is so, there is nothing in the evidence to suggest that the appellant assumed a responsibility which, at least in the case of employees of tenants of the Centre, might ordinarily be expected to be a responsibility of their employers. It was the first respondent's employer which decided the hour at which the video shop would close, and what, if any, arrangements would be made for the after-hours security of employees. The argument provides an example of what Gummow J, in Hill v Van Erp, described as '[t]he use of the imprecise and beguiling but deceptively simple terms "known reliance" and "assumption of responsibility".'[138]

212 Referring to what Gleeson CJ said in Modbury Triangle, the State submitted that the fact that as regulators the State tortfeasors had caused investigations to be undertaken and had the capacity to decide whether or not to exercise statutory power did not mean that the State tortfeasors assumed a particular responsibility to protect anyone who might have suffered loss as a result of the existence of the virus - and this included the owners of the SOM farm.

213 In submitting that the State tortfeasors did not owe any relevant duty of care, the State placed significant reliance upon the High Court's decision in Sullivan v Moody.[139] Relevantly for present purposes, Sullivan v Moody dealt with a statutory scheme and the question of whether a duty of care could arise in circumstances where there were conflicting duties and issues as to indeterminacy. While the statutory scheme in Sullivan v Moody (contained in the provisions of the Community Welfare Act 1972 (SA)) was obviously different from the statutory regime in the present case, in discussing the relevant issues, the High Court said:

The argument was conducted upon the basis that it was foreseeable that harm of the kind allegedly suffered by the appellants might result from want of care on the part of those who investigated the possibility that the children had been sexually abused. But the fact that it is foreseeable, in the sense of being a real and not far-fetched possibility, that a careless act or omission on the part of one person may cause harm to another does not mean that the first person is subject to a legal liability to compensate the second by way of damages for negligence if there is such carelessness, and harm results. If it were otherwise, at least two consequences would follow. First, the law would subject citizens to an intolerable burden of potential liability, and constrain their freedom of action in a gross manner. Secondly, the tort of negligence would subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms. A defendant will only be liable, in negligence, for failure to take reasonable care to prevent a certain kind of foreseeable harm to a plaintiff, in circumstances where the law imposes a duty to take such care.[140]

214 Sullivan v Moody was a case that concerned whether or not medical practitioners retained to examine children the subject of allegations of sexual abuse by others owed a duty of care to the fathers of those children. The Court went on:

More fundamentally, however, these cases present a question about coherence of the law. Considering whether the persons who reported their suspicions about each appellant owed that appellant a duty of care must begin from the recognition that those who made the report had other responsibilities. A duty of the kind alleged should not be found if that duty would not be compatible with other duties which the respondents owed.

How may a duty of the kind for which the appellants contend rationally be related to the functions, powers and responsibilities of the various persons and authorities who are alleged to owe that duty? A similar problem has arisen in other cases. The response to the problem in those cases, although not determinative, is instructive.

In Hill v Chief Constable of West Yorkshire, the House of Lords held that police officers did not owe a duty to individual members of the public who might suffer injury through their careless failure to apprehend a dangerous criminal. Lord Keith of Kinkel pointed out that the conduct of a police investigation involves a variety of decisions on matters of policy and discretion, including decisions as to priorities in the deployment of resources. To subject those decisions to a common law duty of care, and to the kind of judicial scrutiny involved in an action in tort, was inappropriate.

Earlier, in Yuen Kun Yeu v Attorney-General of Hong Kong, the Privy Council held that a regulatory authority did not owe a duty of care to corporate depositors. Their Lordships pointed to the responsibilities and discretions of the authority, and concluded that there was no intention on the part of the legislature that, in considering whether to register or deregister a company, there should be a common law duty of care superimposed upon the statutory framework.

Reference has already been made to the reasoning of Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council.

The circumstance that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable. A medical practitioner who examines, and reports upon the condition of, an individual, might owe a duty of care to more than one person. But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities, or their officers, are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, the law would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations.

There is also a question as to the extent, and potential indeterminacy, of liability. In the case of a medical practitioner, the range of people who might foreseeably (in the sense earlier mentioned) suffer some kind of harm, as a consequence of careless diagnosis or treatment of a patient, is extensive.

The statutory scheme that formed the background to the activities of the present respondents was, relevantly, a scheme for the protection of children. It required the respondents to treat the interests of the children as paramount. Their professional or statutory responsibilities involved investigating and reporting upon, allegations that the children had suffered, and were under threat of, serious harm. It would be inconsistent with the proper and effective discharge of those responsibilities that they should be subjected to a legal duty, breach of which would sound in damages, to take care to protect persons who were suspected of being the sources of that harm. The duty for which the appellants contend cannot be reconciled satisfactorily, either with the nature of the functions being exercised by the respondents, or with their statutory obligation to treat the interests of the children as paramount. As to the former, the functions of examination, and reporting, require, for their effective discharge, an investigation into the facts without apprehension as to possible adverse consequences for people in the position of the appellants or legal liability to such persons. As to the latter, the interests of the children, and those suspected of causing their harm, are diverse, and irreconcilable. That they are irreconcilable is evident when regard is had to the case in which examination of a child alleged to be a victim of abuse does not allow the examiner to form a definite opinion about whether the child has been abused, only a suspicion that it may have happened. The interests of the child, in such a case, would favour reporting that the suspicion of abuse has not been dispelled; the interests of a person suspected of the abuse would be to the opposite effect.[141]

215 Sullivan v Moody was considered by the High Court in Tame v New South Wales ("Tame").[142] In Tame, Gleeson CJ said:

As to the first reason, the case seems to me to be governed by the same principles as resulted in the denial by this Court of the existence of a duty of care in Sullivan v Moody.

In the performance of his duties, Acting Sergeant Beardsley was completing an official report into the circumstances of a motor traffic accident. In the ordinary course, the report would be used in making a decision as to whether charges should be laid against anybody involved in the accident. The two people involved were Mr Lavender and Mrs Tame. Copies of the report would also be available, on request, and for a fee, to third parties, such as litigants, their solicitors and insurers. Primarily, however, this was an official police report of the incident, and of the result of police observations, inquiries and tests.

The primary duty of a police officer filling out such a report is to make available to his or her superiors, honestly and frankly, the results of the observations, inquiries and tests that were made. It would be inconsistent with such a duty to require the police officer to take care to protect from emotional disturbance and possible psychiatric illness a person whose conduct was the subject of investigation and report.

