Ryan v Great Lakes Council - [1999] FCA 177 - FCA 1999 case summary — Zoe

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Ryan v Great Lakes Council

[1999] FCA 177

Federal Court of Australia|1999-03-05|Before: Wilcox J

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Court

Federal Court of Australia

Decision date

1999-03-05

Before

Wilcox J

Source

Original judgment source is linked above.

Judgment (79 paragraphs)

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NEGLIGENCE - Representative claim on behalf of consumers of oysters who contracted hepatitis A from contaminated oysters - Growing area management standards and practices - Whether local authority had a duty of care to oyster consumers in respect of the manner of exercise of its statutory powers - Whether breach of duty - Causal connection to hepatitis A epidemic - Whether State government had duty of care to consumers - Breach of duty and causal connection - Whether breach of duty by oyster growers and distributors - Quantum of damages - Apportionment. TRADE PRACTICES - Proceedings "against manufacturers" of goods - Unsuitable goods - Goods that do not correspond with their description - Goods of unmerchantable quality - Defective goods causing injury - Misleading conduct in the form of an implied representation as to quality - Breach of implied condition of merchantable quality. Trade Practices Act 1974, ss 52, 71, 74A, 74B, 74C, 74D, 75AA, 75AD and 75AK

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GRANT RYAN, SCOTT CALLAGHAN, KEVIN GOWER, DAVID HOLNESS, GEOFFREY BENNETT, BRYAN HOCKING and BROSOW HARDY v GREAT LAKES COUNCIL, GRAHAM BARCLAY OYSTERS PTY LTD, CLIFT OYSTERS PTY LTD, M W & E A SCIACCA PTY LTD, TADEVEN PTY LTD, THE OYSTER FARMERS ASSOCIATION OF NEW SOUTH WALES PTY LTD, R A KING (WHOLESALE) PTY LTD, MANETTAS LIMITED, SHONID PTY LTD T/AS TIM & TERRY OYSTER SUPPLY, VICTORIAN FROZEN FOOD DISTRIBUTORS PTY LTD, GEORGES OYSTERS PTY LTD, SMITHS OYSTER SERVICE PTY LTD, STATE OF NEW SOUTH WALES and GRAHAM BARCLAY DISTRIBUTORS PTY LTD NG183 OF 1997 WILCOX J SYDNEY 5 MARCH 1999

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(i) The proceeding 4 On 13 March 1997 Grant Ryan commenced this proceeding by filing an Application so framed as to take advantage of the representative procedure available under Part IVA of the Federal Court of Australia Act 1976. He sought common law damages and statutory compensation, on behalf of himself and "all persons who as at the date of the filing of this Application had purchased and/or consumed oysters grown and/or cultivated in Wallis Lakes … which were the subject of the contamination alleged in paragraph 9 of the Statement of Claim accompanying this Application … and who as at the date of the filing of this Application had suffered loss and damage thereby …" Paragraph 9 of the Statement of Claim referred to oysters "not reasonably fit or fit at all for human consumption" by reason of contamination with the hepatitis A virus. The Application named as respondents the Great Lakes Council and 13 companies who were alleged to be growers or distributors of Wallis Lake oysters. 5 As a result of various applications, the parties were re-defined. Some respondents were dismissed from the proceeding by consent. New respondents were added. An issue arose as to Mr Ryan's capacity to act as a representative party in relation to claims against oyster growers and distributors whose product he had not himself consumed. On 18 September 1997 I ruled Mr Ryan was not competent to maintain a representative action against a person in relation to whom he had no personal claim: see Ryan v Great Lakes Council (1997) 78 FCR 309. However, I subsequently gave leave Mr Ryan to amend the proceeding in such a manner as to join additional applicants; each being a person who made a personal claim against a particular grower or distributor and was therefore competent to represent other group members who had claims against that grower or distributor. 6 Following that grant of leave, the applicant's solicitors filed a Reamended Application in which they added new respondents, including the State of New South Wales, and substantially restructured the lines of claim. This document re-defined the group members to whom the proceeding relates as being 185 people named in 11 annexures to a Re-Amended Statement of Claim. Each annexure lists the group members who claim against a particular respondent. All 185 people claim against Great Lakes Council ("the Council", the first respondent) and the State of New South Wales ("the State", the 19th respondent). Fewer people claim against each of the other 12 surviving respondents, all alleged to be growers or distributors of oysters. 7 The largest oyster grower at Wallis Lake is the second respondent, Graham Barclay Oysters Pty Ltd ("Barclay Oysters"), whose distributor is the 20th respondent, Graham Barclay Distributors Pty Ltd ("Barclay Distributors"). Not surprisingly, given their sales volume, these two companies (collectively "the Barclay companies") attracted more claims than other growers and distributors. 8 Numerous cross claims were filed. It was obvious that, if any applicant was held entitled to succeed, there would be a lively contest as to the location of the ultimate burden. 9 In this situation there was discussion at directions hearings as to the best method of managing the trial. On 8 April 1998 I directed that the trial of the proceeding commence on 7 September 1998 but only as to: (a) issues of liability and quantum of damages in respect of Mr Ryan's personal claims; and (b) issues of liability relating to Mr Ryan's representative claims against the Council, the State and the Barclay companies. 10 The rationale behind this direction was that in complex litigation it is generally best to focus first on significant common issues. Once they are determined, non-common issues tend to fall away or be agreed between the parties. I envisaged a trial as directed would resolve the key issues raised by the claims: whether the Council and/or the State was liable to all claimants (there being no suggestion of a reason for differentiating between them); the position of the largest grower and distributor in relation to the many group members who made claims against them (the determination of which was likely to cast light on the position of other growers and distributors); and the damages appropriate to be awarded in what was seen as a medically typical case. 11 Consistently with this approach, at a later date when all cross-claims were filed, I added a third topic to the September agenda: (c) all cross claims as between any of the first, second, 19th and 20th respondents and Mr Graham Barclay personally, but excluding the quantum of any damages (other than damages by way of indemnity or contribution) suffered by a cross-claimant. (Some cross claimants alleged a loss over and above whatever damages or compensation they might be required to pay to group members; for example, loss of sales. Most of these claims have now been abandoned.) 12 The trial commencement date was put back to Monday, 14 September. On that day the Court convened at Forster, the largest town in the Shire. Forster lies on the eastern and south-eastern shores of the lake. It is separated from Tuncurry, which is on the northwestern shore of the lake, by a channel, Cape Hawke Harbour, that provides a permanent opening between the lake and the South Pacific Ocean. A road bridge links the two towns. 13 At the commencement of the hearing appearances were announced as follows: Mr T K Tobin QC and Mr J B R Beach for Mr Ryan ("the applicant"); Mr H Nicholas QC and Mr T G R Parker for the Council; Mr P Taylor SC and Mr M J Windsor for the State; Mr C R R Hoeben SC and Mr A Coleman for the Barclay companies; Mr D J Fagan SC for alleged growers M W & E A Sciacca Pty Ltd ("Sciacca") and Tadeven Pty Ltd ("Tadeven"), the eighth and ninth respondents; Mr M Jones for alleged distributors, R A King (Wholesale) Pty Ltd, Manettas Limited, Shonid Pty Ltd, Victorian Frozen Food Distributors Pty Ltd and Smiths Oyster Service Pty Ltd (respectively the 11th, 13th, 15th, 16th and 18th respondents); and Mr K P Rewell for another alleged distributor, the 17th respondent Georges Oysters Pty Ltd. 14 After an opening address by Mr Tobin, and in company with representatives of the parties, I undertook an inspection of sites selected by the parties. They included locations in Wallis Lake and Wallamba River and on land. Next day the Court heard evidence from several local witnesses. At the conclusion of that evidence, the hearing was adjourned until the following day at Sydney, where the hearing proceeded, with minor interruptions, until 2 October 1998. Most parties later made additional submissions, in writing.

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(ii) The hepatitis A virus 15 Alan Maxwell Murphy has worked as a virologist for some 50 years. He spent 25 years (1959 to 1984) as Chief Virologist at the Institute of Clinical Pathology and Medical Research, Sydney, an institution funded by the New South Wales government. In 1984 he established a private practice in Sydney known as Viral Diagnostic and Referral Laboratory. This laboratory is mainly concerned with doing tests for individuals suspected of having a viral infection. Although Mr Murphy recently retired from full-time involvement in the practice, he is still a part-time consultant. From time to time Mr Murphy has lectured in virology at the University of Technology and Sydney University. He is the author or part-author of 84 published papers. 16 Mr Murphy gave evidence on behalf of the applicant concerning the hepatitis A virus ("HAV"). He said the virus multiplies, and is symptomatic, only in humans. The incidence of the disease viral hepatitis A ("VHA") in the community is reported at about 11 cases per one hundred thousand persons per annum. However, Mr Murphy said, infections are under-reported; some infections are subclinical and therefore not investigated, and some clinical cases are not reported. In his statement of evidence Mr Murphy gave this additional information about the virus: "HAV is spread by the 'faecal-oral route'. This means that HAV spreads when excreted in faeces of humans and is contracted when humans ingest material contaminated with faeces. A person suffering from HAV may excrete 108 viruses per gram of faeces. The greatest excretion is in the two weeks before the onset of jaundice. Once ingested it is thought that HAV multiplies in the lining of the gut. It is then transferred to the blood stream and carried to the liver. HAV attacks the cells in the liver and at this stage becomes symptomatic. Common symptoms are anorexia, nausea, fever and jaundice. HAV is considered to be a highly infectious virus. This means that only a small number of viruses are required for an infection to result." 17 Mr Murphy went on to refer to studies that "show the prevalence of antibody to HAV increases steadily with age so that the antibody is thought to be present in approximately 40% of adults at 40 years and in excess of 95% of adults above the age of 60". This means only about 60% of adults aged 40 years who ingest the virus will contract the hepatitis A disease; and only about 5% of adults over 60. 18 Another witness who spoke of the effects of HAV infection was Clement Boughton, Consultant Emeritus in Infectious Diseases to Prince Henry Hospital and the University of New South Wales. Professor Boughton said in young children viral hepatitis A is commonly subclinical (no recognisable symptoms). In older subjects a clinical attack of acute viral hepatitis A has an incubation period of between 15 and 50 days; commonly about 30 days. In his statement of evidence, Professor Boughton spoke about the symptoms and progress of the disease: "Initial symptoms are often non-specific influenza like, that is, shiveriness, generalised aches and pains, headache, malaise, anorexia and fever. There may be a period of several days of acute fever with temperatures rising to 39 degrees Centigrade. This is then commonly followed by nausea, vomiting and the appearance of dark brown urine. Other symptoms of VHA include itchiness of the skin, profound lassitude, right upper abdominal discomfort due to a tender distended liver and pale bowel motions. The clinical presentation of VHA can be explained by the physiological effects of HAV on the human body. HAV enters the body orally after being consumed. It travels to the gut and is transported by the blood stream from the gut to the liver. The virus invades cells of the liver. When healthy, the cells in the liver convert the haemoglobin from red blood cells into bile pigments. The bile pigments are ordinarily excreted to the bile duct and the gut. In the gut the bile pigments are broken down further before being excreted. It is bile pigments that cause faeces to look brown. When HAV invades liver cells it damages and then destroys the cells. The function of the liver cell is disturbed and bile pigments are not broken down. The capacity of the liver to excrete bile pigments to the bile duct and gut is reduced. Higher concentrations of bile pigments are instead retained in the blood stream. The higher concentration of bile pigments in the blood stream can cause the skin and the whites of the eyes to appear yellow. Moreover, blood is filtered through the kidneys. The higher concentration of bile pigments can cause urine to turn dark brown or black. Because more pigments are passing into the bloodstream and kidneys and less are going into the gut, this causes the faeces to have a pale appearance. The attack on the cells of the liver also causes the liver to swell. This causes a damming of venous blood from the gut into the liver which creates congestion in the stomach; this can result in loss of appetite and nausea. The pylorus may then go into a spasm stopping food passing into the gut with which it cannot cope. These spasms can cause vomiting. Any severe generalised infection causes tiredness and lassitude. However, the liver is the powerhouse of the body. It converts fat and starch to glucose and regulates the blood sugar level of the body. Because HAV impairs the functioning of the liver, tiredness and fatigue are accentuated. Attacks can vary greatly in severity from person to person. A mild attack may produce slight jaundice and indisposition lasting two to three weeks. A severe attack, however, can be prolonged with jaundice lasting several months. It is not known conclusively what factors influence the severity of the illness in individuals. The following general observations can be made:- a. the greater the infective dose the more severe the resulting illness. This is because the virus is already present in the body in large numbers and can therefore invade many more liver cells in a short time; b. attacks are more severe for older sufferers; c. people with vigorous immune systems experience a particularly severe illness. If a large number of liver cells are attacked by the virus the immune system may respond by very rapidly destroying the infected cells. The loss of a large number of liver cells very quickly can cause severe inflammation of the liver and can be destructive to the liver." 19 Professor Boughton said there was no antibiotic treatment for viral hepatitis A. The disease does not commonly run a chronic course, but complications may occur. In a small number of cases, the patient suffers continuing lethargy and rapid fatigability. Dealing with the typical case, he said: "Whilst the presentation and severity of VHA varies between sufferers, generally sufferers recover following a period of rest. Nursing care is often required during this period. In severe cases hospitalisation may also be required, particularly when intravenous fluids are required to correct dehydration. Where a VHA sufferer has nobody to provide nursing care admission to hospital may be indicated. In the very acute stage, sufferers often have a fever accompanied by sweating and shivering requiring bed linen to be frequently changed. When sufferers are able to cope with food they need meals prepared for them. Commonly, a person with the illness:- a. is unlikely to be capable of normal household tasks, such as cleaning, food preparation or looking after children; b. will need to be absent from work; c. may require assistance with personal hygiene such as toilet and washing."

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(iii) HAV and oysters 20 Oysters are filter feeders. They process 10 to 20 litres of water per hour, sucking in the water by movement of their gills and extracting from it particles of matter that enter the oyster's alimentary canal and are subjected to the oyster's normal digestive processes. Some particles are retained, others are excreted by the oysters. Particles may contain, not only nutrients, but pathogens, including viruses. HAV is one such virus. Because the oyster relies on a process of concentrating matter, any viral contamination of the oyster is likely to be at a level of concentration far exceeding the concentration of the virus in the water. 21 HAV does not attack the oyster but will ordinarily be retained in the oyster's flesh. If a person consumes the oyster, Professor Boughton explained, the HAV will survive the consumer's gastric acid and pass into the small bowel and on to the liver, where it will have the consequences set out above. Professor Boughton noted that HAV "is able to survive for prolonged periods in the environment, in foods, in fresh, brackish or salt waters and in particulate matter suspended in such media". He said "This is of epidemiological importance should waters in which molluscs are cultivated become faecally contaminated." 22 There is some uncertainty as to the longevity of HAV in the environment. Mr Murphy said: "HAV is an extremely hardy virus. It can survive pH levels ranging from pH3 to pH9, and heating to 60oC for one hour. It can survive in the environment for periods of three months or longer. The major factor which influences the survival of HAV in the environment is the exposure of virus particles to heat and light. HAV particles that are exposed to these elements are likely to die off more quickly than three months. However particles in sediment or in damp or dark surrounds (such as in septic tanks) are likely to remain viable for a more significant period of time. HAV is inactive in the environment, which means that it does not multiply." 23 Mr Murphy said viruses in the environment "tend to attach themselves to other particles either in sediment or in living organisms". He also stated: "HAV tends to be more difficult to remove from an oyster than E-coli bacteria. There are a number of hypotheses as to why this is so: a. HAV is a smaller particle than E-coli and it is possible that it migrates from the gut of the oyster into the flesh of the oyster; b. HAV is more likely than E-coli to find a cell with which to link. This can mean that the virus is more firmly attached to the oyster and less likely to be dislodged." 24 Gerhard (Gary) Grohmann, has worked in the field of microbiology, particularly virology and public health, for over 20 years. During that time he has worked with Mr Murphy on several projects and co-authored papers with him. Dr Grohmann is currently a director and principal consultant of Environmental Pathogens Pty Limited, a private testing laboratory, and Chief Scientist and Head, Immunobiology (Vaccines), TGA Laboratories, Department of Health and Family Services, Canberra. He also lectures in virology at the University of New South Wales. Dr Grohmann was called in this case on behalf of the eighth and ninth respondents. He put HAV's ability to survive in the environment even higher than did Mr Murphy. Dr Grohmann said: "In contrast to bacteria, which typically only survive for a matter of hours in the environment, enteric viruses, including Hepatitis A virus, are very hardy and can survive in the environment for weeks and sometimes years, remaining a potential threat for the whole of that time." 25 Dr Grohmann went on to mention an American study that found viruses in sediment 17 months after sludge disposal had ceased. He himself had found viruses in sediments near cliff edge sewerage outfalls up to two years after sewerage discharge had ceased. He explained: "Viruses often attach themselves to debris and sediment and indeed to each other. As a result, viruses can often accumulate in great numbers in sediment near sewage effluent outfalls…. These viruses … will survive for long periods in the environment, at least several weeks and possibly years. The result of this is that 'reservoirs' of viral material will form near effluent discharge points via virus attachment to sediment and debris. When these reservoirs are disturbed by environmental forces such as tidal movements, rainfall, wind and the like, those viruses become resuspended into the water column, and may be redistributed into the surrounding area. Due to the concentrations of viruses in these 'reservoirs', the impact on recreational and shellfish gathering areas of sediment re-suspension at such times can be much greater than the impact of 'fresh' effluent. This is particularly the case where the 'reservoirs' consist of soft or 'fluffy' sediments which can be easily disturbed by turbulence (rain, tide, environmental disturbances)".

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(iv) Depuration of oysters 26 In June 1978 there was an outbreak of gastroenteritis, involving at least 2,000 people, that was traced to the consumption of oysters grown in the Georges River, Sydney. The oysters were contaminated with Norwalk virus, a virus that has properties similar to HAV. Mr Murphy explained: "They are both small viruses of similar size. They are both relatively resistance to heat, liquid solvents, low levels of chlorine and other disinfectants. They both have a high degree of infectivity. This means that a small number of virus particles are capable of initiating an infection. It has been calculated that 10-50 Norwalk particles will result in infection. It is my opinion that a similar number of HAV particles will initiate infection." 27 Following this outbreak, in the period 1981 to 1983, it became mandatory for oysters grown in New South Wales to be depurated for a period of at least 36 hours. Mr Murphy described the process: "Depuration is a process where oysters are placed in tanks of clean and disinfected estuarine water. The water is disinfected by ultra-violet radiation or ozone treatment. I am advised that all of the depuration facilities in use at Wallis Lake use ultra-violet light as a disinfectant. Ultra-violet light, given correct conditions, will destroy all viruses and bacteria it comes into contact with. Ultra-violet light will not destroy viruses and bacteria with which it does not come into contact. The effectiveness of ultra-violet light as a disinfectant depends on the following: a. The maintenance of the equipment used in the depuration tanks; b. The turbidity of the water in which the oysters are depurated; c. The capacity for ultra-violet light to come into contact with each viral or bacterial particle." 28 Mr Murphy said that the effectiveness of depuration as a mechanism for eliminating HAV from oysters depends on the oyster excreting all particles of virus while in the depuration tank and the viruses then being destroyed by the ultra-violet light. He went on: "If the surrounding water is heavily contaminated and an oyster takes up a large number of HAV particles, it is unlikely to excrete all these particles during a 36 hour of depuration. In my opinion, 36 hours is an inadequate period of time for depuration. The longer an oyster is depurated for the more likely it is that it will excrete more particles. It therefore follows that the longer the period of depuration, the more HAV is likely to be excreted. However depuration has been shown to be not entirely effective in ensuring the safety of shellfish. While oysters depurated in tanks functioning properly will most likely reduce their viral and bacterial load, they will not necessarily excrete all viruses from their system. In 1981 a study was published by the Institute of Clinical Pathology and Medical Research, Sydney; Health Commission of New South Wales; and New South Wales State Fisheries which found that oysters still contained Norwalk virus even after seven days of depuration. The study concluded that depuration of shellfish was not entirely satisfactory as a means of protecting public health." (Emphasis added) 29 Dr Grohmann expressed a similar view. He said ultra-violet depuration, when carefully performed, yields satisfactory results but added: "However, virological results are not always satisfactory as shellfish may still contain enteric viruses after purification if the waters are heavily polluted due to uncontrollable environmental factors. The fact that viral outbreaks still occur via contaminated oysters, despite oyster depuration, indicates that current depuration techniques are not always effective in removing pathogenic viruses." 30 Mr Murphy was Chief Virologist at the Institute of Clinical Pathology and Research when depuration was introduced. He said: "Depuration for 36 hours was introduced in New South Wales as a compromise between scientific principles and commercial pressures. Whilst depuration should in principle reduce the presence of human viruses in oysters it will not remove them completely". 31 The truth of these statements is effectively conceded in a 60 page booklet published by the New South Wales Department of Health: Purification Technology for New South Wales Oysters. It was written by Philip D Bird, Technical Adviser to the Department's Oyster Program. In the second edition of the booklet, published in 1991, Mr Bird described the purification process and commented: "All micro-organisms are not removed including those organisms which invade the oyster tissue e.g. some types of viruses and vibrio bacteria under certain conditions. Given suitable lengths of time (months in some cases), the oysters have a high chance of overcoming the invasion of some types of viruses but this cannot always be guaranteed. … Purification has been used overseas since the 1920's and extensive research has been conducted throughout the world including New South Wales to determine the optimum system and conditions for effective purification. Purification is the only current viable alternative today in New South Wales for the economic production of raw oysters which affords the least risk to public health. It is not a perfect system and will not guarantee the absolute public health safety of raw oysters, however, on a cost-risk basis it is the only alternative. It must be supported by regular testing of oyster harvest areas to monitor large and extended periods of sewage pollution which are likely to pollute oysters to a degree which makes them incapable of effective purification." (Emphasis added) 32 The limitations of 36 hour depuration were graphically demonstrated in the summer of 1989/90 when some 1,200 people suffered gastro-enteritis as a result of Norwalk or Parvo viruses in New South Wales oysters, and again in the Tweed River viral outbreak of August-September 1996. 33 The expert witness called by counsel for the Barclay companies also conceded the limitations of depuration. This was Christopher Martin Burke, a Lecturer in the School of Aquaculture in the University of Tasmania. In a written report tendered in evidence Dr Burke said: "While it is apparent that most studies have reported reduced viral numbers after depuration, it is clear that depuration, as currently practised, is likely to fail to ensure the safety of shellfish all of the time. This is not so much a case of if, but rather when. The problem with viruses is that they are able to adsorb somewhere within the shellfish and resist removal. If they are able to resist inactivation within the shellfish, then they will retain infectivity and present a health hazard. Hepatitis A and Norwalk viruses fall within this category. In my opinion it is NOT possible to state unequivocally that commercial deputation can always completely remove Hepatitis A and Norwalk viruses from shellfish."(Original emphasis) (v) Water quality testing 34 Mr Murphy commented that "the inadequacy of depuration magnifies the need for other devices to reduce the risk of viro contamination of oysters". One of these devices is the monitoring of water quality, a procedure that all the experts regarded as useful, although subject to significant limitations. 35 The experts who gave evidence in this case agreed there is presently no practicable method of directly detecting the presence of HAV in estuarine water. However, it is possible to test water for bacteria, whose presence indicates the likelihood of human faecal contamination. Dr Grohmann explained: "Bacterial indicators were developed to control enteric bacterial diseases particularly in the days when cholera, typhoid and dysentery were prevalent. Bacterial indicators have no relationship to the absence of viruses in polluted waters or even in effluent. The reasons for this include: (a) The different survival characteristics of bacteria and viruses; bacterial indicators and most bacterial pathogens do not survive well in the environment (with some exceptions, for example Salmonella and certain Vibrio species) and at least several thousand organisms are generally required to cause an infection in humans whereas enteric viruses have a very low infectious dose. (b) Differing transport mechanisms. Bacteria do not attach to suspended sediment in the same way as viruses; and (c) Different treatment effectiveness. Treatments that may eliminate most bacteria are much less effective against viruses. For these reasons the absence of bacterial indicators in polluted waters cannot predict the presence or absence of human viruses. Bacterial indicators are, however, useful to show how well a sewerage treatment system is managed and to measure how well a particular component of a treatment process is performing. In addition, they are useful for indicating the presence of some bacterial pathogens … If adequate bacterial standards were not adhered to the risk of bacterial disease would also be extremely high from oysters and recreational swimming in polluted waters. While the lack of bacterial indicators in treated sewage does not indicate the absence of viruses, where there are high bacterial levels from a human effluent source, one can safely assume that levels of viruses will be also high. This is because any treatment which has failed to eliminate bacteria will also have failed to eliminate viruses." (Emphasis added) 36 Mr Murphy expressed similar views. He favoured testing for faecal coliforms (correctly called "thermotolerant coliforms"). There are apparently many subsets of faecal coliform. Some of them appear naturally in the environment. Some are found in the faeces of all warm blooded animals, not just humans. The preferred indicator group is Escherichia coli ("E. coli") which has a strong association with human faeces. The presence of E. coli in water is, therefore, a good indication of recent contamination of the water by human sewage. There was no technical or practical difficulty in 1996 in testing a water sample for the presence of E. coli. 37 It is important to note that the absence of E. coli or other faecal coliforms does not negative the possibility of viral contamination; viruses normally outlive faecal coliforms. Nonetheless, Mr Murphy supported faecal coliform testing, "as a useful tool in detecting the presence of faecal contamination in water". He explained: "This is because faecal coliforms indicate the presence of faecal contamination. The level of faecal coliforms excreted by humans remains relatively constant. Therefore the higher the level of faecal coliform in the water the greater the level of faecal contamination. An increase in the level of faecal coliform would indicate a pollution event." (Emphasis added)

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(vi) Flesh testing 38 Theoretically, there are several methods of detecting the presence of HAV in oyster flesh. However, the only method that achieved any support among the experts, as being feasible from a grower's perspective on a day-to-day basis, was Polymerise Chain Reaction ("PCR"). Even that is problematic. Nicholas John Ashbolt, an environmental microbiologist of 14 years standing, is currently an Associate Professor in the Department of Water Engineering at the University of New South Wales and Deputy Director of the Centre for Water and Waste Technology. For the last 10 years he has specialised in water microbiology, during which time he has worked on projects in several countries. Dr Ashbolt was called on behalf of the applicant. He said this about PCR: "PCR testing involves biochemical amplification of the viral nucleic acids to facilitate their identification. The test however does not discriminate between infectious or non-infectious virus particles. The test must be performed under laboratory conditions by skilled personnel. PCR testing costs between $50 and $200 per sample." 39 Mr Murphy described PCR as "the current method of choice", for flesh testing, and said the process and methodology was known and available in laboratories in November 1996. However, he agreed the test could be undertaken only by trained laboratory personnel. Mr Murphy said some cost could be saved by initially testing for enteroviruses, treating them as a surrogate for HAV. 40 Dr Grohmann thought, at this stage of its development, PCR had no role to play in routine monitoring of viral contamination of oysters. He said PCR tests were still at the research stage in November 1996; tests could be carried out only in a limited number of laboratories with specially-trained personnel. For that reason, they were expensive. But Dr Grohmann had more fundamental reasons for rejecting PCR as a routine testing mechanism. First, at its present stage of development, PCR frequently gives false negatives. Dr Grohmann has no difficulty about accepting a positive result; so he often uses PCR to confirm a suspected contamination. But he said the test often failed to detect a virus; for that reason he does not offer PCR as a routine test at his laboratory. Further, a PCR test destroys the subject. Given that circumstance, PCR can only be used to test samples. But it is legitimate to extrapolate from the result of a sample test only where there is relevant homogeneity between the items from which the sample is taken. Dr Grohmann thought this cannot be assumed in relation to HAV in oysters; because of the propensity of the viruses to cluster together, there might be one contaminated oyster in a bed of uncontaminated oysters; because of the tiny quantity of the virus needed to infect a consumer, that one contaminated oyster may be enough to do so. Even if reliable negatives could be obtained, they would only establish that the tested (now destroyed) oysters were not contaminated. 41 PCR flesh tests are used in Europe to provide information about water quality. There is no reason to doubt this is a useful procedure, both in determining whether particular waters are suitable for the growing of oysters for human consumption and, as an additional precaution, in determining whether to recommence harvesting after a closure caused by a pollution event. However, I am satisfied by Dr Grohmann's evidence it would be unsafe for an oyster grower or a regulatory authority to rely purely on PCR tests as an indication of the absence of viral contamination. This applies whether the person tests immediately for HAV or uses an enterovirus test as an initial surrogate for HAV.

