Graham Barclay Oysters Pty Ltd v Ryan

• Jurisdiction: Australia Federal only
• Judge: Gleeson CJ,Gaudron J,McHugh J,Gummow,Hayne JJ,Kirby J,Callinan J
• Judgment Date: 05 December 2002
• Neutral Citation: 2002-1205 HCA A,[2002] HCA 54
• Court: High Court
• Docket Number: S258/2001 S261/2001
• Date: 05 December 2002

[2002] HCA 54

HIGH COURT OF AUSTRALIA

Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ

S258/2001

S259/2001

S261/2001

Graham Barclay Oysters Pty Limited & Anor

Appellants

and

Grant Ryan and Ors

Respondents

Grant Ryan

Appellant

and

Great Lakes Council and Ors

Respondents

State of New South Wales

Appellant

and

Grant Ryan and Ors

Respondents

Representation:

C R R Hoeben SC with A P Coleman for the appellants (instructed by PricewaterhouseCoopers Legal)

T K Tobin QC with J B R Beach QC and B M Zipser for the first named first respondent (instructed by Slater & Gordon)

No appearance for the second to seventh named first respondents

W H Nicholas QC with T G R Parker for the second respondent (instructed by Coudert Brothers)

B W Walker SC with P W Taylor SC and M J Windsor for the third respondent (instructed by Crown Solicitor for the State of New South Wales)

Intervener:

R J Meadows QC, Solicitor-General for the State of Western Australia with J C Pritchard intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for the State of Western Australia)

Graham Barclay Oysters Pty Ltd v Ryan

Negligence — Local authority — Duty of care — Harvesting of contaminated oysters — Oysters causing Hepatitis A infection — Knowledge of risk on part of officers of the authority — Failure by the authority to exercise statutory powers to control water pollution — Reasonableness — Class to whom duty owed when exercising power to control pollution — Causation — Whether minimisation of pollution and thus risk of viral contamination would have prevented infection.

Negligence — Oyster grower and distributor — Breach of duty of care — Harvesting of contaminated oysters — Oysters causing Hepatitis A infection — Failure to refrain from harvesting and selling oysters during relevant period.

Negligence — The State — Duty of care — Harvesting of contaminated oysters — Oysters causing Hepatitis A infection — Knowledge of risk on part of officers of the State — Failure to exercise general statutory powers — Relevance of State ‘control’ of industry — Reasonableness — Justiciability — Failure to exercise specific statutory power of closure — Whether power enlivened — Class to whom duty owed when exercising power.

Practice and procedure — Federal Court of Australia — Representative action — Declaration of legal right concerning individual entitlement to recovery — Whether the making of such a declaration inappropriate or beyond power — Whether statute and nature of representative proceeding sustain a declaratory order.

ORDER

1. Appeal by Graham Barclay Oysters Pty Ltd allowed in so far as it concerns the issue of negligence.

2. Appeal by Graham Barclay Distributors Pty Ltd allowed with costs.

3. Parties to have 28 days to file draft minutes of consequential orders to be made by this Court in respect of the orders (including costs orders) made by the Full Court of the Federal Court.

4. In default of agreement between the parties to this appeal as to the form of the draft minutes for that appeal, each party is to file within the 28 day period its draft with short written submissions in support, indicating how the drafts of the parties differ.

1 Gleeson CJ. The principal facts, the nature of the proceedings, and the relevant legislative provisions, appear from the reasons for judgment of Gummow and Hayne JJ (‘the joint judgment’).

2 In December 1996, Mr Ryan consumed oysters that a relative had purchased from the companies described in the joint judgment as the Barclay companies. The oysters, which had been grown in Wallis Lake, near Forster, were contaminated. In consequence, Mr Ryan contracted the hepatitis A virus (‘HAV’). The circumstances of the contamination are explained in the joint judgment. Heavy rainfall over a period in November 1996 had increased the risk of pollution of the lake from a number of sources, and had resulted in cessation of harvesting for four days. In February 1997, an HAV epidemic was notified, and on 14 February 1997 Wallis Lake growers ceased harvesting for the season.