Not only was there no such relationship between Acting Sergeant Beardsley and Mrs Tame as would make it reasonable to require that he should act in contemplation of the danger of psychiatric injury to her; the relationship between them was inconsistent with such a requirement.[143]

216 Gummow and Kirby JJ dealt with the issue of conflicting duties in Tame as follows:

It is unlikely that an investigating police officer owes a duty of care to a person whose conduct is under investigation. Such a duty would appear to be inconsistent with the police officer's duty, ultimately based in the statutory framework and anterior common law by which the relevant police service is established and maintained, fully to investigate the conduct in question.[144]

Police officers investigating possible contraventions of the law do not owe a common law duty to take reasonable care to prevent psychiatric injury to those whose conduct they are investigating. Their duties lie elsewhere and to find a duty of care in those whom they investigate would conflict with those other duties.[145]

218 The present case is a claim for damages for pure economic loss. In Tame, Gleeson CJ said:

Unscientific as may be the distinction between 'pure' economic loss, 'parasitic' economic loss and damage to property, the care which the law requires people to show for the personal property of others is not matched by a corresponding requirement to have regard to their financial interests. The distinction is not based on science or logic; it is pragmatic, and none the worse for that.[146]

219 The relevant principles dealing with whether a duty of care is owed in pure economic loss cases were considered in Woolcock Street Investments Pty Ltd v CDG Pty Ltd ("Woolcock Street Investments").[147] In Woolcock Street Investments, Gleeson CJ, Gummow, Hayne and Heydon JJ discussed the issue of pure economic loss in the following terms:

Claims for damages for pure economic loss present peculiar difficulty. Competition is the hallmark of most forms of commercial activity in Australia. As Brennan J said in Bryan v Maloney:

If liability were to be imposed for the doing of anything which caused pure economic loss that was foreseeable, the tort of negligence would destroy commercial competition, sterilize many contracts and, in the well-known dictum of Chief Judge Cardozo, expose defendants to potential liability "in an indeterminate amount for an indeterminate time to an indeterminate class".

That is why damages for pure economic loss are not recoverable if all that is shown is that the defendant's negligence was a cause of the loss and the loss was reasonably foreseeable.

In Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad_'_, the court held that there were circumstances in which damages for economic loss were recoverable. In Caltex Oil, cases for recovery of economic loss were seen as being exceptions to a general rule, said to have been established in Cattle v Stockton Waterworks, that even if the loss was foreseeable, damages are not recoverable for economic loss which was not consequential upon injury to person or property. In Caltex Oil, Stephen J isolated a number of 'salient features' which combined to constitute a sufficiently close relationship to give rise to a duty of care owed to Caltex for breach of which it might recover its purely economic loss. Chief among those features was the defendant's knowledge that to damage the pipeline which was damaged was inherently likely to produce economic loss.

Since Caltex Oil, and most notably in Perre v Apand Pty Ltd, the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. 'Vulnerability', in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, 'vulnerability' is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. So, in Perre, the plaintiffs could do nothing to protect themselves from the economic consequences to them of the defendant's negligence in sowing a crop which caused the quarantining of the plaintiffs' land. In Hill v Van Erp, the intended beneficiary depended entirely upon the solicitor performing the client's retainer properly and the beneficiary could do nothing to ensure that this was done. But in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords, the financier could itself have made inquiries about the financial position of the company to which it was to lend money, rather than depend upon the auditor's certification of the accounts of the company.

In other cases of pure economic loss (Bryan v Maloney is an example) reference has been made to notions of assumption of responsibility and known reliance. The negligent misstatement cases like Mutual Life & Citizens' Assurance Co Ltd v Evatt and Shaddock & Associates Pty Ltd v Parramatta City Council [No 1] can be seen as cases in which a central plank in the plaintiff's allegation that the defendant owed it a duty of care is the contention that the defendant knew that the plaintiff would rely on the accuracy of the information the defendant provided. And it may be, as Professor Stapleton has suggested, that these cases, too, can be explained by reference to notions of vulnerability. (The reference in Caltex Oil to economic loss being 'inherently likely' can also be seen as consistent with the importance of notions of vulnerability.) It is not necessary in this case, however, to attempt to identify or articulate the breadth of any general proposition about the importance of vulnerability. This case can be decided without doing so.[148]

220 In Woolcock Street Investments, McHugh J dealt with the pure economic loss issue as follows:

In Perre v Apand Pty Ltd, I listed five principles that I thought were 'relevant in determining whether a duty exists in all cases of liability for pure economic loss'. They were principles concerned with:

• reasonable foreseeability of loss,
• indeterminacy of liability,
• autonomy of the individual,
• vulnerability to risk, and
• knowledge of the risk and its magnitude.

I went on to say that, in particular cases, other policies and principles may guide and even determine the outcome of the case, but the principles concerning these five categories must always be considered. Accordingly, I turn to consider them and other relevant matters in the context of this case.[149]

221 McHugh J went on to say that the case for imposing a duty is always strengthened if the defendant actually knew of the risk. His Honour went on to say that it was strengthened further if the defendant knew the magnitude of the risk.[150] Additionally, his Honour dealt with the question of disproportionate liability in the following terms:

In some cases concerned with pure economic loss, it may be necessary in determining whether a defendant should owe a duty of care to consider whether any potential liability of the defendant would be disproportionate to its fault. Claims against auditors by investors or creditors are examples of cases where disproportionate liability has played a role in rejecting plaintiffs' claims that the auditors owed them a duty of care.[151]

222 As to the relevance of the ability of a plaintiff to purchase insurance, when considering the issue of vulnerability, McHugh J said in Perre v Apand Pty Ltd:

Whether the plaintiff has purchased, or is able to purchase, insurance is, however, generally not relevant to the issue of vulnerability. In Esanda Finance Corporation Ltd v Peat Marwick Hungerfords, I pointed out that courts often wrongly assume that insurance is readily obtainable and that the increased cost of an extension of liability can be spread among customers by adding the cost of premiums to the costs of services or goods. In Caltex Stephen J rejected the contention that the existence of insurance or the more general concept of 'loss spreading' were valid considerations in determining whether a duty of care existed. I agree with his Honour. They do not assist but rather impede the relevant inquiry. Loss spreading is not synonymous with economic efficiency - which will sometimes be a relevant factor in determining duty. Australian courts, however, have not accepted that loss spreading is the guiding rationale for the law of negligence or that it should be.[152]

223 In my view, the State tortfeasors did not owe the plaintiff a duty of care to protect it from economic losses caused by an escape of the virus or the disease from the SOM farm. The matters that militate against the existence of such a duty of care include the conflicting duties that would be owed to the owners and operators of the SOM farm (and indeed other farms) on the one hand, and the duties that might be owed to those involved in the catching, storing and processing of wild abalone on the other hand.

224 Further, the indeterminacy of the class of individuals to whom a duty would have to be owed, if a duty was owed to the plaintiff, tells against the existence of the alleged duty of care to the class of people whose economic interests might be affected across the western and central zones of Victoria (and perhaps further west or east). The class of people to whom the plaintiff's alleged duty of care might be owed is, in my view, indeterminate. This is particularly so when one has regard to the plaintiff's attempt to describe the various persons or bodies whose economic interests might be affected by a decision to exercise or not exercise one of the statutory powers referred to by the plaintiff.