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(ii) The United States 44 The applicant's leading witness on growing area management was David Warren Alton, a recently retired officer of the United States Food and Drug Administration ("FDA"). Mr Alton has a first degree in bacteriology and public health and a Masters degree in sanitary engineering. For a period of over 25 years, until February 1998, he was involved with shellfish sanitation programs in the United States and internationally. From 1992 until February 1998, he was Associate Director for International Programs, Office of Seafood, in FDA. In that capacity Mr Alton was concerned to ensure that foreign countries that sought to export shellfish to the United States met FDA standards, including in relation to growing area management. In essence, as I understand the position, FDA required foreign countries to adopt and enforce a regime akin to the United States National Shellfish Sanitation Program ("the NSSP"). Mr Alton described the NSSP as "a voluntary, tripartite program composed of shellfish producing and receiving states [that is, American States], the shellfish industry and federal agencies". FDA co-ordinates and administers the NSSP. In each participating State, one or more regulatory agencies manages the local shellfish program. Mr Alton said: "A principal objective of the NSSP is to provide a mechanism for certifying that shellfish shipped in interstate commerce meet agreed upon, specific sanitation and quality criteria. The NSSP has procedures that allow a participating state to certify firms handling shellfish products that have passed state inspection. This inspection and certification assures the public health officials in a receiving state that shellfish products from a certified dealer have been grown, harvested, transported, processed, and shipped in accordance with NSSP criteria." 45 Explaining the program, Mr Alton commented that "the concentration of a toxic substance in an oyster can range between 1,000 and 70,000 times that in the water". Although "cleasing" the oyster in clean water is designed to confront this health problem, "it has been shown that cleasing or the commercial process of Depuration is only ever at best likely to partially decontaminate oysters." Mr Alton went on: "Growing oysters in water of acceptable sanitary quality is the first critical control point with which the NSSP is concerned. Growing area classification is thus central to the effectiveness of the NSSP. The essential finding of many studies is that any seafood harvested in polluted water is by definition dangerous for the consumer. 'For more than half a century it has been known that sea water can be significantly contaminated by human wastes and that this contaminated water may be a factor in the transmission of enteric diseases. This may occur either through the direct use of water or indirectly through shellfish which have been exposed to it'." The internal quotation is from a 1956 paper "Survival of Enteric Organisms in Sea Water" by Arnold E Greenberg. The emphasis to Mr Alton's words is mine. 46 Mr Alton described the NSSP approach in these terms: "Shellfish growing area classification under the NSSP is divided into two parts, the sanitary survey and the bacteriological survey. The sanitary survey provides an overall view of pollution sources, types and volumes of sewage, locations of potential point and non-point sources of pollution and an overview of the total environment of the growing area and the impacts of known or potential pollution sources. The bacteriological survey defines the level of viable sewage organisms in terms of indicator equivalents at any given point in the growing area. The importance of the sanitary survey to classify shellfish growing areas can not be overstated. This is the one classification step that experienced shellfish control agencies believe gives them the best answers on the appropriate classification of shellfish growing waters. The bacteriological survey is a supplement to the sanitary survey and confirms the findings of the sanitary survey with some definition of the concentration of indicator organisms." (Emphasis added) 47 Mr Alton said the principal components of a sanitary survey include: "a. an evaluation of the pollution sources that may affect the areas; b. an evaluation of the meteorological factors; d. a review of hydrographic factors that may affect distribution of pollutants throughout the area; and e. an assessment of water quality." 48 After detailing what is involved in each of these components, Mr Alton emphasised that "a sanitary survey must be made of each growing area prior to its approval by the state as a source of shellfish for human consumption"; but it is updated annually and more comprehensively every third year. Both updates involve evaluation of any changes in pollution sources and analyses of water quality samples taken in the preceding 12 months. 49 Dealing with the bacteriological survey, Mr Alton commented that "[as] zero tolerance goal is unachievable, the task for any regulatory agency is to determine what level can be tolerated and still maintain safety and quality". He noted "the most common bacterial indicator group used by the public health community to determine the presence of sewage has been the coliform group". The NSSP manual requires that the total coliform median not exceed 70 per 100 megalitres (with not more than 14 faecal coliforms) and not more than 10% of the samples ordinarily exceed 230 and 43 respectively. A minimum of 15 water samples must be collected from each station in the approved area, the stations being located adjacent to actual or potential sources of pollution and sample collection being timed to represent adverse pollution conditions. Mr Alton commented: "Both the coliform and faecal coliform indicator groups have been used successfully in the classification of shellfish growing areas. Neither group fulfils all of the desirable characteristics of the ideal indicator. The standards are based upon the public health assumption that the presence of viable faecal material in estuarine water establishes a potential for shellfish-borne illness. The shellfish control agency must decide how much viable faecal material will be tolerated in waters that produce filter-feeding shellfish destined for the raw market, and then it must establish and enforce the appropriate standards. With our present state of knowledge, testing for bacterial and viral pathogens in oyster flesh may be an adjunct to, but not a substitute for the use of indicator organisms for the detection of faeces in shellfish waters." (Emphasis added) 50 Mr Alton explained how the information was used: "The results of the sanitary survey and bacteriological survey are utilised to give growing areas one of the following classifications: approved; conditionally approved; restricted; conditionally restricted; or prohibited. All areas that have not been the subject of a sanitary survey are prohibited. Prohibited areas are established adjacent to each sewage treatment plant outfall and other waste discharges of public health significance. An upward revision of an area classification must be supported by an adequate sanitary survey. Maps showing the boundaries and classification of each shellfish growing area are maintained in a central file by the state shellfish control agency. Closures of growing areas are made when pollution conditions exist outside the database used to classify the area. Re-opening of the area will not occur until the area returns to normal for a sufficient time to allow the shellfish to reduce the coliform group of indicator organisms or to reduce poisonous or deleterious substances that may be present in the shellfish meats to acceptable levels." (Emphasis added) 51 Mr Alton continued: "Growing areas are designated as approved when the sanitary survey indicates that faecal material, pathogenic microorganisms, poisonous and deleterious substances are not present in the area in dangerous concentrations. In order to satisfy the Approved classification, growing areas must satisfy stringent water quality standards. These standards are outlined in the Manual at C-8. Growing areas that are subject to predictable pollution events, but otherwise for a reasonable period of time satisfy the approved classification, can be classified as 'Conditionally Approved'. A management plan accompanies the grant of conditional approval. The plan includes:- a. An evaluation of the sources of pollution including the circumstances under which those sources are anticipated as actual pollutants of the growing area; b. The criteria and procedures for area closure and subsequent re-opening; c. The frequency and thoroughness with which the area will be monitored and re-evaluated. An area will be classified as restricted when the sanitary survey indicates a limited degree of pollution. The levels of pollution must be low enough so that relaying (placing oysters in approved growing areas to allow a period of natural cleansing) or depuration are effective to make the shellfish safe for human consumption. Water sampling data is relied upon to identify the level of faecal contamination to which the area is exposed during adverse pollution conditions. Studies are relied upon as a basis for determining the bacteriological quality requirements necessary to ensure that relaying or depuration is effective." 52 Mr Alton then commented on the international situation: "Shellfish sanitation is practiced internationally in a variety of ways. In undeveloped countries there may be little if any control, while in developed countries there are high levels of control. The procedures may vary but the end result sought is protection of consumers from illness caused by consumption of raw or partially cooked molluscan shellfish. Currently there are two primary shellfish growing area classification models. The NSSP, which is a sanitary survey and water sample based classification system and the European Union (EU) model which places emphasis on samples of shellfish meats for classification purposes. A mutual recognition of the EU and US controls for bivalve molluscs is still in discussion in the framework of the Sanitary and Phytosanitary Agreement of the World Trade Organization. Comparison of the US and EU legislative requirements show that they share a similar philosophy in many respects and are likely to deliver similar end results. However, in one important respect they take a different approach, which makes direct comparison difficult. Sanitary controls under both systems are underpinned by a classification of harvesting areas according to the degree of pollution as judged by faecal indicators. The purpose of this classification is to ensure that shellfish are not harvested from polluted areas. For these classifications or grading of mollusc harvest areas EU Directive 91/492 relies on microbiological analysis of shellfish flesh whereas the US FDA National Shellfish Sanitation Program relies on microbiological analysis of growing waters. Unfortunately bacterial counts in shellfish do not directly correlate with bacterial counts in seawater and therefore the equivalence of these approaches for delivering the same level of public health protection is not immediately apparent." (Emphasis added) 53 Mr Alton spoke about visits he had made to ten countries in relation to their shellfish programs. He said that, in general, the countries which had signed memoranda of understanding have met or exceeded the NSSP requirements. They have experienced "very limited numbers of illness outbreaks or problems". He added: "The NSSP requirements are not easy and it is not lightly that a nation undertakes the commitment to safe shellfish. Some of these countries did or are applying the NSSP criteria to a few growing areas used for export of product under the NSSP because of the costs of following the program nationally. Some are gradually applying the standards nationally or as discussed above already have. Our experience is that the system works very well if followed as specified. We are learning more about viruses and indicators yet the tried and true faecal coliform indicator applied to an in depth sanitary survey continues to protect the public health of raw and semi-raw shellfish consumers." (Emphasis added) 54 Mr Alton also commented: "It has been observed that when shellfish are routinely depurated prior to sale that the enforcement agencies and industry members develop a tendency to believe that the situation is well in hand and that the depuration process will solve pollution problems. This unfortunately has been found to not be the case with numerous outbreaks of illness from depurated shellfish taken from improperly classified areas, grossly polluted areas, or areas impacted by human faecal material. It is well documented internationally that virus particles do not completely depurate from shellfish in the short time period of the depuration process (48 - 72 hours). It is also well documented internationally that the normal depuration process does not adequately remove from heavily polluted oysters: bacteria, heavy metals/pesticides, or marine biotoxins (shellfish poisoning). This means, shellfish control programs should have a classification limit on the quality of the growing area water from which shellfish are harvested for depuration. This has been well known in the international community since the 1980's." (Emphasis added) 55 Mr Alton also dealt with the incidence of HAV contamination in shellfish: "Hepatitis A is one of the most serious illnesses associated with shellfish-vectored disease, causing debilitating and chronic infection and even death. The first documented outbreak of shellfish-borne hepatitis occurred in Sweden in 1956, when 629 cases associated with raw oyster consumption were reported. Subsequent to that, hepatitis A cases were reported in the United States. In 1961, several large outbreaks were reported among consumers of raw oysters in Mississippi and Alabama and consumers of raw clams in New Jersey and Connecticut. Outbreaks of hepatitis A have been reported consistently since the early 1960's and the illness continues to be a public health concern today. Worldwide, the illness is reported frequently. The most disturbing recent incident occurred in China in 1988 when more than 292,000 cases (nine deaths) of hepatitis A (associated with the consumption of uncooked, contaminated cockles) were reported in the urban areas around Shanghai. This outbreak clearly demonstrated the need for effective sanitation programs to prevent the introduction of contaminated shellfish into the marketplace and what can happen when the system breaks down or when there are no effective programs in place." (Emphasis added) 56 In the course of cross examination, Mr Alton agreed with Mr Hoeben that a system of grower self-regulation was not effective; "even if there's goodwill on the part of most growers, there's always going to be the maverick … who'll pursue the dollar and won't really care about the general good". Mr Alton also agreed there was sometimes a problem of overlapping responsibilities and jealousies between agencies, so "someone has to actually take charge". 57 Mr Taylor put to Mr Alton that "the United States regime has not had to deal with the situation of an established growing area being brought on stream as part of the NSSP". Mr Alton replied: "No, I wouldn't agree with that. There are growing areas coming on and off and areas that are new. Particularly, we have that happening in States like Alaska or in States where the growing area was not considered, it wasn't used whatever and they needed to classify that." 58 Mr Alton agreed with Mr Taylor that the presence of E. coli is "a good indicator of the likelihood of viral contamination", but the absence of E. coli immediately after the abatement of pollution may be misleading. He gave this evidence regarding the relationship between classification and depuration: "Would you agree with this that current purification technology cannot itself always be relied upon to eliminate viruses from oysters?---That's correct. And the answer would be the same whether or not you were taking oysters from a classified or a non-classified area and applying the US purification technology?---No, I wouldn't agree with that because I believe that if you had a classified area the requirements of the NSSP is that shellfish for depuration have to be at least from an area that meets restricted growing area classification. In the process of doing this you throw in some barriers to viral contamination. But if you don't have those barriers before depuration then it's certainly correct to say that depuration cannot always be relied upon to eliminate viral contamination?---Correct. … And even if one was, for example, in the NSSP program dealing with oysters that had come from a conditionally approved or conditionally classified area the result would be the same would it not that depuration applied to oysters coming from such a source would not even then provide an absolute guarantee of freedom from viral contamination?---No, there's no absolute guarantee. It's designed to reduce the risk and it doesn't happen very often but you could have a problem. Finally, I wonder if I could put this to you and ask you if you would agree with this that extreme caution should be exercised when resuming oyster harvesting operations after oysters and water have been polluted by faecal coliform contamination?---That's correct." (Emphasis added)

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(iii) Europe 59 The European system of management was described by Christopher John Rodgers, an English fish and shellfish microbiologist, who was employed by the United Kingdom government from 1987 to 1993 to advise on the design and construction of shellfish purification plants and is now an aquaculture consultant providing advice to various international agencies. Dr Rodgers gave evidence, by video-link with Spain, on behalf of Great Lakes Council. He confirmed Mr Alton's evidence that the European approach is to use flesh tests for classifying harvesting areas. In his written statement of evidence, Dr Rodgers said Directive 91/492 of the European Union "requires all Member States to classify their shellfish harvesting areas into one of three categories (A, B or C) according to the degree of faecal indicator bacteria present in samples of shellfish flesh". The classification determines the required shellfish treatment regime. 60 Category A areas are those where shellfish flesh tests have shown less than 230 E. coli per 100 grams of flesh. Shellfish from these areas may be sold without depuration. Dr Rodgers said this standard "recognises the lack of an acceptable viral indicator". He went on: "Consequently, it stipulates that in the absence of routine virus testing procedures and the establishment of virological standards, health checks must be based on faecal bacterial counts. In other words there is no routine test for virus presence in shellfish currently in existence in the EU. A non-routine test, based on the polymerase chain reaction (PCR), is but used only by specialist laboratories for experimental and investigative purposes in cases of shellfish related viral infections." 61 Category B areas are those where shellfish flesh tests do not exceed 4,600 E. coli per 100 grams of flesh in 90% of samples. Shellfish from these areas must be depurated. 62 Category C areas are those whose tests record up to 60,000 faecal coliforms in 100 grams of flesh. Shellfish from these areas may be placed on the market only after a relaying period elsewhere of at least two months. Dr Rodgers said: "… there is no provision for harvesting shellfish that exceed the upper limit of the most polluted category. Shellfish from such areas cannot therefore be placed on the market for human consumption and are effectively prohibited for sale." 63 Dr Rodgers referred to the Directive's requirements for shellfish harvesting and transportation and for inspection and licensing of purification centres. He went on: "The main reasons why the EU system (shellfish flesh testing) was adopted in preference to other systems elsewhere (water testing) are largely historical and related to the end product standard. In the decades prior to the adoption and subsequent implementation of the Shellfish Hygiene Directive it was widespread practice across Europe to test shellfish flesh in order to determine their quality. Countries such as the UK, France and Denmark all used various bacteriological methods, related to quality standards, for examination of shellfish, although before the Directive none were adopted as standard procedure. In addition, the end product standard was a measure designed to be applied to the shellfish themselves, since these are the objects of the retail sale and public consumption in their raw state, particularly for oysters. In this way the shellfish were considered to act as sentinels and thus reflect the quality of the growing waters, although the relationship between the levels of faecal coliforms in water and shellfish can vary appreciably. Nevertheless, in general, the levels in shellfish can be expected to be higher than in the surrounding waters. This may be an important consideration after the onset of intermittent faecal contamination (e.g. storm water run-off or accidental spillage) because the shellfish would remain contaminated after the event and after a subsequent improvement in water quality. … The object of each system is ultimately to protect the consumer. In the USA, they take the path of water quality testing, whereas in contrast the European Union takes the path of shellfish flesh testing. Neither is completely able to guarantee freedom of the product from faecal pollution, due to a variety of factors." (Emphasis added) 64 Dealing with viral contamination, Dr Rodgers said: "Heavily contaminated shellfish cannot be adequately depurated, particularly for viral contamination. This natural, biological cleansing action is not sufficient for reducing the contamination to a sufficiently safe level in circumstances where the shellfish may initially contain high concentrations of virus. Some outbreaks of viral hepatitis and gastroenteritis have been attributed to inadequately depurated shellfish taken from heavily contaminated waters. In addition, experimental depuration studies have shown the prolonged persistence of HAV in oysters. Nevertheless, the operating conditions of a purification plant are important to the efficiency of any depuration process. Conditions such as turbid water, old or dirty UV light sleeves, fluctuations in water temperature, incorrect salinity and excess density of shellfish all have a potentially deleterious effect on the tank-based cleansing of shellfish. In addition, the re-contamination of shellfish by the inadvertent introduction of additional (possibly polluted) shellfish should be prevented. For this reason, it is important that clean and polluted shellfish are kept apart, and a system used that ensures that uncleansed shellfish cannot be sent away in error." 65 Dr Rodgers concluded: "In my opinion the system of shellfish hygiene control used in the European Union provides a good basis for ensuring a safe end product for shellfish consumers. However, to my knowledge, no scheme will provide total protection against contracting a shellfish-related viral enteric illness. One way to ensure such a situation does not occur is to prevent the retail sale of shellfish after pollution incidents, such as storm water run-off after heavy rain, in areas likely to contribute high levels of faecal contamination. However, this can be difficult where there are other activities that conflict with growing shellfish. Nevertheless, the regulatory authorities have designed monitoring and control programmes for shellfish harvesting areas in order to protect the consumer. This is despite any variability in methodology and the uncertainties linked to the relationships between the shellfish themselves and faecal pollution. The current control programmes are the best available, given the present understanding of all the variables involved, and they are periodically open to review and improvement. This is achieved as further advances are made in the applied scientific research dedicated specifically to uptake, persistence, elimination and alternative indicators for enteric viruses. Success in these areas will lead to additional consumer safeguards through enhanced monitoring strategies." (Emphasis added) 66 In oral evidence Dr Rodgers mentioned the role of a sanitary survey: "… if you actually have a sanitary survey, and you have good monitoring in place prior to any sort of potential outbreak, you may not actually need to elevate the amount of testing which you routinely undertake, providing you have a historical database which indicates the sort of situation you would expect in any particular area. This type of monitoring program is designed to reduce the risk, providing it is well designed statistically, and the samples are taken regularly. Unfortunately for this type of viral outbreak there are no guarantees that these measures, these risk measures would actually prevent an outbreak because there is still a risk albeit small, even within a carefully designed program that such an outbreak could still occur." (Emphasis added) 67 Under cross examination Dr Rodgers explained further: "But to determine whether something is in the first place a category A, B or C area you need to undertake a sanitary survey for that particular area?---In the case of a new classification the sanitary survey would be part of the initial classification program and in the case of the European Union you would then go on to support that with flesh testing, yes. But if you say had an initial classification of an area as area A you would on a regular, perhaps annual, basis update your sanitary survey for that particular area?---That's right, following further regular testing which if you already have an historical picture of what's happening in the area from a contamination point of view then perhaps your annual testing would be say once every month to maintain a classification or to change the classification if something has happened in the local area to downgrade or even improve a classification, yes, you would have to do that, yes. In terms of a sanitary survey, are you referring to identifying actual or potential points, sources or likely point sources of pollution in that particular area?---Yes, yes." (Emphasis added) 68 Dr Rodgers agreed the European model permits prohibition orders to be made by the relevant local authorities, "closing down the harvesting area if it is unsafe for health reasons after a heavy rainfall event". He then gave this evidence about sample selection: "In terms of the meat testing of oysters that is part of the European model, it is correct to say is it not that you have to have a statistically representative selection procedure in terms of where you take oysters and the quantity of oysters from a harvesting area, for such a model to work effectively?---That's correct. You need to statistically design a monitoring program to cover the extent of your shellfish base and also take into account through the sanitary survey which you've already mentioned where the points of pollution might impinge upon the actual bed and then return to the same point and then once that data is built up it gives you a very good indication as to where the pollution is coming from and also how polluted the shellfish might be, if at all." (Emphasis added)

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(iv) Tasmania 69 Ray Brown is a qualified microbiologist employed by the Tasmanian government. Since 1987 he has managed the Tasmanian Shellfish Quality Assurance Program ("TSQAP"). This program was established pursuant to a Memorandum of Understanding between the Tasmanian government and the Commonwealth Department of Primary Industries ("DPI"). That Department, in turn, made an agreement with the FDA in respect of certification of the Tasmanian shellfish industry under the United States NSSP. After that agreement was made, the DPI, or its successor in administration, the Australian Quarantine Inspection Service ("AQIS"), established a committee of Australian State governments and shellfish producers called the Australian Shellfish Sanitation Advisory Committee ("ASSAC"). ASSAC adopted the Australian Shellfish Sanitation Control Program ("ASSCP"), the purpose of which, according to Mr Brown, "is to safeguard public health through the implementation of sound, uniform standards in relation to the cultivation, harvest, processing, storage and distribution of shellfish for human consumption". He said ASSCP, like the NSSP, "gives primacy to growing area classification … A principle philosophy of the ASSCP is that if shellfish are only harvested from clean, unpolluted waters, then the shellfish will not be contaminated and public health episodes will be averted". (Emphasis added) 70 Mr Brown said there are now about 100 oyster leases in Tasmania covering 1,300 to 1,400 hectares and producing oysters worth $15 to $20 million per year. Under the TSQAP, leaseholders pay an annual fee of $960 per lease. That contribution is matched by the Tasmanian government, to form a program management fund. Mr Brown said all commercial bivalve shellfish growing areas are assessed and classified according to their sanitary quality by TSQAP. "[This] involves identifying and evaluating actual and potential sources of pollution and analysing the impact of these pollution sources on water quality in the growing area." 71 He explained the sanitary classification had three main components: a shoreline survey, bacteriological examination of water samples and bacteriological and chemical examination of shellfish. The purpose of the shoreline survey is "to identify and evaluate all actual and potential point and non-point sources of pollution, which may affect the growing area". Faecal coliform levels are used to determine the bacteriological quality of the water. In relation to bacteriological examination of shellfish, Mr Brown said: "Bacteriological examination is used less frequently than water testing. When utilised, the TSQAP uses the e. colistandard from the food standards code. We ensure that at a minimum 15 shellfish per sample are collected and analysed. It is used particularly in association with analysing whether a growing area is suitable for re-opening after a closure." 72 There are four classifications of proposed shellfish harvesting areas: approved, approved conditionally, restricted and prohibited. Harvest areas are classified as "approved" only where there is no detectable pollution impact and high water quality standards are met. An area may be "conditionally approved" even though subject to occasional pollution impacts, provided these are well defined, predictable and manageable. But there must be a management plan specifying criteria for closure of the harvest area and provisions to prevent harvesting during a closure period and specifying the conditions that need to be met before the area is reopened. Mr Brown commented: "It is common for pollution events to occur after heavy rainfall. In that case, a level of rainfall for the harvest area will be established as the criteria by which the lake must be closed for harvest. A harvest area will not be conditionally approved if there are point sources of pollution directly impacting on the area." 73 Mr Brown said a "restricted" harvest area "does not meet the 'approved' criteria but is not grossly polluted". Shellfish taken from restricted areas must be relayed to an approved area for at least two weeks or subjected to depuration. However, depuration is accepted only "when sufficient studies have been concluded to demonstrate the effectiveness of the purification process to be adopted". Mr Brown sounded a warning about reliance on depuration: "There are known limitations to the capacity of depuration to purify shellfish. If a significant event (such as unusually heavy rainfall) occurs within a restricted area then:- a. the level of pollution in the growing area may be increased; b. If the growing area is impacted by urban run-off then there will also be an increase in the risk of human viral contamination because of the increased presence of human faecal contamination in the water body; and c. The prevailing conditions may result is [sic: 'in'] a physiological stress of the shellfish, which could reduce their capacity to filter feed. These factors are known to combine to further reduce the effectiveness of depuration. Under conditions where the effectiveness of depuration is reduced, a restricted area should be closed for relaying." 74 Mr Brown concluded: "In the absence of a sanitary survey a shellfish growing area must be prohibited according to the ASSCP. Under the TSQAP, if an area is subject to severe rainfall conditions then irrespective of its classification (approved, conditionally approved and restricted) the area is closed for harvest. The area will not be reopened until both water samples and oyster flesh samples have returned to within normal values, based on the database of existing samples. The principle governing the closure policy under the TSQAP is that oysters should not be released for human consumption if there is an unacceptable risk to human health in so doing. It is equally important to examine the effects of secondary rainfall (i.e. after an initial downpour). Additional rainfall may have a critical effect on the re-opening strategy. In the North West of Tasmania, our experience has been that after period of drought, initial rainfall does not tend to cause a marked increase in pollution. However, after the ground is soaked, subsequent rainfall can dramatically increase run off. In my opinion, a prudent person, with:- a. knowledge of the impact of heavy rainfall on an estuary system; b. a lack of information concerning the impact of pollution sources on the oyster growing areas in the system; and c. knowledge of the public health risks associated with human faecal contamination of oysters would do all things available to them to ensure the safety of oysters cultivated within that estuary system. If there was a danger that depuration was unlikely to be effective in protecting public safety, the only option available to such a prudent person would be to recommend a closure of the growing area or to warn against continuing harvest. Consistent with public health principles, an estuary system should remain closed for harvest until such time as testing confirmed that oysters harvested from the area are fit for human consumption." (Emphasis added) 75 During cross examination Mr Brown gave additional information about ASSAC. Because Tasmania and Victoria were the first States to sign a Memorandum of Understanding with DPI or AQIS, they were the foundation members of the Committee. Subsequently, South Australia became a full member. Other States sent observers, one representing the relevant State government and the other representing oyster growers in that State. Mr Brown said that in November 1996 Western Australia and Queensland, "who had fledgling industries", were "in the throes of implementing the program". Asked about New South Wales, he said "They were not embracing it at all". Mr Brown said the New South Wales government observer had always been Mr Philip Bird of the Health Department. Mr Bird started to attend meetings in about 1990; in recent years he had not attended regularly. 76 Under cross examination by Mr Nicholas, Mr Brown made clear that responsibility for the Tasmanian management program rests with the State government (specifically, the Health Department), rather than local government or the growers. The Health Department bears that part of the cost of the program that is not covered by the growers' levy and provides the personnel needed for the shoreline surveys and water bacteriological examinations. 77 Mr Taylor and Mr Windsor, counsel for the State, did not challenge any of Mr Brown's evidence. (v) NHMRC recommendations 78 In 1987 the National Health and Medical Research Council ("NHMRC") published a 20 page booklet entitled "Code of Hygienic Practice for Oysters and Mussels for Sale for Human Consumption". The code was stated to apply "to the estuarine bivalve molluscan shellfish of commercial importance in Australia, i.e. oysters (Crassostrea commercialis, C. gigas) and mussels (Mytilidae), which are filter feeders, may be eaten raw or cooked and are normally consumed whole including the viscera". Crassostrea commercialis ("the Sydney rock oyster") is the species grown in Wallis Lake. After a section containing definitions, the code dealt at length with two subjects: "raw material requirements"; and "plant facilities and other operating requirements". 79 The raw material requirements section of the code was divided into "environmental sanitation in growing areas"; "hygienic harvesting and food protection"; and "transportation". It is necessary only to refer to the material on the first of these topics. It includes the following: "1. Sanitary disposal of human and animal wastes Adequate precautions should be taken to ensure that shellfish growing areas are free from pollution capable of causing pollution of the shellfish, and extreme care should be taken to protect the shellfish from contamination by any wastes. A clean area surrounding the shellfish growing areas should be established and the dumping of all wastes of agricultural, domestic or industrial origin, including wastes from private residences or boats, should be prohibited. 2 Determination of pollution types and sources Surveys of the shoreline should be conducted to determine sources of both domestic and industrial pollution. Sources may include municipal sewage outfalls, industrial outfalls, mine wastes, geophysical contaminants, agricultural activities, nuclear power plants, refineries or other sources. The need to reschedule sanitary surveys will be determined by changes in population shifts caused by commercial development of the shoreline or other factors affecting local population stability. 3 Classification of the growing area When pollution sources have been identified and evaluated, sampling stations for water, shellfish and/or bottom mud should be established and studies conducted to determine the effects of the pollutants on water and shellfish quality. The data should be evaluated by the official agency having jurisdiction and growing areas classified or designated according to official standards and criteria. When interpreting growing area data, the official agency having jurisdiction should take into account variations which may affect the level of pollution during the most unfavourable hydrographic and climatic conditions as influenced by rainfall, tides, winds, methods of sewage treatment, population variations and other local factors, since shellfish respond rapidly to an increase in the number of bacteria or viruses in their environment by accumulating these agents. The agency should also consider that shellfish have the ability to accumulate toxic chemicals in their tissue in concentrations greater than the levels found in the surrounding water. FAO, WHO, or other international or national food standards may be used as a guide to acceptable levels. 4. Growing area control (a) Designated growing areas should be routinely monitored for changes in water quality, and sub-standard areas patrolled to prevent harvesting for purposes other than that established by the official agency. (b) Shellfish unless they are to be purified should not be removed for sale from water which, when examined using the methods prescribed, does not meet the following specifications. (i) the coliform median MPN of the water should not exceed 70 per 100 mL, and not more than 10% of the samples taken should ordinarily exceed an MPN of 230 per 100 mL when examined by a 5-tube multiple dilution test; or (ii) the Escherichia coli median MPN of the water should not exceed 2.3 per 100 ml, and not more than 10% of the samples should ordinarily exceed an MPN of 7 per 100 mL." 80 The section of the code dealing with plant facilities set out depuration requirements. They included a minimum depuration period of 36 hours. (vi) The Shoalhaven program 81 The City of Shoalhaven is centred on Nowra. It contains a substantial portion of the New South Wales south coast and extends inland to Morton National Park. The city has a population of about 82,000 people and relies heavily on tourism, fishery and dairy farming. The city encompasses many estuaries, rivers and lakes including the Shoalhaven River and Lake Conjola, in both of which there is significant oyster growing. 82 Since 1993 Warwick Andrew Papworth has been Environmental Services Manager of the council. In that capacity he has been responsible for the council's Environmental Monitoring Program, commenced in 1991. Mr Papworth said this program attempts, by the collection and analysis of water samples, to provide a body of data by which Shoalhaven Council can judge the long term impact of its development and planning decisions. The program also assists assessment of water quality for the benefit of users of the waterways, including oyster farmers. The city is divided into 21 catchment areas. Samples are taken from a number of sites in each catchment area and tested for various pollution parameters including faecal coliforms. Mr Papworth said that, "if an actual or potential pollution problem is identified or suspected, Council expands the scope of its activity (including studying sources of pollution and specific event testing) in order to identify the source of the problem, monitor it and formulate rehabilitative measures". He gave examples of this being done. 83 Mr Papworth said Shoalhaven Council provides Shoalhaven River and Lake Conjola test results to the local oyster farmers. He commented: "In my experience, the period when water quality is at its worse in the oyster growing areas of the city coincides with periods of high rainfall". 84 In a supplementary statement, Mr Papworth expanded on the purpose of the water tests: "Firstly to sound a warning bell if the results of testing and monitoring depart from established 'base line' data and where there is a potential risk to public health. Secondly, when water sampling results reveal a systematic departure from base lines collated and established over a long period of data collection, investigations are undertaken to identify faecal pollution risks and steps taken to redress problems where possible. For example on several occasions water sampling has revealed potential problem areas which have lead to the investigation of septic tank systems. Some of these systems have in turn been found not to comply with Council regulations. In this way water sampling and monitoring has contributed to the Council fulfilling its regulatory function with regard to public health and environmental management in the City of Shoalhaven." 85 In cross examination Mr Papworth said there were 8,000 to 10,000 septic tanks in the City of Shoalhaven. He agreed they have potential implications for public health and water quality and that illegal pump outs can be difficult to detect. He also agreed that his council's testing program was not designed specifically for the oyster industry; it was designed to provide "a general understanding of long term trends". However, he said the program: "has identified areas where we get elevated faecal coliform readings and then we have then carried out property surveys and identified a certain level of failure rate in systems in that area which required rectification."

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(viii) Dr Burke's view 88 In contrast to Mr Bird, Dr Burke thought a sanitary survey an essential adjunct to depuration. In reply to Mr Beach, he said that in November 1996 a hepatitis A outbreak was "a serious possibility, serious in the sense that you've got to be careful and be worried about it". Later he said he understood the depuration system run by Barclay Oysters was "good by normal industry standards" and gave the following evidence: "But notwithstanding that and without criticising Barclays you're still left with a situation that depuration will not get rid of a problem of contamination by viruses, infection by viruses?---That's true, yes. So what is one to do?---The - the approach is to know what your growing area - where your oysters come from and to understand what the likely pollution is and accept that, yes, you can use depuration to get rid of, say, faecal coliforms and bacteria that could come from sewage but if you've got viral problems then in reality you've got to close down for that period until you're reasonably safe that you will be able to harvest clean oysters. Well, I think that brings me to the other point. I understand your response to Mr Beach who said, well, carry out tests for viruses and you questioned the utility of doing that given the variation you can get between even individual oysters I gather?---Yes, that's correct. You said, well, close down. But how does the grower know when to start harvesting again? Let's assume you've got a rain event that sends up the faecal coliform levels. You would say if you were standing beside him, well, you had better stop harvesting. Then he stops harvesting for a while. When do you say to him it's all right to start harvesting again?---It'd be a combination of - you've had a heavy rainfall and you know that it's caused pollution from a particular source. You've got to know the estuary, where the pollution is likely to come from. What if you don't know that?---Well, that's the first step. The crucial issue is to actually know the estuary and if you haven't done the sanitary survey you are not going to be in a position to say whether or not a pollution source has been stopped, you know, a sewage works is now functioning properly, there's no, storm water overflow or whatever. If you haven't done the sanitary survey, no, you're not going to be able to do it. You'll have to rely on testing the oysters for faecal coliforms and we know that that leaves you open to false negatives for viruses because viruses may be in there with zero E-coli." (Emphasis added)

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(ix) Conclusions about growing area management standards 89 The material set out above justifies the following findings about the proper management of oyster production: (i) depuration for 36 hours is not an adequate protection to oyster consumers against the foreseeable risk of contracting viral disease, including hepatitis A; (ii) that being so, it is good practice to manage oyster growing areas in such a way as to minimise the risk of viral contamination of the waters in which the oysters are grown; and (iii) whether or not growing areas are classified and differing harvesting regimes formally adopted, as in the United States, Europe and Tasmania, a management regime that complies with proposition (ii) requires, at the least: (a) an initial sanitary survey to identify possible sources of pollution of the growing waters; (b) regular update surveys to detect any change in the pollution situation; and (c) regular monitoring of faecal coliform or E. coli levels of the growing area water, by testing samples of the water itself or oyster flesh. This must be done in a systematic manner so as to enable the test results to provide assistance in locating pollution sources and guidance as to the safety of recommencing harvesting after heavy rain. 90 Propositions (i) and (ii) are accepted by all the experts who gave evidence in this case, by those who devised the United States, European and Tasmanian oyster management regimes and by Mr Bird. In relation to those propositions, there is no dissenting voice. 91 In relation to proposition (iii), the only dissentient appears to be Mr Bird. As he failed to give evidence, his reasons are unclear. Mr Bird's position has at all material times been that adopted by the Health Department and, through that Department, the State. 92 The State's failure to recognise the need for items (a), (b) and (c) in proposition (iii) is not only at odds with practice widely accepted outside New South Wales; it leaves oyster consumers exposed to an unnecessary risk of viral disease - from pollution sources that are capable of being detected and rectified. There being no evidence of facts suggesting it is reasonable for those controlling oyster growing areas in New South Wales to adopt a lesser standard of protection to consumers than is required in comparable communities elsewhere, the State's position must be regarded as failing to ensure an adequate standard of management of oyster growing areas. At this stage, I state this merely as a factual finding, postponing consideration of the State's legal duty to consumers.

