Colbran t/a Tablelands Coffee v State of Queensland ; Hatmill P/L & Ors v State of Queensland; Maloberti & Ors v State of Queensland [2008] QSC 132

SUPREME COURT OF QUEENSLAND CITATION: Colbran v State of Queensland [2008] QSC 132 PARTIES: BENJAMIN COLBRAN and NORMA VIOLET COLBRAN Trading as Tablelands Coffee (Plaintiff) v STATE OF QUEENSLAND (Defendant) HATMILL PTY LTD & ORS (Plaintiffs) v STATE OF QUEENSLAND (Defendant) MARIA MALOBERTI, BRUNO MALOBERTI and LUISA MALOBERTI & ORS (Plaintiffs) v STATE OF QUEENSLAND (Defendant) FILE NO/S: S441 of 2002; S437 of 2002; S458 of 2002 DIVISION: Trial PROCEEDING: Claim ORIGINATING COURT: Supreme Court at Cairns DELIVERED ON: 12 June 2008 DELIVERED AT: Cairns HEARING DATE: 10 July 2007 – 27 July 2007, 20 August 2007, 10 September – 14 September 2007, 15 October 2007 JUDGE: Jones J ORDER: 1. In action No S 441 of 2002 judgment against the defendant in favour of Benjamin Colbran and Norma Violet Colbran in the sum of $1,066,400.00. 2. In action No. S 437 of 2002 judgment against the defendant in favour of Jaques Australian Coffee Pty Ltd in the sum of $6,256,575.00. 3. In action No S 458 of 2002 judgment against the defendant in favour of Maria Maloberti, Bruno Maloberti and Luisa Maloberti in the sum of $1,840,000.00 plus interest, the assessment of which is reserved. -- 1 of 58 -- 2 4. Direct that the parties prepare submissions on costs, such submissions to be exchanged and delivered to the Court within 28 days. CATCHWORDS: TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – Government and public authorities – Whether the public authority was acting in the public interest –Whether a duty of care existed to ensure a product used for spraying on coffee by the defendant was safe for such use – Whether the defendant owed a duty to ensure the spraying was conducted in a safe manner - Whether the defendant owed a duty of care to adequately train and supervise staff conducting spraying – Whether the spraying of coffee was a policy decision –Where the spraying was a part of the program to eradicate papaya fruit fly TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – STANDARD OF CARE – Emergencies – Whether the papaya fruit fly outbreak constituted an emergency – Whether the standard of care owed was lower because of the public interest in eradicating papaya fruit fly TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DAMAGE – Causation –– Whether the evidence established a causal connection between the spraying of coffee by the defendant and subsequent poor harvests - Where the rate and concentration of spray was higher than the off label permit EVIDENCE – ADMISSIBILITY AND RELEVANCY – OPINION EVIDENCE – EXPERT OPINION – In general – Whether the expert witnesses were qualified to give evidence about the effect of Maldison 500 – Whether the expert witnesses were qualified to give evidence about the most suitable program to eradicate papaya fruit fly DAMAGES - MEASURE AND REMOTNESS OF DAMAGES IN ACTIONS FOR TORT – Measure of damages – damage to land and buildings – Loss of profits – Whether the plaintiffs had mitigated their loss – Whether impecuniosity barred plaintiffs from claiming further loss – where impecuniosity attributable to defendant’s act Agriculture and Vetinary Chemicals Act 1988 (Cth) Plant Protection Act 1989 (Qld) Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653 applied Chappel v Hart (1998) 195 CLR 232 applied Evans v Balog [1976] 1 NSWLR 36 applied Haines v Bendall (1991) 172 CLR 60 -- 2 of 58 -- 3 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 considered Johnson v Perez (1988) 166 CLR 351 applied Jones v Gooday [1841] 8 M W 146 applied Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353 Schneider v Hoerscht Schering Agrevo Pty Ltd [2001] FCA 102 considered Sullivan v Moody (2001) 207 CLR 562 considered Sutherland Shire Council v Heyman (1985) 157 CLR 424 applied COUNSEL: Mr M Stewart SC with Mr A Collins for the plaintiffs Mr Freeburn SC with D Grigg for the defendant SOLICITORS: Williams Graham & Carman for the plaintiffs The Crown Solicitor for the defendant [1] The plaintiffs in each of these proceedings are commercial coffee growers with plantations located on the Atherton Tableland in Queensland. Between September – December 1996, the defendant, acting through its Department of Primary Industries (DPI), applied a protein bait spray to coffee plants growing on the respective lands owned by the three plaintiffs. The defendant did so as part of its programme to eradicate the Papaya Fruit Fly (“PFF”) from northern Queensland. The plaintiffs claim that in so doing, the defendant acted negligently, causing damage to their coffee plants resulting in substantial and continuing