225 Similarly, the potential liability of the State tortfeasors would be disproportionate to any fault that might be attributed to them, in preferring the interests of one group over the interests of another group, when deciding to exercise or not exercise one of the relevant statutory powers. In this case, the plaintiff's claim alone (that is, taking no account of the amounts of the claims of the 88 collections of group members referred to in amended schedule A to the plaintiff's second further amended statement of claim, and any other people or entities that might have claims against the State on the same basis as the plaintiff and the identified group members) for economic loss was originally calculated by the plaintiff's expert chartered accountant (Mr Meredith) in the sum of $8,199,000.[153]

226 A further matter telling against the existence of the duty of care for which the plaintiff contends is the State's argument concerning the quasi-legislative nature of the statutory powers. In Crimmins, Gaudron J said:

The critical consideration in relation to the Authority's order-making power under s18(1) of the Industry Act is that, if made, orders would have had the force of law.[154] It is, thus, appropriate to characterise the power to make orders as legislative in nature. There is considerable incongruity in the notion that the common law might impose a duty of care in relation to the exercise or non-exercise of a power that is legislative in nature.[155] Indeed, so incongruous is that notion that I am of the view that, as a matter of necessary implication, s18 is to be construed as excluding the operation of the common law in relation to the Authority's exercise or non-exercise of its power to make orders. That aside, however, there is nothing to exclude the operation of the common law in relation to the Authority's power to take other action in the discharge of the functions referred to earlier. More precisely, there is nothing in relation to those powers and functions to exclude a common law duty of care to waterside workers.[156]

227 On the same topic, in Vairy v Wyong Shire Council,[157] Gummow J said:

However, to observe the existence of the analogy thus drawn is not to say, as the Council's concession referred to above appears to assume, that the mere circumstance that a statutory authority has powers of management over public lands, which are in turn used as of right by members of the public, is alone sufficient to enliven the duty of care in question. Such a proposition fails to take into account the emphasis given by this Court to the notion that where, as in the present case, those powers of management may be said to be quasi-legislative in nature, their exercise cannot be compelled or constrained by a common law duty of care.

...

Given that failure to comply with a notice or warning made under Ordinance 52 was made an offence pursuant to the terms of cl 29, such a prohibition would have had the force of law. It would have represented the exercise by the Council of a quasi-legislative power.[158]

228 As to the creation of offences with criminal sanctions for breaching orders, declarations or notices that might be issued by one or more of the State tortfeasors pursuant to the provisions of the LDC Act or the Fisheries Act, see ss 13(3), 24(1), 27(1), 112, 114 and 115(2) of the LDC Act and s 152(7)(c) of the Fisheries Act.

229 In submitting that the State tortfeasors owed the plaintiff a duty of care, the plaintiff contended, amongst other arguments, that the State tortfeasors exercised a degree of control sufficient to create a duty of care when one looked at the circumstances as a whole. Additionally, the plaintiff relied upon the proposition that it was vulnerable in the sense that it could do nothing to protect itself from the risk of economic loss caused by the escape of the virus or the disease into the wild. However, I do not accept that the State tortfeasors had the requisite degree of control justifying the imposition of a duty of care on them (or any of them). In truth, control was exercised by the farmers - or more particularly in this case, SOM. It was the farmers who could (without conflicting duties or responsibilities) take steps to eradicate the virus or the disease (or at least to stop its spread). Further, while it might be accepted that the plaintiff was vulnerable in the sense that it could not take steps to prevent the virus or the disease spreading into the wild, this vulnerability, when looked at in the light of the other relevant considerations determinative of whether a duty of care exists or not, is an insufficient foundation upon which to base the duty of care contended for by the plaintiff.[159]

230 In contending that the State tortfeasors owed the plaintiff a duty of care, the plaintiff submitted that Dr Appleford contributed to the risk of the plaintiff suffering loss by permitting SOM to translocate interstate abalone onto its farm, notwithstanding the ecological risk that carried. Additionally, it was contended that both Dr Millar and Dr Appleford contributed to the risk by advising, directing and entering into agreements with SOM in the management of the disease outbreak. I reject these submissions. First, there is no basis for saying that Dr Appleford was in any way negligent in permitting SOM to translocate interstate abalone onto its farm. Secondly, the plaintiff's argument that by advising, directing and entering into agreements with SOM, the State tortfeasors increased "the risk" amounts to no more than saying that in performing the functions expected of them, a duty was owed because the State tortfeasors had statutory powers which they could use - but which they chose not to use. On the evidence, it is plain that any risk created was created by SOM - not by the State tortfeasors.[160]

231 To the extent that the plaintiff's case was that the duty of care alleged by it required the State tortfeasors to persuade or advise SOM to take steps that would impose a burden on SOM (culling, disposing, decontaminating or taking some other step which would result in the destruction of abalone), the contention that such a duty was owed must be rejected for the reasons given by Gummow and Hayne JJ in Graham Barclay Oysters,[161] where their Honours said:

But the exercise or potential exercise of powers of supervision or persuasion of this type provides an insecure basis for a duty of care enforceable by common law. ... That the practical content of any such duty would be elusive supports the conclusion that it does not exist. As counsel for the State asked rhetorically during argument, is such a duty to be described as a duty to be persuasive, especially persuasive or successfully persuasive?[162]

232 As I have said above, while the plaintiff placed significant reliance upon Pyrenees as authority for the proposition that the duty of care it alleges in this case was owed by each of the State tortfeasors, Pyrenees was a very different case from the present case. First, unlike in Pyrenees, the present case is a claim for damages for pure economic loss. Secondly, in Pyrenees, there were no conflicting duties. Further, there was no indeterminacy in respect of the class of people to whom a duty of care might be owed. Additionally, in Pyrenees, there was no disproportionality between the liability contended for and the fault of the Council. Finally, unlike the present case, where the State tortfeasors are sued for not exercising a power or powers, in Pyrenees the defendant Council had entered upon the exercise of its statutory powers.[163]

233 For these reasons, none of the State tortfeasors owed the plaintiff the duty of care alleged against them. In its defence, in denying that the State tortfeasors owed a duty of care and in denying any breach of any duty of care, the State also relied upon (amongst others) ss 48, 83 and 85 of the Wrongs Act 1958. In coming to the conclusion that the State tortfeasors did not owe the plaintiff a duty of care, I have considered the operation of these sections. While s 48 is contained in a division of the Wrongs Act headed "Duty of care", it is clear that, like its New South Wales counterpart (s 5B of the Civil Liability Act 2002 (NSW)), it engages only with the issue of breach, rather than the existence of a duty of care.[164]

234 Section 83 of the Wrongs Act provides:

In determining whether a public authority has a duty of care or has breached a duty of care, a court is to consider the following principles (amongst other relevant things)-

(a) the functions required to be exercised by the authority are limited by the financial and other resources that are reasonably available to the authority for the purpose of exercising those functions;

(b) the functions required to be exercised by the authority are to be determined by reference to the broad range of its activities (and not merely by reference to the matter to which the proceeding relates);

(c) the authority may rely on evidence of its compliance with the general procedures and applicable standards for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceeding relates.