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THE NEW SOUTH WALES REGULATORY SYSTEM (i) The New South Wales Oyster Quality Assurance Program 93 In April 1992 the then New South Wales Minister for Health Services Management, Mr Ron Phillips MP, published a document prepared by an Advisory Committee entitled "New South Wales Oyster Quality Assurance Program". The document revealed the committee had been established by a previous Minister as a response to "cases of oyster associated food poisoning during 1989 and 1990 and attendant adverse publicity" when "sales of oysters plummeted in response to consumer concern". The committee was chaired by Mr Bird of the Health Department and also comprised a Fisheries Department Officer and three industry committee representatives. One of the industry representatives, David Maidment, was an industry observer at ASSAC; another, Peter Clift, was a Wallis Lake grower. 94 In a section headed "Background", the report noted that New South Wales oyster production had fallen in recent years but annual production was still about 90,000 bags (that is, over 100 million oysters) with a farm gate value of about $34 million and a value to the State economy of about $200 million. Under the heading "Public health implications", the report described oysters' method of feeding and ability to concentrate non-food particles. It went on: "In pristine or clean estuarine conditions this is of no public health consequence however, if the oysters' environment is contaminated or polluted serious problems can arise. … In public health terms the major problems arise from human (and to a lesser extent animal) wastes particularly from sewage outfalls. Human sewage, even when it has received high level tertiary treatment still contains large concentrations of micro-organisms, primarily bacteria but also protozoans and viruses. The vast majority of these are harmless to man but sewage reflects the health of the community and when that community has individuals within it suffering from gastrointestinal disease, the causative bacterial or viral agents will be excreted in high concentrations and if they reach the waterway, may be ingested and concentrated by oysters and other filter feeding animals. If such shellfish are subsequently eaten by man then the disease organism or pathogen will be eaten also and may give rise to disease or illness in the consumer. … Documented cases of food poisoning associated with the consumption of oyster produced in New South Wales date back at least twenty five years and cases may well have occurred prior to then. Urban growth has been rapid within that period and pressures on the waterways used for oyster cultivation have increased along with awareness of the potential health risks involved. It is a matter of record now that over 2,000 cases in 1978 and further outbreaks involving some 1,200 people in 1989/90 arose from the transmission of Norwalk or Parvovirus-like agents causing gastroenteritis in the consumer. Over one hundred human enteric virus types have been identified in sewage, but documented cases of transmission by oysters are limited to the Norwalk and Parvo viruses, other small virus-like agents and hepatitis virus. To date no hepatitis cases have been reported from shellfish in New South Wales, but it must be considered a serious potential hazard. Aside from the obvious necessity to prevent shellfish transmitted disease, outbreaks have attracted very adverse publicity which has been damaging to the image of the New South Wales oyster industry and lately reduced consumer confidence in the face of other perceived safer sources of oysters or indeed alternative products." (Emphasis added) 95 The report described the role of purification, noting its limitations in relation to viruses. 96 The report then turned to the Oyster Quality Assurance Program. After describing what was meant by "quality assurance", it emphasised the role of the New South Wales Health Department "which has the powers of enforcement, investigation and if necessary, prosecution". The report described the United States approach and noted it had extended to other countries (Philippines, South Korea, Japan, France and New Zealand) and was used in Tasmania. The committee commented: "It must be emphasised that adoption of a clean waters classification system by the N.S.W. oyster industry and relevant agencies either for domestic use or for intended export of oysters to the U.S. market is not something which could be achieved overnight. The collection and analysis of the necessary data is an expensive and time consuming exercise and for export purposes, is likely to be subject to detailed scrutiny by U.S. authorities and lengthy negotiations at government level." 97 The committee made no recommendation for adoption of a clean waters classification system. This was apparently not only because classification could not be "achieved overnight"; the committee listed what were said to be "inherent problems and difficulties" in that approach. The first of these was the difficulty of locating pollution from "intermittent sources (e.g. from boats, septic overflows, sewerage system failures on very localised sources)". The second "difficulty" was that, although "one expects increasingly polluted water to give rise to increasingly polluted systems", the extent of pollution of the oyster is affected by the oyster's level of activity - lower in winter than summer. Third, "[v]iruses may remain in water, sediments and shellfish for very much longer than indicator bacteria and so water tested as 'clean' following a pollution incident may not be virus free and neither may the oysters harvested from it". (Original emphasis) Fourth, "[c]lean waters classification may result in some areas being found to be so polluted that oyster harvesting is prohibited". If there are significant stocks of oysters in those areas, they may be illegally harvested and sold without any form of treatment. Fifth, and perhaps this was the real point, classification might undermine mandatory purification. The committee said: "If at some time in the future, certain or all of New South Wales estuaries are classified, it is anticipated that many will meet the approved or conditional criteria for much of the year if not all. Although oyster purification is now a way of life in the New South Wales oyster industry, it is still an added cost of production. Awareness that some areas are clean (i.e. pollution free), will certainly lead to pressure for a change in policy regarding mandatory purification in New South Wales and government (and industry) must address the question well before it arises. If it is not addressed then it can be expected that conformity to the requirement for purification will be adversely affected and this in turn could seriously prejudice all the likely benefits of a statewide quality assurance program." 98 Instead of a classification system, the committee recommended a pollution early warning system and vigilance against developments that would adversely impact on oyster growing areas. It considered the problem of non-participant growers and recommended it be a condition of purification plant licences that all oysters treated in the plants be cultivated, harvested and purified in accordance with an approved quality assurance program. 99 The Advisory Committee presented a Final Report in February 1994. In relation to clean waters classification, it maintained the same approach as that stated in its earlier report. Under the heading "Export Considerations", the committee said: "A small section of the industry, with a view to export, would prefer the establishment in NSW of a Clean Waters Classification system based on the American National Shellfish Sanitation Program (NSSP), funded by Government (be it State or Federal). In developing the NSW Oyster Quality Assurance Program the Advisory Committee recognised that it was essential that the Program provide a pro-active mechanism that could be quickly implemented to deal with the intermittent pollution events that currently effect the microbiological quality of oysters in the domestic market place. It was also recognised that, although it is desirable that estuaries be classified in terms of pollution risk in the future, which can be achieved under the Program, the industry can ill afford the delay required to provide the data to establish such a classification scheme covering all commercial oyster producing estuaries in NSW. However, the NSSP procedures and standards were taken into account by the Advisory Committee during the program development process. The NSSP standards can be met under the program, if the local estuaries so desire, by increasing the testing regimes in their estuaries and carrying out more detailed documentation and auditing required by the NSSP. It is the view of the Advisory Committee that the industry at this stage could not afford to establish and maintain a monitoring program in each oyster producing estuary in NSW as set out under the NSSP. It is the view of the Advisory Committee that it would be more cost efficient and appropriate for NSW to have a limited number of strategic estuaries approved for export under the NSSP through an extension of the Program at a later date. This would provide an affordable opportunity for farmers wishing to export their oysters to relay their oysters in these estuaries for the required period, as specified by the NSSP, prior to export. The establishment and maintenance of a NSSP program in these estuaries could only occur after lengthy negotiations by the industry with Australian Federal, NSW State and US Government authorities." (Emphasis added) 100 The committee firmed up its recommendations concerning non-participant growers, recommending that "[m]embership of an Oyster Quality Assurance Program be made compulsory for all oyster leaseholders either by a condition of oyster lease ownership or oyster sale". (ii) Oyster legislation 101 In 1994 the New South Wales Parliament enacted the Fisheries Management Act 1994. In introducing the Bill for that Act, the responsible Minister, Mr Ian Causley MP, stated "it brings with it the opportunity to bring fisheries management practices in this State into a new era". In the course of his speech, the Minister referred to aquaculture permits: "The major change in the aquaculture section of the bill is the introduction of aquaculture permits over oyster leases, a change which brings the oyster industry into line with the remainder of the aquaculture industry. These permits will now become the tool by which the industry is managed, with the result that most of the operational controls on oyster farmers will be removed from the leases and placed on permits. This will provide greater security over their leases for the oyster industry and make the industry more attractive to lenders." (Emphasis added) 102 The 1994 Act commenced on 13 January 1995. Consistently with the Minister's reference to "management", s8(i) empowered the Minister "from time to time, by notification, [to] prohibit, absolutely or conditionally, the taking of fish, or of a specified class of fish, from any waters or from specified waters". Section 14 made it an offence to take fish in contravention of a fishing closure. The word "fish" was defined by s5 so as to include oysters. 103 Part 6 of the Act (ss142 - 191) was entitled "Aquaculture Management". Section 142 defined "aquaculture" as meaning: "(a) cultivating fish or marine vegetation for the purposes of harvesting the fish or marine vegetation or their progeny with a view to sale; or (b) keeping fish or marine vegetation in a confined area for a commercial purpose (such as a fish-out pond)," but not including certain actions. 104 Section 143 of the Act empowered the Minister to make aquaculture industry development plans. Such a plan could contain provisions describing "areas suitable for aquaculture and the type of aquaculture for which any such area is suitable", "suitable species of fish … for aquaculture in a particular area" and "any other matter concerning aquaculture that the Minister considers appropriate". 105 Section 144 made it an offence for a person to undertake aquaculture except under the authority of an aquaculture permit. Subsequent sections provided a regime for the making and granting of applications for permits. One of the grounds upon which an application might be refused is that it is "inconsistent with any relevant aquaculture industry development plan". Section 156 required the permit holder, if the regulations so required, to pay to the Minister an annual contribution towards the cost (amongst other things) "of monitoring the quality of the environment in which aquaculture is undertaken and of testing the quality of the fish … cultivated". Section 160(1) empowered the Minister to cancel or suspend an aquaculture permit under certain circumstances, including the mismanagement of the permit holder's lease area: see para (i). 106 Section 189 relevantly provided: "(1) The Minister may, by a fishing closure under Part 2, prohibit during a specified period the taking of fish or marine vegetation cultivated under an aquaculture permit from the area to which the permit applies if satisfied: (a) that the area is in such a condition that the taking of fish or marine vegetation from the area ought to be suspended, or (b) that the fish or marine vegetation are, or are likely to be, unfit for human consumption. (2) Any such fishing closure does not prevent the taking of fish or marine vegetation for any purpose authorised by the regulations or the fishing closure. (3) …" 107 Regulations were made pursuant to the 1994 Act, including the Fisheries Management (Aquaculture) Regulation 1995. This Regulation also commenced on 13 January 1995. It contained provisions dealing with permits. Permits were divided into nine categories. Class A permits authorised "extensive aquaculture on public water land". The Regulation was amended on 1 May 1995 so as to include a new Division (Div 4) dealing with New South Wales Shellfish Quality Assurance Programs. An explanatory note to the amending Regulation included the following: "The object of this Regulation is to provide for the determination of a commercial aquaculture industry development plan to ensure that shellfish taken for sale for human consumption from estuarine waters in New South Wales are of the highest quality and, in particular, are free from disease and pollutants. The plan is to consist of a New South Wales Shellfish Quality Assurance Program, which is to include local shellfish quality assurance programs for estuarine waters in New South Wales where shellfish aquaculture is carried on. It will be a condition of all class A aquaculture permits that permit holders comply with the requirements of the New South Wales Program and the relevant local program." 108 The new Division encompassed cll 12A to 12M. Clause 12A contained definitions, including a definition of "shellfish" as "bivalve molluscs". Clause 12B provided: "12B(1) The Minister is required to determine as a commercial aquaculture industry development plan a program to assure the quality of shellfish taken from estuarine waters for sale for human consumption. (2) The plan is to consist of the New South Wales Shellfish Quality Assurance Program, which is to include local shellfish holders of class A permits operate aquaculture farms. (3) The objective of the New South Wales Program is: (a) to ensure that shellfish are taken from estuarine waters to be sold for human consumption only if: (i) the shellfish meet the quality standards specified in or under the program; and (ii) those waters meet environmental standards so specified; and (b) to supervise the co-ordination of local programs; and (c) to ensure that local programs meet the objectives specified in paragraph (a). (4) The Minister is responsible for establishing the New South Wales Program in consultation with the New South Wales Committee. (5) If there is an inconsistency between the New South Wales Program and a local program, the New South Wales Program is to prevail." 109 Clause 12C required the Minister "to appoint an advisory committee, to be called the New South Wales Shellfish Quality Assurance Committee". It was to consist of a chairperson appointed by the Minister, four class A permit holders and the Director of Fisheries or his nominee. The clause also required the Minister to appoint "a local shellfish quality assurance committee for each area or group of areas of estuarine waters to which the New South Wales Program relates". Neither the New South Wales Committee nor a local committee was to be subject to the control or direction of the Minister; but the Minister was empowered to require a committee to reconsider any decision it had made and the Minister had power to remove from office members of a committee. 110 Clause 12D gave the New South Wales Committee responsibility for supervising and administering the New South Wales Program and cl 12E gave local committees responsibility for local programs. Clause 12G made it a condition of a class A permit that the permit holder comply with the requirements of the New South Wales Program and any relevant local program and pay charges levied by the local committee. By cl 12H each holder of a class A permit was required to pay to the Minister a contribution towards the cost of operating the New South Wales Program and the costs incurred in maintaining the New South Wales Committee. (iii) The New South Wales Quality Assurance Committee 111 There was some delay in the appointment of members of the New South Wales Shellfish Quality Assurance Committee. The committee's inaugural meeting was held on 15 December 1995, Annette Fordham being chairperson and Mr Clift and Mr Maidment being amongst the members representing the industry. Steve McOrrie of NSW Fisheries, who attended as an observer, mentioned the possibility of a Memorandum of Understanding permitting the export of New South Wales oysters to Europe, Japan and the United States, possibly covering only one or two estuaries. No decision on that matter was made. 112 The committee appointed a State Co-ordinator, Kate Jackson. She commenced duties on 2 September 1996. Her appointment coincided with an outbreak of gastroenteritis, involving at least 93 people, caused by oyster-borne Norwalk disease in the Tweed River growing area. A report on this epidemic by Mr Bird, dated 6 November 1996, contained these observations: "The outbreak attracted wide national media coverage and oyster sales from the Tweed stopped. A month after the outbreak, sales were still below 50% due to harvesting suspensions and adverse consumer reaction. The Tweed River was closed by NSW Fisheries on 4 September 1996. The smaller harvesting area of Chinderah was re-opened on 18 September 1996 but the major area was still closed by 6 November 1996. A quality assurance program was established to monitor the public health safety of oysters and water in growing areas and indicates a continuing water quality problem. Sewage from the sewerage system, septic tanks and boats are suspected. This incident raises a number of problems requiring solutions: an effective oyster quality assurance program, greater compliance by purification plant operators, hygienic oyster processing, an adequate trace-back system, a more effective public health network, a modern government virology laboratory and greater community and government involvement in addressing sewage pollution of our rivers." (Emphasis added) 113 At the time of Mr Bird's report, only two weeks before the "rainfall event" that seems to have caused the pollution that gave rise to the present claims, there was still no New South Wales Shellfish Quality Assurance Program, as required by cl 12B of the regulations that had come into force 18 months earlier. There was no Wallis Lake local program.

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(i) The 1989-93 water testing program 114 Between August 1989 and late 1993 Great Lakes Council monitored the water quality of Wallis Lake. Brian Anthony Brooker, who was then Council's Senior Environmental Health Officer, or a trainee working under his instructions, took samples every few weeks at ten points on the lake and at the mouths of five stormwater outlets into the lake. The person who took the samples noted the tide or outlet flow conditions, weather and temperature and analysed the samples, in a small Council laboratory, for faecal and total coliforms. The results varied considerably. In some locations, notably the stormwater drains, the faecal coliform reading frequently exceeded the accepted standard of 14 per 100 ml; there were sometimes several thousand faecal coliforms per 100 ml. Even at sites within the lake itself, readings were often in the high hundreds or thousands. Mr Brooker did not carry out any systematic investigation of the cause of these high readings. Neither did he explore the relationship between rainfall events and faecal coliform readings, by deliberately taking samples after heavy rain. This was not because he was unaware of the link between rainfall and increased pollution. Mr Brooker was the author of a report submitted to the Development Committee of Council on 11 June 1991 in the name of the Chief Health and Building Surveyor, John Chadban. That report noted the United States standards for the quality of water in which oysters are grown and commented on graphs prepared by Mr Brooker showing total coliform and faecal coliform counts in the period September 1989 to October 1990. Mr Brooker wrote: "From the graphs it can be seen that water quality for the majority of the year complies with the requirements where oysters are NOT (original emphasis) required to be purified. The times when the water quality does not comply with the U.S. standards generally correspond with times of high rain fall. Fresh water inflow brings with it high bacterial contamination such as sewerage surcharge, urban run off, rural run off, septic tanks etc. Through identification of point sources the level of pollution can be lowered. (Emphasis added) This should have the beneficial affect of decreasing the period of contamination thus increasing times when oysters may be harvested without purification. In addition to reduction of bacterial contamination, the lake system would also benefit from a reduction in nutrient load as the process of reducing bacteria would also reduce nutrients. The relationship between high bacterial levels and fresh water can be further defined by salinity tests to determine the level of fresh water. A correlation between a specific level of salinity and a specific level of contamination would give the oyster industry a high degree of confidence in the water quality at the time of harvesting with the knowledge that purification is or is not required. A further advantage in determining a specific correlation between salinity and bacterial contamination is the time normally required for the lake water to achieve a satisfactory water quality. Given weather forecasting and salinity readings the harvesting of oysters could be programmed according to conditions." 115 Mr Brooker went on to note: "Total Catchment Management systems are being adopted for may [sic: 'many'] river systems and one of the primary considerations of such is water quality. With the information that Council now possesses, a basis for water quality can be formed as a goal for management." 116 The report stated the future program: "It is now proposed to:- 1. increase sampling during rain periods and over tidal variations for the development of salinity bacterial correlations, 2. of point source [sic] to be carried out to locate specific pollution sites." 117 The report concluded with a recommendation that the information, including the future program, be noted. Apparently the Council committee adopted that recommendation. None of the proposed action was taken. 118 In a memorandum to the Council's General Manager dated 19 April 1993, written by him in the name of Mr Chadban, Mr Brooker described the testing programs for Wallis Lake and Smiths Lake as "serving a vital purpose in assessing water quality". But he pointed out the existing program only measured microbial quality; it ignored "biological, physical and chemical parameters which are ecologically more important". The memorandum suggested the Council extend into these areas. It said: "There has been very significant developments in water quality management particularly in the areas of fresh and marine waters, not associated with drinking water quality. Council's laboratory has the capabilities to perform analysis within the physical, chemical and biological parameters and it is likely that this could be extended to pesticides and herbicides in the near future. Council is leading the field of environmental water monitoring and has the potential to develop a water management strategy. This strategy would greatly exceed the benefits of the current programme and also assist the assessment of the current programme while enabling Council to view future development with the advantage of a water management strategy." 119 Notwithstanding the arguments in this memorandum, Council did not extend its testing program. On the contrary, a few months later it terminated the water testing program altogether. Mr Brooker gave evidence this happened as a result of a discussion between himself and Mr Chadban. He said: "We discussed the staff and the resource problem and we came to a decision that for the time being that we'd recommence at a later date." They never did. 120 Mr Brooker said the cost of the testing program was only $2,000 per year. Much of the work was done by trainees; it occupied about four and a half days per month. The decision to abandon testing was taken because the latest trainee had just left and Mr Brooker felt he had insufficient time to do all the work himself.

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(ii) The Wallis Lakes' Oyster Quality Assurance Committee 121 Shortly before the testing program was terminated, a committee was established under the name Wallis Lakes' Oyster Quality Assurance Committee. The members of the Committee were elected at a meeting on 14 December 1992 chaired by the Shire President and attended by 16 local oyster growers, two officers of the Department of Fisheries and some Council officers. Mr McOrrie of the Department of Fisheries explained the concept of an Oyster Quality Assurance Program. In a report to Council about this meeting, Mr Chadban set out information about the program: "The objectives of the policy are:- a. To introduce a program which provides, at estuary level, long term quality assurances in respect of oysters offered for sale for public consumption via industry self-regulation. b. To facilitate an understanding of the oyster farming environment in each estuary so that existing problems can be rectified and future degradation of waterways avoided. It is intended therefore that growers, to a large degree, will control their own destiny by collecting data about their waterway, imposing harvesting restrictions during certain conditions, creating public awareness, undertaking sampling programmes and continually monitoring all sampling results. The responsibilities of the latter are quite onerous and if properly undertaken will guard against the 'pollution scare' that is too frequently levelled against oysters." 122 The Committee met on 22 February 1993. Seven people attended, comprising four growers (including Mr Barclay), an officer of the Department of Fisheries and two Council officers: Mr Chadban and Richard Powell, Council's Water and Sewerage Engineer. One of the growers, Robert Moran, chaired the meeting and was appointed Area Co-ordinator. Mr Chadban was appointed Secretary. The committee adopted the following Preliminary Policy: "Resolved on the motion of M. Verdich and W Snowdon that the following Preliminary Policy be adopted:- 1. That commencing in September/October, 1993, two oyster samples be taken from the four zones within the estuary, before depuration and after depuration, and that this continue on a monthly basis for the duration of the harvest season. 2. Harvesting shall not be permitted when water salinity levels are reduced to below 18 p.p.t. in the harvest area. 3. Harvesting will not be permitted to resume until such times as water tests indicate a salinity level of at least 18 p.p.t. AND that tests on individual oysters meets the required health standards." 123 The committee also resolved to divide the lake estuary into four zones, each of the Committee's grower members being a zone monitor. The idea was that each zone monitor would have responsibility for contacting growers in his zone whenever there might be a question of stopping harvesting because of weather conditions, and negotiating a common decision about that matter. 124 A few days after this meeting, Mr Chadban issued a Media Release. It attributed to Mr Moran the statement that Wallis Lake oyster farmers "have now taken the first step towards controlling their own destiny". Mr Moran was quoted as saying: "For too long farmers from Wallis Lake have been tarred with the same brush as less responsible growers from other areas. We aim to install stringent requirements which will guarantee our product anywhere and people will know that to eat a Wallis Lake oyster is the safest thing they can do." 125 It seems the committee continued to meet every month or two. Judging by the minutes in evidence, its main business was arranging with Microtech Laboratories in Sydney for the projected oyster flesh testing and collecting a $50 levy from each of the local oyster lease holders. However, from time to time the Committee drew Council's attention to possible pollution points of the lake; the evidence does not reveal whether Council investigated them. At least in the period before the HAV epidemic that gave rise to this proceeding, the committee did not formulate a local Quality Assurance Program.

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(iii) The WallisLake Oyster Management Plan 126 Members of the committee - although, apparently, not the committee itself - were involved in a project conducted by Kenneth Robin Brown and others on behalf of the Institute for Coastal Resource Management at the University of Technology, Sydney of which Professor Brown is Director. The Institute received funding from government sources to produce a mariculture study and oyster management plan of Wallis Lake. After consultation with relevant people, including local oyster growers and community groups, Great Lakes Council, the Departments of Fisheries and Conservation and Land Management ("CALM"), Professor Brown's team published two documents in August 1994: Wallis Lake Mariculture Assessment and Wallis Lake Oyster Management Plan. Copies of these documents were sent to the Minister for Fisheries, the Minister for Public Works, the Council and others, including numerous growers. 127 The documents are lengthy. I will refer only to what the latter document said about pollution. "Water pollution from sewage and in the case of Wallis Lake, probably agricultural runoff, poses environmental threats to oyster culture in the Lake. To-date, limited closures have occurred in the Lake, but elsewhere, such closures as in the Georges River are common. Although present regulations intended to diminish [if not eliminate] pollution exist, they are not being enforced. Pollution is allowed to continue and the risks to the oyster farms are increasing, or at least being detected as routine water quality testing increases and improves … In the USA, under federal legislation, rural run-off is being gradually eliminated, thereby reducing nutrients and hence potentially toxic algal production. As indicated previously, pollution not only effects the oyster leases, it also affects all of the shoreline and beaches/parklands that are held in trust by the Crown for the benefit of all the State. In Wallis Lake the main sources of pollution are: Sewage - human and animal Compared to other areas, there is little sewage dumped into Wallis Lake per se, however with increasing development unless adequate safeguards are taken, there are real dangers of effluent and stormwater contaminants entering the Lake. There still appears to be a problem with the Bungwahl Creek site, an old sewage depot. Licences to discharge issued by the New South Wales EPA need to be examined carefully to safeguard the interests of the growers and other lake users. Sewage from boats should be eliminated with better education and enforcement. Boats Small recreational boats in particular are using the Lake in increasing numbers. Not only do many dump raw effluent into the Lake as such small boats are too small to have on board retention tanks. Shore based 'environmentally friendly' toilets could be installed by Council at strategic areas. An education campaign is required to effect hygienic practice. Many health questions arise due to pollution: are the oysters safe to eat? Is an area safe today, still safe tomorrow? These questions also pose a real threat to the marketability of Wallis Lake fish and other products. Consumers sensitivity to the quality and safety of seafood products will be increasingly hard to reverse. Water Quality The oyster industry at Wallis Lake like the oyster industries in other estuaries is not a contributor to the water pollution problem, but is a victim of it. The situation has been likened to the miner's canary, so the oyster industry is an early warning system for the degradation of the aquatic environment. There is a perception that government is reluctant to deal with the water-quality issue. At present, testing is not being done on a uniform and consistent basis. However, as outlined, public confidence in the existence of a clean environment is crucial to the development of and the sustainability of the market for oyster farming products. Because clean water is essential for the industry to exist and prosper, the quality of water conditions of the Lake should be monitored on a regular basis and the results of these tests should be available to the public. Adequate testing for contaminants in both water and in the product is a requirement, not only for the obvious human health issues, but if the industry cannot promote its products with confidence as having come from one of the cleanest and safest natural environments in the state, if not the world, again, industry opportunities shall be lost." (Emphasis added)

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(iv) Evidence of Dr K R Brown 128 Professor Brown was in America during the trial of this proceeding. However, his witness statement was admitted into evidence and he was cross-examined by video-link. His statement dealt with the biology of oysters, their method of cultivation and the risk of accumulation of pathogens injurious to human consumers. He also pointed out the limitations of depuration and summarised the critical features of the regimes adopted in the United States, New Zealand and Tasmania. He concluded: "6.1 The preponderance of international experience demonstrates that the central components of successful quality assurance for oyster production are:- a. Careful and close scrutiny of the environment in which oysters are to be cultivated - the more pristine the environment the better; b. In urbanised areas of existing oyster production, comprehensive pollution surveys should be undertaken designed to identify point sources of pollution. c. Once identified, point sources must be regularly monitored. Such a program of monitoring should include as a minimum regular faecal coliform (e coli) testing as a measure of faecal contamination. In Wallis Lake the peak harvesting period coincides with the busiest time of year for the district in terms of tourism. This places additional pressures on sewerage facilities and septic tank systems. It is particularly important that testing of suspected sources is intensified during this period. d. Management plans for oyster growing areas should be designed and implemented. Central to management of oyster cultivation is testing the quality of water of the oyster growing area prior to harvest. Testing must be statistically valid and take account of the specific characteristics of the catchment (eg tidal movements) and the methodology of harvest. For example oysters are generally harvested at low tide. Tests conducted at high tide will give a better pre-harvest indication of any faecal contamination. e. Suspension of harvesting following defined events (such as rain) is also central to reducing the risk of contaminated oysters being harvested. The duration of any withholding periods should be reliant on testing outcomes following events. 6.2 The quality assurance regime in place at Wallis Lake in the summer of 1996-97 compares unfavourably with the practice of other oyster growing regions in Australia and internationally. This is because: a. at Wallis Lake no detailed pollution surveys had been undertaken to identify likely sources of pollution; b. no apparent monitoring of water quality was occurring at pollution point sources or in oyster leases; c. no effective system was in place to withhold harvesting following events such as rain and/or where elevated faecal coliforms levels were indicated. 6.3 As a result, oysters which were cultivated in waters contaminated with HAV were able to be harvested, depurated and sold to consumers without the presence of HAV being detected. 6.4 Had a comprehensive quality assurance regime, of the kind described above, been in place at the time, it is my opinion that consumers represented in the current proceedings would not have contracted HAV from Wallis Lake oysters. This is because: a. A detailed pollution survey would have identified the likely sources of pollution, such as caravan parks, the unsewered township of Nabiac, the risk of pollution from recreational boaters and campers, and storm water drains carrying urban run off into the lake. b. These point sources could then be routinely monitored by regular testing for faecal coliforms; c. The water quality in the oyster lease areas would also have been the subject of rigorous testing. d. In my opinion, elevated levels of faecal coliforms would have been detected during this period at pollution point sources and in the oyster lease areas. Faecal contamination sufficient to contaminate the oysters cultivated from the Lake with HAV would have been reflected in detectable elevations in faecal coliform levels. e. Elevated levels of faecal coliforms at point sources and in oyster leases would have triggered: i. further testing (including viral testing) which would have been likely to confirm the presence of pathogens including HAV; and ii. a withholding period from harvesting and sale; f. Furthermore, the period was marked by heavy rainfall. The rainfall in November 1996 of itself would have caused the harvesting of oysters to be withheld for a period. g. In any event, contaminated oysters would not have been available for consumption by those persons who subsequently contracted HAV." (Emphasis added) 129 The views expressed in this passage were not challenged in cross examination or contradicted by other experts. This is telling but, perhaps, not surprising. The importance of maintaining the water quality of Wallis Lake has long been recognised. This can be seen from a letter dated 11 March 1994 from the New South Wales Environment Protection Authority ("EPA") to the Council commenting on an Environmental Impact Statement for proposed sewerage schemes for Forster and Pacific Palms. The letter made this observation; "The EPA considers the estuarine waters of Wallis Lake and the near shore marine waters to be sensitive. These waters are used for primary contact recreation, are the focus of the region's tourism industry and are the basis of important regional fishing and oyster industries. We believe that the protection of a high water quality standard is critical to the maintenance of these beneficial uses." 130 Professor Brown was asked to elaborate his views. In answer to Mr Nicholas, he explained he would regard Tuncurry-Forster as an "urbanised area" within the meaning of para 6.1(b) of his statement and said pollution surveys should ascertain the points at which pollution discharges into the waterway. Asked whether he had in mind that the water testing to which he referred would be the responsibility of the oyster farmer, he replied: "That certainly would be one possibility. The other possibility of course would be a government agency or a local government agency doing that testing". He agreed that his reference to "other oyster growing areas in Australia" was primarily a reference to Tasmania, but he mentioned South Australia as well. Asked whether he suggested a comprehensive quality assurance regime would have eliminated any HAV risk in Wallis Lake, Professor Brown replied: "I'm suggesting it would certainly reduce significantly the chances of a pathogen being transferred". 131 In response to Mr Hoeben, Professor Brown acknowledged that flesh testing, before the resumption of harvesting after rain, was "a step in the right direction". He also conceded that the pollution survey he envisaged would be "beyond the resources of one or two oyster growers" and would need to be co-ordinated at State or local government level. When Mr Hoeben asked whether it was correct that his Wallis Lake oyster management plan was never implemented, Professor Brown replied: "I believe so. We had very good letters from the Ministers but I believe it was never implemented at all". After this evidence, in further response to Mr Nicholas, Professor Brown explained that his reference in para 6.4(f) to oysters being withheld after rain was a reference to what would have happened under the Tasmanian or United States system. However, when the matter was put to him directly, he said that, even in the absence of such a system, "a prudent farmer would withhold their oysters subject to further testing". 132 Mr Taylor then put a series of questions on that matter: "Mr Brown, you just answered the last question by Mr Nicholas in terms of, it would be good practice for a grower to cease harvesting after a rain event. You remember that?---Yes. It would be good practice for the grower to cease harvest if he was aware that there was no sanitary survey that had been done?---Yes. It would be good practice if he was aware that there was no water quality monitoring going on?---Yes. If he was aware that in the past incidents of high rainfall had produced high level of faecal coliform contamination?---Yes. If he was aware that depuration could not be relied upon to remove viral contamination?---Yes. Again, if he was aware that extreme caution was required before resuming harvesting after incidents of faecal contamination?---Yes. To go back to the answer that you gave Mr Nicholas, the true position is this, is it not: that for a Wallis Lake oyster farmer after rainfall the cessation of harvesting until adequate testing had been done was not just good practice but an absolute necessity?---I believe so." (Emphasis added)

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(v) The Wallis Lake Estuary Management Committee 133 In August 1994 Council decided to establish a committee to be known as the Wallis Lake Estuary Management Committee. The date of the Committee's first meeting is unclear but it was active by March 1995 at least. The minutes of a meeting of 26 April reveal there were representatives of the Council, the Department of Public Works ("PWD"), CALM, the Department of Fisheries, EPA, the Waterways Authority, the National Park and Wildlife Service, a person representing recreational boaters, Mr Barclay representing the oyster industry and two persons appointed by Council as community representatives. At that and subsequent meetings, there was discussion about the Committee's objectives. On 8 June 1995 the General Manager of Council wrote to CALM seeking a grant of $10,000 for studies of Wallis Lake and Smiths Lake. In that letter he described the function of the Wallis Lake and Smiths Lake Committees in these terms: "The Committees will oversee the preparation of a Management Plan for each lake, the aim of which is to sustain a healthy, productive and attractive estuary where balanced and co-ordinated management of resources ensures sustainability of diverse natural systems whilst meeting community needs. The Committees, which have representation from Council, State Government agencies and the local community, are being guided by the Estuary Management Manual in formulating the plans. In accordance with the Management Process it is now ready to proceed with step 2, the preparation of data Compilation studies for each lake." 134 At a meeting held on 26 July, the Wallis Lake Committee resolved the Management Plan is to take priority. Revised objectives stated the plan will be one which: ". analyses the existing condition of the catchment; . identifies issues impacting on the long term (10 year plus) Ecological Sustainability of the catchment; . nominates a range of options for the on-going management of the asset; . recommends a preferred strategy in the form of a plan of action." 135 The Plan was intended to be developed in three phases, the time for each of which was stated in weeks. The total estimate was 51 weeks. In December 1995, the Minister for Land and Water Conservation acceded to Council's request for a $10,000 grant towards the cost of the plan. Notwithstanding this and later additional assistance from CALM, when this case was heard, almost three years later, the plan was still incomplete.