losses to each of them. By these proceedings they claim damages in respect of those losses. [2] The parties have agreed that the three actions be heard together and that the evidence be admissible in each case. Two of the plaintiffs conduct their respective businesses on a trust arrangement under the name of corporate trustees. For convenience I will refer to each grower by the family name. [3] The discovery of PFF in Cairns in October 1995 caused grave concern. The threat caused by an infestation of PFF had ramifications for the agricultural industries across the whole of Australia. The measures undertaken by the defendant to meet that threat are at the heart of this dispute. The evidence adduced on both sides requires an understanding of technical matters and of the administrative arrangements the defendant put in place to deal with the threat. As a result there has been a resort to the use of a large number of acronyms and technical terms. [4] Many witnesses have given evidence and produced documents of varying degrees of relevance and weight. I have not felt it necessary to refer to each of them in these reasons. The case in my view turns upon a few critical decisions and the circumstances in which those decisions were made. The evidence in respect of these matters has been fully canvassed in written submissions and oral address and it is to that evidence that I have had particular regard. It will, however, be necessary to refer in some detail to the background evidence against which the decisions were made. An application by the plaintiffs to tender further documents at the close of -- 3 of 58 -- 4 the case was opposed by the defendant. I have determined that the evidence is only of marginal relevance and should not be received. The Papaya Fruit Fly (Bactrocera Papayae) [5] There are a large number of fruit flies which infest various areas of Australia. Many of them are endemic to Australia. Most common amongst them are species known as Queensland Fruit Fly and Mediterranean Fruit Fly. The infestation of fruit flies is controlled by a variety of procedures which vary from State to State. This is because species differ in the level of their impact and their tolerance to dis- infestation treatments. The PFF however is recognised worldwide as a major quarantine pest. Its presence in an area results in the imposition of trade barriers and a requirement that authorities undertake long-term monitoring and suppression procedures. As well, the horticultural commodities for export would have to undergo expensive dis-infestation treatments. Professor Richard Drew who, together with Dr Hancock, identified and scientifically named the Papaya Fruit Fly in the 1980’s, described it as “the most severe pest species I know in the whole of the tropical region of the world”.1 PFF has the widest host range of any fruit fly species in the world. As well, the females have a very long ovipositor so that it can push the eggs deeper into the fruit and avoid the zones of risk for the eggs, such as glands in the skin of citrus fruit and the oily glandular tissue on the surface of bananas.2 [6] The effect the PFF infestation in Queensland had on export markets was felt immediately. Japan suspended trade in mangos in October 1995, New Zealand withdrew approval for the export of Australian bananas and New Caledonia suspended trade in fruit and vegetables.3 Such trade restrictions would be overcome by demonstrating that area had become pest free or that post harvest dis-infestation had been undertaken. One of the other characteristics of PFF which make it such a pest is, unlike other species, it will attack fruit which is immature. Consequently, if its presence became established, more extensive field control measures would be necessary resulting in higher expense for growers. [7] There was the further danger that if the PFF became established in the largely inaccessible rainforest areas of North Queensland it would be difficult to control and perhaps impossible to eradicate because of the availability of host plants in that environment. Hence, there was considerable urgency in the response to this discovery of PFF in North Queensland. PFF is discovered in North Queensland [8] In September 1995 a pawpaw grower near Cairns became concerned about the early attack by fruit flies in his orchard.4 On 2 October 1995 DPI received from the grower a sample of fruit from which the PFF was identified by scientists on 17 October. The property was immediately placed in quarantine pursuant to s 13 of the Plant Protection Act 1989 (“the Act”). 