235 Section 85 of the Wrongs Act provides:

In a proceeding, the fact that a public authority exercises or decides to exercise a function does not of itself indicate that the authority is under a duty to exercise the function or that the function should be exercised in particular circumstances or in a particular way.

236 Accepting the State's submission that each of the State tortfeasors constitute a "public authority" within the meaning of ss 83 and 85 of the Wrongs Act,[165] the application of s 83 and/or s 85 of the Wrongs Act does not change the conclusion I have reached that none of the State tortfeasors owed the plaintiff the duty of care alleged against them. In my view, so far as the issue of duty is concerned, s 83 has no relevant application to the circumstances of the present case. The decision by the various State tortfeasors to act or not to act at various times between January and May 2006 was not determined by reference to resources or the broad range of activities in which the State tortfeasors had the capacity to act.

237 Similarly, and again so far as the issue of duty is concerned, in my view, s 85 of the Wrongs Act has no real application to the circumstances of the present case. In my view, the question of whether any of the State tortfeasors owed the duty of care alleged against them fell to be determined by reference to the principles described in the various authorities to which I have already referred. Proper consideration of the relevant statutory provisions contained in the Wrongs Act does not alter the answer that would otherwise be given to the duty question in this case. The short point is that none of the State tortfeasors owed the plaintiff a relevant duty of care.

238 Having concluded that none of the State tortfeasors owed the plaintiff a duty of care, the plaintiff's claim against the State must fail. However, in the event that I am wrong on the duty issue, I turn now to consider the issues of breach and causation. Central to the question of breach is s 48 of the Wrongs Act 1958. Section 48 provides:

(1) A person is not negligent in failing to take precautions against a risk of harm unless-

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and

(b) the risk was not insignificant; and

(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things)-

(a) the probability that the harm would occur if care were not taken;

(b) the likely seriousness of the harm;

(c) the burden of taking precautions to avoid the risk of harm;

(d) the social utility of the activity that creates the risk of harm.

(3) For the purposes of subsection (1)(b)-

(a) insignificant risks include, but are not limited to, risks that are far-fetched or fanciful; and

(b) risks that are not insignificant are all risks other than insignificant risks and include, but are not limited to, significant risks.[166]

239 Central to the question of causation is s 51 of the Wrongs Act.[167] Section 51 provides:

(1) A determination that negligence caused particular harm comprises the following elements-

(a) that the negligence was a necessary condition of the occurrence of the harm (factual causation); and

(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability).

(2) In determining in an appropriate case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be taken to establish factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm (the injured person) would have done if the negligent person had not been negligent, the matter is to be determined subjectively in the light of all relevant circumstances.

(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.[168]

240 In Roads and Traffic Authority of New South Wales v Dederer,[169] Gummow J identified five relevant principles in relation to the issue of a breach of a duty of care in a negligence proceeding. His Honour said:

First, the proper resolution of an action in negligence depends on the existence and scope of the relevant duty of care. Secondly, whatever its scope, a duty of care imposes an obligation to exercise reasonable care; it does not impose a duty to prevent potentially harmful conduct. Thirdly, the assessment of breach depends on the correct identification of the relevant risk of injury. Fourthly, breach must be assessed prospectively and not retrospectively. Fifthly, such an assessment of breach must be made in the manner described by Mason J in Wyong Shire Council v Shirt.[170]

241 As was said by Hayne J in Vairy v Wyong Shire Council:[171]

The inquiry into breach, although made after the accident, must attempt to answer what response a reasonable person, confronted with a foreseeable risk of injury, would have made to that risk. And one of the possible answers to that inquiry must be 'nothing'.

242 This proposition was emphasised by McHugh J in Dovuro Pty Ltd v Wilkins,[172] where his Honour said:

A defendant is not negligent merely because it fails to take an alternative course of conduct that would have eliminated the risk of damage. The plaintiff must show that the defendant was not acting reasonably in failing to take that course. If inaction is a course reasonably open to the defendant, the plaintiff fails to prove negligence even if there were alternatives open to the defendant that would have eliminated the risk.[173]

243 As I have said above, a significant part of the plaintiff's case involved criticising the State tortfeasors (and in particular Dr Millar and Dr Appleford) and/or those for whom they were responsible for failing to implement or comply with the management plan and VAMAADE. For example, Dr Millar was cross-examined as to why he did not formally establish an LDCC[174] or an SDCHQ.[175] It was suggested to Dr Millar in cross-examination that VAMAADE mandated the establishment of these bodies in the circumstances of this case. Dr Millar's response was that VAMAADE was a guide and that the circumstances of this case did not mandate the establishment of a formal SDCHQ or LDCC.[176] Further, Dr Millar gave evidence that in essence there was a State level team (although it did not have the acronym SDCHQ), and local staff were involved (even though an LDCC was not formally established).[177]

244 In respect of the statement in VAMAADE that "Where there are grounds for suspecting a risk of an aquatic animal disease emergency, the field officer must ... initiate steps to limit the potential spread of disease by quarantine, to stop the movement of animals, people, animal product, water and other fomites into and out of the suspect area", Dr Millar agreed with the broad proposition that this was not done in this case. However, Dr Millar went on:

This was not one of the defined known animal disease emergencies. We were investigating what it was. To the extent that there had been movements of animals and products and fomites and so on put in place, they were in place.[178]

245 In cross-examination, Dr Millar agreed that VAMAADE was designed "to take a precautionary approach in managing suspected disease".[179] That said, Dr Appleford (one of the authors of VAMAADE) gave evidence that VAMAADE:

was a framework about how we organised ourselves not a reflection of the policies of the day of the government. It was the arrangements of how we allocated roles and responsibilities and ensured we could respond to a disease that always had to be done within the framework of policy that existed and the legislation of the day.[180]

"discusses how we should arrange ourselves but doesn't prescribe what sort of actions should be taken.[181]

247 There is no doubt that the management plan and VAMAADE are relevant documents so far as the question of breach is concerned in this case. However, one should not lose sight of the purpose of these documents. The documents were designed to facilitate the careful, considered and appropriate responses to outbreaks, and suspected outbreaks, of disease. What was required of the State tortfeasors, and those for whom they were responsible, were considered and reasonable responses and decisions, in respect of an outbreak or outbreaks - the circumstances of which evolved over time. More importantly than following any sentence or sentences in these documents was an intelligent, reasonable and rational approach to the problem as it was known by relevant officers to exist from time to time.