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CONTAMINATION OF WALLIS LAKE (i) The problem at Nabiac 136 Nabiac is a village of about 600 people within the Shire of Great Lakes. It lies northwest of Forster-Tuncurry and about 17.5km away. The Nabiac town area is situated between one and two kilometres north of the Wallamba River, which at that point is a small stream. The land falls gently from the town to the river. Nabiac has no reticulated sewerage system. Residents rely substantially on septic tanks. Some on-site disposal systems use transpiration beds. Mr Brooker estimated there are about 300 septic tanks in the village. 137 In January 1990 Council resolved to investigate the possibility of providing a reticulated sewerage system for Nabiac. PWD was asked to advise. In April 1993 PWD proposed the installation of a reticulated sewerage system to collect sewage and convey it to a sewerage treatment plant located in or near the town, where it would be treated to tertiary level; the effluent would be discharged in a nearby sand dune. The project was estimated to cost about $4 million. 138 On 22 June 1993 the Finance Committee of Council discussed a report from the Finance Manager relating to sewerage works within the Shire. The report said it was financially feasible for the Council to adopt a program, set out in the report, that involved construction of the Nabiac treatment plant in 1996-97. The report was noted and apparently Council officers worked on the basis this would occur. However, according to Mr Powell, delays were incurred in finding a suitable location for the treatment plant. Although Mr Powell told CALM, in a letter of 11 December 1995, that Nabiac was "high on the Council's list" of sewerage projects, it was not until October 1996 that a site was selected. Mr Powell attached to his December 1995 letter a table in which he showed the Nabiac project as "urgent" and gave an affirmative answer to the question: "Public health risk: Aware of any common sewage problem in this community?" He assessed the problem as "annual" rather than "seasonal". He also said he was "aware of run-off to surface water" and there had been community complaints "based on combination of sewage effluent's physical impacts such as odour, flooding, flies, mosquitoes". He named the Wallamba River as "the nearest river to which the stormwater from this community flows". In answer to a question about development of local amenities being deferred due to lack of sewerage services, Mr Powell said in evidence: "What has tended to happen is that they have been built and then the problem of no sewerage has been of concern since then. A good example would be the school at Nabiac which continually has problems with effluent." 139 During cross examination Mr Powell agreed he was aware that stormwater from Nabiac flowed into the Wallamba River and would ultimately reach Wallis Lake. The evidence went on: "Your knowledge at the time was that ultimately sewerage contamination from Nabiac would find its way down to Wallis Lake?---Could find its way down to Wallis Lake, yes. Would find its way down to Wallis Lake as a matter of probability?---It depends on what the contamination is and whether it's still alive at that time. The type of contamination that you were talking about here from human sewerage, faecal waste material is the type of material that would ultimately find its way down into the sensitive waters of the Wallis Lake, is that not so?---That is so but it may not still have been active at that time. You have no idea one way or the other?---I don't know, no, any more than you do." 140 Mr Powell later explained that, when he referred in evidence to a "common sewage problem" in Nabiac, he had in mind: "that the soils of Nabiac and the numbers of people that we're now getting into Nabiac and the other villages were such that it's very difficult to retain the liquid on the site that you're disposing it onto." Mr Powell said this meant the liquid escaped from the site and, depending on volume of flow and saturation conditions, it would find its way into the stormwater system; after a lot of rain there would be a large flow. 141 The evidence confirms Mr Powell's statement to CALM about the receipt of complaints. Graham Newlan purchased a home in Nabiac in about February 1992 and moved there with his wife and four children. The house had a septic tank system. Mr Newlan found problems with the septic tank system when it rained; the family were temporarily unable to flush the toilet or bathe. Mr Newlan gave evidence that, in May 1992, he telephoned the Council and spoke to an employee named Brian Semple. Mr Newlan complained about the smell in Nabiac caused by inadequate sewerage arrangements. He asked Mr Semple when mains sewerage would be installed. Mr Newlan said Mr Semple responded that, if mains sewerage was installed, it would mean an increase in rates. Mr Newlan attributed to Mr Semple the additional comment that, if this happened, Mr Semple would make it known in Nabiac that the rates had risen because of him (Newlan). Mr Semple was called to deny this comment. He said he did not recall the conversation but would have informed any enquirer concerning the funding of mains sewerage that it would result in a significant increase in rates for residents in the affected area. 142 Mr Newlan also said that, on occasions, he saw septic tanks "that had popped", where there was obvious overflow. Mr Nicholas asked him whether he ever went into the property and spoke to the householder. Mr Newlan replied he did not, it was not his position to do that. He agreed overflowing tanks constituted a health problem but said: "it was a bigger issue. It was the health problem at Nabiac itself. The whole of the village is a health problem, not just individuals." 143 Mr Newlan also spoke of the situation at the school. He said: "On several occasions following heavy rain, the lid of the septic tank at the public school across the road from my house popped open and raw sewage was dispersed onto the ground. … This was in about March 1996. Outside the school there is a large stormwater drain which runs under the road and ultimately I understand into a Creek which runs into the Wallamba River." 144 Mr Newlan also mentioned the overflow of the Council septic tank at the Nabiac showground in about March 1996. He said the overflow released raw sewage onto the ground. 145 In response to Mr Nicholas, Mr Newlan conceded he did not report the overflow at the school or showground to Council. Mr Nicholas condemned this omission and submitted that, to the extent it is critical of Council, Mr Newlan's evidence ought not be accepted. However, Mr Newlan did not sit idle. He became involved with the Nabiac Progress Association and, through that body, organised a petition that was presented at a meeting of Council on 22 October 1996. The petition was signed by 155 Nabiac residents; this must have been about half the adult population of the village. The petition read: "We, the undersigned residents of Nabiac, do urgently request the provision of sewerage for our village". Mr Powell acknowledged the petition in a letter to Mr Newlan dated 25 October 1996 in which he announced the Council's decision about "its preferred option" for location of the proposed sewerage treatment works. 146 I do not think it is necessary for me to resolve the issue between Mr Newlan and Mr Semple as to whether Mr Semple threatened to name him as the person who had caused an increase in rates, if the sewerage treatment works were constructed. If this was said, it was intimidatory and unfair. However, I have no hesitation in accepting Mr Newlan's evidence about his observations and concern. The latter is amply indicated by his contemporaneous activity. 147 In any event, Council knew there was a problem in Nabiac. Not only is this clear from Mr Powell's letter of December 1995 to CALM, Mr Semple said he "fielded" about 10 telephone complaints; and he was not even "the right person to speak to" about this topic. Council's knowledge of the problem is demonstrated also by letters of complaint, received before November 1996, that were admitted into evidence. 148 The situation at the school was the subject of detailed evidence. On 27 March 1995 Mr Brooker wrote a letter to the Principal of Nabiac Primary School referring to an inspection he had undertaken two weeks earlier which revealed, amongst other things, that "[e]ffluent was being received into the collection well from no apparent source via the septic tank. This may indicate that stormwater is entering directly into the collection well". He noted the septic tank and collection well had a capacity to cater for only about 80 students, whereas the school population was about 250 students. He said this population would require a septic tank system of 7,000 litres (as against the existing 3,600 litre tank) and a seven day collection well of 35,000 litres (as against the existing three day well of 4,500 litres). Mr Brooker went on: "My responsibilities require me to ensure that public health is protected and to this effect I should require the septic tank and collection well to be increased in size to at least those stated above and that the stormwater be prevented from entering the septic system. However, given the likelihood of the availability of a sewerage system in the near future you may wish to develop a system that ensures that public health is not endangered through the inadvertent overflow of the septic tank system. As an alternative to the works indicated above, you may wish to propose to Council alternatives such as: 1. Enclosing the septic tank collection area with a suitable fence which would limit student access and provide a buffer area should the system overflow. 2. Install an additional collection tank with sufficient capacity to significantly reduce your dependence on a daily collection service. 3. Locate any stormwater infiltration sources and disconnecting them from the system. I would appreciate your advice as soon as possible." 149 On 20 June 1995 Mr Brooker wrote a letter to Mr K Northam of Pacific Highway, Nabiac. The letter said Mr Northam had complained of "septic tank effluent being discharged from a premises at Nabiac impacting on a creek flowing through your property". He went on to say that water samples collected on 1 June 1995 indicated sewerage pollution and said "septic tank effluent would be suspected of being the main contributor", although animals, particularly cows, could not be excluded as possible sources. He concluded: "The main reason for the poor condition of the creek is suspected to result from the failure of effluent disposal systems throughout Nabiac. One corrective action would be to install a sewerage system ensuring that all effluent is removed from the area and treated. Until such action occurs it is unlikely that any significant improvement would result." 150 Two months later, on 7 August 1995, a Council inspector reported on a complaint made by Mrs A Stansel of Nabiac about septic effluent on Crown land near her home. The inspector related the problem to failed or inadequate transpiration pits in two nearby residences. He commented: "The issue is of great magnitude in the Nabiac area as overflow of septic discharge into s/water outlets is an ongoing problem concern". 151 On 2 February 1996 Mr Brooker wrote a memorandum to two other Council officers, including Mr Powell, that read: "On a recent investigation relating to septic tank effluent discharge at Nabiac, I examined a drainage channel which drains a substantial portion of the Nabiac urban area. This drain is affected by high nutrient loads which appear to be a result of both residential development and from the cattleyards. To ensure improvement in public health and reduced environmental impacts, I suggest that for any sewerage scheme you investigate the possibility of connecting the cattleyards/saleyards to the sewerage system, thereby permitting appropriate treatment of this highly contaminated waste." 152 After the HAV outbreak, an Interagency Task Force investigated the situation. The notes of a meeting of that Task Force on 17 March 1997 included the following: "Nabiac School was routinely discharging to a watercourse when DLWC [Department of Land and Water Conservation] inspected last week. This has now ceased." Shortly after the meeting of 17 March, Council gave notices to people who owned seven properties in or near Nabiac whose septic systems had been inspected and found defective.

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(ii) Flow from Nabiac to the lake 153 Counsel for Great Lakes Council submit the applicant failed to prove that septic effluent discharged into the Wallamba River at Nabiac would reach Wallis Lake during the time any viruses in the effluent remained viable. This is a vexed question. Critical to it is the flow in the river, and that is related to the volume of run-off (in turn reflecting the volume and pattern of rainfall and degree of soil saturation) and the extent of tidal influence. 154 There is no evidence as to the time it would take septic effluent to travel down the river from Nabiac to the oyster-growing areas in the lake. However, two hydrological engineers, Ian Pemberton King and Graham Lloyd Hurrell, gave estimates as to the time it would take sewage contamination to travel from Shalimar Ski and Caravan Park to the main body of the lake, after a period of rain like that which occurred between 21 and 24 November 1996. Shalimar is located on the Wallamba River about halfway between Nabiac and the lake. Professor King, who was called on behalf of the applicant, thought contaminant from Shalimar would reach the lake in less than seven days. Mr Hurrell, who gave evidence on behalf of the Council, thought it would take rather longer; he regarded seven days as a minimum period. Mr Hurrell criticised Professor King's estimate because it was based on the rainfall recorded at Forster. Mr Hurrell based his calculations on recorded flows in the Wang Wauk River, which rises about ten kilometres south-west of Nabiac and flows into the Cooloongolook River. Mr Hurrell assumed rainfall in the Wang Wauk catchment would be more likely to reflect that in the Wallamba catchment than would rainfall recorded at Forster. However, he offered no evidence to justify that assumption. The Wang Wauk catchment is closer to the upper catchment of the Wallamba River than is the town of Forster, but this is hilly country. There may be differences in the rainfall patterns in the two catchments. Mr Hurrell conceded during his oral evidence that there were errors in his calculations of estimated run-off. He said he would check the calculations but the position was never clarified. 155 The difference of opinion between Professor King and Mr Hurrell as to the time taken for contaminant to travel from Shalimar to the lake seems not to matter. The range seems to be something like five to nine days, a time well within the lifespan of hepatitis A viruses, especially when the water is turbid because of heavy rainfall. If it were reasonable to assume a constant rate of flow all the way from Nabiac to the lake, the evidence of Professor King and Mr Hurrell would tend to suggest that, after heavy rainfall, Nabiac contamination would take somewhere between ten and 18 days to reach the lake. Unfortunately, the evidence does not directly address the reasonableness of that assumption. On the one hand, the volume of flow must decrease as one travels further upstream; on the other hand, the tidal influence must weaken. Neither of the experts assessed these factors. In response to Mr Parker, Mr Hurrell said pollutants from Nabiac "wouldn't reach the lower estuary area within several months". But he was assuming normal flow conditions; that is, not after heavy rainfall. This is apparent from his immediate addendum that the same statement applies to Shalimar. As already noted, Mr Hurrell thought the proper estimate for Shalimar after heavy rain was seven days plus. 156 Some assistance on the flow question is provided by a 1982 report written by J H and E S Laxton, Environmental Consultants. This report was prepared in relation to a proposed residential development (1,200 dwelling units with shops and other facilities) on a site northwest of Tuncurry, apparently approaching close to the Wallamba River. The consultants established seven sampling stations, the most upstream of which was 1km upstream of Darawauk Junction. This point would be about one-third down the section of the river that lies between Shalimar and the lake. There were four river stations further downstream and another two in the lake itself. The consultants analysed samples from each station taken over a period of six months from August 1981 to February 1982. For comparative purposes, samples were also taken in the Dawson/Manning River system. The consultants reported: "There have been two periods of moderate rainfall so far during the study period. The first period was in October-November and the second in December-January. The effect of the first rain period on the two river systems was very much less than that of the second period. This may have been because the first rain period broke a very long drought and much of the water may have been absorbed into the soil. The second rain period caused those reaches of both river systems under investigation to become almost fully fresh. In the Wallamba River and the Dawson River the fresh water extended right to the bottom but in the deeper Manning River the bottom water was as saline as it had been prior to the rain." 157 Later they said the Wallamba River and Dawson River "became almost fully fresh following moderate rainfall" and added: "Rainfall and subsequent fresh water run-off carries organic matter, solids, nutrients and faecal coliform bacteria into the rivers. The water in both rivers becomes stained by plant tannins following moderate rainfall. Under these circumstances the transparency of the water is greatly reduced." 158 Mr Hurrell agreed this passage describes what he calls "turbidity". He related the break down of turbidity to increasing salinity: "… its depending on the level of turbidity and as the salinity levels rise and after they get above about point six parts per million then the material starts to flock out, so as tide comes in the salinity levels build up a little bit, the water becomes clear more quickly." Even at that point, he agreed, it "would stay turbid a bit" for five days. 159 Mr Tobin referred Mr Hurrell to the Laxton report and asked him whether, when "most of the river is fresh", this water must have been generated by the rainfall mentioned in the report making its way to the sea. Mr Hurrell agreed, although he made the point that the water in the lake itself was of oceanic salinity. As the lake is subject to strong tidal influence, this is not surprising. What is significant for present purposes, as it seems to me, is that after only moderate rainfall the whole of the river (as distinct from the lake) was found to be almost entirely fresh, except at depths below one metre in the lower reaches of the river. Plainly, even a moderate rain event can send a flow of water down the river that is sufficient substantially to resist tidal influences. Under these circumstances, I see no reason to doubt that contaminants released into the river at Nabiac, during or immediately after a period of heavy rain, could reach the lake within ten to eighteen days. Hepatitis A viruses can survive that long, especially in turbid water.

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(iii) Cooloongolook 160 On 8 October 1996 Mr Brooker made a report to the Works and Services Committee of Council relating to "the health and environmental problems associated with inappropriate and failing on-site waste water systems". The report contained a Table setting out the results of random sampling of street stormwater at 10 non-sewered locations. All the samples were taken on 13 August 1996. The Table set out, in relation to each sample, figures for electrical conductivity, phosphate level and faecal coliform level. 161 Most of the locations at which samples were taken lay outside the Wallis Lake catchment area. However, one location was at Cooloongolook, a village that lies beside the Cooloongolook River. The distance in river miles from the village of Cooloongolook to the oyster growing areas in Wallis Lake, along the Cooloongolook River, seems to be a little less than the river mile distance from Nabiac to the oyster areas, along the Wallamba River. The sample taken on 13 August 1996 showed a faecal coliform reading of 3,780,000 cfu/100ml. Mr Brooker described this sample as "grossly polluted with septic tank effluent" and said "it indicated that the effluent is likely to be piped directly to the street gutter". 162 There is no evidence about the flow characteristics of the Cooloongolook River. (iv) Shalimar Caravan Park 163 At the junction of the Wallamba River and a small tributary, Bungwahl Creek, two caravan parks lie side by side. They are the Shalimar Ski and Caravan Park and Wallamba Ski and Caravan Park. Both parks contain substantial mobile homes and numerous caravans. Both cater for permanent residents and casual holiday makers. For a period of almost ten years, from January 1989 until recently, Lesley Westrupp and Ross Carter lived in a mobile home in Shalimar. Initially they had their own septic tank. However, about 1990 the owner of the caravan park constructed a sewerage treatment system, consisting of two tanks with caps and four open pits (holding ponds). The new installation was located only about 15 metres from their home site. They paid to be connected to it. 164 Ms Westrupp, Mr Carter and Ms Westrupp's parents, who visited them in February 1994, all gave evidence about the odours that emanated from the sewerage treatment system. They also gave evidence about liquid emissions. 165 Ms Westrupp said there was a black pipe that led from the holding ponds to wetlands at the back of the park abutting the creek. She said the pipe was crinkled, like an agricultural drain pipe, and was rolled up and kept under a tree when not in use. Ms Westrupp said this pipe was used to drain effluent from the ponds when they were overfull. However, it emerged in cross examination that she had seen this pipe in use on only two occasions. Ms Westrupp also spoke of a white pipe that led from a holding pond to a grassy area that dropped down to the wetlands. Apparently this was a fixed pipe. It was installed in 1995. Thereafter it was frequently used. Ms Westrupp used to hear the pump operating at night. She also observed effluent discharging from the pipe when walking her dog along the grassy strip. Ms Westrupp also described a third outlet, an underground pipe taking water from the holding ponds to a sprinkler system located in the wetlands area. 166 Although Ms Westrupp's description of the various pipes was somewhat confused, there was no challenge to the thrust of her evidence: that effluent was regularly discharged from the holding tanks into the wetlands adjoining Bungwahl Creek. Effluent would inevitably make its way from that point into the Wallamba River. 167 Mr Carter confirmed Ms Westrupp's account of the sprinkler system. He said it was operated by an electric discharge pump that cut in automatically each morning and evening. He also confirmed the use of the white overflow pipe. Mr Carter was challenged about his claim that he complained to the then mayor, Councillor Machin, about the smell emanating from the sewerage treatment ponds near his home but nobody disputed his evidence about the white pipe and the sprinkler system. Mr Carter said that, in May 1997 and following an inspection by the EPA, the sewerage treatment system was removed and the holding ponds filled in. After that date effluent was removed from the septic tanks each day. 168 Documentary evidence confirms EPA involvement at that time. On 27 March 1997 Graham Clarke, Head of the Coastal Operations Unit of the Authority, wrote to each of the owners of the park referring to inspections during February and March 1997 that "revealed that runoff from the irrigation area on your premises is discharging or is likely to discharge to waters". The letters enclosed notices under cl 21 of the Clean Waters Regulations 1972 that contained these recitals: "b. For the purposes of effluent management at the Caravan Park there is an effluent irrigation area on the Premises. c. Runoff from the effluent irrigation area is or is likely to flow into wetlands which drain via Bungwahl Creek to the Wallamba River which flows into Wallis Lake. d. Runoff and seepage are likely to occur from the effluent irrigation area after rain. e. Runoff and seepage from the effluent irrigation area is likely to contain pollutants such as nutrients and human pathogens. f. Samples of soil obtained by the EPA on 12 March 1997 from below the effluent irrigation area and from sediments in the unnamed drainage channel have tested positive for viruses and Clostridium perfringens spore." The notice set out various requirements, in effect to close down the effluent holding structures and use the pump out system. 169 Barry Roberts, who lived in Shalimar Caravan Park between 1991 and October 1997, confirmed Ms Westrupp's evidence about the park's sewerage treatment works and the use of sprinklers to dispose of effluent. He said the caravan park had about 30 permanent residents. There were about 100 caravan sites or camp spaces. He estimated that, at busy times of the year, the park population would be over 300 people. Mr Roberts recounted an incident in May 1997 when he saw people, whom he later identified as being from the EPA, taking photographs and samples and inspecting the sewerage works at the park. He went to investigate and discovered brown sludge in a channel running from the direction of the sewerage holding ponds to Bunghwahl Creek. Mr Roberts telephoned Ross Brylynsky of the EPA. Mr Brylynsky came to the park. Mr Roberts showed him the channel and Mr Brylynsky's team took samples of the sludge. Mr Roberts was not cross examined. 170 Mr Brylynsky was not called to give evidence of the inspection deposed to by Mr Roberts. No evidence was put before the Court as to any analysis of the samples taken in May 1997. However, the applicant tendered a report from Dr Grohmann's laboratory, Environmental Pathogens, concerning 23 sediment samples submitted by the EPA at an earlier date, 13 March 1997. According to a table attached to the report, the samples were collected on 11 and 12 March 1997. Eight samples were identified by the letters "SHA" followed by a number, from which I infer they were samples of sediment collected in the vicinity of Shalimar Caravan Park. All these samples tested negative for HAV and Norwalk virus but one was positive for Reovirus, four were positive for Adenovirus, and five were positive for Enterovirus. Dr Grohmann commented: "The presence of viral nucleic acid in samples indicates that sewage effluent has been discharged in the region. It should be noted that sewage contamination presents a potentially serious public health risk to the community. The risk of viral infectionis high from contact with contaminated water for several reasons: . viruses are constantly excreted into the sewerage system by infected individuals some 15% or more of the population carry and excrete enteric viruses. Most people would have a sub-clinical or silent infection rather than overt disease. . viruses have a very low infectious dose, estimated to be from <5 viruses - 100 organisms . viruses survive well in the environment for some 4 weeks and possibly longer. … The types of viruses present depends on the season of the year and the viruses affecting the community at the time. For example, it is not uncommon for enteroviruses to predominate in late summer - Autumn. Norwalk viruses are often detected during winter - spring. Hepatitis A virus is usually prevalent in Spring - Summer months. Adenoviruses and Reoviruses are usually found throughout the year." (Emphasis added) 171 Ms Westrupp's evidence of the discharge from the holding ponds was also corroborated by her parents, Terry and Joyce Gibbs, who stayed in the mobile home for a couple of days in February 1994 while Ms Westrupp and Mr Carter were in Sydney. Mr Gibbs said, on the first day, as he and his wife took Ms Westrupp's dog for a walk towards the creek, he saw a pipe leading to a drain. He observed a liquid coming from the pipe. It was "very smelly and smelt like sewage". Other liquid, which was not coming from the pipe, was running across the ground and down a small ditch. The ground was "very wet with this smelly liquid". On the next day, Mr Gibbs again observed liquid coming from the pipe and a lot of liquid on the ground. He said it also smelt like sewage. 172 Mrs Gibbs gave similar evidence. Her shoes were "covered in stinking slush. They smelt so bad that I threw them away". On the second day, the ground was again soaked but she was careful to avoid walking in the liquid. Neither Mr or Mrs Gibbs was required for cross examination. (v) Wallamba Caravan Park 173 Ms Westrupp also spoke of a white pipe that led from the Wallamba Caravan Park to the Wallamba River. She noticed it in 1994. Ms Westrupp said: "Effluent was flowing from the pipe where we fished. The effluent smelt like sewage. To the best of my knowledge the pipe was connected to an underground tank at the Wallamba Caravan Park. I am not aware if this pipe still exists but I am aware of it discharging sewage up to 1996. The sand was stained with green slimy discharge around the pipe outlet which was edged with a brown stain." 174 Under cross examination by Mr Nicholas, Ms Westrupp described the effluent from the pipe as "a fluid, green and slimy, yucky fluid". She said she saw it while fishing and did not fish there again. However, she said in re-examination, she continued to see it whenever she walked that way with her dog, about once a week, until the dog died in October 1996. This evidence was not challenged or contradicted. 175 Evidence about Wallamba Caravan Park was also given by Geoff Tonge, who lived with his wife at the caravan park from November 1993 to February 1994 while building a home on a nearby allotment. Mr Tonge deposed to seeing treated sewage effluent being dispersed by a sprinkler system. The system consisted of a number of sprinklers, each about one metre high, joined together by a pipe. The sprinklers sprayed the effluent onto the bank of a small creek flowing into the Wallamba River. Mr Tonge mentioned this in a letter to the Council dated 21 February 1995 in which he expressed concern about the caravan park extending, without permission, over land that had been zoned in such a way as to exclude caravan parks. He said: "An elaborate waste water sprinkler system has also been set up, and the run-off from the system discharges immediately into the gully and the newly formed inlet." 176 This was not the first time the Council had become aware of pollution problems at the park. In June 1990 Council had written to the proprietors of the caravan park, Trevor and Joan Smith, stating that water samples collected on 27 June 1990 from four locations along the Wallamba River adjoining the caravan park had "revealed high readings in both faecal and total coliform bacteria". One of the locations was identified as "seepage water near amenities block". The letter went on: "It is evident therefore from the results that seepage from the transpiration area of the caravan park is flowing into the Wallamba River. Council is aware that you have been investigating measures to install a new mini treatment plant, however, this problem needs to be rectified immediately to avoid effluent discharging into the river. Council is very concerned that the river being a major skiing and bathing area that there would be no alternative other than to post signs on the reserve advising the public that the water is unsafe to swim in." The letter requested Mr and Mrs Smith to take interim measures to rectify the problem until the installation of the mini-treatment plant. 177 At about this time, Mr and Mrs Smith applied to the State Pollution Control Commission ("SPCC" - predecessor of EPA) for approval of a package sewage treatment plant designed by Aeration & Allied Technology Pty Ltd. SPCC sent a copy of that application to Council. It stated that "[e]xcess sludge will be disposed of off site [by] a road tanker" but also envisaged disposal of liquid effluent (to a maximum of 3.6 kl per hour) to an irrigation area. Although one proposed method of disposal was by adsorption trenches, SPCC provided the option of "land irrigation" at a rate not exceeding 30mm per week, with the provision that no effluent be irrigated within 20 metres of any camping site. The proprietors adopted this option. 178 Mr Brooker became aware of that choice in July 1993, if not earlier, when he dealt with an application by Mr and Mrs Smith for a rezoning of land (lot 1) adjoining the caravan park to permit its extension. He questioned the adequacy of the existing sewerage disposal system and referred the matter to the EPA for advice. EPA agreed the existing system was inadequate for the extension but issued a licence for a system with upgraded storage capacity, still using spray irrigation for disposal of effluent. The licence granted by EPA on 1 February 1995, valid for one year, specifies the authorised discharge point of the licensed pollutant as "the defined irrigation area". The relevant discharge classification is "LIKELY DISCHARGE TO WATERS DURING/AFTER RAINFALL, FROM A LAND APPLICATION SYSTEM". One of the conditions of the licence was that "[i]rrigation of waste water must not be carried out if soil moisture conditions are such that surface runoff or ponding is likely to occur". Notwithstanding this condition, Mr Tonge said he observed the effluent sprinkler system in operation in all weather conditions. 179 Council considered a report on the rezoning application at its meeting of 13 June 1995. The report was prepared by its Spatial and Landuse Planner, Stuart Murray. The report mentioned the sprinkler irrigation system and a "canal" that apparently took stormwater from the site to the river. It identified two potential impacts on the Wallamba River arising from the proposed rezoning. The first of them was described as "possible increased water pollution (of the river & canal) resulting from increased boating and effluent disposal from the caravan site". Mr Murray recommended deferral of the rezoning application pending resolution of several issues. 180 Apparently Mr Tonge addressed the council meeting. On 22 June 1995 he wrote to Mr Brylynsky of EPA outlining his concerns. They included the following: "1) The river is already suffering from pollution to the point of causing 'red spot' on fish. 2) The park is unable to cope with existing waste disposal and has been using aerial irrigation in the approximate area of proposed irrigation system (illegal at this time). 3) The peak outflow of waste is during the 2 month Christmas period. This is the time of year when the area is least able to cope with increased effluent. 4) The proposed irrigation area is within a treed area, of clay structure and holds water after less than 5mm of rain. Any runoff would go directly into the illegally dredged lagoon and into the river." 181 Mr Brylynsky responded with a letter in which he stated: "The Environment Protection Authority (EPA) is aware of the potential for water pollution associated with the inappropriate operation of package sewage treatment plants and irrigation areas. We are also aware of the sensitivity of the Wallamba River and are concerned to protect it from water quality degradation. The red spot disease to which you refer is usually associated with acid drainage to estuarine waterways which may occur when wetlands and other low lying lands are drained or excavated. Maps showing the areas where acid sulphate soils may occur have been recently released by the Department of Land and Water Conversation, and may be obtained from the department's local office, or viewed at Council. I advise that the proprietor of the Wallamba Ski Lodge holds a current licence with the Environment Protection Authority for the operation of the site's sewage treatment plant, with specific conditions relating to the operation of the plant and waste disposal area. Treated effluent from the plant is disposed of by spray irrigation, which provides for evapo-transpiration of the effluent. Spray irrigation of effluent may not be undertaken during periods of wet weather. For this reason a wet weather storage tank is in place." 182 Mr Brylynsky also wrote to Council stating he had inspected the premises and confirmed "the treatment system and irrigation area were being maintained in a satisfactory manner and that the operator is complying with EPA licence conditions. No evidence of pollution was observed". He indicated EPA had no objection to the proposed rezoning "provided the operator complies with licence conditions and the wet weather storage capacity is upgraded to 15 days capacity". On the basis of that letter, on 19 September 1995, Council resolved to prepare a draft Local Environmental Plan to rezone lot 1 to permit development of caravan sites. 183 Council received seven objections to the proposed rezoning, mostly from nearby residents (including Mr Tonge). In a report dated 5 March 1996, Mr Murray noted, as the first objection: "Inadequacy of the effluent disposal system to protect the immediate environment and water table from pollution". He disposed of that objection by stating EPA's position. Apparently, no Council officer attended the site to assess the current position. Council resolved to request the Minister for Urban Affairs and Planning to make the Local Environmental Plan. He did so on 13 May 1996. On 4 June 1996 Council approved a development application to establish on lot 1 a caravan park containing 26 static van sites and a gazebo. Conditions were imposed, including upgrading to 15 days the wet weather effluent storage capacity. 184 Mr and Mrs Smith proposed construction of a dam to meet the upgraded storage requirement. This proposal was referred to EPA. On 17 January 1997 EPA replied approving the proposal, subject to the dam being emptied by irrigation as soon as possible after rain. The letter added: "Due to the close proximity of the site of the dam to the ephemeral watercourse which flows to the Wallamba River, Council should ensure that appropriate sediment and erosion control measures are used to prevent the migration of sediments during the construction phase and prior to the re-establishment of vegetation on the site. Council may wish to apply appropriate conditions of consent to ensure that these issues are adequately addressed." 185 A notification on this letter, dated 5 March 1997, indicates it was not passed on to Mr and Mrs Smith because "EPA are at present investigating all caravan parks along the Wallamba River as to the suitability of effluent disposal systems (result of Oyster scare)". Mr Tonge said that, "before the dam got built, we had the problem with the oyster and then they had to pump-out". 186 However, in early December 1996, Mr Tonge had noticed caravans on lot 1 and drawn Council's attention to them. On 5 December 1996 two Council officers, John Matlawski and Eleanor Nunn, investigated the position. They found eight caravans on lot 1, each of which appeared to be unoccupied. In a letter prepared by Ms Nunn, the Director Planning Services of Council informed Mr Tonge of the inspection. Nobody from Council checked the position after the school holidays commenced. Mr Tonge gave evidence that, over the Christmas period, there were campers and casual vans on lot 1, amounting to 50 or 60 people.