1 Transcript 649/50 2 Transcript 649/40 3 Evidence Ken Priestly ex Annexures KP34, 22, 31 4 Statement Dr Fay [11] – ex 122 -- 4 of 58 -- 5 [9] On 19 October 1995 a PFF outbreak committee was established to coordinate the defendant’s response to this discovery. The committee consisted of officers of the DPI with expertise in entomology, plant sciences, horticulture, agriculture, administration, chemical standards and public affairs. The immediate action included the declaring of a quarantine area to prevent the movement of fruit outside its borders, the setting up of laboratories for the identification of PFF, establishing a monitoring and control regime as well as a number of other regulatory actions.5 This committee supervised the immediate response to control and suppress the infestation. In the main it was led by Dr Keith Jorgensen, Professor Drew and Dr Harry Fay and included other experts from the Fruit Fly Research Centre at Indooroopilly, Brisbane. On 2 November 1995 this committee was reconstituted, with virtually the same personnel as the PFF Management Team. [10] At this time there was a standing national committee called the Plant Health Committee (“PHC”) with experts from all governments in Australia. This committee provides technical and policy advice on national plant health policy and programmes and in particular approves the funding arrangements for those programmes. The PHC arranged for the formation of the PFF Consultative committee (“PFFCC”), a national body that represented the interests of Commonwealth and State Governments who ultimately would combine to fund the eradication programme. This committee reported to PHC and was comprised of some members of PHC, core members of the two Queensland committees and other relevant experts. [11] The first phase of the emergency campaign lasted until mid-December 1995. Attention then turned to appropriate arrangements for the long term response. By 13 March 2006 a new management structure6 had been put in place to facilitate the inputs of national and scientific opinion and to arrange for the shared funding of the programme between the States and Commonwealth. [12] The original PFF Management Team was replaced by the State Pest Control Headquarters (“SPCHQ”) which was led by Mr Kevin Dunn, Deputy Director- General and was comprised of senior DPI officers including Professor Drew, Dr Hancock, and Mr Sing as Operations Manager. The SPCHQ was based in Brisbane and had regular meetings with various stakeholders and authorised the public information releases. The national interests were overseen by the PFFCC which met twice a year and made recommendations to other national groups about funding and to the State groups about strategic directions. [13] One of the key scientific advisory groups was the Scientific Advisory Panel (“SAP”) which carried out an overview of the operations and made recommendations for future efforts. This panel included experts from all Australian States, some with departmental experience and others with university research backgrounds. Other persons with expert qualifications also attended meetings and were identified as associate members. Mr Sing was an associate member. [14] SPCHQ was the executive manager of the programme but the operations were undertaken by the Local Pest Control Centre (“LPCC”). Its role was “to establish and maintain communication and consultation with local community and primary producer groups affected by the programme and to manage the implementation of 5 Ex 122 Statement Harry Fay paras [11]-[19] attachments HF6 et seq; ex 64 Statement of Neil Sing 6 Ibid Annexure HF9 -- 5 of 58 -- 6 the programme”. 7 In addition, the LPCC were involved in monitoring activities, eradication activities, regulatory functions and discussion with industry and community groups. The LPCC was led by Mr Neil Sing as Operations Manager. As has been seen he was a member or associate member of each of the groups which made a contribution to the eradication programme. He held degrees in agricultural science and in economics and worked in the DPI in North Queensland as a Regional Manager of Agribusiness. He did not have any scientific qualifications relating to the monitoring or eradication of fruit flies. Techniques available for the control of PFF [15] The discovery of PFF in the Cairns region was the first outbreak of this pest in mainland Australia. It had previously been discovered in the Torres Strait Islands in 1993 and an eradication programme was undertaken then, led by Professor Drew and Dr Hancock. Their efforts were successful in the eradication of PFF in the Torres Strait and their methodologies were set out in published papers. 