248 That said, in its written closing submissions, the plaintiff identified the following matters which it was said that VAMAADE required in the circumstances of this case:

(a) first, the establishment of a Local Disease Control Centre (LDCC) near the location of the outbreak;

(b) secondly, the establishment of a State Disease Control Headquarters (SDCHQ) to which the LDCC reports;

(c) thirdly, the declaration of an Infected Place under s 21 of the LDC Act;

(d) fourthly, the declaration of a Restricted Area under s 26 of the LDC Act; and

(e) fifthly, the initiation of steps to limit the potential spread of disease by quarantine, to stop movements of animals, people, animal product, water and other fomites into and out of SOM.[182]

249 In final address, counsel for the plaintiff said that while these five matters were the matters which the plaintiff contended VAMAADE required in the circumstances, more generally VAMAADE required not merely the exercise of the powers in ss 21 and 26 of the LDC Act - but also the exercise of the other powers in the LDC Act to which I have already referred.

250 So far as the management plan was concerned, the plaintiff submitted that it required (according to its terms) that "The transfer of disease or unwanted genetic material to the wild must be prevented". Otherwise, the plaintiff's submission in final address so far as the management plan was concerned was that the management plan "should inform the exercise of the discretion.[183]

251 The plaintiff submitted that the State tortfeasors were required to have regard to the management plan when performing their functions and exercising their powers. In support of this submission, the plaintiff relied upon s 34 of the Fisheries Act. Section 34 of the Fisheries Act relevantly provided:

(1) A public authority must have regard to any relevant management plan when performing its functions and exercising its powers.

(2) If a public authority proposes to take any action that is inconsistent with a management plan, the public authority must consult the Secretary in writing at least 28 days before the action is to be taken.

(3) ... .

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

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

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

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

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

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

257 Under the heading "Lack of Aquatic Veterinary Expertise", the plaintiff submitted:

First, the State tortfeasors lacked aquatic veterinary expertise. Appleford is not a veterinary scientist. His doctorate in philosophy is in the comparative physiology of fish. However, as he admitted in cross-examination, 'I really don't know enough about aquatic animal diseases' and he had 'never really looked into the nature of the spread of diseases in aquatic animals'.

Millar is primarily a veterinary scientist, with a subsequent professional qualification in epidemiology. Despite being charged with the responsibility of managing [the disease], Millar lacked expertise in aquatic disease. In cross-examination, he admitted he had 'no practical experience whatsoever with fish disease before 2006'.[185]

258 Under the heading "Misapplied Epidemiological Principles", the plaintiff submitted:

Secondly, the State tortfeasors misapplied principles of epidemiology. On his own account, Millar required a certain level of knowledge before he was prepared to act:

Control and eradication can only be carried out successfully if a disease can be reliably recognized and the causative agent reliably detected. Diagnostic tests are needed to confirm the presence of infection and prove absence of infection.

Despite his qualifications as an epidemiologist, this was misconceived. Thrusfield's evidence was:

An imperfect state of knowledge is no reason to abstain from disease control. Cattle plague exemplifies disease control using appropriate procedures (isolation, slaughter and quarantine) with only a rudimentary knowledge of disease.

...

I agree with Dr Millar when he states that a disease must be 'reliably recognised', because, without such recognition, outbreaks of specific diseases would go undetected, and therefore disease could not be controlled.

Recognition of disease requires a clear case definition. Case definition can be based on criteria other than detection of the causal agent; for example, clinical signs and outbreak profile (e.g., morbidity and mortality). In the context of [the disease], characteristic clinical signs were identified as early as January 2006 and lesions characteristic of a herpes-like virus disease were also identified by pathologists in January 2006. Moreover, the increased levels of mortality associated with [the disease] in both of the outbreaks at SOM are a constituent part of the case definition. I disagree with Dr Millar when he states that the 'causative agent' must be 'reliably detected', in order for 'control and eradication' to be 'carried out successfully'. Infectious-disease outbreaks can be controlled without identification of the causal agent, although there must be a clear case definition, which was available for [the disease].

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

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

This passage reveals two things about Millar's thinking. First, he had effectively read two requirements into the LDC Act which did not exist:

1. that those subject to the mandatory destruction of livestock be consulted; and
2. that those subject to the mandatory destruction of livestock be compensated.

The LDC Act, on the other hand, does three important things with respect to compensation:

1. under Part 5, provides for compensation with respect to those exotic diseases declared to be compensable (as well as diseases in certain set-out (sic) in the legislation);
2. by section 61, vests the decision as to what exotic disease shall be compensated with the Governor-in-Council; and

1. in light of the matters in (a) and (b) (scil, a. and b.), quite deliberately fails to make compensation a condition of its various disease-prevention powers.

For these reasons, Millar's concern with compensation was a misreading (scil, misunderstanding) of his own power. This contention is strengthened by Millar's apparent disregard for the Management Plan which was, under the Fisheries Act, a mandatory consideration.

Secondly, this passage reveals Miller's unwillingness to exercise powers delegated upon him for the very purpose of their conferral. In contrast to Millar's need:

1. to obtain the 'endorsement' of the Secretary and Minister;
2. to engage in 'extensive consultation' with 'stakeholders' and 'industry';

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

260 Under the heading "Millar's Disposition against Acting", the plaintiff submitted:

Millar's expressed views confirm his failure to bring a reasonable mind to the problem he faced. From very early on, what informed Millar's view that water was required for transmission was that, if this were the case, it would mitigate the prospective risk for the wild fishery. As Millar noted in January 2006 to the Environmental Protection Agency:

Early observations suggest transmission requires direct contact between abalone. If this is so it limits the implications for wild populations.

This view was formed in January 2006 based on what had occurred at Abonex (where Millar had never visited) and CSF (where abalone clump together immersed in water). However, as Millar admitted:

1. He did not know - nor had been told - of any aquatic disease that required direct contact.
2. There was nothing to suggest contact was the exclusive means of transmission. (This is, of course, a very sensible concession: wherever abalone had been observed to touch, there would have also been water.)

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

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

I will ask the question again: were you of the view that direct contact was required?---Yes.

What was the basis for that view?---The observations to that time and the information available to me.[189]

...

When you say direct contact, do you mean from abalone to abalone or from fomite to abalone?---That's correct.

The latter?---Both.

So it doesn't require one abalone to contact another?---Not necessarily.

It needs a fomite to travel, if you like, from one abalone to another?---Correct.

Fomites travel in water in abalone farms?---They may.

They do, don't they, not all of them but some of them?

HIS HONOUR: That's the point, he said they may.

MR CURTAIN: Yes, Your Honour. So did you think as at mid-January 2006 that the disease was transferable from ill abalone to healthy abalone via fomites in the water?---I had no view at that stage, no.