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(vi) The Little Street public toilet 187 Little Street, Forster follows the eastern shoreline of Wallis Lake. A public toilet block is situated about half way along its length, some 800 metres north of the Barclay companies' premises. Located nearby is a tank within which waste matter emanating from the toilet is held pending pumping into the reticulated sewerage system. Almost directly behind the toilet, on the lake foreshore, is an establishment known as "Paradise Marina" which offers marine and boat hire facilities. On the street side of the marina, near its main entrance, is a tap and waste water outlet, designed so as to allow waste water to enter the lake. 188 From 1988 until December 1996 the marina was owned by John Robert Millington. He gave evidence that, on about half a dozen occasions during that period, the pumping equipment for the public toilets broke down, with the result that the holding tank filled. Sewage back-flushed and raised the effluent level in the tap waste outlet near the marina entrance. Mr Millington recalled at least one occasion when sewage waste flowed over the paving surrounding the outlet. He said it emitted a strong odour. Each time a breakdown occurred, Mr Millington telephoned the Council and a repair crew attended to fix the pumping system. The Council call-out book contains two entries of late 1996 involving the Little Street toilets. The first shows a call out on 16 October 1996, the work being described as "locate leak in P/S R/M". The book contains a note "repairs effected 17/10/96". It seems that "PS" stands for pumping station. No explanation was given of "RM". The second entry is dated 15 December 1996 and describes the work as "check septic tank pump and get restarted". 189 James Herbert Green is a Boating Service Officer employed by the Waterways Authority, a New South Wales statutory authority. On the morning of Easter Saturday, 30 March 1997, he went to Paradise Marina to make inquiries about a boat. At the marina he noticed a smell like sewage and said to Gordon Young, the new proprietor of the business: "I can smell sewage. Have those toilets started overflowing again?" A female employee replied: "Yes, it has just started overflowing the same as before". Mr Green carried out an inspection and fetched a camera. He took a number of photographs. They show sewage emanating from the outlet pipe at the tap and lying on the surrounding brickwork and concrete paving. They also show a gap at the edge of the paving down which liquid could flow into the lake. Mr Green asked someone to go into the toilet and flush a cistern. When he heard the cistern flush, he observed more sewage came out of the pipe near the tap. Mr Green took samples of the sewage and telephoned the Council. An Ordinance Inspector, Greg Pevitt, attended and carried out an inspection with Mr Green. Mr Pevitt referred to a "reset switch" beside the pump motor. Mr Green turned the switch and the pump started. Mr Pevitt told Mr Green he had previously taken photographs and commented: "There is no lock on the cover to the pump which pumps the sewage up to the sewer line from the public toilet waste tanks and anyone can play with the installation. It's a most unsatisfactory installation". 190 Later that day Mr Green returned to the Paradise Marina. He noticed a Council truck near the toilet and saw that Paul Langley, the Council's Plant Superintendent, was working on the pump. During the course of conversation, Mr Langley said to Mr Green: "This installation has been like that for at least 10 years and I can't understand why Council haven't spent any money on fixing these sorts of installations up when they spend plenty of money fixing other things up". 191 Mr Green issued an infringement notice to the Council relating to the discharge of sewage into Wallis Lake from the public toilets. Two days later, on 1 April, he returned to the marina. He noticed the pump switch was again turned off and saw dozens of cockroaches around and under the pump cover. Some sand and gravel had been used to fill in the gap through which Mr Green had seen sewage discharging into the lake. 192 Two days later, Mr Green received a telephone call from Mr Chadban, the former Chief Health and Building Surveyor (later Executive Manager, Environmental Health and Building Services) of Council, who was by now the Mayor. Mr Chadban said to Mr Green: "I want to tell you how disgusted and disappointed I am at your attitude and the action you have taken". Mr Green replied that he was not free to discuss the matter. 193 Mr Green sent the samples to the Forster Environmental Laboratory for analysis. On 14 April 1997 he received a report indicating a reading of 28 million faecal coliforms per 100 megalitres. 194 On 1 April 1997 Mr Green had a conversation with Mr Barclay in which he referred to the sewage overflow he had witnessed two days earlier. Mr Barclay replied: "You know I've told Chadban about those toilets before. He wrote it in his notebook and said he would get it fixed". 195 On 5 June 1997 Gerard Patrick McDonagh, the then Acting General Manager of Council (now General Manager), wrote to the Waterways Authority in relation to the infringement notice issued by Mr Green. He said the matter had been investigated by Council "and it is clear that the pump was deliberately switched off by a person or persons unknown". This had "caused the tank to fill up and overflow". Mr McDonagh went on: "The electrical wiring on the pump does not allow the 'on/off' switch to switch 'off' or trip out with overload; but has to be turned off manually. The pump can cut out from overload, but it resets and can then continue to do the job although there can be overflow adjacent to the tank in the interim. In the present situation the pump had been deliberately turned off. The cover over the pump is now secured by locking which should prevent a re-occurrence of the problem. The whole pump system is also proposed to be replaced in the next few months." 196 Mr Nicholas objected to the admission of Mr Green's evidence on the basis that it was irrelevant; it referred to observations made after the hepatitis A outbreak. I overruled that objection. I thought evidence as to the condition of the pump and sewage disposal system in March 1997 might cast light on its likely condition a few months earlier, especially having regard to conversations about those matters. Mr Nicholas then made a particular objection to the admission of the response of the unidentified female employee to Mr Green's question on 30 March about the toilets overflowing again. However, I ruled this response was a contemporaneous representation by the woman about her knowledge or state of mind, and therefore an exception to the hearsay rule: see s 72 of the Evidence Act 1995. No objection was taken by any counsel regarding the other statements made to Mr Green. Nor was any challenge made by any counsel to Mr Green's account of those statements. Indeed, he was not cross-examined at all. Mr Langley was not called to deny he had said the installation had been "like that for at least 10 years" and he could not understand why the Council did not spend money "fixing these sorts of installations". 197 Mr McDonagh did give evidence. He was asked about the incident and the letter. He said the pump had been replaced but did not agree it had been defective in March 1997; "it was certainly an upgrading just like you might change your car, you certainly went to some improved model but I can't testify that it was defective". Mr McDonagh agreed that the Little Street toilet installation "was having a problem coping in the peak period". 198 Mr Barclay did not deny telling Mr Green he had previously spoken to Mr Chadban about the Little Street toilets. Indeed it emerged in cross examination that he had complained to Mr Chadban in late 1996. There "had been a problem over many months" in 1996. On one occasion in 1996 Mr Barclay had gone to the marina. A Waterways officer was present. Mr Barclay said "as soon as it started to overflow, the boat proprietor got a shovel and he blocked it off". Apparently this occurred before Mr Barclay arrived. Mr Barclay gave this evidence: "So your understanding is that in late 1996 there was sewage overflow from the Little Street Channel and when you got there the proprietor had blocked off the hole through which it was discharging into the lake, is that right?---Yes, yes. Was the soil around it wet and smelling of sewage?---It was - we call it effluent, yes, effluent. It wasn't raw sewage, it was effluent. Effluent?---Effluent, yes. But it never reached - when I was there it had never reached the water. It was contained. How did you know that, Mr Barclay?---It was contained with a shovel before I got there. A man with a shovel stopped it before you got there?---Yes, yes. You don't know whether it got into the water, do you?---I don't know. I didn't see it go in the water, I've got to - I'm telling the truth. Did you do anything about changing your harvesting practices because of that episode?---Well, it never got in the water. He said it didn't either. He said I saved it. He saved it, did he?---That's what he said to me." 199 The evidence contains a Council internal memorandum of 3 March 1997 written by a junior engineer, Brendan Guiney. In this memorandum, Mr Guiney details the result of inspections by him of various pump stations, including that at Little Street. He refers to a conversation on 26 February 1997 in which Mr Young described an incident "about three weeks ago" when the pump failed and the sewer surcharged through the outlet pipe. He quotes Mr Young as claiming that, on that occasion, he (Young) prevented any of the surcharged sewage escaping into the lake. He also said a Council inspector attended and showed Mr Young how to reset the pump, "since hot weather frequently causes the pump to overload and cut out". 200 In assessing the significance of the foregoing evidence, it is relevant to bear in mind evidence given by Gerard Leo Tuckerman, Council's Environmental Officer since April 1995. Since taking up his appointment, Mr Tuckerman has regularly attended meetings of the Estuary Management Committee for Wallis Lake. He was involved, on behalf of Council, in the preparation by consultants of a Data Compilation Report on the lake. This was completed in April 1996. He was also involved in a subsequent study by consultants concerning, amongst other topics, the fluvial morphology and hydraulics of the lake system. Mr Tuckerman said it would be a matter of concern if raw sewage entered the lake at the Paradise Marina "[p]articularly where you've got oyster production and people swimming". He gave this evidence: "As the environmental officer of the council in 1996, would you agree with me that raw sewage entering at the Pacific [sic: Paradise] Marina would in your view, if it came to your attention, pose an extreme danger to both the Barclay oyster operation further along the street and to The Paddock, the oyster fattening area straight across from the marina. Do you agree with that or not?---Yes, if it came to my attention I would have acted. It could pose a danger." (vii) Islands in Wallis Lake 201 During the course of cross examination, Mr Tobin took Mr Brooker through the Council's records relating to the sanitary survey undertaken in February-March 1997. These records revealed the existence of makeshift toilets on several of the islands in the lake. Many toilets were simply holes in the ground, some within a few metres of the water. Mr Brooker agreed that, before the sanitary survey, he had known that people visited the islands, either to camp overnight or as day visitors from boats. He agreed that overnight campers, particularly, would need somewhere to defecate; he had assumed they defecated on the island. He was aware in 1996 that some of the islands contained unapproved pit toilets. Despite this, no public toilets were constructed until after the sanitary survey. Nor, to Mr Brooker's knowledge, did Council ever remove human excrement from the islands. He gave the following evidence:

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(viii) Watercraft 203 The attachment to the EPA report revealed that the sanitary survey included 31 private watercraft, of which nearly 50% "do not have proper facilities". The document included the comment "MSB Waterways are surveying watercraft and pump out facilities in Wallis Lake in more detail. Early indications are that there are adequate pump out facilities but they are being under utilised". 204 An earlier document, a progress report on the sanitary survey of 5 March 1997, reveals that 20 of these 31 watercraft are pleasure boats, 10 of which had permanent or semi-permanent residents. The progress report stated that only three of the pleasure boats had "holding tanks or other suitable treatment devices. The remaining craft were fitted with 'standard' direct disposal units". (ix) Stormwater drains 205 Some Forster and Tuncurry stormwater drains carried high levels of faecal coliforms to the lake, especially after heavy rain. Since 1995 students at Forster High School had carried out a Streamwatch program in which they monitored the quality of the water at two locations, Lakes Way, Forster Keys, and Kenrose Wynne Drainage Reserve. In each case, apparently, the sampled water was taken from a stormwater drain flowing into Wallis Lake. The students passed on their findings to the Council. A report that was received by the Council on 31 January 1997 summarised the results for the previous twelve months: 16 samples had been taken at Lakes Way and nine at the drainage reserve. Fourteen of the 25 samples showed a faecal coliform level in excess of 300 per 100ml. A sample taken on 1 May 1996, after rain, was analysed at 17,000 cfu/100ml and seven other samples exceeded 1,000 cfu/100ml. 206 These results are consistent with readings taken by Council after the resumption of water testing in late February 1997. Council established 12 locations within the lake from which it regularly took water for analysis. During March 1997 it also took water from five lakeside sites, apparently stormwater drains. Each of these five sites regularly returned readings of more than 300 cfu/100ml. Four of them provided at least one reading of 1,000 cfu/100ml or more. On 6 March 1997 the reading from one site was 22,000 cfu/100ml and, from another, 47,000 cfu/100ml. 207 The evidence does not establish whether the high faecal coliform levels in the stormwater drains, especially after rain, resulted from contamination of the water by sewage effluent nor, if this was the case, the source of that effluent. However, there must be a question about the sewerage pumping stations. The problems relating to the Little Street public toilet pump have already been mentioned. The Council itself recognised this might not be an isolated case. After the HAV outbreak became known, it had an officer inspect all the pumping stations for possible leakage. No leakage was established but in several cases the officer reported on the difficulty of being certain of the position because of lush grass around the pump. 208 On 19 December 1996 the Council received a letter from the Taree District Office of the New South Wales Department of School Education concerning a "very strong odour" emanating from the Council's pumping station in Middle Street, Forster "at numerous times throughout the day". The writer of the letter quoted complaints from school staff and nearby residents and mentioned previous phone inquiries and visits to the pumping station by Council officers. During the course of evidence, counsel attempted to obtain further information about this complaint, but without success. The letter is left to speak for itself. All that can be said is that it suggests the possibility of an escape of sewage effluent at that point. After rain any such effluent would probably be carried into the lake. 209 During the course of cross examination, Mr Beach put to Mr Powell that he knew in March 1996 "that stormwater discharge in periods of heavy rainfall was contaminating Wallis Lake". Mr Powell agreed.

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(i) Council's legal responsibilities 213 The Council exercises powers under the Local Government Act 1993 (NSW). Section 7 of that statute specifies its purposes. They include: "(a) to provide the legal framework for an effective, efficient, environmentally responsible and open system of local government in New South Wales, … (d) to give councils: … a role in the management, improvement and development of the resources of their areas; (e) to require councils, councillors and council employees to have regard to the principles of ecologically sustainable development in carrying out their responsibilities". 214 Section 68 requires council approval before a person carries out an activity specified in the Table to the section. The Table includes "Carry out sewerage work" and "Install, construct or alter a waste treatment device or a human waste storage facility or a drain connected to any such device or facility". The term "sewerage work" is defined in the Dictionary to the Act in wide terms: "sewerage work means the construction, alteration, extension, disconnection, removal, ventilation, flushing or cleansing of any sewerage service pipes or fittings or fixtures communicating or intended to communicate, directly or indirectly, with: (a) a septic tank, an effluent or a sullage disposal system, or (b) any sewer of a council, and includes work of sanitary plumbing and work of house drainage." 215 Clause 45 of the Local Government (Water, Sewerage and Drainage) Regulation (NSW) 1993 provides that, in determining an application under s 68 of the Act for "carrying out sewerage work", the council must have regard, amongst other considerations, to "the protection and promotion of public health" and "the protection of the environment". 216 Section 124 of the Local Government Act empowers a council (amongst other things) to order an owner or occupier of premises: (i) to take action to comply with relevant standards in relation to a "sewerage system on premises"; (ii) to do or refrain from doing specified things "to prevent environmental damage" or further environmental damage, where damage to the physical environment has been caused, or is likely to be caused, by drainage works; (iii) to cease conducting an activity that is a threat to public health; and (iv) not to permit the use of a human waste storage facility on premises after a specified date. The term "premises" is defined in the Dictionary in wide terms. It includes "a building of any description or any part of it and the appurtenances to it" (para (a)), "land, whether built on or not" (para (b)), "a shed or other structure" (para (c)) and "a ship or vessel of any description (including a houseboat)" (para (f)). 217 Section 125 empowers a council to abate - that is, summarily remove or remedy - a public nuisance or order a person responsible for a public nuisance to abate it. 218 Part 2 of Chapter 8 of the Act gives councils extensive powers in respect of inspections and investigations, including on private land: see ss 192 and 197. Section 197 provides: "If a person authorised by a council enters any premises under this Part for the purpose of making an inspection and as a result of that inspection, under a power conferred on the council, the council requires any work to be carried out on or in the premises, the council may recover the reasonable costs of the entry and inspection from the owner or occupier of the premises." 219 Section 29 of the Clean Waters Act 1970 (NSW) empowers an "authorised officer" to enter any premises for the purpose of investigating discharges. Mr Brooker, at least, was an authorised officer under this Act. Section 27 of the Clean Waters Act reads: "27(1) Where any waters, whether or not they are classified waters, are polluted by any person, any statutory authority or local authority may and shall, if directed to do so by the Authority, take such action as is necessary to remove, disperse, destroy or mitigate the pollution and may recover all costs and expenses incurred by it in connection with the removal, dispersal, destruction or mitigation of the pollution from that person. (2) Any such costs and expenses may be recovered as a debt in a court of competent jurisdiction."

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(iii) Council's reaction to the septic tank problem 223 Council officers were aware of the health significance of septic tank pollution. The Council's State of the Environment Report for 1995-96, published in September 1996, includes these passages on the topic of effluent disposal: "In areas still reliant on septic tanks, pollution may occur as a result of seepage from these septic systems. The effluent may contain high concentrations of nitrogen, phosphorous, biochemical oxygen demand (BOD) and pathogenic organisms such as bacteria and viruses. … Seepage from septic tanks may cause damage if unfiltered flows enter directly into waterways. The introduction of nutrients from this source can combine with the nutrient load arising from run-off from agricultural areas and, under certain conditions will reduce water quality through algal blooms and eutrophication problems … The evidence of failure of on-site systems is plentiful. The reasons underlying these failures relate more to the planning, operation and maintenance of systems rather than inherent design faults in the technology. If we are to protect the quality of water in our catchments, the basis upon which systems are selected, installed operated and maintained needs to be altered. Local authorities in many instances need to take a more active role and require support at the State level with the most current information on on-site wastewater management. …" (Emphasis added) 224 Notwithstanding these sentiments, the relevant Council officers decided to give up investigating complaints about septic tanks. On 9 May 1996 Mr Brooker sent this memorandum to his immediate superior, Adrian Braybrooke: "Over the past months I have received a number of septic tank complaints which have remained outstanding. The reason these complaints have not been dealt with is that they cannot be effectively resolved without support and direction from Council. The difficulties with septic tank installations is that any rectification or constant maintenance, such as pumpouts, requires considerable financial resources and these installations tend to be in areas where occupants direct limited financial resources to other areas that they consider to be more appropriate. Another major problem is that the numbers of complaints are relatively small compared to the septic tank installations which are not operating in accordance with the environmental public health requirements and to focus in on those few areas of complaint appears to be discriminatory as many neighbouring properties have similar systems which do not operate satisfactorily. I recommend that no action be taken at this point and that complainants be advised of such as Council will, hopefully in the near future, be receiving a report from the Planning Services Division, with my comment, on the difficulties associated with septic tanks. I hope that this report receives favourable consideration from Council, which may permit the development of policies and community protocol so as to address the septic tank effluent problems as a whole rather than on an individual basis which is currently the practice. RECOMMENDATION 1. That the complainants be advised that a report is being presented to Council concerning septic tank disposal systems. 2. That these complaints be held pending the report to Council." (Emphasis added) On 17 May 1996 Mr Braybrooke endorsed this memorandum: "Agreed. Please formally notify Mgr Bld Services that you are awaiting results of his report to Council. Careful wording of advice to complainants, we are interested in finding solutions. Schedule a review of the situation for 12 weeks time, let's look at the opportunities again then." (Original emphasis) That review never occurred. 225 During the course of cross examination, Mr Brooker claimed that, after he read Mr Braybrooke's comments on his memorandum, he realised a policy of non-response "would be a ridiculous position to take and continued on dealing with complaints". He did not inform Mr Braybrooke of this change in position, at least not in writing. And he agreed he was unaware of any notice about defective septic tanks being issued to any property owner between that time and the HAV epidemic in early 1997. He said: "We negotiate with owners rather than issue notices". But there is no evidence of negotiation with any owner. Mr Braybrooke did not give evidence. I do not believe Mr Brooker changed his position. [For completeness I record that Council's file includes a copy of a letter written by Mr Brooker on 24 October 1996 responding to a complaint by a subdivider of land at Nabiac about the owners of one allotment "emptying their septic tank" over an adjoining allotment. Apparently Mr Brooker had spoken to the offenders. However, this seems to have been a complaint about dumping of effluent, not about a defective septic tank.] 226 In saying there was never a review of the policy suggested by Mr Brooker on 9 May I have not overlooked a report dated 21 May 1996 prepared by Tony Tuxworth, Council's Manager, Building Assessment, with contributions by Mr Powell and Mr Brooker. This was a long report concerning "a number of issues relating to the approval, operation and management of on-site effluent disposal systems within the Council area". Under the heading "Background", the report noted that "on-site waste water management systems often fail to meet environmental and health protection standards which will have a detrimental impact on our waterways and surrounding environment and health of the community". Particular reference was made to "the spread of disease by bacteria, viruses, parasites and other organisms in the wastewater". There was discussion about the various types of on-site management systems including pump-out septic tanks, in relation to which Mr Tuxworth said: "It is not uncommon for premises with pump-out septic tank systems to divert grey water so that it does not discharge to the septic tank. I believe that it is not uncommon for pump-out septic tanks to be pumped out or siphoned by the owner to reduce the cost of getting the tank pumped out by the contractor." Mr Tuxworth made six recommendations: "1. Prepare a policy and guidelines for the installation and use of septic tank systems. 2. Prepare a policy for subdivision of land where sewer is not available. 3. Prepare information to be distributed to owners in relation to the operation and maintenance of septic tank systems. 4. Review the existing system for providing pump out services within the Council area. 5. Prepare a contract and call for tenders for the provision of a pump out service within the Council area. 6. Investigate alternative means of providing reticulated sewerage services in all towns and villages within the Council area and prepare a strategy for the provision of reticulated effluent disposal in all villages and towns." 227 Mr Powell commenced his comment with the words: "I fully agree with the thrust of this report. Great care is taken to ensure that Council's sewerage schemes are well operated and maintained and that the treatment processes are to a very high standard. In contrast in the smaller villages and rural areas, very little control is exercised on liquid waste disposal. Many of the systems just do not work and localised pollution of the environment results." Mr Powell offered some specific comments. They included a proposal for Council supervision of septic tank pump-out contracts and regular inspection of transpiration areas. He observed: "My own experience with both septic and aerated systems are that they can be a gross pollutant unless very carefully managed and maintained. This work can be undertaken at full cost recovery." 228 Mr Brooker's note commenced with agreement "that the problems resulting from the defective septic systems demand action and that the proposed actions 1-6 of the report have considerable merit". He thought recommendations 1, 2 and 3 should "be prepared as one document including an information and an educational kit to owners of septic systems". He wanted a broadening of the review proposed in recommendation 4 but that recommendation 5 be deferred until the completion of the investigation proposed in recommendation 6, the nature of which he wished to vary. 229 The Director of Planning Services added a notation to the report recommending "the information be noted and actions resulting from the briefing be incorporated into a further report to Council". Council resolved "that the Director bring back a more specific report". 230 On 8 October 1996 Mr Brooker wrote the report mentioned in para 161 above. He mentioned the formation of an "Effluent Group" comprising various Council officers, its goal being: "that every residence, premises and place of gathering within the Great Lakes community will have an effective system for the collection, treatment and disposal of sewage. The attainment of the goal will ensure that appropriate methods for the treatment of sewage will adequately protect the environment and the health of the public." Mr Brooker referred to studies in other parts of Australia that had "detailed public health risks resulting from defective effluent disposal systems". He mentioned the presence of viruses in sewage including poliomyelitis, meningitis, pneumonia, acute gastroenteritis and hepatitis. Mr Brooker then referred to tests of street stormwater randomly collected in non-sewered areas on 13 August 1996. The sample locations did not include Nabiac but five of the ten locations yielded faecal coliform levels above 10,000 cfu/100ml. [As already mentioned, the village of Cooloongolook yielded an astonishing 3,780,000 cfu/100ml.] Mr Brooker described the five high figure samples as being "grossly polluted with septic tank effluent". He commented: "the disturbing aspect of these samples is that they were collected from street gutters which are within the public environment exposing the public to risk of disease". Mr Brooker warned Council of its potential legal liability and observed that "Council has no money allocated to this area and no effective policies to protect public health through ensuring appropriate installation of systems and appropriate maintenance". But he made no recommendation for action. Nor did his supervisor, the Director of Community and Recreation Services. The latter contented himself with recommending: "1 That Council nominate representatives to the Effluent Group. 2 That the issues of effluent treatment and disposal from premises with on-site waste water systems be addressed by: a) developing policies for existing and future systems, both within villages and isolated premises; b) development of appropriate effluent disposal systems for each of the unsewered villages; and c) involve the community in the development of these issues." 231 Council adopted this recommendation and nominated two councillors to join the Effluent Group. So far as appears, no action was taken to meet the identified problems before the hepatitis A outbreak which occurred three months later. No inspection regime was put in place until after the HAV epidemic became known. In the course of his evidence, Mr Brooker agreed with Mr Fagan that discussion in the Effluent Group never "actually resulted in anybody going out into the field and doing anything". He conceded he was aware that s 27 of the Clean Waters Act authorised a local government authority to enter premises and rectify problems causing any run-off of faecal matter that might enter the waterway and then recover the cost of so doing from the proprietor. 7. THE 1996-97 OYSTER SEASON (i) The HAV outbreak and aftermath 232 Under normal conditions the oyster harvesting season in Wallis Lake extends from mid-October until April. In the 1996-97 season, Barclay Oysters started harvesting at the usual time. In the period 22-25 November 1996, heavy rainfall was recorded at Forster. The readings, for the 24 hours to 9am on the second stated day, were: 21-22 November, 4.00mm; 22-23 November 66.6mm; 23-24 November 39.8mm; 24-25 November 19.00mm. Mr Barclay agreed that, on these readings, it would have been wrong for an oyster grower to harvest on 23 November; it would be a risk to public health. He maintained his company did not do that, notwithstanding entries in the company's records indicating the harvest of 92 bags of oysters on 23 November. When pressed on the matter, Mr Barclay asked that the question be referred to the company's Office Manager, Richard Ellery, who was to follow him in the witness box. Mr Ellery is now responsible for quality assurance management, but he did not have this task in the 1996-97 season. At that time, quality assurance was a responsibility of Gary Atkinson, the foreman. Mr Ellery did not remember 23 November but he surmised that, if harvesting took place, it would have been only after the making of a salinity test and a visual inspection of the water; "if it was still raining on the morning of the 23rd we would have started work at 5 o'clock in the morning, we would have removed trays till 9 o'clock [morning tea time] and that would have been it". Although he is still employed by Barclay Oysters, Mr Atkinson was not called to give evidence. 233 Whatever the position in relation to 23 November, it seems there was no further harvesting between that day and 27 November, some two days after the rain stopped. 234 Oysters taken from two Barclay leases, and received by the laboratory on 26 November, tested negative for E. coli. The sample consisted of about one dozen randomly selected oysters. A similar result occurred in relation to samples from two leases submitted on 3 December, samples from three leases submitted on 17 December and samples from two leases submitted on 9 January 1997. During all that time, Barclay Oysters continued to harvest oysters and supply them, after depuration, to distributors for resupply to the public. 235 On 21 December 1996 Thomas Ryan, the father of the applicant, purchased six dozen oysters from Barclay Distributors. He took them to his holiday home at Green Point and, subsequently, his home in Sydney. The oysters were consumed on Christmas Day by members of Mr Ryan's family including the applicant. 236 On 31 December, David Ryan, the applicant's brother, purchased a further 10 dozen oysters from Barclay Distributors. He took them to Sydney the following day and gave about two dozen to the applicant. The applicant consumed them a few nights later. 237 On 30 January 1997 the applicant began to feel unwell, though he went to work as usual. On the following day he felt increasingly ill. On that day he attended hospital for the birth of his fourth child and felt faint. On 1 February Mr Ryan saw his general practitioner who arranged blood and urine tests. They disclosed that Mr Ryan was suffering from hepatitis A. 238 According to a subsequent report by the Department of Health, hepatitis A notifications began to increase in the week commencing 20 January. Notifications peaked on 3 February, with 34 new cases. Most patients were Sydney residents. However, by 10 February, the Department had established that a high proportion of patients reported having recently visited the mid-north coast of New South Wales and/or having consumed oysters. Of the 467 cases of hepatitis A reported in New South Wales with symptom onset between 22 January and 4 April, 64% reported oyster consumption. During the peak of the epidemic, this figure reached 85%. Officers of the Department were able to trace 123 oyster purchases. They found 115 retailers were selling Wallis Lake oysters at the time of purchase; six were not. 239 It appears the Department established the probability of a connection between the HAV epidemic and Wallis Lake oysters by about 10 February. Steps were immediately taken to arrange for sample analyses and inspections at Forster/Tuncurry. 240 Mr Barclay first became aware of the hepatitis A problem on about 11 February when his premises were visited by Mr Bird, an officer of the Tamworth Area Health Service and Mr Brooker. He immediately recalled oysters from all his customers. On 14 February 1997 the local growers met at Mr Barclay's premises and decided to cease harvesting. Barclay Oysters did not resume harvesting until the commencement of the 1997-98 season. 241 There is some evidence as to the leases upon which contaminated oysters were grown. A report by Microtech Laboratories, analysts for the Wallis Lakes' Oyster Assurance Committee, of E. coli flesh tests of ten oyster samples received on 27 November 1996 reveals that seven samples returned an E. coli result of 0.5 cfu/g or less, one was 2.0 cfu/g, one 4.5 cfu/g and the last 30.5 cfu/g. The accepted standard is 5 cfu/g for non-depurated oysters and 2.3 cfu/g for depurated oysters. The report does not make clear into which category the 4.5 and 30.5 samples fell. The 4.5 reading came from oysters grown by B Holder on the eastern tip of Mather Island (Oyster Lease 60-242) and the 30.5 reading from oysters of W Snowdon grown on the southern shore of Cockatoo Island. The distance between these two points is about 1˝ km in a direct line, much more round the shore line. 242 A document summarising the results of PCR testing of oysters harvested between 24 December 1996 and 13 March 1997 reveals that HAV contaminated oysters were taken on 24 December 1996 from Barclay Oysters' lease (OL70-18) at the southern end of the "Paddock" area off Godwin Island; on 4 January 1997 from the lease of Dent (OL74-138) off the northern shore of Cockatoo Island; on 22 January 1996 from Cain's lease (OL58-114) off the eastern shore of Wallis Island; on the same day from the lease of Verdich (OL58-038) in the middle of the "Paddock" area; on 3 February 1997 from Warner's lease (OL71-199) in the channel between Cockatoo and Wallis Islands and on 18 February 1997 from Barclay Oysters' lease (OL56-233) in the "Bull Pen" area near the western end of Cockatoo Island. These sites are widely dispersed. The distance between some of them is as much as three to four kilometres, even as the crow flies. 243 Other samples taken during this period showed either high faecal coliform levels or the presence of other viruses, chiefly enterovirus and adenovirus; all these being indicators of faecal contamination. The map contained in ex AW shows the locations from which these samples were taken. It graphically makes the point that faecal contamination was widely dispersed throughout the estuary. Even measuring in a direct line, there is a distance of up to eight kilometres between some positive sample leases; the distance by water would be two or three times that figure. 244 The Health Department organised a sanitary survey, using personnel supplied by various public agencies, chiefly the Council and EPA. According to Mr Brooker, 14 people participated in a five-day survey. Over the following months, 10 people carried out follow-up inspections. There were inspections of 319 residences (including at Nabiac), 61 boatsheds and oyster depuration sheds, 31 watercraft and the islands and foreshore reserves on the lake. According to the EPA summary, 154 residential premises required follow-up action. Mr Brooker said this extended over the balance of 1997. Of the 154 residences listed for follow up action, seven were classified as "clearly discharging to waterways", 16 were rated as a "high risk" of causing pollution and 44 as "moderate risk". 245 The EPA report also reveals that, in the wake of the HAV epidemic, Council recommenced its water monitoring program and instituted a regime of compulsory pump-out of septic tanks in the lake catchment area, including at Nabiac. 246 On 19 March 1997 the Minister for Fisheries approved the Wallis Lake Shellfish Quality Assurance Program, as a local program under cl 12E(3) of the Fisheries Management (Aquaculture) Regulation. The local program was rushed through to meet the crisis arising from the HAV infection; there was still no New South Wales Shellfish Quality Assurance Program to lay down general principles that could be applied in local programs. No doubt for that reason, the approved Wallis Lake program referred to the likelihood of its modification "when the forthcoming State Shellfish Quality Assurance Program is approved by the Minister". 247 Notwithstanding the lack of a State program, the Wallis Lake program dealt with a number of matters: education of oyster farmers, "environmental survey of potential sources of pollution", monitoring for pollution (including water testing, pre-purification oyster meat testing and post-purification oyster meat testing), physical parameters for harvesting and purifying, a pollution early warning system, "collaboration with other stakeholders" (the Council, Health Department and Fisheries Department) and administrative arrangements, including rules concerning the closure and re-opening of harvesting after rain or a pollution incident. In relation to the survey of potential pollution sites the program stated: "The Local QAP has mapped (in consultation with Great Lakes Shire Council) all known sources of pollution, eg. Sewage treatment plants, industrial discharge and locations of all storm water discharges. Other sources of pollution such as caravan parks, septic tanks, and houseboats are also noted. All existing information from Great Lakes Shire Council, E.P.A. and from the Local QAP will be used to assess the condition of all oyster growing and harvesting areas. Future information will be added to this survey as it becomes available." Routine water testing was to be conducted on a weekly basis at sites designated by Council in association with oyster growers. Further water testing was to be conducted: "in any area exhibiting adverse test results in an attempt to identify possible pollution sources. Council and any relevant agency will be notified and requested to investigate and rectify identified/suspected pollution sources." The pre-purification oyster meat testing requirement was for a weekly test of five samples from each of the two zones into which the program divided the lake; that is, ten samples in all. Post-purification tests were to be arranged by individual growers, each purification plant with a capacity of 25 bags or more being required to submit a sample from each batch of oysters purified and smaller plants less frequently. 248 On 2 April 197 Graham Clarke of EPA reported to George Dodds (presumably also of EPA) regarding a meeting of the Wallis Lake Working Group on 26 March. The report included the following information: "Council presented additional water quality monitoring results, in summary low levels of FC being detected in the lake/river with some 'spikes' recorded at random locations after rainfall. Viral sampling of sediments indicate hot sports around Nabiac and in the Wallamba River in the stretch where the caravan parks are located. Council suggested that FC results are difficult to interpret and future monitoring should focus on using one viral indicator. Anxious to scale down their monitoring and to be replaced by the 'program' under consideration by the task force, QAP and industry requested daily sampling to continue over Easter period. Council to sample water quality on one or two days over the period." (Emphasis added)