8 This experience had established that the male PFF was strongly attracted to a chemical lure, methyl eugenol. The attractant was combined with a pesticide and used to annihilate the male flies and, with the impact on the breeding cycle, the species in that area. [16] The first step in the programme was to establish the whereabouts of the PFF, to monitor its movements and to anticipate the areas where outbreaks of infestation might occur. The monitoring in the main involved two procedures, the placing of traps at various recorded points and the collection of fruit samples to determine whether PFF was breeding in that host plant. The effectiveness of the monitoring thus depended on placing a sufficient number of traps in appropriate areas to identify the presence and movement of the PFF. The collection of fruit samples was important because it identified the actual breeding sites of the PFF. However, there was a delay in the emergence of the fly from infected fruit. There are over 30 species of fruit fly in North Queensland, many of which are extremely difficult to identify and some that look similar to PFF. The monitoring effort required expertise in the identification of PFF and correct analysis of data gained from those two sources. [17] The traps used cotton wicks steeped in methyl eugenol and an insecticide placed in the trap. The traps were cleared of dead insects at regular intervals. These and the collected fruit were dealt with at laboratories established at the Kamerunga Research Station and later at premises in Spence Street, Cairns. One of the early tasks in the programme was the setting up of these laboratories and the training technicians to identify PFF so as to distinguish them from other fruit flies. Given the number of samples that were collected throughout the quarantine area, this was a difficult and painstaking job which understandably did not proceed without some hiccups.9 [18] At the later stages of the programme the monitoring analysis using trap data was in some degree compromised by the fact that the eradication technique, using the same chemical attractant, was reducing the number of PFF in any particular area. 7 Ex 64 Statement of Mr Sing at [5] and [19] 8 Ex 43 - Statement of Dr Drew [6] Transcript 608 9 See Ex 110 letter from Annice Lloyd to Ken Priestly 25/10/1996 -- 6 of 58 -- 7 [19] The magnitude of the task can be gauged by the size of the quarantine area and the eradication zone depicted in Map 1 to the report of SAP meeting May 1996. 10 As well as the quarantine area, various outlying treatment areas are also identified in that map, stretching between Cardwell and Mossman. [20] The techniques for the control/eradication of PFF were three in number:- 1. Male annihilation technique (MAT); Methyl eugenol is a powerful attractant to male PFF. The distance over which it is effective depends on the weather conditions, wind strength, etc but it is generally regarded as being able to attract over a distance of at least a kilometre. By infusing any absorbent material with the attractant methyl eugenol together with an insecticide is a proven means of suppression and eradication. The absorbent material used will vary depending on the location of the fruit flies. One method is the impregnation of cotton cords (cordalittos) which can be dropped from aircraft into uninhabited thickly forested areas where the cordalitto will be caught up in the tree foliage. In populated areas the medium of choice is a piece of fibrous material, such as a canite block, which can be nailed to or hung from a tree. This process is called “blocking”. This is the term I will use to refer to this technique. The chemical lure and the insecticide in tropical areas need to be resistant to being leached out of the block by rainfall.11 Also the blocks need to be replaced at regular intervals. 2. Protein bait spraying: This method requires a measured dose of a combination of chemical lure and insecticide being sprayed onto a tree or plant, such that the fruit flies visiting the tree will be attracted to the bait and will be killed by contact with the insecticide. The bait used in these circumstances is either a protein or yeast autolysate which is an attractant to both the male and female of the species. Its range of attraction however is approximately 10 metres. Its effectiveness therefore depends upon the fruit fly being in the vicinity of the plant targeted by the spray. The spray in this environment needed to be reapplied every week during periods of PFF activity in the target plant. 