Well, you thought it required direct contact?---Yes.

You thought that included contact from fomite to abalone?---Yes.

Fomites can exist in the water?---Yes.

In the abalone farms, they certainly did, didn't they?---Fomites may exist - the water may be a fomite in its own right but the fomites were actually objects themselves not associated or contained in or dissolved in or part of water.[190]

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

263 Insofar as the plaintiff's case involved some assertion that any of the State tortfeasors did not possess relevant veterinary expertise and that this constituted negligence on their part, I reject this submission. Each of the State tortfeasors' conduct falls to be assessed by reference to what might reasonably be expected of them (holding the position they held) at the relevant time. To this end, it is to be noted for example that a livestock inspector (Dr Millar) was, under the LDC Act, not required to have any particular qualifications, other than being a "person employed under Part 3 of the Public Administration Act 2004".[191]

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

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

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

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

268 All of that said, it is to be remembered that the State tortfeasors are to be judged by reference to what a reasonable person in each of their positions would have done - not by reference to what a highly qualified specialist aquatic veterinary scientist might or might not have done. Further, it is as well to remember that while expert evidence can be very useful in explaining matters about which a court has limited (if any) knowledge, once these matters are explained, often the utility of opinions upon ultimate questions, about which a court is then well placed to form its own opinions, are not of great assistance. That is, while the evidence of these opinions might be admissible under the provisions of the Evidence Act, there is much to be said for scrutinising them with care if they are no more than an attempt to put a party's case "more vividly and cogently" before the court.[192]

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

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

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

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

(b) the limited scientific knowledge around transmission in a natural environment, including limited knowledge around issues such as shedding, transmissibility through water, survivability and necessary infective dose;

(d) the known qualities of herpes viruses, including latency, fragility and the fact that they were host-specific;

(e) that a possible source of the virus was wild brood stock;

(f) the reasons for the expression of the virus as a disease on the farms, and in particular the fact that intensive farming of animals was a known environmental factor influencing the spread of infection and disease;

(g) the absence of infection in samples collected from the wild, from the CSF lagoon and from the Abonex sentinel abalone;

(h) the owners of the farms had self-interest in managing the spread of disease on the farms, and were best informed and equipped for that task;

(i) to require the immediate cessation of the flow of effluent water from the farms would result in the death of the abalone stocks at the affected farms, with (at least) economic consequences; and

(j) there was no compensation scheme available.[194]

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

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

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

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

277 I have taken the same approach in respect of Dr Doroudi, Dr Kefford, Dr Cameron and the epidemiologist.[197] The evidence of what occurred between 10 January and 25 May 2006, coupled with the extensive evidence of Dr Millar and Dr Appleford, was voluminous. This did not leave me in a position where I thought it either necessary or reasonable to draw an adverse inference against the State in respect of any failure to call the witnesses to whom the plaintiff referred in its final submissions. The calling of additional witnesses may simply have resulted in cumulative evidence being given. As was said by Gyles and Weinberg JJ in O'Meara v Dominican Fathers,[198] the rule in Jones v Dunkel[199] does not require a party to give merely cumulative evidence.[200]

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

279 Having regard to the conclusions I have reached in respect of duty and breach, I can express my view in relation to causation briefly. In my opinion, the plaintiff's case also fails at the causation level. At trial, a considerable body of evidence was tendered in order to attempt to show that reducing the viral output from the SOM farm on or shortly after 22 March 2006 (either by culling and disinfecting and/or by ceasing effluent flows) would have prevented the virus and the disease from escaping into the wild. The problem, it seems to me, is that one can only speculate how and when the disease came into the wild.[202] Many possibilities exist. One of which, as likely as not, is that the second outbreak occurred when virus was taken in through the intake pipes in Taylors Bay. Such a scenario would explain the explosive nature of the second outbreak which involved multiple outbreaks in different tanks occurring at SOM on successive days in March and April 2006 (otherwise all that might be said about the second outbreak is that there was massive fomite contamination with the virus being transmitted from tank to tank by human or other activity (remembering that the water on the farm, generally speaking, did not go from tank to tank)).

280 My conclusion about causation does not depend upon the disputed question of whether infected abalone were found in Taylors Bay on 2 May 2006. Even if the first sign of diseased abalone in the wild was in Drain Bay on 25 May 2006, I remain of the view that one cannot say that, but for failing to take some relevant step at SOM on or shortly after 22 March 2006, the disease would not have spread to the wild. The plaintiff having failed to establish factual causation, it is not necessary to consider the question of scope of liability.[203] Further, this was not a case where it was suggested that s 51(2) of the Wrongs Act has any application.[204]

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

[1] Plaintiff's second further amended statement of claim, paragraph [58].

[2] At the relevant time, the Minister was the Hon Robert Cameron, MLA.

[3] At the relevant time, the Secretary was Mr Peter Harris.

[5] See also, the definition of "Department" inserted into s 4 of the Fisheries Act by s 3 of the Fisheries (Further Amendment) Act 2003.

[6] Administrative Arrangements Order (No 183) 2002.

[7] See the Instrument of Delegation dated 23 August 2004 in respect of the Secretary and the Instrument of Delegation dated 24 November 2004 in respect of the Minister.

[8] See the Instrument of Delegation dated 28 August 2005.

[9] See further, Commonwealth v Mewett (1997) 191 CLR 471, 502 (Dawson J).

[10] Originally, livestock inspectors in addition to Dr Millar were also alleged to have breached duties for which the State was vicariously liable, but these allegations were withdrawn at trial (see T196).

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

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

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

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

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

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

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

[15] In the case of a quarantine notice issued in respect of an exotic disease, 240 penalty units or 24 months' imprisonment or both; in any other case, 60 penalty units.

[16] 240 penalty units or 24 months' imprisonment or both in the case of a notice with respect to an exotic disease; in any other case, 60 penalty units.

[17] In the case of a notice with respect to an exotic disease, 120 penalty units; in any other case, 60 penalty units.

[18] 360 penalty units or 36 months imprisonment or both.

[19] 360 penalty units or 36 months imprisonment or both.

[20] Plaintiff's written opening [96].

[21] [1998] HCA 3; (1998) 192 CLR 330.

[22] [2002] HCA 54; (2002) 211 CLR 540, 581-2 [94].

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

[24] Plaintiff's second further amended statement of claim, paragraph [52].

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

[26] As reformulated by the plaintiff on the second last day of the trial.

[27] On the last day of the trial, the plaintiff deleted the words "16 January 2006, and/or on or after" from this question. As to the significance of this deletion for the plaintiff's case, see the exchange between the Court and counsel for the plaintiff after final addresses at T1344.29 - T1347.7.

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

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

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

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

[36] [2005] HCA 62; (2005) 223 CLR 422, 449-450 [81]-[84].