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(ii) The cause of the epidemic 249 Immediately after the first reports suggesting a link between hepatitis A cases and Wallis Lake, the New South Wales Department of Health formed two investigatory teams: an epidemiological team and a field team. The field team was led by Mr Bird and Greg Bell, Senior Environmental Health Officer in New England Public Health Unit. After conducting meetings and inspections in and around Forster, Mr Bird and Mr Bell wrote a report dated 27 February 1997 which they supplied to the Council - no doubt amongst others - the following day. In that report they said that, by 14 February 1997, "sufficient case histories had been established and a case control study had been completed confirming that Wallis Lake oysters were the source of the outbreak … No other source or estuary was established". This finding is not challenged by any party to this litigation; all parties conducted their cases on the basis that it is correct, the issues being: (a) how it came about that Wallis Lake oysters were HAV contaminated; and (b) whether that contamination resulted from a breach of duty by any respondent. 250 Mr Bird and Mr Bell noted that two local oyster farmers had been diagnosed to be suffering from hepatitis A. However, they gave no information as to the date of the diagnosis. Consequently, it is impossible to say whether the infectivity of these people was a possible cause of the epidemic or a result. As the authors of the report did not suggest the infection stemmed from those farmers, I assume they considered the farmers to be victims, rather than causes. They stated a "telephone survey of GPs in the Tuncurry/Forster area did not indicate that they were seeing any more cases than usual". However, they also recorded that "[l]ater in the investigation local reports increased". 251 Neither Mr Bird nor Mr Bell gave evidence, so no fuller account of their information is available. In its absence, I interpret their statement as indicating the telephone survey showed the existence of some reported HAV cases at all material times, the number noticeably increasing during February 1997. On that interpretation, there would at all material times have been people within the area served by Tuncurry/Forster general practitioners - an area that would include Nabiac, Cooloongolook and the caravan parks - who were capable of acting as sources of the infection. 252 Mr Bird and Mr Bell commented that "HAV is of human origin and therefore human sewage sources are suspected of polluting oyster areas". They considered a number of possible sources, most of which are discussed above. However, it is relevant to note their reference to cruise ships passing oyster growing areas. They said: "Three ships operate: two have suitable (disinfected) holding tanks but one does not. Investigations are currently proceeding into determining the actual situation". However, no evidence was put before the Court in relation to this investigation or the possibility that the third cruise ship was a source. 253 Mr Bird and Mr Bell thought the infection was shore-based. Under the heading "Current pollution scenario", they said this: "A number of likely sewage sources discharging into the Wallamba River up to, including and climaxing in November 1996 resulted in sufficient HAV in sediments, water and oysters caused by a doubling of population which overloaded sewage disposal systems to become an infective dose. High rainfall in November and a ski speed boat competition over a week in November on the Wallamba River flushed sediments suspending high levels of HAV in the water column further polluting oysters and severely polluting the Wallamba River. Wallamba River out going tides flowed over oyster areas around Wallis Island on its way to the ocean. There was ineffective QAP monitoring oyster areas, no water monitoring program by Council of likely pollution sources and a number of purification plants were not operated properly. Peak harvesting of millions of Wallis Lake oysters occurred in the December/January holiday period providing increased numbers of oysters for public consumption." (Emphasis added) Although this view was formed at a relatively early stage, there is nothing to suggest either Mr Bird or Mr Bell departed from it. Neither of them was called to give evidence supporting a different scenario. 254 Their view was apparently shared by other members of the Wallis Lake Oyster Crisis Strategic Working Party, on which the Council was represented. A schedule of possible sources of the pollution was prepared as at 13 March 1997. It listed numerous possibilities with notes about appropriate actions and comments on their degree of risk and the urgency attached to each. Watercraft was marked "low" risk and urgency whereas "General sampling", "Tracking high reading to sources", Nabiac, "General infrastructure on Wallamba River (Oyster depots, purification plants, dwellings)" and "Caravan Parks" were all rated "high" for both risk and urgency. Some weight should be given to the contemporaneous assessment of the Working Party, comprised as it was of people with expert qualifications who were engaged on the precise task of identifying the causes of the problem. 255 It will be noted Mr Bird and Mr Bell postulated multiple sources of the infection. This view is strongly supported by the expert evidence led before me. For example, Mr Murphy, a very experienced virologist, said in his statement: "For the level of virus in the lake to be high enough to contaminate some 260 people it is highly likely that the source of contamination would have been more than one infected person. This is because an extremely large number of virus particles must have been in the lake. The more infected people who are contributing to the source of contamination, the greater the level of viral particles in the water. It would be unlikely that one person would excrete enough virus particles to cause such widespread contamination. It is more likely than not that the HAV contamination came from the community sewerage facilities in the area. Coincident with such a significant amount of virus particles entering the estuary, it is very likely that there would have been markedly elevated levels of faecal coliforms. A rise in Hepatitis A notifications was not observed by General Practitioners in the population surrounding Wallis Lake in the period preceding the contamination. The presence of large numbers of HAV particles in sewage can nonetheless be explained in my opinion by one (or a combination of) the following factors:- a. viral Hepatitis A is generally sub-clinical in children. Children may be excreters of HAV but will not be recorded as notifications by doctors; b. A person infected with viral Hepatitis A will contribute about 108 virus particles per gram of faeces on each occasion that they defecate during the infective period; c. HAV can accumulate and survive in the septic tanks of excreters and community sewerage facilities; d. HAV can accumulate in the sediment of river banks over which contaminated run off has passed; e. Accumulated particles of HAV will be released from sewerage facilities and sediments during heavy rainfall;" (Emphasis added) 256 In oral evidence Mr Murphy explained that the term "community sewerage facilities in the area" was intended to include septic tanks in caravan parks and private residences. Mr Nicholas asked him about a casual polluter: "Of course you wouldn't exclude, would you, what I choose to call the casual polluter, somebody in a boat defecating, you wouldn't exclude such a person as a contributor?---I think that could be possibly excluded on mathematical grounds. You have a large body of water; if you had one person excreting into that large body of water there would be insufficient viruses to spread far enough. But say you had a number of boating people over a number of weeks?---Yes, but you're assuming that they all had hepatitis A over a number of weeks. Well, at least one of them did?---I'm saying one is insufficient. One person would not excrete sufficient viruses, if one person only had hepatitis they would not excrete sufficient viruses to contaminate the wide area which appears to have been contaminated." Later in his cross examination, Mr Murphy agreed that it was not feasible to eliminate the possibility that an infected casual polluter contributed to the problem; but he emphasised that, as infected oysters came from a number of places, one polluter could not have been the sole cause of the infection. 257 Looking at the question from a hydrological point of view, Professor King supported Mr Murphy's opinion. He said in his written report: "The model supports the thesis that widespread faecal contamination of Wallis Lake in November 1996 (evidenced by the spread of HAV positive results), is likely to have been the result of widespread pollution in the catchment of the Lake and its tributaries rather than a single pollution source. In which case, an effective regime for detection of pollution in the Lake using water sampling would rely on samples taken from a variety of areas within the Lake rather than from a single location. In the less likely case that a single pollution source were responsible for the identified contamination of Christmas 1996, it would require a discharge volume typical of a municipal source of sewage (such as an outfall) rather than a single household scale discharge." 258 Mr Parker cross-examined Professor King about this section of his report, but did not suggest it was incorrect. Mr Parker was concerned merely to obtain - and he did obtain - concessions from Professor King that he was unable to identify the multiple sources and that, if there were multiple sources of sewage contamination, there must also have been multiple HAV infected individuals. 259 None of the experts challenged the multiple source theory. By the end of the hearing, it became almost common ground. Nor was the theory challenged in submissions. Although counsel for the Council pointed out that the infectivity of HAV was so great "that in theory a single HAV infected defecation could produce sufficient virus particles (if sufficiently dispersed) to infect thousands of oysters", they accepted that "HAV infected oysters have been traced to widely scattered growing areas in the Lake" so "HAV particles must … have been widespread in the Lake when the oysters were contaminated". 260 The only other respondents' counsel to address the matter was Mr Fagan. He points to the evidence concerning the relationship between faecal coliform levels, as detected after resumption of water testing on 28 February 1997, and rainfall. Faecal coliform levels were relatively low from 28 February until 6 March 1997, apart from a reading of 13,000 cfu/100 ml at one stormwater drain on 5 March. [I say "relatively low" notwithstanding that only one of the 12 water sampling sites consistently provided readings of less than the accepted standard of 14 cfu/100 ml and three sites recorded figures over 100 cfu/100 ml, one of them in four out of the seven tests and ranging up to 740 cfu/100 ml.] In the period to 9am on 6 March, 55mm of rain were recorded at Forster. Faecal coliform levels immediately rose, especially in the stormwater drains, one of which reached 47,000 cfu/100ml. On 7 March samples from all twelve water sites showed much higher faecal coliform readings - ranging from 160 cfu/100 ml at one site to 2,000 cfu/100 ml at another. As Mr Fagan points out, this sudden rise in faecal coliform levels must have been a result of the impact of the rain upon pollution sources closer to the lake than the Shalimar and Wallamba Caravan Parks. Having regard to the high readings in the stormwater drains, it is reasonable to conclude their waters were transporting heavy loads of faecal coliforms to the lake. 261 No E. coli readings were taken, so it is not possible to demonstrate these loads included human sewage. However, as Mr Fagan also points out, the Microtest E. coli analysis of oyster meat taken from Mr Snowdon's lease on 27 November 1996 showed a reading of 30.5 cfu/g. Even treating this as a pre-puration test, the result is well above the accepted standard of 5 cfu/g. As Mr Snowdon's lease is on the north shore of Cockatoo Island, a considerable distance from the urban areas, there must have been widespread contamination of the lake even before the rain of 23-25 November brought down contamination from the caravan parks, Nabiac or Cooloongolook. There is at least a strong possibility that some of that contamination entered the lake from the stormwater drains and contributed to the high faecal coliform readings in them. 262 Mr Fagan also calls attention to the report of Dr Grohmann referred to in para 171 above. This was a report of the analysis of 23 sediment samples. They were all collected on 11 or 12 March 1997, most of them from sites near the caravan parks and tourist facilities along the Wallamba River. Twelve of the 23 samples (including at least one from each of the parks and tourist facilities) proved positive for at least one virus associated with human sewage. Although none of the samples gave a positive HAV reading, the analysis suggests widespread human sewage pollution of the river. There is no evidence of cruising or houseboating on the river, as distinct from the lake. 263 Mr Fagan concluded his analysis of the evidence by submitting it "indicates that inadequately treated human effluent entered the Lake, in particular the oyster growing areas, from a number of sources, both up the Wallamba River and closer to the leases, during a period dating back to before late November 1996". 264 I accept that submission. Although it is not possible to say the HAV contamination of the lake came from any particular source, in common with the experts I conclude it emanated from many sources. For multiple human faecal contamination to lead to multiple HAV contamination, there would need to be more than one infected person in the area at a relevant time. However, given the population of the district, I see no reason to reject that possibility. Again in company with the experts, I believe the contamination probably stemmed from land-based pollution sources. One or more boat people may have contributed to the problem, but the extent and distribution of the HAV contamination tells against this being its primary source. 265 Counsel for the Council challenge the assumption made by most of the expert witnesses that the HAV outbreak was associated with the November 1996 rain. They say "the main body of the outbreak was mid-February. This suggests that the consumption of contaminated oysters was centred on the first half of January 1997". As oysters might be expected to be consumed within a week or so of harvesting, they argue the evidence suggests "widespread HAV contamination of the Wallis Lake occurring in the second half of December 1996". Counsel note that the applicant's case has been presented on the basis that the HAV outbreak was causally related to the heavy rain of 22-25 November 1996; they argue this is inconsistent with contamination occurring in the second half of December. 266 Three comments may be made about this submission. First, the occurrence of widespread contamination in the second half of December is not inconsistent with its having emanated from Nabiac or Cooloongolook. The evidence suggests a couple of weeks for viruses from those areas to reach the lake and it would take some more days for them to spread widely in the lake. Second, it is incorrect to say the "main body" of the outbreak was mid-February. The peak notification day was 3 February. Allowing for the delays inherent in people seeking medical attention, pathological testing to confirm HAV infection and notification by the medical practitioner to the Health Department, and a mean four week incubation period, it seems probable that the peak consumption period of contaminated oysters was over the Christmas-New Year holiday period. This may simply reflect the fact that, as Mr Barclay said, more oysters are consumed during the holiday period than at other times. 267 Thirdly, if the question is the cause of the outbreak, it is necessary to consider the earliest, rather than peak, consumption date. The report on the HAV outbreak prepared by the Wallis Lake Task Force stated HAV notifications "began to increase in the week beginning January 20". Allowing a few days between the onset of illness and notification, this suggests people affected by the Wallis Lake contamination began to become ill, in significant numbers, from about 16 January. Having regard to an incubation period of two to six weeks, those people must have become infected between about 5 December and 2 January. There is normally a lapse of three to four days between harvest and shipment of oysters. No doubt the period between shipment to a distributor and consumption of the oyster varies considerably from case to case, but it seems reasonable to assume it would not usually exceed 10 days. 268 It is obviously not possible to be precise about the period of consumption of contaminated oysters; still less their dates of harvesting. However, it seems unlikely the contaminated oysters were harvested before the November rain. They could have been harvested at any time after the resumption of harvesting on about 27 November. I do not think it is correct to say the illness pattern is inconsistent with there being a causal relationship between the HAV outbreak and the November rain. On the contrary, it seems to me highly likely that the rain brought the HAV contamination into the lake. I note this view accords with that expressed by Council's hydrological expert, Mr Hurrell. He agreed with Mr Alton that "human faecal material was/is impacting on Wallis Lake in sporadic high levels, with multiple sources, triggered during rainfall conditions". 8. NEGLIGENCE: THE CASE AGAINST THE COUNCIL

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(i) Applicant's submissions 269 The applicant's case against the Council lies in negligence. It depends upon a duty of care said to arise at common law. There is no statutory cause of action. Notwithstanding these circumstances, counsel for the applicant point to the statutory powers referred to in paras 214 to 220 above. They argue the Council ought to have used these powers in order to eliminate or reduce the risk of viral contamination of Wallis Lake. They say Council knew of the pollution points discussed above, and the likelihood they were impacting upon the quality of the water of Wallis Lake, especially after heavy rainfall; Council also knew the water quality of Wallis Lake was important to the oyster industry and public health. Counsel argue that consumers of oysters were in a position of proximity to the Council in relation to water quality. They say: "First, they were not an indeterminate and unascertainable class. The class could be ascertained with precision as being those persons who consumed Wallis Lake oysters and suffered injury thereby. Second, on any view, the Council owed a duty of care to the oyster farmers. But the oyster farmers would only suffer loss and damage by reason of the actual or potential loss suffered by consumers. It would be illogical to find that a duty was owed to the farmers but not the consumers given that the foreseeable damage to farmers would depend first upon actual foreseeable damage to consumers." Although they accept the statute follows the form of conferring powers on councils, rather than imposing duties, counsel submit this is a case to which are applicable the words of Earl Cairns LC in Julius v Lord Bishop of Oxford (1880) 5 App Cas 214 at 222-223: "…there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so." Counsel go on: "The powers referred to were capable of preventing the harm which occurred. Further the relevant powers were conferred, inter alia, for the purpose of preventing the harm. There are multiple powers conferred upon the Council by the relevant statutes and hence there are multiple statutory 'objectives'. The statutory framework empowered the Council to manage the complex relationship between: - the public places and waterways under its jurisdiction; - the 'water supply' system; - sewerage and stormwater drainage systems. The powers were conferred with a view to 'ecologically sustainable development' … However when regard is had to the specific powers conferred on the Council and in particular: - the power to regulate and monitor sewerage disposal; - the power to remove/prevent pollution etc; it is clear that the Council was entrusted with the management of the human/environmental relationship in the specific context of effluent control. The 'unnamed beneficiaries' of these powers and of the 'framework of management' were persons of the class of the Applicant. Further, the power to 'manage' the water supply, to regulate and monitor sewerage disposal and treatment, to monitor pollution of waterways and so on, are only given meaning and content when seen in the context of public health. It was for the very purpose of preventing the type of harm that occurred in the present case, that the relevant powers were conferred. Accordingly, the Council could not, consistently with the policy of the relevant legislation, have refrained from acting in all the circumstances. In summary: . the Council was vested with powers intended to prevent harm of the kind suffered to a class of which the Applicant was a member; . the Council was the body in a position to exercise those powers; . the Council could have prevented the harm; . the Council had actual knowledge of the risk; . the consequences of the Council refraining from action were severe; . the Applicant could not have known of the risk and was in a vulnerable position. Each of the abovementioned factors establish proximity in the present case." 270 In the course of their argument, counsel referred to the decision of the High Court of Australia in Pyrenees Shire Council v Day (1998) 151 ALR 147. That was a negligence claim against a council arising out of a fire that damaged or destroyed adjoining premises, each consisting of a shop and residence. The fire was caused by a defective fireplace in premises tenanted by Eskimo Amber Pty Ltd and spread to the adjoining premises of Mr and Mrs Day. In 1988, before Eskimo Amber became the tenant, the council had become aware of the defective fireplace and ordered the then tenants to replace it or seal it up. They were ordered not to use the fireplace in the meantime. The council did not follow-up its instruction. The work was not done and the warning was not passed on to the controllers of Eskimo Amber when that company took over the lease. When they lit a fire in the fireplace, it spread, as predicted by the council inspector, and damaged the property of Mr and Mrs Day. The council had statutory powers sufficient to enable it to ensure compliance with its instruction. Notwithstanding this, the council denied it was under a duty of care to Mr and Mrs Day. 271 The five Justices who constituted the Court unanimously held to the contrary, but they differed in their reasons. Brennan CJ, Gummow and Kirby JJ rejected the concept of "general reliance" that was adopted by Mason J in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 464 and McHugh JA (as he then was) in Parramatta City Council v Lutz (1988) 12 NSWLR 293 at 330. But each of them held the plaintiffs nonetheless entitled to succeed. 272 Brennan CJ at para [16] adverted to the distinction between an action for breach of statutory duty and an action for common law negligence but observed "the same set of circumstances may give rise to either cause of action". He noted that, in the case before the Court, the statute imposed no general duty on a council to exercise its fire-prevention powers irrespective of the circumstances; yet, "as the escape of fire frequently exposes neighbouring persons and their property to the risk of damage or destruction, the provision of a measure of protection for those individuals is at least one of the purposes, if not the chief purpose, of arming a council with fire-prevention powers". In para [17] he asked whether, if a council unreasonably fails to exercise its powers to prevent a known risk of fire, a fire occurs which an exercise of the powers would have avoided and the fire causes loss to the person or property of an individual, that individual has a remedy against the council. After referring to authorities supporting the proposition that the existence of a discretion to exercise a power is not necessarily inconsistent with a duty to exercise it, Brennan CJ said at paras [24-25]: "Thus a duty to exercise a power may arise from particular circumstances, and may be enforceable by a public law remedy. Where a purpose for which a power is conferred is the protection of the person or property of a class of individuals and the circumstances are such that the repository of the power is under a public law duty to exercise the power, the duty is, or in relevant respects is analogous to, a statutory duty imposed for the benefit of a class, breach of which gives rise to an action for damages by a member of the class who suffers loss in consequence of a failure to discharge the duty. The general principles of public law establish the existence of the statutory duty to exercise the power and the statute prescribes the class of individuals for whose benefit the power is to be exercised. Where the power is a power to control 'conduct or activities which may foreseeably give rise to a risk of harm to an individual' …and the power is conferred for the purpose of avoiding such a risk, the awarding of compensation for loss caused by a failure to exercise the power when there is a duty to do so is in accordance with the policy of the statute. An individual who is among the class whose interests are intended to be protected by exercise of the power has both locus standi to seek a public law remedy and a right to compensation for damage suffered as the result of any breach of the duty to exercise the power in protection of that individual's person or property." 273 The Chief Justice went on to hold the extremity of the risk in the case before the Court meant there was a public law duty for the council to ensure compliance with its order. 274 Toohey J saw the concept of general reliance as relevant to determining whether there was a sufficient degree of proximity between the parties to create a duty of care. He said at para [77] the "general reliance" category: "… 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." 275 McHugh J adhered to the position on general reliance he took in Lutz. He said at para [115]: "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." 276 For Gummow J the critical factor was that the council had entered upon the exercise of its powers. He said at para [177]: "A public authority which enters upon the exercise of statutory powers with respect to a particular subject matter may place itself in a relationship to others which imports a common law duty to take care which is to be discharged by the continuation or additional exercise of those powers. An absence of further exercise of the interconnected statutory powers may be difficult to separate from the exercise which has already occurred and that exercise may then be said to have been performed negligently. These present cases are of that kind." 277 Gummow J thought the policy/operational classification "not useful in this area": see para [182]. He went on at para [183]: "On the other hand, questions of resource allocation and diversion, and budgetary imperatives should fall for consideration along with other factual matters to be 'balanced out' when determining what should have been done to discharge a duty of care." 278 Kirby J saw the "general reliance" matters listed by McHugh JA in Lutz as "proximity factors": see paras [230] and [239]. At [244] he favoured the adoption in Australia of the three-stage test expressed by the House of Lords in Caparo Industries Plc v Dickman [1990] 2 AC 605: "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'? 4. 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?" 279 Council for the applicant place particular emphasis on a comment by Gummow J in para [168] in Pyrenees: "… the touchstone of what I would hold to be its duty was the Shire's measure of control of the situation including its knowledge … that, if the situation were not remedied, the possibility of fire was great and damage to the whole row of shops might ensue". Counsel argue this passage can be applied to the present case: "the Council had both the requisite measure of control and knew of the danger". The "interconnected statutory powers", of which Gummow J spoke in para [177], "clearly had the purpose of pollution prevention". Counsel also point out their case does not involve imposing upon the Council "a liability in an indeterminate amount for an indeterminate time to an indeterminate class"; the class is finite and ascertainable. The claims are not for pure economic loss: see Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstadt" (1976) 136 CLR 529and San Sebastian Pty Ltd v Minister Administration & Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340. 280 Counsel for the applicant disclaim the contention that Council had a duty to install a sewerage reticulation system for Nabiac. They do contend Council had a duty properly to inspect septic tanks in Nabiac and along the Wallamba River. But they say that, even if there was no duty, this does not mean the applicant fails; Council at least had a duty to monitor the water pollution caused, or likely to be caused, by septic tanks under its control and to warn others of any health risk or potential danger. They go on: "Third, the Applicant's case does not depend upon him demonstrating that any particular point source caused the pollution which ultimately led to the outbreak. Rather his primary case is that given the number of likely or potential pollution sources that could impact on Wallis Lake, for which the Council was responsible, the Council in the circumstances had a duty to test and warn. Fourth, if the Applicant's case does depend upon him demonstrating that particular point sources caused pollution, his position is that the evidence discloses that after heavy rainfall, the following point sources on the balance of probabilities were significant contributing causes to the pollution which was responsible for the outbreak: 1. Nabiac; 2. Shalimar Caravan Park 3. Wallamba Ski Lodge 4. Public Toilets in Forster/Tuncurry; 5. Islands in Wallis Lake; 6. Stormwater Outlets; 7. The sewerage being trucked from Forster to Tuncurry The evidence discloses … that these were clear 'viable pathways' from these sources to Wallis Lake and the oyster leases in particular. Further, there is general agreement amongst the experts that the problem was caused by multi-point sources confirming the likelihood that the above locations were significant contributing causes." In summary, counsel for the applicant submit the Council had duties: (a) to test water quality for faecal contamination by testing for faecal coliforms or E-coli; (b) to warn oyster farmers and relevant State government agencies when the tests revealed contamination; and (c) to prevent contamination from all or any of the "significant contributing causes" itemised by counsel. (ii) State and growers' submissions 281 Counsel for the State, the Barclay companies and growers Sciaccia and Tadeven all argue the Council was subject to a duty of care towards the applicant and the group members. They all say the Council was bound to exercise its statutory powers in such a manner as to prevent contamination of the lake. None of these counsel support the applicant's submission that the Council had duties to test and warn; indeed Mr Fagan, on behalf of Sciaccia and Tadeven, argues against imposing liability on that basis. He says the only warning that could have been given was "that viral contamination of unknown longevity could spread through the oyster leases to an unknown extent at unknown times and continuing for an unknown period. Such a warning would be a last resort directed to closing the oyster industry". 282 At paras 261 to 264 I mentioned Mr Fagan's detailed submission regarding pollution of the lake. He says it was a breach of duty for Council to fail to prevent that pollution. In that regard, he points to evidence from Mr Brooker as to the resources available to the Council to investigate the pollution situation. In the period up to 1997, the Council employed four health and building inspectors as well as more senior staff (Mr Chadban, Mr Bell and Mr Brooker himself), all of whom could have undertaken site inspections. Notwithstanding this, until May 1996 Council restricted itself to responding to complaints, knowing the incidence of complaint was well below the incidence of the problem and, in May 1996, adopted the policy that it would not even respond to complaints. Mr Fagan points out that, in February-March 1997, a sanitary survey was conducted by 14 people over five days. This represents only 70 person days, or the equivalent of 14 weeks' work for one inspector. 283 In relation to this submission, it is fair to mention Mr Brooker's suggestion that, under normal circumstances, inspections would have taken more time than in the emergency situation of February-March 1997, when inspectors visited properties without prior notice to occupiers. However, even if that is correct and it is assumed that, on average, only three premises could be visited in one day by one inspector, on the basis of there being about 420 relevant premises (see para 245 above), this represents only 140 person days; the equivalent of seven weeks' work for four inspectors. Mr Fagan's point remains valid. 284 Mr Fagan's submissions on legal principles cover much the same ground as those of counsel for the applicant. He argues: (a) the powers given to Council under the Local Government Act and Clean Waters Act "were obviously conferred for the purpose of avoiding a foreseeable risk to the health of individuals"; (b) the evidence establishes there was at all relevant times such a risk arising from "persistent, substantial and widespread escape of faecal contaminants from private land into the lake, either directly across or through the ground or indirectly via the stormwater system"; (c) the contaminant contained viruses that were insidious and, for practical purposes, undetectable and against which oyster growers could not protect their produce, and therefore their consumers; (d) in this situation, the case falls within the principles stipulated in Pyrenees.