3 In seeking to assign legal responsibility for the harm he suffered, Mr Ryan blamed the growers and distributors of the oysters (the Barclay companies), the Great Lakes Council (‘the Council’), which was the local government authority that exercised regulatory functions, including functions designed to protect the environment, under the Local Government Act 1993 (NSW) (‘the Local Government Act’), and the State of New South Wales (‘the State’). Claims were also made under the Trade Practices Act 1974 (Cth) (‘the Trade Practices Act’) against the Barclay companies. That is how the case came to be litigated in the Federal Court. The Trade Practices Act claims were not directly in contest in this Court.

4 In the present appeals, the principal issue in relation to the claims against the Council and the State was whether there was a duty of care of such a nature that any act or omission shown to have been causally related to Mr Ryan's injury constituted a breach. In relation to the claims in tort against the Barclay companies, the existence of a duty of care was accepted; the principal issue was whether a breach had been established.

5 It is convenient to deal with the claims against the various defendants in the following sequence: the State; the Council; the growers and distributors. There are important differences between claims made against the State and the Council, on the one hand, and those made against the Barclay companies, on the other. A consumer of food suffered personal injury because the food was unfit for human consumption. His case against the growers and distributors of the oysters is essentially a straightforward product liability case. He sued the producers and suppliers of the product, the form of contamination being such that it was not reasonably discoverable upon any intermediate inspection. The existence and content of a duty of care was not in contest. But the nature of the case against the other defendants is far less obvious. The consumer is suing the government; local and State. He seeks to make the government directly liable. Originally there were attempts to establish tortious conduct on the part of persons, authorities or instrumentalities, for whom, or for which, the State might be vicariously responsible, but those attempts failed on the facts, and have not been pursued in this Court. The allegations now pressed against the State, and the Council, do not involve allegations of carelessness in the exercise of a statutory power. The complaint is not about acts, but about omissions. In the particular circumstances of the case, the issues, raised by this assertion of direct governmental liability in negligence, include what are, in the final analysis, issues of justiciability.

6 Citizens blame governments for many kinds of misfortune. When they do so, the kind of responsibility they attribute, expressly or by implication, may be different in quality from the kind of responsibility attributed to a citizen who is said to be under a legal liability to pay damages in compensation for injury. Subject to any insurance arrangements that may apply, people who sue governments are seeking compensation from public funds. They are claiming against a body politic or other entity whose primary responsibilities are to the public. And, in the case of an action in negligence against a government of the Commonwealth or a State or Territory, they are inviting the judicial arm of government to pass judgment upon the reasonableness of the conduct of the legislative or executive arms of government; conduct that may involve action or inaction on political grounds. Decisions as to raising revenue, and setting priorities in the allocation of public funds between competing claims on scarce resources, are essentially political. So are decisions about the extent of government regulation of private and commercial behaviour that is proper. At the centre of the law of negligence is the concept of reasonableness. When courts are invited to pass judgment on the reasonableness of governmental action or inaction, they may be confronted by issues that are inappropriate for judicial resolution, and that, in a representative democracy, are ordinarily decided through the political process. Especially is this so when criticism is addressed to legislative action or inaction. Many citizens may believe that, in various matters, there should be more extensive government regulation. Others may be of a different view, for any one of a number of reasons, perhaps including cost. Courts have long recognised the inappropriateness of judicial resolution of complaints about the reasonableness of governmental conduct where such complaints are political in nature.

7 In Brodie v Singleton Shire Council1, I took the view that the non-feasance rule which previously applied to highway authorities was an aspect of a wider problem concerning the manner in which the law should relate the public responsibilities of persons or bodies invested by statute with a power to manage public facilities, including the responsibility to apply public funds for that purpose, and the rights of citizens who may be affected by the manner in which those responsibilities are exercised. In that case, three members of the majority expressly accepted that it may be proper and necessary for a court to decide

whether the priorities of a local council in dealing with road repairs in various locations were reasonable 2. The decision in the case required that view. Even so, the scope for judicial examination of the reasonableness of governmental spending priorities was not held to be, and cannot be, at large. Raising and spending money for road repairs involves setting priorities, not only between parts of the road...