3. Sterile insect technology (SIT); also known as “sterile insect release method” (SIRM). Sterile insect technology is regarded as the most effective method of eradication of a particular species. It involves the breeding of a large number of sterile male flies and releasing them to breed with females who then fail to produce larvae. Its drawback is the time it takes to establish a sufficient colony of sterile male insects and the considerable expense associated with the programme. Whilst this method was advocated by a number of scientists consulted to give eradication advice, it became clear early in the programme that the expense of setting up the necessary laboratories and infrastructure was not warranted in North Queensland because of the success of the other methods. Whilst the various scientific papers contain this recommendation it is of no relevance to the choices made in dealing with the infestation with which these proceedings are concerned. 10 Ex 44 – Statement of Dr Alan Meats Attachment “AM-6” 11 Transcript p1314/1 -- 7 of 58 -- 8 [21] The most powerful attractant to a fruit fly is of course the presence of ripening fruit in a host plant. There is a hierarchy of hosts which differs between fruit flies, for example with the PFF the most significant hosts are sea almond (terminalia), guava, mango etc.12 [22] Against this background it is necessary to look at how the programme was in fact undertaken. The choice of chemicals [23] One of the early tasks was to determine what various chemicals would be used for traps, blocks and sprays. The choice of chemicals for traps and canite blocks were not so critical as those to be used as sprays. The traps were enclosed and the chemical components were thus not a threat to the environment. In terms of environmental impact, chemically infused canite blocks were regarded as relatively benign. [24] The size of the quarantine area and the fact that it included populated areas as well as unattended parks and gardens, commercial plantations and a wide variety of host plants made the choice of the chemical pesticide a difficult consideration yet one that had to be undertaken urgently. The scientists involved in the Outbreak Committee had to determine what pesticide would be used for each of the various methods used to attack the infestation. A pesticide, which would be sprayed widely, particularly in areas to which the public had access, would have the highest environmental impact. Because of the large areas to be covered and the urgency of controlling the infestation, consideration as to the adequacy of pesticides already available on the market had to be made. Higher volumes of the pesticide might be needed and coverage of a wider range of plants was necessary. The use of available pesticides outside the restrictions detailed on the product’s label would have been illegal. For such use to be allowed it was necessary for the defendant to obtain an off-label permit for the increased application of the pesticide. [25] The use of pesticides is controlled by the provisions of the Agriculture and Vetinary Chemicals Act 1988 (Cwth). Such permits are issued by the National Registration Authority (“NRA”), a Commonwealth government agency which, since September 1995, has been responsible for the evaluation of applications for the registration of agricultural and vetinary chemical products. Prior to this, each State government determined its own registrations but by the time of these events it was necessary to pursue permits through the Commonwealth authority. The task of obtaining the relevant permit was assigned to Ms Cassie Wright, a scientific technologist within the defendant’s agricultural standards section of DPI. It was necessary for Ms Wright to collate the information necessary to found an application for a permit. To do this she consulted with various experts including Dr Annice Lloyd, entomologist, and Mr Denis Hamilton, agricultural chemist, and as well she read reports prepared at the behest of the Outbreak Committee.13 This question of needing special permits was first raised at the initial meeting of the outbreak team on 19 October 1995 and again at the next meeting on 23 October 1995. [26] Off-label permits were sought in respect of a number of chemicals but the only one relevant to these proceedings is that related to the product, Maldison 500. In this 12 Ex 44 Statement of Mr A Meats “AM-6” at 8 13 Ex 121 -- 8 of 58 -- 9 product the active pesticide ingredient is malathion. Often times in the evidence and, indeed, in the literature, the terms “maldison” and “malithion” are used interchangeably. But for the purpose of these proceedings the distinction between the pesticide malithion and the product Maldison 500 must be maintained. The varied forms in which malithion and Maldison may be found is illustrated in ex 121.14 [27] Maldison 500 was only registered for use on certain crops against PFF. The off- label permit was necessary for it to be used as a bait spray.15 Maldison 500 had not previously been registered for use on coffee. [28] Maldison 