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(iii) Council's submissions 285 Counsel for the Council commence their submissions by criticising the applicant's contention that their client was under a duty to test and warn. In their written submission they say: "6. The duty alleged is totally amorphous. Plainly there can be no duty to test the Lake everyday and everywhere. The applicant does not specify the scope of the duty. The supposed duty is presumably continuous, but the applicant's case is vague as to: (a) how often tests must be carried out (b) what has to be tested for (ie faecal coliforms, E coli, viruses?) (c) how many locations. 7. Furthermore, there is no limit suggested as to the action to be taken in the light of the results. Such action would of course vary depending on the level of each result and where the result came from. In summary nothing is said about what would be required to discharge the duty. 8. Even if it were possible to give some content to the alleged duty, it would not be 'fair just and reasonable' (Pyrenees at para [244]) to impose such a duty on the Council having regard to the following three matters. 9. First, the Council had little to do under the relevant legislation with the production and marketing of oysters. 9.1 Leases were allocated by the State Government. The Council had no input into this process. 9.2 Revenue associated with the Lake in general, and the leases in particular, went to the State. 9.3 The regulation of the industry was co-ordinated by State officials. 10. Second, the Council's testing had little if any connection with oyster quality. 10.1 In 1992, the State official co-ordinating the industry in the Wallis Lake area (Mr Bird) told Council it didn't need to test anymore. 10.2 From early 1993 the State and the growers had assumed responsibility for deciding when harvesting would cease and resume. They elected to follow a flesh testing rather than water testing regime. The growers had also adopted a zoning mechanism to assess water quality to enable them to decide when to cease harvesting. 10.3 From mid 1993, the growers knew that the Council's testing had ceased. 10.4 Testing of the sort suggested would tell the growers nothing more than they already knew (ie faecal coliforms would be present during a fresh) and had accommodated by their own arrangements (ie they ceased harvesting for a few days until the water was clear - by which time faecal coliform and E-coli testing would be negative). 11. Third, the decision to cease and not resume the environmental testing program was made in good faith and on a rational basis. As such, the Court cannot be asked to review it: (para [22]). 11.1 A water testing program of the sort suggested would have imposed a significant cost and on the evidence resources were simply not available. The evidence about Shoalhaven's program does not provide a useful basis of comparison. 11.2 The Council had embarked on an alternative approach to the problem, following the procedure laid down in the State Government's estuary management policy, which involved first collecting data and second a study of the estuary (the wisdom of this approach is not of course in issue but it can be noted that all the experts, including those called by the Applicant, expressed the view that as much as possible should be done to understand potential sources of contamination in the catchment and the dynamics of the estuary). 12. The applicant's argument accepts that if any duty to test exists, it must be owed to the growers as well as consumers. But in the circumstances it is absurd to suggest that the Council owed a duty to the growers to undertake regular water testing. To impose such a duty would effectively require the Council to undertake part of the growers' quality assurance, contrary to the wishes of the growers and the State. 13. There is no evidence that had the Council undertaken the tests and reported the results to the growers/State, the HAV outbreak would have been avoided. 13.1 The argument assumes that the outbreak was associated with the November 1996 rain event but analysis of the evidence shows this assumption is not established. 13.2 Scientific evidence is that faecal coliforms and E coli disappear quickly. If testing had been carried out weekly, it could still have missed the rain event. 13.3 Even if the testing had been done during or after rain event, it would only have confirmed what was well known. 13.4 Testing would not have detected viruses. 13.5 The evidence relied on by Applicant falls far short of establishing reliance in the relevant sense." 286 In relation to the alleged duty to prevent pollution, counsel submit it must be wrong to claim the existence of an absolute duty; any duty can only be a duty to take reasonable steps to prevent pollution of the lake. They say the applicant has failed to identify either the additional steps the Council ought to have undertaken or the source of the pollution that caused the HAV epidemic; "none of the particular sources mentioned can be said on the balance of probabilities to have actually caused or contributed to the outbreak". Counsel attribute to the applicant a case that "alleges the named sources increased the risk of the outbreak" and say this is not enough; "[t]he law requires a plaintiff to establish causation in fact, not merely conduct which increases risk: see Bender Minter v Pty Ltd v Barnes (1997) 2 NSWLR 307 at 316-317". Counsel say the applicant's case fails to recognise that the problem of sewage treatment and disposal occurs throughout New South Wales, does not admit of absolute solutions, is a difficult one with a multitude of potential sources that are difficult to detect and is one only aspect of public health. 287 Counsel for the Council contend their client was not under a statutory duty to make regular inspections. They criticise the applicant's failure to define the scope and content of the suggested duty, in relation both to frequency and geographic area, and say that, in any event, the supposed duty "cannot be accepted as it invites the Court to review the Council's decision as to the exercise of its powers. The decision has not been shown to be other than bona fide and rational". Finally, they contend none of the suggested sources was a likely cause or contributor to the HAV outbreak.

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(iv) Conclusions 288 I accept Council's submissions in relation to the applicant's "test and warn" case, if that case is considered in isolation. I do not think the evidence establishes that a water testing program along 1989-93 lines "would have imposed a significant cost" on Council, as suggested in para 11.1 of the submission quoted above. Mr Brooker said the testing program undertaken between 1989 and 1993 involved the labour of one person (usually a trainee) for 4˝ days per month. That cannot be regarded as a major burden, having regard to the contribution of the Wallis Lake oyster industry to the economy of the Shire, the significance of a "clean water" image to the Shire's extensive tourist and recreational fishing industries, and the importance of safe-guarding the health of local residents and visitors. But I agree that a 1989-93 type water testing program conducted in 1996 would have told growers only what they already knew: that faecal coliform levels increased quickly and dramatically after rain and dropped within days. Such a testing program would not have identified the sources of the faecal coliforms or given growers any information about the presence of viruses. 289 This does not mean water testing is valueless. Although a negative coliform test does not establish the absence of viruses, the expert evidence indicates it is an essential feature of an acceptable oyster management regime. Water testing can be used for the purpose of detecting points of pollution. It follows, I think, that the question whether the Council had a duty to test water samples is related to the question whether the Council had any obligation in relation to minimising pollution of the lake. 290 In addressing that question, I find useful the pragmatic approach to the matter of proximity taken by Priestley JA of the New South Wales Court of Appeal in Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1. Writing after the judgment of the High Court in Pyrenees, his Honour went back to the speech of Lord Atkin in Donoghue v Stevenson [1932] AC 562, and especially his Lordship's adoption at 581 of the principle "that a duty to take care did arise when the person or property of one was in such proximity to the person or property of another that, if due care was not taken, damage might be done by the one to the other". Lord Atkin adopted this formulation on the basis that there need not be physical proximity; it would be sufficient if there were "such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his careless act". After referring to subsequent formulations of proximity advanced and later rejected, Priestley JA (at 8) accepted a comment of Professor Fleming that "No generalisation can solve the problem upon what basis the courts will hold that a duty of care exists"; the question whether a relationship is so close as to give rise to a duty must be answered "in light of the court's own experience-based judgment". 291 In applying that precept to the present case, it is important to bear in mind that, although the oyster industry is a major contributor to the economy of the Great Lakes Shire, the Council has no direct responsibility for the operation of the industry or the quality or safety of Wallis Lake oysters. On the other hand, the Council at all material times knew the following facts: (i) the waters of Wallis Lake were used for the growing of oysters for human consumption; (ii) within the lake catchment area, there were numerous facilities (septic tanks, pit toilets, pumping stations, watercraft and the like) that constituted potential sources of human faecal contamination of the waters of the lake; (iii) the HAV virus (like other viruses) is commonly transmitted in the faeces of infected persons; (iv) the HAV virus is capable of surviving for many weeks (even months) in estuarine waters and may be concentrated by oysters; (v) no procedure is available (whether by depuration or testing) to prevent HAV contaminated oysters being consumed by humans; (vi) an HAV contaminated oyster might cause its consumer to become seriously ill; and (vii) Council had extensive statutory powers to control pollution from the facilities mentioned in (ii). 292 I accept the submission that Council was not under an absolute duty to prevent pollution of the lake; prevention could never be guaranteed. Any duty must be confined to a duty to take those steps that were reasonably open to the Council in order to minimise human faecal contamination of the lake. But I do not accept Council did not have even that duty. Having regard to the facts listed above - none of which is a matter of dispute in this case - the Council knew, or should have known, that oyster consumers were likely to be adversely affected by any failure by it to take reasonable steps to minimise human faecal contamination of the lake; in particular by the emission of faecal effluent from any of the facilities mentioned in (ii) above. That being so, it seems to me Council came under an obligation to oyster consumers to take those steps. 293 I do not think anything in Pyrenees points to a different conclusion. The language adopted in that case by each of the Justices may readily be applied to the present case. It will be remembered that Brennan CJ spoke of the purpose of conferring fire-prevention powers on a council being to protect neighbouring persons and their property, so that "a council that knows of a risk by fire to persons or property cannot refuse to exercise [those] powers … unless the council has some good reason for not exercising [those] powers so far as they are needed to prevent the risk eventuating". The same may be said about the purpose of arming councils with pollution-prevention powers. Paragraphs [24] and [25] of the Chief Justice's judgment, quoted above, are directly in point. 294 Toohey and McHugh JJ favoured the "general reliance" concept of proximity. It can hardly be doubted that consumers of oysters would assume that relevant public authorities have exercised the powers available to them so as to ensure, so far as they can, that oysters grown and harvested for human consumption are free from viral contamination. 295 If one adopts the "control" approach favoured by Gummow J, a similar result emerges. Although it would go too far to say that the Council was in a position totally to prevent any possibility of viral contamination of the lake, it was certainly in a position to prevent deposition into the lake of significant quantities of human waste, even from boats. It therefore had a large measure of control of the problem. Having regard to the purposes for which it was given its control powers and the foreseeable consequences to oyster consumers of any failure to take reasonable steps to exercise those powers, the Gummow approach supports the imposition upon the Council of a duty of care to oyster consumers. 296 If the three questions posited by Kirby J in Pyrenees are applied to this case, the first question (reasonable foreseeability of harm) must clearly be answered affirmatively. The second and third questions (proximity and "fair, just and reasonable") require the type of experience-based judgment referred to by Priestley JA. For the reasons stated above, I think that judgment must be favourable to the applicant. 297 The applicant need not prove the particular source or sources of the HAV contamination. The HAV oyster contamination came from human faecal pollution of the lake. The expert evidence establishes the probability that this pollution came from multiple points, predominantly land-based. All of those points were subject to Council control. The pollution occurred because the Council did not exercise its powers in a responsible manner; although it knew there was a problem, the Council allowed the continuation of pollution from those points. It does not matter that it is impossible to say which of those pollution points introduced the HAV contaminated faeces into the lake. 298 It is not necessary to determine whether the Council owed a duty of care to the oyster growers. It was certainly not obliged to undertake general quality control of the oysters harvested from the lake. However, if the content of the supposed duty of care is defined merely as being an obligation to exercise the Council's statutory powers in such a manner as to minimise pollution of the lake, I see no reason for rejecting such a duty; like Mr and Mrs Day in Pyrenees, the growers were entitled to expect the Council to exercise its powers in such a manner as to avoid a nuisance that would damage their property (the oysters) and cause them consequential loss. 299 If there was a duty of care to oyster consumers, as I hold, there can be little doubt it was breached. Prior to the HAV epidemic, the Council took no steps to identify point pollution sources. Although the 1989-93 water tests showed high faecal coliform levels after rain, including in stormwater drains, Council took no steps to ascertain - for example by E. coli tests of that water - whether human sewage effluent contributed to those high levels. Given that the drains served the towns of Forster and Tuncurry, this was at least a distinct possibility. If tests had revealed significant E. coli levels, this would have indicated a problem of discharge from sewerage pumping stations or septic tanks. Armed with that information, the Council could have taken samples from various locations along the stormwater drains to trace the source of the pollution and then taken whatever steps were necessary to ensure the problem was fixed. All this would have been no more than good housekeeping for a local government authority that took its responsibilities seriously. It is the Shoalhaven Council approach, according to Mr Papworth. 300 However, it is not necessary for the applicant to depend upon Council's failure to trace effluent emissions. The evidence establishes Council was aware of serious sewage effluent problems in the villages (Nabiac and Cooloongolook) draining to the lake's tributaries. Anybody who gave the matter thought would have realised there was a possibility that viruses in that effluent might reach the lake and contaminate the oysters. That suspicion would have been heightened (at least in relation to Nabiac) if the person read the Laxton report, a copy of which was in Council's possession. 301 Closer to home, numerous sites were contributors, or potential contributors, to estuarine pollution; for example, the two caravan parks, the Little Street public toilet, the toilet pits on the islands and the houseboats on the lake. If Council did not know about these problems, that was because it chose not to look. Until May 1996, Council's policy was merely to respond to complaints; and this despite the fact that Council's officers knew the complaints they received represented only the tip of the iceberg, that pollution from septic tanks was a widespread problem. The responsible reaction to such knowledge would have been to institute a sanitary survey, especially of premises that drained to estuarine waters. Astonishingly, in May 1996 Council's officers took the opposite course, determining not even to respond to complaints. It may not be coincidence that the HAV outbreak occurred shortly after the first heavy rain of the next oyster season. 302 Council's principal response to the applicant's claim of breach of duty was to say the Court should not review its decisions about the exercise of its powers; its decision not to engage in regular inspections "has not been shown to be other than bona fide and rational". Counsel say the evidence indicates that regular inspections would be expensive and funds were not available; the inspections carried out immediately after the HAV epidemic were not comparable because they were supported by the State government. 303 In their supplementary written submissions, counsel say "Council's failure to have a water monitoring program for Wallis Lake oysters was based on policy judgments and financial constraints". They cite no evidence in support of that statement. I believe it to be untrue. So far as I am aware, the first mention of financial constraints was made in the course of the hearing of this case. The contemporaneous material suggests an upgraded water testing program was not seen as imposing an unreasonable burden on Council's resources. As early as June 1991, Mr Brooker had written a report, in the name of Mr Chadban, noting the relationship between poor water quality and high rainfall and the potential for water testing to identify point sources and thereby lower the level of pollution of the lake system. He proposed to increase sampling during rain periods so as to identify point sources: see para 114 above. Neither he nor Mr Chadban saw any resource problem about an expanded sampling program. The proposed expansion was never implemented, but the evidence does not suggest this was because of inadequate resources. 304 In April 1993 Mr Brooker again informed Council of a proposal to extend water testing; once again his report was written in the name of Mr Chadban and without any suggestion of a resource problem: see para 118. 305 In June 1996 Councils' then General Manager informed Mr Warner of the Oyster Fisherman's Association that a "comprehensive program of water testing is being developed for Wallis Lake" that would be "far more comprehensive than that formerly undertaken which was concerned only with faecal coliforms". No doubt this statement was made in good faith; if so, the Council's chief executive officer was unaware of any resource problem about an expanded water testing program. 306 It is true the State government provided support for the shoreline inspection conducted in March 1997, after the HAV outbreak. However, the analysis set out in para 284 above demonstrates an inspection regime would have cast little additional burden on the relevant employees of Council. No attempt was made by Council to establish that those employees were already so busy that they could not have found some 140 person days, between the seven of them, for an initial shoreline survey, and a lesser number of days in subsequent years for update surveys. In this regard, it is significant that Mr Chadban was not called (although available) to give evidence. At the time of the HAV outbreak he was the Mayor. For many years prior to that, he had been Council's senior health officer. Nobody would be more aware of any resource problem than Mr Chadban. His absence from the witness box fortifies the conclusion that Council's inaction did not stem from inadequate resources. 307 I note also that Mr Brooker's reason for abandoning, in May 1996, the policy of responding to complaints about malfunctioning septic tanks was not that Council lacked the resources to inspect, but because it was selective and unfair to do so. In evidence, Mr Brooker did not claim to have been thwarted by lack of resources from tackling the pollution problem comprehensively. Nor is there any evidence that he (or any other officer of the Council) ever sought the allocation of additional resources for that task. The decision Mr Brooker made in May 1996 may have been made bona fide. It was not rational. Mr Brooker conceded this by his evidence that, after he read Mr Braybrook's comments on his memorandum, he realised a policy of non-response "would be a ridiculous position to take and continued on dealing with complaints". I believe the latter claim to be false, but it is significant Mr Brooker was not prepared to defend in the witness box the rationality of his proposal. 308 Counsel for the Council submit the establishment in 1993 of the Wallis Lake Oyster Farmers Quality Assurance Committee brought to an end any responsibility Council might have had for ensuring the estuarine water quality was satisfactory for the growing of oysters; the oyster farmers took over responsibility for water quality, in conjunction with relevant State officers. 309 One difficulty about this submission is that Council was a major participant in the committee; Mr Chadban and Mr Powell were members and Mr Chadban acted as Secretary. The membership of the committee reflected the fact that the oyster growers, the Council and various State agencies all saw themselves as having an interest in the safety of Wallis Lake oysters. The committee's deliberations show its members recognised this involved attention to water quality. 310 In any event, counsel for the applicant do not argue Council was the only party concerned with oyster safety, or was obliged to act as insurer of the safety of oysters harvested from the lake. The applicant's case is that the Council was under a duty to take reasonable steps, in the exercise of its statutory powers, to minimise pollution of the lake. That is not inconsistent with a readiness by others to take responsibility for oyster safety. 311 Counsel for the Council emphasise the possibility that the sewage that contaminated the lake emanated from boats. As I have indicated, the consensus of opinion, both amongst those who investigated the situation immediately after the HAV outbreak and amongst the expert witnesses, is that the pollution was substantially land-based. However, there may have been some contribution from boats. Contrary to the assumption underlying counsel's submission, this does not absolve Council from responsibility. Council had been warned, in the 1994 Wallis Lake Oyster Management Plan, of the risk of contamination from boats: see para 127 above. The statement was made that "many (recreational boats) dump raw effluent into the Lake" because they are too small to have on-board retention tanks. The authors of the Plan suggested Council install "environmentally friendly" toilets at strategic points and undertake an education campaign. None of this was done. No suggestion was made in evidence that this was for want of resources. 312 In relation to larger boats, it is relevant to note that a "ship" or "vessel", including a houseboat, falls within the definition of "premises" in the Local Government Act. In respect of larger boats,Council had the same powers of inspection, the giving of abatement notices and direct abatement as it had in relation to houses, caravan parks and other shore-based facilities. If there were tourist boats or houseboats on the lake with unsatisfactory or inadequate toilet facilities, it was within the power of Council to do something about that; and given their proximity to the oyster leases, there was every reason to exercise that power. 313 Counsel seek to distinguish Pyrenees on the basis that the defendant council was there dealing with what counsel in this case call "a known situation"; a particular fireplace was known to be defective. It was fundamental to the imposition of liability in that case, they say, "that a place has been identified". Counsel agree their client would be liable in the present case if, for example, it did nothing about a burst sewerage pipe known to be pouring effluent into the waterway, or a known discharge from a factory or private sewerage system; but they contend that is not this case. 314 I do not think Pyrenees should be read as narrowly as counsel suggest; the case is to be read for its statements of principle rather than its particular facts. While it is true the whole factual situation was understood in Pyrenees, none of the judgments depends on that circumstance. Certainly, the judgments make plain that a local government authority sought to be made liable must be shown to have actual or imputed knowledge of the existence, and likely nature, of a danger to others. But no judgment suggests the enunciated principles apply only where everything is known. In any event, in the present case, it is clear that the Council had actual knowledge of pollution of Wallamba River by septic effluent from Nabiac. 315 I find the Council breached its duty of care to the applicant and group members. As it is clear the breach occasioned damage to the applicant, he is entitled to recover against the Council in respect of his personal claim. He is also entitled to recover against the Council in relation to his representative claim, subject to proof of the damage suffered by group members.

[52]

(i) Applicant's submissions 316 There are four elements to the applicant's case against the State. First, what counsel describe as their client's "essential case" is that the State failed to prepare or implement any proper oyster management plan for the lake. This has a number of aspects. 317 Second, the applicant claims EPA failed properly: (a) to carry out its functions in relation to land, buildings thereon and discharge therefrom so as to ensure they were not sources of pollution; or (b) appropriately to monitor the water quality of the lake. 318 Third, the applicant says the Health Department failed to properly monitor and regulate the depuration facilities of oyster farmers; 22 out of the 32 facilities being found defective after the HAV outbreak. 319 Fourth, it is said the Heath Department failed to ensure that appropriate water was used for depuration. The suggestion is that Barclay Oysters' depuration intake pipe was too close to the lake floor, so the depuration water was likely to contain virus-bearing sediment. 320 The third and fourth points may summarily be dismissed. So far as the third point is concerned, it is true the post-HAV epidemic inspection of depuration facilities revealed that two-thirds of the plants were unsatisfactory, in terms of design, construction or maintenance. Given the depuration facilities were supposed to have been inspected regularly by officers of the Health Department, this must cause concern. However, there is so far no evidence of any connection between the HAV infection suffered by any group member and unsatisfactory depuration facilities. The inspectors found no fault with Barclay Oysters' depuration facilities. As we know, viruses can survive even properly undertaken depuration. 321 The fourth point emerged late in the hearing. It depends on conjecture. Mr Barclay said the position of the intake point was dictated by expert advice. That advice is not shown to have been incorrect. Nor is it shown the Health Department was at fault in approving the location of the intake pipe. 322 In developing the first point, counsel for the applicant note that cl 12B of the Fisheries Management (Aquaculture) Regulation "required" the Minister to "determine … a program to assure the quality of shellfish taken from estuarine waters for sale for human consumption". This was to be the New South Wales Shellfish Quality Assurance Program. There was also to be a local program for each estuary. Counsel observe this Regulation took effect on 1 May 1995; but when the Wallis Lake "rainfall event" occurred 18 months later, there was not yet either a New South Wales program or a Wallis Lake local program; and this notwithstanding the years of work that preceded the making of the Regulation and the development of a Tweed River quality assurance program following the Norwalk virus epidemic in that estuary in September 1996. Counsel point out that State officers had always known depuration was an inadequate protection against viruses. The fact that a Wallis Lake quality assurance program was approved by the Minister on 19 March 1997, only five weeks after the cause of the HAV outbreak was established, demonstrates the delay was not due to policy or budgetary considerations or the need for extensive consultation. Indeed, they say, the relevant policy had been formulated before the Regulation was promulgated: the program had to "assure" quality. Given the known limitations of depuration, this meant a quality assurance program would need more than depuration; in practical terms, a sanitary survey and water monitoring. As we have seen, the program approved in March 1997 included both these features. Counsel argue this program could, and should, have been approved earlier. Had it been approved and implemented before November 1996, they suggest, the HAV outbreak would not have occurred. 323 In relation to the EPA, counsel say that authority failed properly to regulate pollution from the caravan parks; if it be accepted that pollution from that source significantly contributed to the contamination of Wallis Lake and the HAV outbreak, the State is responsible for EPA's neglect.

[53]

(ii) Council's and growers' submissions 324 The Council, the Barclay companies, Sciacca and Tadeven all support the applicant's claim against the State. 325 Counsel for the Council say this is not a case of a government being involved in an undertaking only to the extent of determining general policy and making legislation; through the Department of Fisheries, the State was actively involved in the day to day management of the fishery. The State leased the oyster leases to the growers, stipulated the terms of the aquaculture permits under which they operated and received and retained the rentals they paid. Through the Department of Fisheries, it was represented on the Wallis Lake Oyster Quality Assurance Committee which, on 22 February 1993, laid down what the Committee Chairman, Mr Moran, called "stringent guidelines … regarding the harvesting of oysters in Wallis Lake". Officers of the Department of Health supervised the depuration process and, for that purpose, required growers to maintain Oyster Purification Log Books. They approved and inspected growers' depuration facilities. However, importantly in counsel's submission, those officers were aware of the limitations of the depuration process; in particular its limited effectiveness against viruses. In his publication "Purification Technology for New South Wales Oysters", Mr Bird had pointed out purification "is not a perfect system and will not guarantee the absolute public health safety of raw oysters"; depuration was justified as the "only alternative" on "a cost risk basis". Mr Bird had referred to the need to warn consumers about the risks associated with the consumption of raw seafood: "[e]ducation of consumers [about those risks] should be on-going and effective". Yet there is no evidence of any warning to oyster consumers, whether generally or in relation to Wallis Lake oysters, still less on-going "education"; and this despite the fact that the Department knew there was no oyster management plan or water testing program for Wallis Lake. 326 Counsel for the Barclay companies did not put a reasoned submission about the liability of the State. Mr Fagan did so on behalf of Sciacca and Tadeven. However, he confined his criticism to the EPA's failure to exercise reasonable care in relation to escape of effluent from the caravan parks.

[54]

(iii) State's submissions 327 The Outline of Argument provided by counsel for the State was based on the applicant's Reamended Statement of Claim. Many of the allegations made in that pleading are not pressed. I will confine my summary to those that are. 328 Counsel for the State commence by analysing the Fisheries Management (Aquaculture) Regulation. They mention the use of the passive voice in cl 12B(1) ("The Minister is required") and the permissive "may" in s 143(1) of the Fisheries Management Act ("The Minister may, in accordance with this section, determine plans for the development of the commercial aquaculture industry"). The effect of those provisions, according to counsel, is to confer a power, not to impose a duty; certainly, the Minister is not obliged to determine a quality assurance program within any particular time. In any event, counsel argue, a statutory obligation does not give rise to a duty of care unless that is the clear legislative intention. Counsel also put policy arguments against the existence of civil damages liability arising out of the legislation. 329 In relation to the EPA, counsel refer to provisions in the Protection of the Environment Administration Act 1991 and the Clean Waters Act. They argue these provisions confer powers; they do not impose duties. And there is no indication that Parliament intended that failure to exercise the power would confer a right of action on an affected person. Counsel dispute that EPA was negligent in regard to its handling of the caravan park effluent problems; they say it is not proven that any EPA officer was aware of the existence of a problem until after the HAV outbreak. Counsel say: "Even if one assumes there was a relevant civil duty in the present case, the absence of a statutory QAP has no causal significance. This is so for the following reasons:- 62.1 a local statutory QAP would, in relation to matters that are relevant to the present case, only have included matters that were already notorious in the industry in any event e.g., (a) the requirements for sanitary surveys (b) the necessity of cessation of harvesting after a 'fresh' (c) the need for extreme caution in re-opening 62.2 a local QAP could not have created an obligation to carry out a sanitary survey. It would, even if it had required one, left the Wallis Lake growers in the situation they had been in for years - either unwilling to carry out any sanitary survey, heedless of the need to survey beyond the river inlets, and/or unable to obtain the co-operation of the Council to carry out the exercise. 62.3 compulsory closure powers already existed under the Food Act 62.4 in any event, the voluntary Wallis Lake Committee was in operation and was capable of ensuring an effective voluntary closure 62.5 the real explanation for, and cause of, the release of contaminated oysters in December 1997 was the failure of the growers to appreciate the full extent of the risks involved in harvesting and depurating after a fresh and their failure to implement the safeguards that were objectively necessary. 62.6 The inadvertence and lack of care of the growers is highly significant given the notoriety of the Tweed River incident only a few months earlier. If that incident alone did not sensitise the growers to the need for extreme care, there is no credible basis for supposing that the creation of a statutory QAP would have altered the position."