[37] [2002] HCA 54; (2002) 211 CLR 540, 610 [185].

[39] (2001) 207 CLR 562.

[43] Broadly speaking, reef codes are an area of water identified for regulatory purpose to manage abalone fishing. Each reef code has a name and number. Typically, each reef code is usually several kilometres of coast. Abalone are found throughout each reef code, albeit in different quantities. Generally speaking, the reef codes run in ascending number order from west to east. The relevant reef codes in the western zone for the purpose of this proceeding are 1.01, Discovery Bay; 1.02, Whites; 1.03, Water Springs; 1.04, Blowholes; 1.05, The Tits; 1.06, South Bridgewater/Bully Cove; 1.07 and 1.08, Seal Caves and Horseshoe; 2.01, Murrels; 2.02, Jones Bay; 2.03, Outside Nelson; 2.04, Devils Kitchen; 2.05, Inside Nelson; 2.06 and 2.07, Killer Waves and Yellow Rock; 2.08, Cape Grant; 2.09 and 2.10, Passage and Lawrence Rocks; 2.11, Blacknose; 2.12, Hospital Reef (adjacent to Portland); 2.13, Dutton Way; 2.14, Julia Bank; 2.15, Yambuk; to the south of 2.14, Julia Percy Island, containing reef codes 3.01 to 3.04, Julia Percy North, Julia Percy North-east Reef, Julia Percy East Side and Julia Percy Prop Bay respectively; going further east again, 3.05, Crags; 3.06, Burnet's; 3.07, Water Tower (the SOM farm is on the border of Burnet's and Water Tower); 3.08, Light House Reef (just to the east of Port Fairy); 3.09, Mills; 3.10, Killarney; 3.11, The Cutting; 3.14, Levys Point; 3.12, Thunder Point; and 3.13, Lady Bay (outside Warrnambool).

[51] These dives were towards the eastern end of Crags.

[56] See the cross-examination of Associate Professor Gilkerson at T429.8 - T429.19.

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

[59] To be questioned in detail about what a person said, or was told, or thought more than seven years after the relevant events -and from voluminous and detailed documents -is almost always difficult for any person; the more so if one's professional competence is being called into question at each step along the way.

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

[64] These farms have suffered unusually high rates of mortality in one or more populations of stock. Abalone dying show typical clinical signs and have histopathological changes related to the nervous tissue.

[65] Abonex is referred to in many of the documents in this case as Abanex.

[66] Please refer to DPI Fisheries Officers who investigated this farm.

[68] Australian Animal Health Laboratory.

[69] Department of Agriculture, Fisheries and Forestry (Commonwealth).

[70] Generally speaking, a fomite is an inanimate object or substance that is capable of transferring an infectious agent from one animal to another.

[76] See further, the cross-examination of Dr Jones at T317 wherein Dr Jones said that he could not recall if he had been critical during the meeting of 3 February 2006 of Victoria's management of the outbreak of the disease.

[80] Senior Fisheries Management Officer - Port Phillip Fisheries Victoria.

[82] As they had (and have) been referred to.

[84] T757.5 - T757.12. See further, T757.17 - T758.29.

[89] AF1 is CSF, AF2 is SOM, AF3 is Abonex and AF4 is Great Southern Waters.

[95] T653.14.1 - T654.7. See further, Dr Appleford's beliefs as to relevant matters as at the end of March 2006, set out at T863.22 - T866.19.

[97] The reference to the wild abalone harvesting sector stirring the pot is a reference to a number of letters and communications from members of that sector expressing concern that effluent was continuing to be discharged into the sea from farms where the infection and disease was present.

[101] T663.10 - T663.20. See further T663.21 - T664.6.

[103] T800.21 - T800.27. See further, T800.28 - T802.4.

[105] Aquatic Consultative Committee on Emergency Animal Diseases.

[106] In the table at the end of situation report number 3, wild stocks around SOM are described as "infected?".

[107] [2003] NSWSC 907 [74].

[110] See also the same assumption put by the plaintiff's solicitors to Professor Michael Thrusfield and Dr John Brian Jones.

[111] Paragraph 5 of the plaintiff's written submissions dated 22 October 2013.

[112] cf s 190(3) of the Evidence Act.

[113] Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180.

[114] Amended schedule A to the plaintiff's second further amended statement of claim lists 88 groups of individuals and corporate entities (each group containing up to 3 entities).

[115] See paragraph 1A(v) of the plaintiff's second further amended statement of claim and the plaintiff's further and better particulars dated 10 August 2012.

[116] [1998] HCA 3; (1998) 192 CLR 330.

[119] Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330, 361 [77].

[121] Ibid 389 [168] (citations omitted).

[122] Ibid 419-420 [244]-[245] (citations omitted).

[123] Stuart v Kirkland-Veenstra [2009] HCA 15; (2009) 237 CLR 215, 260 [132]. See further, Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540, 624 [234] and [236]; and Miller v Miller [2011] HCA 9; (2011) 242 CLR 446, 468 [59] and the authorities referred to therein.

[124] See for example, Graham Barclay Oysters v Ryan [2002] HCA 54; (2002) 211 CLR 540, 624[234]. See further, Pyrenees [1998] HCA 3; (1998) 192 CLR 330, 344-345 [19]-[20] (Brennan CJ), 385-388 [157]-[165] (Gummow J) and 410-412 [229]-[232], 418-419 [242] (Kirby J).

[125] [1990] UKHL 2; [1990] 2 AC 605.

[126] Graham Barclay Oysters [2002] HCA 54; (2002) 211 CLR 540, 626[238].

[127] [2002] HCA 54; (2002) 211 CLR 540.

[128] See Sullivan v Moody (2001) 207 CLR 562. See further, Graham Barclay Oysters [2002] HCA 54; (2002) 211 CLR 540, 625[237].

[129] Graham Barclay Oysters [2002] HCA 54; (2002) 211 CLR 540, 581-582 [94]-[95].

[130] [2009] HCA 15; (2009) 237 CLR 215.

[131] [2002] HCA 54; (2002) 211 CLR 540.

[132] [1999] HCA 59; (1999) 200 CLR 1.

[133] [1998] HCA 3; (1998) 192 CLR 330.

[134] Kirkland-Veenstra [2009] HCA 15; (2009) 237 CLR 215, 255-256 [115]-[118] (citations omitted).

[135] [2000] HCA 61; (2000) 205 CLR 254.

[138] Ibid 265 [25] (citation omitted).

[139] (2001) 207 CLR 562.

[141] Ibid 581-2 [55]-[62] (citations omitted) (emphasis added).

[142] [2002] HCA 35; (2002) 211 CLR 317.

[143] Ibid 335 [24]-[27] (citations omitted).

[144] Ibid 396 [231] (citations omitted).

