PLAINTIFFS are satisfied at progress made in trying to prove their argument in the class action claim against the Commonwealth government, over the Indonesian live cattle export ban, during the first stage of trial.
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The Brett Cattle Company of the NT are lead litigants in the legal action that’s seeking to prove misfeasance in former Labor Agriculture Minister Joe Ludwig’s decision to suddenly suspend the live cattle trade to Indonesia for up to six months in mid-2011.
It came days after the ABC Four Corners program of May 30, 2011 “A Bloody Business” exposed images of dramatic animal cruelty filmed by animal activists in targeted abattoirs, which ignited an unprecedented public backlash directed at the then Labor government demanding action – including banning the entire livestock export industry.
Mr Ludwig was a notable absence during the first round of trial proceedings over the past fortnight, failing to appear and defend his decision; despite repeated references to his potential importance as a witness, by the judge and plaintiffs’ lawyers.
But Northern Territory Cattleman’s Association CEO Tracy Hayes said she was still pleased with how the industry had pressed its case during the initial proceedings held in the Federal Court in Sydney, before Justice Rares.
“We believe we are in a good position after presenting a strong argument for misfeasance over the past two weeks,” she said.
“The judge in particular we believe showed an acute understanding of supply chains in Indonesia at the time of the suspension that were still able to process exported Australian cattle to acceptable welfare standards.
“We’re really satisfied with the outcome of the first six days at trial and presenting strong evidence in arguing our case that the minister's second control order was invalid.
“The court has already accepted damages but we're not getting ahead of ourselves because it's a tough case and ground-breaking.
“If we prove misfeasance it will be the first time a court has made such a decision.”
The industry is seeking about $600 million in damages for losses incurred by the abrupt suspension decision with legal costs, to push the claim, backed by the Australian Farmers Fighting Fund.
The claim was initially filed in October 2014 - but ongoing efforts by Minter Ellison lawyers to try and settle with the former Labor government and current Coalition administration, have proven futile.
Ms Hayes said a directions hearing was now likely to be held ahead of a scheduled return to court on Tuesday, December 11, to argue the cost of damages, or quantum, which is not uncommon practice in such cases.
“We know many producers and industry and others who lived through the ban are watching closely and we thank them for their support.”
Both legal teams have focused on establishing a paper trail of evidence around proving what the former minister had at his disposal - including briefing federal cabinet and legal advice – to guide his thinking, in making the six month suspension decision.
Sledgehammer to crack a nut
The plaintiffs Senior Counsel Noel Hutley has argued during trial proceedings that the second control order signed by Mr Ludwig which ultimately suspended the entire trade - rather than the first move to ban trade to 12 abattoirs identified in the Four Corners program, and take other steps like a review of in-market welfare standards - was “unreasonable”, “disproportionate” and “irrational”.
Mr Hutley has detailed various factors pressuring the then minister into making a “rushed” decision, including the significance of external groups like RSPCA Australia and Animals Australia, aided by the GetUp! social media campaign, warning of a systematic failure to provide welfare assurances in Indonesia, while urging all cattle shipments to be stopped immediately.
He’s also cited various political forces at play within the Labor party, pressing Mr Ludwig and then Prime Minister Julia Gillard, and further pressure applied by independents who held sway in the fragile hung parliament.
During the final day of evidence last week Mr Hutley said there was “acceleration” at the last moment to achieve an end, “which we say closed down the entire trade in circumstances where there was, both in the instrument as taken to cabinet and, as common sense would tell one, an appropriately focused alternative or means of achieving what was the obvious object of the instrument which did not have the sledgehammer effect of stopping trade dead”.
He said Elders was, “we say to the knowledge of the minister”, in a position to meet any reasonable closed loop view which, “demonstrates the unreasonableness of the approach taken and, with respect, the recklessness of the minister”.
“Let it be assumed that Indonesia had had immaculate conditions generally, supply chain security, but there were one abattoir which had been managed with practices which were abhorrent,” he said.
“Would it be…a proper exercise of this power to ban the entire export to Indonesia?
“As it were, using the proverbial…sledgehammer to crack a nut.
“It would be capricious and irrational to visit harm upon the whole industry to respond to a problem.”
Mr Hutley said the minister was also taking forward and had advice of a proposal which had an exception that avoided the “capricious imposition of harm to the undeserving”.
“That is, undeserving of harm,” he said.
Justice Rares said “you’re sort of saying….that the rejection of a proposal that accommodated the real possibility of which the minister was aware of facilities in Indonesia being - or being able to be shown to be compliant with animal welfare objectives, which is encapsulated in the draft cabinet recommendation is, without any further explanation, irrational because it can’t be justified”.
“It’s a rejection of an actual alternative contemplated – recommended by his department?” he said.
Mr Hutley said his side of the legal case had made submissions, which weren’t disputed by the defendants in their submission, of the “immense implications of contractual obligations and the like which flowed”.
“The minister has chosen not to give any evidence as to how that came about,” he said.
Defence hits back
But in presenting a legal point to summarise his side’s case, defence Senior Counsel Neil Williams said the recklessness required for the tort was that the official must actually believe or suspect the unlawfulness of his or her proposed act.
“A dishonest state of mind is required or a lack of an honest state of mind is required,” he said.
“Here, that requires the minister to be shown to have believed or suspected that the suspension he proposed was manifestly irrational – that’s the first way they put it.
“Or alternatively, that he believed or suspected that the second control order, in suspending exports of live cattle to Indonesia for six months, went beyond any measure that could reasonably be adopted as a means of fulfilling the statutory object of controlling exports.