[55]

(iv) Conclusions 330 I do not find it necessary to decide whether EPA was negligent in relation to the caravan parks. That question would have practical significance only if it were possible to say it was probable that contamination from that source affected one or more of the oysters consumed by Mr Ryan or a group member. I accept the view favoured by Mason P and Beazley JA in Bendix, that it is insufficient for a plaintiff to establish that the conduct of the defendant materially increased the risk of injury. The plaintiff must show the defendant's conduct caused or materially contributed to the injury itself. While I have no doubt that the escape of sewage effluent from the caravan parks materially increased the risk that an oyster consumer would contract hepatitis A, it is not possible to find this effluent contributed to the contraction of the disease; for all we know, there may have been no HAV carrier at either of the caravan parks. 331 The substance of the only case against the State that seems open to the applicant is not unlike that which I have upheld against the Council: that the State failed to exercise its management powers in such a way as to minimise the risk of HAV infection of oyster consumers. I accept the submission that neither the Fisheries Management Act nor the Fisheries Management (Aquaculture) Regulation imposed an obligation on the Minister to approve a quality assurance program within any particular period of time. In any event, I would not be prepared to say a delay of about 18 months, between the making of the Regulation and the Wallis Lake "rainfall event", was so excessive as to constitute a breach of the Minister's obligation, under cl 12B of the Regulation, to approve a quality assurance program. Section 143 of the Act requires consultation with the industry and the public prior to the making of a "development plan" - a term that seems to include a local quality assurance program. While the evidence does not suggest frenetic activity in relation to the preparation of the New South Wales Program or any local program, I cannot say the pace was unreasonably slow. 332 I agree with counsel for the State that the absence of a statutory local quality assurance plan is not a matter of causal significance. But my reasons are different from those advanced by counsel. It seems to me the State already had a responsibility to ensure the matters identified by counsel in their para 62.1 quoted above. I have in mind the following facts: (a) the State owned, and had powers of control over, the lake; (b) through the Department of Fisheries, it established, and supervised the operations of, a mosaic of oyster leases; (c) through the Department of Fisheries, it issued, and enforced the provisions of, aquaculture permits; (d) through the Department of Health, the State supervised the depuration process, including the nature and location of water intake points and the design, construction and maintenance of depuration tanks and ultra-violet facilities; (e) through the EPA, the State had powers under the Clean Waters Act to remove, disperse, destroy or mitigate pollution of waters (s27) and to carry out inspections and investigations of premises (s29); (f) through a number of agencies, the State was a participant in the Wallis Lake Estuary Management Committee, one of whose objectives was to prepare a management plan designed "to sustain a healthy, productive and attractive estuary"; and, most importantly, (g) through the Minister for Fisheries, it had the power - at any time, to prohibit the taking of oysters from the lake: see para 102. 333 This is not a case where the alleged negligence of a government lies in failing to enact appropriate legislation. It is not a case, like McMullin v ICI Australia Operations Pty Ltd (1997) 72 FCR 1, where the claim made against government depended on policy, rather than operational, factors: see 93-98. What ought to be the content of a New South Wales Shellfish Quality Assurance Program was, no doubt, a matter of policy; to be determined at a political level by the responsible Minister. The same comment may be made about any decision by the Minister to approve or not approve a local quality assurance program. Decisions of that nature fall within Gummow J's description "quasi-legislative activity of public authorities": see Pyrenees at [182]. They are not cognisable by the law of negligence. Consequently, it would have been immaterial, if it were the fact, that a New South Wales or local program had been made that did not include a requirement of a sanitary survey. 334 However, it does not follow that the absence of a sanitary survey is irrelevant to the case against the State. Although the State cannot be made liable for failing to make a general prescription for sanitary surveys, it may be made liable for ignoring the necessity of a sanitary survey in relation to its management of a particular oyster growing area. In the present case, the State did more than lay down rules and leave the industry to manage itself. Through various agencies, the State actively involved itself in the management of the Wallis Lake oyster industry. This is understandable. The State had a direct financial interest in the industry, as a lessor of oyster leases, as well as indirect financial interests and (presumably) social and political concerns. The determination by the Fisheries Department of the areas to be leased to oyster growers, and the supervision of their use, were activities within the operational area; as were the depuration activities of the Health Department and any decisions by the Minister as to the closure or non-closure of the fishery. The EPA was involved in inspections and directions in relation to premises in the Wallis Lake catchment area. Decisions by EPA regarding the necessity to inspect premises for the purpose of determining whether they were sources of water pollution were decisions in the operational area. In sum total, through various agencies, the New South Wales government exercised substantial managerial control over the Wallis Lake oyster industry. It exercised that control by day-to-day operational decisions. 335 It is interesting to note that State functionaries themselves recognised the State's managerial role in relation to oyster fisheries. The Advisory Committee that prepared the 1992 New South Wales Oyster Quality Assurance Program included Mr Bird and an officer of the Department of Fisheries. In discussing the concept of quality assurance, the Committee referred to the Health Department's "powers of enforcement, investigation and if necessary, prosecution": see para 96 above. In his Second Reading Speech for the 1994 Act, the Minister for Fisheries spoke about aquaculture permits becoming "the tool by which the industry is managed": see para 101. Aquaculture permits were to be issued by his Department, managing on behalf of the State. 336 It seems to me the State's involvement in the management of the Wallis Lake oyster fishery was so extensive and significant as to warrant the conclusion that it gave rise to a duty of care to oyster consumers. As with the Council, the State was not obliged to undertake a quality assurance role or guarantee the safety of the oysters harvested in the lake. But it was under a duty to take those steps that were reasonably open to it to minimise the risk of consumers contracting a viral infection from the oysters. 337 If the State was under a duty of care, that duty was clearly breached. In the extract from their submission quoted at para 330 above, counsel for the State describe "the requirements for sanitary surveys" as being "notorious in the industry". This description accords with the evidence in this case. There is overwhelming evidence as to the desirability of investigation of possible sources of pollution of a shellfish growing area. Although the Americans and Europeans adopt different methods of monitoring water quality, they agree on the need for regular sanitary surveys. As the witnesses made clear, there ought to be a sanitary survey before an area is used for commercial shellfish production. The stated reason is compelling. Depuration cannot be relied on to remove viruses from shellfish. The only way of safeguarding consumers is to prevent the shellfish becoming contaminated in the first place; that means preventing human faecal contamination of growing area waters. Although it may rarely be possible to eliminate the possibility of water contamination, a thorough initial shoreline survey will go a long way towards this, provided it is supplemented by regular subsequent surveys. 338 In a case where there is an existing commercial operation, when the issue of a sanitary survey first arises, it might be thought unduly disruptive to require immediate cessation of harvesting. It may be reasonable for the managers of the oyster fishery to permit continuation of production during such time as is necessary to enable them to undertake, or arrange for others to undertake, a comprehensive sanitary survey. However, a point must arise after which it is not reasonable for a management authority to have failed to carry out a sanitary survey or, alternatively, terminate production. How long it will be before that stage is reached must depend upon the circumstances pertaining to the particular fishery. A matter of foremost importance will be the nature and use of the catchment area. Prompt action is especially necessary if the catchment area is significantly urbanised, and critically so if it is known that many premises in the catchment area are not connected to a reticulated sewerage system and/or that tests of the growing area water have revealed high faecal coliform levels after rain. Indeed, the relevant expert evidence in this case is unanimously against allowing any harvesting of oysters grown in such an area until the sanitary survey is complete. 339 At all material times, those matters were well known to State officers. Since its establishment, Mr Bird has been the State's representative at ASSAC meetings. The purpose of that committee is to encourage the adoption in Australia of the highest standards of shellfish hygiene. The Program adopted by ASSAC, ASSCP, requires closure of shellfish growing areas that have not been subjected to sanitary survey. Mr Bird knew this. He must also have known the ASSAC philosophy was based upon that adopted in the United States and other overseas countries; it represented accepted international practice. Mr Bird knew that 36 hour depuration was an inadequate safeguard against viruses and the Wallis Lake oyster growing area was situate in an urbanised area. If he did not know about the septic tanks in the catchment area, and their persistently unsatisfactory performance, that was only because he did not bother to enquire from either the Council or EPA. It was not necessary for Mr Bird, or other State officers, to have knowledge of particular pollution sources; on the information they did have, it should have been obvious to them that a viral epidemic was extremely likely. Indeed, the evidence shows this was obvious to Mr Bird. He was a member of the Advisory Committee that reported in April 1992 to the Minister about the problem arising from human sewage wastes contaminating oyster growing areas and said that "hepatitis cases … must be considered a serious potential hazard": see para 94 above. It was Mr Bird who wrote the report of 6 November 1996 about the Tweed River viral outbreak in which he stressed the need for "government involvement in addressing sewage pollution of our rivers": see para 112. 340 Long before November 1996, the stage had been reached by which the State, as the ultimate manager of the fishery, should either have ensured the making of a comprehensive and competent sanitary survey or closed the fishery. It was negligent of the State to have failed to do one or other of these things. 341 During the course of their submissions, counsel for the State asserted the standards that existed in New South Wales for meat quality testing exceeded those applying elsewhere. They also pointed out that some jurisdictions permitted same sale of non-depurated oysters, depending on the classification of the relevant growing area. These statements are true but I agree with counsel for the applicant that they miss the fundamental point, recognised elsewhere, that meat testing prior to sale is not a sufficient guarantee of non-contamination. All the international models rely on the classification of harvesting areas by reference to sanitary surveys. As Mr Alton put the matter in the course of his evidence: "Growing oysters in water of acceptable sanitary quality is the first critical control point …" If the water quality is satisfactory, viral contamination problems should not arise. If it is not, they may confidently be expected; and when they do arise, neither depuration nor flesh testing will be an effective weapon against likely infection of consumers. 342 I think the applicant is entitled to succeed against the State both in respect of his own claim and, subject to proof of damage, in relation to his representative claim. 10. NEGLIGENCE: THE CASE AGAINST THE BARCLAY COMPANIES

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(i) Applicant's submissions 343 The applicant's negligence case against Barclay Oysters and Barclay Distributors is shortly expressed. Referring to Mr Bird's paper "Purification Technology for New South Wales Oysters", which Mr Barclay said he read some years ago, counsel say the Barclay companies were aware that: (a) depuration was not adequate to remove viruses from oysters; and (b) E.coli testing (whether of growing area waters or meat) would not necessarily reveal the presence of viruses. Counsel also say the companies knew, or ought to have known, of the existence of sources of pollution of the harvesting area. In such circumstances, they say, Barclay Oysters was negligent in harvesting oysters from the area, especially shortly after heavy rain. 344 Counsel also put submissions regarding the location of the depuration water intake pipe and the harvesting of oysters on 23 November 1996. As it is not established that the infection of any person was related to these matters, I need not consider them further. (ii) Council's and State's submissions 345 The Council submits that, if it is held liable to the applicant, there ought to be contribution from the Barclay companies. The basis of this submission is that, with the establishment of the Wallis Lakes' Oyster Quality Assurance Committee in 1993, the State and oyster farmers assumed responsibility for the safety of oysters grown in the lake. Counsel itemise steps subsequently taken by the growers to assure oyster safety, including the flesh testing program. Although they applaud these steps, counsel assert the Barclay companies knew they could not ensure the oysters that would be sold were virus-free; they refer to Mr Barclay's evidence about his knowledge of Mr Bird's paper. Counsel's submission is that Barclay Oysters elected to take a commercial risk about the safety of its oysters, by selling them without issuing any warning to consumers. As "the farmers became the means by which the virus bearing oysters were passed on to consumers", it is just that they (and the State) indemnify the Council for the amount of any verdict awarded against it. 346 The State also claims indemnity by Barclay Oysters. Counsel for the State put a long list of steps that are said to constitute "prudent practice" for an oyster grower at Wallis Lake in 1996. They include limitations on harvesting after heavy rain, PCR flesh testing for viruses and faecal coliform water testing. That there is merit in these suggestions points up the folly of the State authorities, the Departments of Health and Fisheries, in relying only on depuration.

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(iv) Conclusions 349 Notwithstanding the attention given to the matter at the hearing, I am not persuaded there was a causal connection between the HAV epidemic and the harvesting undertaken by Barclay Oysters' on 23 November 1996 or on 27 November and the immediately succeeding days. The cause of the epidemic was the widespread HAV contamination of the lake. I see no reason to believe the date of harvesting was a critical factor in relation to any particular consumer contracting the disease. 350 I accept Mr Barclay's evidence that, at all times, he endeavoured to implement the requirements set out in Mr Bird's publication. There is no evidence of any deficiency in Barclay Oysters' depuration plant, in design, construction or maintenance, or in relation to its manner of operation. However, this does not mean the Barclay companies must be exonerated of negligence. 351 The existence of a duty of care is conceded; the only issues relate to breach of duty and damage. As to breach, it seems to me the applicant is able to establish his case out of matters conceded by Mr Barclay himself. Mr Barclay agreed he was at all times aware: (a) of the existence of potential sources of viral pollution of the lake; (b) that depuration was not adequate to remove viruses; and (c) that E. coli oyster meat testing would not necessarily show viruses. In this situation, it seems to me apparent that a prudent oyster grower needed to do more than depurate and rely on E. coli flesh tests; ex hypothesi those steps would be an insufficient protection against the known danger. I do not agree with the State's submission that Barclay Oysters' omission lay in its failures further to defer harvesting after the November rain and to carry out PCR flesh testing and faecal coliform water testing. Useful though these measures might have been, they would not necessarily have protected consumers of the oysters. As already explained, viruses could have remained in the water, or in unharvested oysters, for many weeks after cessation of the rain, and after faecal coliform levels had dropped back to normal limits; and their existence would not necessarily have been revealed by PCR testing. The only real protection to consumers was to prevent viral contamination in the first place. As is the case with the Council and the State, Barclay Oysters was not obliged to ensure the absence of viruses, but it was obliged to take the steps reasonably open to it to obtain a virus-free growing environment and, if this was impossible, to refrain from selling oysters for human consumption, except perhaps with a warning about the risk in eating them. 352 Counsel for the Barclay companies cross-examined the witnesses who urged the need for a sanitary survey by obtaining their agreement that they would not ordinarily expect this to be undertaken by a single producer. Counsel seemed to assume that this agreement absolved their clients from any responsibility for the absence of a sanitary survey. I do not see the matter that way. The Barclay companies could have made a significant contribution to risk reduction by having a few men walk that part of the foreshores of the lake, rivers and islands that is publicly accessible - and that is most of it - and list all items of apparent concern. However, a satisfactory sanitary survey required access to all premises and possession of enforcement powers. Governmental or local governmental involvement was essential. This does not let the Barclay companies off the hook; neither they nor any of the committees with which they were associated attempted to procure governmental or local governmental involvement. The evidence does not reveal any approach to the Council or a State agency for the making of a sanitary survey, with or without support (manpower or financial) from the local industry. The Barclay companies (and, apparently, the other local oyster producers) were as oblivious to the need for a sanitary survey as was the State. Given that they actually produced the product that put consumers at risk, they cannot escape some responsibility for the lack of a sanitary survey. 353 If the oyster producers had endeavoured, and failed, to persuade the Council or the State to undertake a proper sanitary survey, they would have needed to consider other options. One option - presumably expensive - might have been to relay the oysters in other waters for a period before sale. There may have been other possibilities. It is not necessary to go into them. It is enough to say it was not sufficient for the Barclay companies (or any other producer) to shrug off their knowledge of the possible pollution of the lake by saying this was someone else's responsibility. 354 In my opinion, in selling without warning oysters grown in waters known to be subject to possible undetectable viral contamination, both Barclay companies breached their duty of care to ultimate consumers of the oysters. Because it is apparent that the viral infection sustained by Mr Ryan, and the group members who became ill after consuming Barclay oysters, stemmed from the contamination of the lake, there is a clear causal connection between the breach and the damage. 355 It does not follow that all distributors of Wallis Lake oysters are liable in negligence to HAV infected consumers of their oysters. Barclay Distributors is in the unusual position of being controlled by a person (Mr Graham Barclay) who is also the controller of a grower company. Barclay Distributors is therefore fixed with an unusual degree of knowledge about the circumstances of production of the oysters it distributes. Its knowledge may exceed that of distributors based elsewhere; and, even more so, people (perhaps including restaurateurs) who purchase oysters for commercial purposes without knowledge of the circumstances, even location, of their production.

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(i) The applicant's claims 356 The applicant's Trade Practices Act claims affect only the Barclay companies, not the Council or State. They are six in number. The first three claims arise out of Division 2A of Part V of the Act, dealing with actions against manufacturers and importers of goods. Section 74B deals with unsuitable goods, s74C with goods that do not correspond with their description and s74D with goods of unmerchantable quality. The applicant relies on all three provisions. The fourth claim depends on s75AD of the Act, liability for defective goods causing injury. Fifth, the applicant relies on s52 of the Act, contending there was misleading conduct in the form of an implied representation that the oysters sold to Mr Thomas Ryan and Mr David Ryan were fit for human consumption. Finally, the applicant alleges a breach of the implied condition of merchantable quality enacted by s71 of the Act. (ii) Section 74B 357 Section 74B of the Trade Practices Act provides as follows: "74B(1) Where - (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any antecedent negotiations in connexion with the acquisition of the goods were conducted; (d) the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied; and (e) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose, the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Sub-section (1) does not apply - (a) if the goods are not reasonably fit for the purpose referred to in that sub-section by reason of - (i) an act or default of any person (not being the corporation or a servant or agent of the corporation); or (ii) a cause independent of human control, or (b) where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the corporation." 358 Section 74A defines the word "manufactured", for the purposes of Division 2A of Part V, as including "grown, extracted, produced, processed and assembled". These words of extension clearly cover the activities of a corporation such as Barclay Oysters which grows, harvests, cleans, depurates and packs oysters for distribution to retailers. 359 There are two possible ways of applying subs (1) of s74B to this case. On either approach, the requirements of the subsection are fulfilled. 360 In relation to para (a), it is clear the oysters consumed by the applicant were "manufactured" by Barclay Oysters and, in trade or commerce, supplied by that company to another person, Barclay Distributors, who acquired them for re-supply. 361 In relation to para (b), a question arises whether the applicant should be regarded as "a consumer" or whether the "consumer" was the relevant purchaser: the applicant's father or brother. Because para (e) contemplates that the "consumer" is not necessarily at the end of the acquisition chain, I prefer the latter approach. However, it does not matter. If the applicant is thought of as the "consumer", para (b) was satisfied when his father or brother, as the case might be, gave him the contaminated oyster or oysters. If the father or brother is the "consumer", the paragraph was satisfied at the time of sale of the oysters to that person by Barclay Distributors. In either event, para (c) was satisfied. There is only one purpose for which oysters can sensibly be used: human consumption. Accordingly, although there is no evidence anything was said about the purpose of the acquisition, it was implicit in the whole series of transactions that this was the purpose to which these oysters would be put. That purpose was known at all times to both Barclay Oysters and Barclay Distributors. 362 It is clear the contaminated oysters were not reasonably fit for human consumption (see para (d)) and that the applicant - who was either "the consumer" or a person who acquired the oysters from a "consumer" - suffered loss as a result (see para (e)). 363 Counsel for the Barclay companies do not dispute this analysis. Nor do they suggest para (a) subs (2) is relevant. But they rely on para (b). They say the circumstances demonstrate "the consumer", whoever he was, did not rely on the skill or judgment of Barclay Oysters or, alternatively, it was unreasonable for him to do so. 364 I see no basis for the first submission. There is no evidence of reliance; but that does not mean the circumstances demonstrate a lack of reliance. A person will not normally seek an assurance that an item grown or manufactured for human consumption is fit for that purpose; in the absence of an obvious defect or special circumstance, fitness will be assumed. The acquirer will rely on the skill and judgment of the grower or manufacturer in ensuring the article is fit for human consumption. That was the situation in this case; if they had been asked, each of the Messrs Ryan would surely have said he assumed the oysters were fit for human consumption; they were purchased from a supplier associated with a reputable grower. 365 The argument about unreasonableness has a little more force. Counsel for the Barclay companies say it was unreasonable for anyone to rely on the skill or judgment of the grower "since the expert evidence reveals that it was not possible to ensure that an oyster was free of viral contamination, even if viral testing had taken place before sale. Viral testing, of its nature, involves destruction of the oyster and could not have been carried out in relation to every oyster sold". 366 I accept it would not have been possible for Barclay Oysters to test the particular oysters sold to the applicant's father and brother. I also accept it is impossible to ensure that a particular oyster is free from viral contamination, although it is possible to minimise the risk of the oyster being contaminated at the time of sale. However, as counsel for the applicant submit in reply, the question is not whether the grower could reasonably have discovered the defect; the issue is the reasonableness of the consumer's reliance, not the reasonableness of the manufacturer's behaviour. The right of action created by s74B is a statutory cause of action. Its elements must be taken from the statute itself, free of any preconceptions that might arise by reference to principles governing common law negligence. 367 As counsel point out, neither of the Barclay companies gave any warning of the possibility that the oysters might contain a virus they could not detect. It seems none of the Messrs Ryan was in fact aware of this possibility. That is not surprising. Probably many people are aware that, if hygienic procedures are not maintained, the consumption of oysters may result in gastroenteritis or other illnesses. However, I think most people would assume there are procedures and tests that enable a grower to ensure its product is fit to eat. I believe it would come as a surprise to most members of the public, as it has come as a surprise to me, to learn this is not necessarily so. In the absence of a warning, each of the Messrs Ryan was entitled to rely on the skill and judgment of the grower. 368 The applicant is entitled to succeed under s74B as against Barclay Oysters in respect of his personal claim. I cannot make any concluded finding in relation to the applicant's representative claim under s74B against Barclay Oysters; it is conceivable - although, perhaps, unlikely - that something was said or done, at the time of the supply of oysters to a particular consumer, to make it unreasonable for that consumer to rely on the skill or judgment of Barclay Oysters. The application of s74B to group members must be left for future determination, if that should prove necessary. 369 Section 74B has no application against Barclay Distributors, for two reasons. First, that company did not "manufacture" the goods, even within the expanded definition of that term; second, it is not shown that either Mr Thomas Ryan or Mr David Ryan acquired the unfit oyster or oysters for re-supply. The evidence suggests the oysters given to Mr Grant Ryan were simply part of a larger batch acquired for the family generally.

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(iii) Sections 74C and 74D 370 Section 74C is similar in format to s74B but concerns cases where goods are supplied to a consumer by description and the goods do not correspond with the description. That is not this case. There is no suggestion in the evidence that the description of the desired goods descended to any greater particularity than "oysters", and oysters were supplied. There is a difference between description and quality: Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 at 466-467 and 489. 371 Section 74D deals with goods that are not of "merchantable quality". It reads: "74D(1) Where - (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are not of merchantable quality; and (d) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not of merchantable quality, the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Sub-section (1) does not apply - (a) if the goods are not of merchantable quality by reason of - (i) an act or default of any person (not being the corporation or a servant or agent of the corporation); or (ii) a cause independent of human control, occurring after the goods have left the control of the corporation; (b) as regards defects specifically drawn to the consumer's attention before the making of the contract for the supply of the goods to the consumer; or (c) if the consumer examines the goods before that contract is made, as regards defects that the examination ought to reveal. (3) Goods of any kind are of merchantable quality within the meaning of this section if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to - (d) any description applied to the goods by the corporation; (e) the price received by the corporation for the goods (if relevant); and (f) all the other relevant circumstances." 372 Subject to the definition of "merchantable quality", subs (1) is clearly satisfied, as against Barclay Oysters, but not Barclay Distributors. Subsection (2) is irrelevant. The issue in relation to s74D arises out of the definition of "merchantable quality" in subs (3). 373 Counsel for the Barclay companies argue that the subject oysters were as fit for the purpose for which oysters are commonly bought, consumption as food by humans, as it was reasonable to expect, having regard to the circumstance that it is impossible for a grower to guarantee the absence of a virus. 374 The error in this approach is similar to that in relation to s74B. The issue posed by s74D(3) is not whether it was possible for the grower to ensure the oysters were free of viruses, but whether a purchaser would act reasonably in expecting they were. Unlike s74B(2)(b), which directs attention to the acts and omissions of the particular consumer, s74D(3) imposes an objective standard ("as it is reasonable to expect"), though that standard must be applied having regard to all relevant circumstances. In the present case those circumstances include the absence of any warning by the Barclay companies of the possibility of a virus in the oysters. Of course, this would not matter if it was well known to members of the public that viruses can survive even proper processing and depuration, but the evidence does not suggest it was. 375 The s74D claim should be determined in the same way as that arising under s74B: the applicant is entitled to succeed on his own behalf against Barclay Oysters, although not Barclay Distributors. His representative claim against Barclay Oysters should be reserved.

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(iv) Section 75AD 376 Section 75AD appears in Part VA of the Trade Practices Act. This Part was added in 1992 to provide remedies against manufacturers and importers of defective goods. Section 75AD covers the case of a loss by an injured individual. It reads: "75AD If: (a) a corporation, in trade or commerce, supplies goods manufactured by it; and (b) they have a defect; and (c) because of the defect, an individual suffers injuries; then: (d) the corporation is liable to compensate the individual for the amount of the individual's loss suffered as a result of the injuries; and (e) the individual may recover that amount by action against the corporation; and (f) if the individual dies because of the injuries - a law of a State or Territory about liability in respect of the death of individuals applies as if: (i) the action were an action under the law of the State or Territory for damages in respect of the injuries; and (ii) the defect were the corporation's wrongful act, neglect or default." 377 The term "manufactured" is defined in s75AA, for the purposes of s75AD, in the same terms as in s74A. Section 75AC(1) explains that "goods have a defect if their safety is not such as persons generally are entitled to expect". Consistently with what I have already said, it seems to me the elements stipulated by s75AD are satisfied in this case. However, s75AK(1)(c) provides a defence to an action under s75AD (amongst other sections) "if it is established that … the state of scientific or technical knowledge at the time when they were supplied by their actual manufacturer was not such as to enable that defect to be discovered". The paragraph obviously intends the defence be unavailable if the goods were supplied notwithstanding the possibility of discovery of the defect. Conversely, the defence is available if the defect was not capable of discovery before supply. In the present case, discovery and supply were mutually exclusive; the only test that would reveal the defect would destroy the goods. Accordingly, it seems to me the defence applies and the s75AD claim fails.

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(vi) Section 71 379 The final Trade Practices Act claim depends on s71. That section reads: "71(1) Where a corporation supplies (otherwise than by way of sale by auction) goods to a consumer in the course of a business, there is an implied condition that the goods supplied under the contract for the supply of the goods are of merchantable quality, except that there is no such condition by virtue only of this section - (a) as regards defects specifically drawn to the consumer's attention before the contract is made; or (b) if the consumer examines the goods before the contract is made, as regards defects which that examination ought to reveal. (2) Where a corporation supplies (otherwise than by way of sale by auction) goods to a consumer in the course of a business and the consumer, expressly or by implication, makes known to the corporation or to the person by whom any antecedent negotiations are conducted any particular purpose for which the goods are being acquired, there is an implied condition that the goods supplied under the contract for the supply of the goods are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the consumer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the corporation or of that person. (3) Sub-sections (1) and (2) apply to a contract for the supply of goods made by a person who in the course of a business is acting as agent for a corporation as they apply to a contract for the supply of goods made by a corporation in the course of a business, except where that corporation is not supplying in the course of a business and either the consumer knows that fact or reasonable steps are taken to bring it to the notice of the consumer before the contract is made." 380 If this section has any application to the present case, it would be against Barclay Distributors; that was the company which supplied the oysters to a "consumer" (Mr Thomas Ryan and Mr David Ryan). If either of those people had contracted hepatitis A as a result of eating the oysters purchased by him, it seems to me an action would lie under either s71(1) or s71(2). However, there was no privity of contract between the applicant and Barclay Distributors. The applicant's counsel argue this does not matter because the situation is covered by the decision in Trident General Insurance Co Limited v McNiece Bros Proprietary Limited (1988) 165 CLR 107. In that case the High Court allowed recovery against an insurer by a contractor to a construction company that took out a public liability insurance policy in which the term "The Insured" was defined to include the construction company's contractors. No doubt the full ramifications of that decision have yet to be assessed, but I am not persuaded it would justify allowing recovery in the present case. Each member of the High Court who favoured dismissal of Trident's appeal emphasised that the parties had contracted on the basis of benefiting third parties. That was also the situation in each of the subsequent cases, of which I am aware, in which Trident has been applied to permit recovery. See Nitschke v Rossair Pty Ltd (1989) 97 FLR 54 (Jacobs J), Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 (Brownie J) and SGIC v Giacomelli (1993) 9 SR (WA) 126 (Judge Keall) and compare Cousin v Grant (1991) 103 FLR 236 (Miles CJ). There is no evidence in the present case that the parties contracted on that basis.

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(i) The quantum of damage 381 As already mentioned, Mr Ryan first felt unwell on 30 January 1997. He said in his witness statement he "felt hot and sick in the stomach and was off my food". He thought he might be coming down with influenza but he went to work as usual. He is a self-employed plumber. 382 On the following day, Mr Ryan's wife, Julie, gave birth to their fourth child. He attended the hospital for the birth but "began to feel increasingly unwell" and thought he "might faint and pass out". Mrs Ryan returned home five hours after the baby's birth. Mr Ryan was too unwell to assist her with the baby. On 1 February Mr Ryan attended the surgery of his local medical practitioner, Mary Bower-Williams. According to a report from Dr Bower-Williams tendered in evidence, Mr Ryan complained of "feeling ill and feverish and passing dark urine". Dr Bower-Williams observed he was "extremely jaundiced and had a very tender liver on examination". Dr Bower-Williams arranged blood and urine tests. On the following Monday, 3 February, Mr Ryan was informed he had infective hepatitis and advised to rest and refrain from fat and alcohol in his diet. 383 Mr Ryan subsequently attended Dr Bower-Williams on a number of occasions. He underwent blood tests and an ultra-sound of his gall bladder. Dr Bower-Thomas reported: "Mr Ryan was physically incapable of working at this time and it was felt that it could be 4-6 weeks before he would be fit for work. His Liver Function Tests were checked weekly until he was reviewed on 18.2.97 when his jaundice was resolving but he was still feeling ill with aching kidneys. On 24.3.97 Mr Ryan was still very listless and felt he was not able to cope with his work load and tending to 'flake out' with exhaustion. His LFT's had settled considerably but were still abnormal. Mr Ryan's wife had just delivered her fourth child and it caused considerable distress to the family to discover that Mr Ryan had infective hepatitis. Consequently all members of the family including the newborn baby and Mrs Ryan's father were given immunoglobulin to protect them from contracting Hepatitis A." 384 Mr Ryan did not remain off work for four to six weeks. He returned to work after about three weeks. During his time off work, he felt "extremely unwell". He suffered abdominal pains and aches, he felt "very nauseous" and could not hold down his food, he had a fever, sweated profusely and was jaundiced. He lost about eight kilograms of weight. Mr Ryan was cared for by his wife. In his written statement, Mr Ryan said: "In the beginning she performed all the household tasks, helped me with personal hygiene, ensured that I had plenty of fluids, washed my clothes and bed sheets daily and took me to the doctor and organised blood tests. This placed a great strain on her as she was also caring for our newborn son and our three other school aged children. I was also very distraught at not being able to hold my newborn son, or have contact with my other children for fear of infecting them. The entire family, including my infant son had to be immunized against Hepatitis A virus." At the end of three weeks, Mr Ryan returned to work but he said: "I was still very unwell. I was unable to eat much food and I had back pain near my kidneys. I was also very weak and lethargic. I found strenuous physical work almost impossible and I was only able to perform lighter duties. I was also only able to work reduced hours. Normally I work from 7.00am to 5.00pm but after my infection with Hepatitis A I was only able to work until about 3.00pm. When I returned home from work I would go to bed and sleep, then wake up for dinner and return to bed. I depended on my wife to take care of all the household duties and also to look after our children. It was a number of months before I started to eat more normally and feel stronger. After about 6 months I had regained the weight I had lost and was able to perform my normal work duties." 385 Mr Ryan's account of his illness was confirmed by his wife. The symptoms he recounts conform with those of a typical hepatitis case, as described by Professor Boughton. I have no hesitation in accepting Mr Ryan's evidence. He suffered a most unpleasant and distressing illness, albeit one that has left him with no permanent effects. 386 Mr Ryan incurred out of pocket expenses of $554.05, all for medical consultations and tests. These were paid by Medicare but Mr Ryan will be obliged to refund that payment out of his damages award. 387 In addition Mr Ryan lost some income. He operated through a family company, Grant Ryan Plumbing Pty Ltd. He said in evidence the company's gross receipts, through his labour, were about $1,000 per week. That figure is consistent with the company's financial statements for the year ended 30 June 1997. There is a question what deductions from that figure ought to be made. Some costs were fixed costs, incurred regardless of whether or not Mr Ryan was working; others would not have been incurred during his absence from work. It is also necessary to make some allowance for the effect on his earnings of being obliged to work short days for some months. Taking everything into account, it would be reasonable to allow a round figure of $4,000 for loss of income and medical expenses. 388 Mr Ryan also makes a claim for the nursing services provided to him by his wife. In Van Gervan v Fenton (1992) 175 CLR 327 a majority of the High Court held that the true basis of a claim for damages with respect to care and services gratuitously provided to an injured person is the need for those services; it is unnecessary to prove payment. Damages are to be determined, not by actual cost to the plaintiff, but by reference to the market cost of providing the services. In that regard, the applicant tendered evidence from Shirley Wruck, a registered nurse who runs an agency called Macquarie Nursing Service, deposing to 1997 hourly rates for a "domestic carer" . The rates are $14.70 on Mondays to Fridays, $22.50 on Saturday and $29.40 on Sunday. The stated duties of a domestic carer extend beyond those performed by Mrs Ryan for her husband in his illness; and, of course, those duties were performed intermittently as the need arose. So it is difficult to translate Sister Wruck's rates into a figure appropriate to this case. But I think it is reasonable to allow $1,000 for the value of Mr Ryan's nursing services. This takes the progressive total to $5,000. 389 The suggestions made by counsel about the appropriate general damages figure range from $3,000 to $45,000. The former figure seriously under-appreciates the significant physical effects of a bout of hepatitis A, suffered over a period of several months, and the stress and inconvenience this must cause any sufferer. The latter figure seems too high, given the absence of any residual disability. In my view the appropriate figure in this, fairly typical, case is $20,000. I add this sum to the $5,000 previously assessed to reach a pre-interest total of $25,000. 390 It is now just over two years since the commencement of Mr Ryan's illness. Rounding out the period by allowing two years interest at 10% per annum, I add $5,000 for interest and assess total damages at the figure of $30,000.