[145] Ibid [298] (citation omitted).

[146] Tame [2002] HCA 35; (2002) 211 CLR 317, 329 [6]. See further, Cattanach v Melchior [2003] HCA 38; (2003) 215 CLR 1, 57 [148].

[147] [2004] HCA 16; (2004) 216 CLR 515 at 529-531 [19]- [24], 547-550 [74]-[87]. See Barclay v Pemberthy [2012] HCA 40; (2012) 246 CLR 258, 284 [42].

[148] Woolcock Street Investments [2004] HCA 16; (2004) 216 CLR 515, 529-531 [21]-[24] (citations omitted).

[149] Ibid, 547 [74]-[75] (citation omitted).

[151] Ibid, 553-554 [98] (citation omitted).

[152] [1999] HCA 36; (1999) 198 CLR 180, 230 [130] (citations omitted).

[153] See Mr Meredith's first report. However, in Mr Meredith's second report (based on additional information and on some different assumptions), Mr Meredith assessed the plaintiff's loss at either $7,223,000 or $6,967,000 (depending upon 2 different total allowable commercial catch (TACC) scenarios that were put to him). But see the opinion of the State's expert accountant, Mr Lonergan, who on 2 alternative TACC scenarios (i.e. alternative to the 2 scenarios used by Mr Meredith) assessed the plaintiff's loss at either $1,702,000 or $1,362,000. All of that said, in an additional submission dated 1 November 2013, dealing with taxation issues that arose during final addresses, the plaintiff contended that if the Court awarded damages for future losses characterised as loss of future profits then those damages would have to be grossed up to take into account the plaintiff's taxation liability in respect of those damages. Calculated on this basis, the plaintiff contended that its total damages were either $11,034,261.68 or $10,574,009.35 (depending on which scenario was used).

[154] S20(1)(c) of the Industry Act.

[155] See, for example, Welbridge Holdings Ltd v Greater Winnipeg [1971] SCR 957 at 967-968 per Laskin J; Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 500 per Deane J; Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330 at 393-394 per Gummow J and the cases there cited.

[156] Crimmins [1999] HCA 59; (1999) 200 CLR 1, 20-21 [32] (footnotes in original). See further, to like effect, Crimmins at 39 [93] (McHugh J), 62 [170] (Gummow J) and 101 [292] (Hayne J).

[157] [2005] HCA 62; (2005) 223 CLR 422.

[159] See further, Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; (2008) 74 NSWLR 102 (Allsop P, Beazley and McColl JJA).

[160] cf Goldman v Hargrave [1966] UKPC 2; [1967] 1 AC 645, 656.

[161] [2002] HCA 54; (2002) 211 CLR 540, 610 [185].

[163] Kirkland-Veenstra [2009] HCA 15; (2009) 237 CLR 215, 255 [117] (Gummow, Hayne and Heydon JJ).

[164] Cf Shoalhaven City Council v Pender [2013] NSWCA 210 [55] (McColl JA).

[165] See the definition of "public authority" in s 79 of the Wrongs Act.

[166] See further, s 49 of the Wrongs Act. See further, ss 83 and 85 of the Wrongs Act, upon which the State places reliance.

[167] See generally, Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420, 440 [41]-[45] (French CJ, Gummow, Hayne, Heydon and Crennan JJ). See further, Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182, 191-192 [20] (French CJ, Gummow, Crennan and Bell JJ).

[168] See further, s 52 of the Wrongs Act, which provides:

In determining liability for negligence, the plaintiff always bears the burden of proving, on the balance of probabilities, any fact relevant to the issue of causation.

[169] (2007) 234 CLR 330.

[170] Ibid 337-338 [18] (citation omitted).

[171] [2005] HCA 62; (2005) 223 CLR 422, 461 [124].

[172] [2003] HCA 51; (2003) 215 CLR 317.

[173] Ibid 330 [38] (emphasis in original). See further, Shoalhaven City Council v Pender [2013] NSWCA 210 [53]-[54]. See also s 49(b) of the Wrongs Act 1958.

[175] State Disease Control Headquarters.

[176] See Dr Millar's evidence-in-chief in T558, and his cross-examination at T697 - T 698.

[177] See further, the reference to the establishment of a Local Working Team in paragraph 11 of the minutes of the 16 January 2006 teleconference, which was to "act as the 'Local Disease Control Centre' if the results of EM are positive" -as they were.

[182] Plaintiff's closing submissions, Tab 5, paragraphs [96]-[100].

[183] Plaintiff's closing submissions, Tab 5, paragraph [84(d)]. See also T1340.29 - T1341.27 and T1343.3 - T1343.7. Cf paragraph [40] of the plaintiff's written opening where it was submitted that "had the management plan and VAMAADE been implemented ... [the disease] would not exist in ... wild abalone".

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

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

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

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

[192] Cf Clark v Ryan [1960] HCA 42; (1960) 103 CLR 486, 491 (Dixon CJ). See further, HG v R [1999] HCA 2; (1999) 197 CLR 414; Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705; Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588; Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99; Matthews & SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Limited (Ruling No 9) [2012] VSC 340. As to Clark v Ryan, note further the statement by the plurality in Dasreef that the admissibility of opinion evidence is to be determined by the provisions of the Evidence Act, rather than by any attempt to parse and analyse particular statements in decided cases divorced from the context in which those statements were made; Dasreef[2011] HCA 21; , (2011) 243 CLR 588, 604 [37].

[193] See further, Dr Millar's evidence at T575.2 - T 576.10.

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

[196] [1959] HCA 8; (1959) 101 CLR 298.

[197] The epidemiologist being more relevant to quantum issues in any event.

[198] [2003] ACTCA 24; (2004) 153 ACTR 1, 17 [69].

[199] [1959] HCA 8; (1959) 101 CLR 298.

[200] See further, Kuhl v Zurich Financial Services [2011] HCA 11; (2011) 243 CLR 361, 384-5 [63]-[64]; Wodonga Regional Health Service v Hopgood [2012] VSCA 326 [64] and [69].

[201] To which Dr Millar was only briefly taken in cross-examination: see T827.31 - T828.2.

[202] Equally, it seems to me that one can only speculate where the disease or virus was between late January 2006 and 17 March 2006. Was it latent on SOM as was theorised in some evidence, or was it already in the wild (but not yet detected by anyone), or was it both latent in SOM and in the wild? The inability to do other than guess as to these matters impedes one's ability to make a conclusion on the balance of probabilities that any particular step or steps would have made a relevant difference to the outcome in this case.

[203] See s 51(1) of the Wrongs Act.

[204] See generally, Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420, 443 - 444 [54] - [57], noting in s 5D(2) of the Civil Liability Act 2002 (NSW) the phrase "in an exceptional case" is used rather than "in an appropriate case", which is used in s 51(2) of the Wrongs Act.