“Having regard to the material before the minister from the department, the Chief Veterinary Officer, from AMIC (Australian Meat Industry Council), the RSPCA, the minister’s contemporaneous statements as to his reasons, neither of those propositions can be made out.”
Mr Williams said on May 31, (2011) the Australian Livestock Exporters' Council (ALEC) told the department, that even with the “tightest of controls in the supply chain, cattle still found their way into poorly run facilities through leakage”.
“This was a risk to any system in the industry and ALEC committed to providing details of possible scenarios,” he said.
“The industry plan a day or two later did not contradict this, but, indeed, reinforced it.
“Nor did the minutes of what were said by industry in the meetings with the department on June 3 or June 6 suggest that secure supply chains already existed.
“Those considerations informed the department’s advice to the minister as to why targeted responses would not work and why a suspension was necessary.
“They underpinned the minister’s explanations of his reasons for imposing the suspension by reference to the need to have an assured verifiable system for ensuring animal welfare.”
Mr Williams said in light of the advice given to him, “it simply does not matter what the minister might have been told” on April 1, 2011 by Consolidated Pastoral Company CEO Troy Setter - who appeared at the trial to give evidence - and former Meat and Livestock Australia chair Don Heatley, who was also a witness.
He said on the defence’s submission, the judge would decide factual issues in the case by reference primarily to the contemporaneous records of what was said or provided to the minister, to the department, and what the minister himself said by way of explanation of his actions the next morning.
But Justice Rares said “it’s really what was said to the minister”.
“It doesn’t matter what was said to the department except to the extent that any reliance on what the department provided to the minister could be said to be rational or irrational for these purposes,” he said.
“The minister’s making the decision.
“It’s what’s in the minister’s mind that’s relevant and what he has before him and a lot of the stuff that’s said to the department and the functionaries in his office or in the department doesn’t matter, does it?”
Mr Williams said the minister was “relying on his officials, as ministers always do”.
“This was a regular process of departmental decision-making – his officials had meetings with industry and those meetings plainly informed what they told the minister,” he said.
But Justice Rares said what industry told the department may or may not inform the sphere of rational choice open to the minister, “objectively speaking”.
“My task at the end of the day is to look at what the minister actually had in front of him, not what the department or other people were told which was not in front of the minister - but what the department told the minister in the briefings and what the minister saw of the Four Corners program and then whether or not that was an exercise of power that was open to him without it being a misfeasance,” he said.
“It seems to me that if I’m judging whether the minister abused his office by making an order that was beyond power and a belief – or reckless as to whether he had the power or not - the only evidence that’s relevant to his state of mind is what he had in front of him and he didn’t have all these meetings that the department had or whatever.”
Lack of Ludwig testimony at trial in question
Justice Rares said the defence’s inference was that the minister would have been informed of certain matters – but the question was how and of what part of them or whose version of them, or what way he would have been informed.
“It’s one thing to say this was put in front of him and he read it - that I understand - but there’s absolutely no evidence of that,” he said.
“So it seems to me, not having called the minister, to ask me to draw the inference that everything that’s material in these communications with the office is put before the minister is just beyond belief, because it doesn’t look like anything was directly sent to the minister.
“It would have been the easiest thing in the world for you to have tendered emails to the minister showing these things had been put before him that he could read.
“I don’t know what they told the minister and whether they told him accurately, whether they omitted material matters, or anything else.
“Now, that could have all been clarified if he had been called - but he wasn’t.
“So I’ve got to deal with what I have and if you ask me to draw an inference, sure, I might not draw a positive inference that the minister was misinformed.
“I wouldn’t be able to do that - but the fact is you’ve chosen not to call him so you can’t ask me to infer that when I’ve got masses of stuff that are going into the ministerial office and not one document that demonstrates, apart from the departmental briefs, that the minister looked at or was shown any of that in writing.
“So, you know, how do I know what he was told?”
Justice Rares said it was not just paucity but “a complete absence of one email to the minister”, passing any of the material on.
“And I have got chiefs of staff of the Prime Minister writing to chiefs of staff from his office saying, ‘We want to know about all this’,” he said.
“It’s all being done by these functionaries.”
“I haven’t been taken to one in the evidence so far in five days we’ve been listening to this case.
“The minister was able to give evidence - he didn’t - so I’m left with what I know he got, and that may – and you will tell me does provide a firm foundation to say that there’s no basis I could draw the inference that he acted with an abuse of his office.”
In his closing argument, Mr Williams said the evidence in the case was “wholly inadequate” to establish a state of mind of “reckless indifference” on the part of the minister.
“How do our friends possibly get to anything like the states of mind that are required for this tort in circumstances where the minister, before the Four Corners program, has already inquired about powers to regulate and has been provided with advice from the AGS (Australian Government Solicitor)…specifically about liability and has been informed by his department that he has a broad power to regulate?” he said.
“Advice that was plainly right and supported by advice given to the department by Blake
“There is no material on the present case…from which it could be inferred that the minister had any consciousness of a lack of power or any wilful disregard of it.
“To say he acted under circumstances of some time pressure, when better advice might have been obtained, had he taken another week or two, is merely to emphasise the complete lack of material in the present case which could possibly give rise to a finding of this gravity to the requisite standard.
“The two grounds on which invalidity is asserted, one is manifest irrationality, and that requires that the minister…know or suspect, believe or suspect that his decision was irrational.
“Now, we ask rhetorically: where is the evidence for that in circumstances where the minister was given firm advice by his department on repeated occasions, including legal advice, and was given firm advice…on repeated occasions by AMIC to take more or less precisely the course which he did take in the interests of preserving the very valuable Australian domestic and export meat trade?”