500 is produced by two manufacturers, Nu-Farm and Rhone-Poulenc. The respective formulations are listed as follows:- NUFARM RHÖNE Ingredient Proportion (g/kg) Ingredient Proportion (g/L) Technical Maldison (950 g/kg purity) sufficient to give 500 g/L Maldison 527 g/kg Technical Maldison (Typically 96% purity) sufficient to give 500 g/L Maldison 526 g/L Teric 200 23 Blend of non-ionic emulsifiers (For example Teric 200 or antarox 724P) 42 Dobenz HF 29 Calcium dodecylbenzene sulphonate (For example Kemmat HF60 or Dobenz CA or Rhodocal 60BE) 38 Solvesso 150 493 Hydrocarbon solvent to 1L (For example Solvesso 150 or Pegasol R150 or Certrex 47) 441 Total 1072 Total 104716 What is to be noted is the use in the Nu-Farm product of a solvent, Solvesso 150 and in the Rhöne-Poulenc product the reference to the hydrocarbon solvent for which there is indicated other choices. [29] The defendant sought to use this product in a spray to which was added a PFF attractant. In this instance the attractant was initially a protein autolysate which was later changed to a yeast autolysate.17 The application to the NRA was lodged on 3 November 1995 having been hurriedly prepared. The permit was granted on 6 November 1995 but amended two days later.18 In the end result the permit conditions were as follows:- Situation Pest Rate Critical Comments Fruit trees, ornamental Papaya fruit fly Preparing Bait: Prepare 100 Lbait Apply the bait to the 14 See Annexure “CW-11” 15 Per Dr Lloyd Transcript 1305/1 and statement ex 106[211] 16 Exs 91 and 92 17 Ex 121 Annexures “CW-30” and “CW-31” 18 Ex 121 paras 26-33 Annexure “CW-20” -- 9 of 58 -- 10 trees, and heavy foliage trees in urban areas including recreation areas, public parks, gardens, backyards, forests, horticultural and agricultural production areas. (Bactrocera papayae) by mixing either: 8970 mLs of product (with 1150 g/L maldison); or 1L of product (with 1000 g/L maldison); or 2 L of product (with 500 g/L maldison) with 5L of protein autolysate, with sufficient quantity of water to make 100 litres. Applying Bait: Rate of 100-200 mL of prepared bait per tree. vegetation as a foliage spray. Apply bait using powered sprayers in utilities or backpack sprayers. Use large spray droplets (course spray) as these are more effective. Avoid contact of the bait with the fruit. Apply at weekly intervals as required. Withholding period: Do not harvest fruit for 3 days after application19 This application rate has to be compared with the suggestion in the application itself that the application would be by way of 100 ml spots.20 Even there, there was a suggestion attributed to Dr Annice Lloyd that this level constituted an “over-kill”.21 This suggestion was not put to Dr Lloyd who had given evidence at an earlier time.22 [30] Dr Lloyd said she did not recommend Maldison 500 and does not know who did.23 However, malithion was the most appropriate pesticide in the circumstances.24 Malithion was the pesticide which was effective against the Torres Strait outbreak in 1993. She left the choice of the chemicals to be used to the regulatory team. [31] Mr Denis Hamilton, who was in charge of the agricultural standards section of DPI, said he did not make the choice of Maldison 500. He acknowledged that he reviewed the application for off-label permit but his effort was limited to investigating the likely residues occurring on fruit.25 In November 1995, in compliance with protocol, Mr Hamilton requested a literature search for published papers on the effects of the various chemicals for which off-label permits had been obtained from the NRA. The relevant part of the search for the purpose of these proceedings related to malithion. As no suggestion is made that malithion was the source of damage to the plaintiff’s crops the results of this search do not appear to have relevance. The scientific papers were not referred to in submissions and have not been read by me. These articles appear in exhibit 98, annexures “DJH-2” – “DJH-4” and “DJH-6” – “DJH-26”. [32] Significantly, however, it seems that no check was made at this time of any of the other constituents of Maldison 500. [33] After the plaintiffs delivered their Third Further Amended Statement of Claim, Mr Hamilton reviewed relevant data sheets with respect to the solvent Solvesso 150.26 19 Ibid annexure “CW-20” 20 Ex 121 Annexure “CW-9” at p 6 21 Transcript 1441/10 22 Transcript 1307/40 23 Transcript 1295/60-1296/5 24 Transcript 1295/50 25 Ex 98 3 rd statement at para [127] 26 Ex 98 3 rd statement at para [117] -- 10 of 58 -- 11 He expressed the opinion that Solvesso is immiscible in water and insoluble in water and that damage to the coffee crop would not be predicted.27 He also opined that the main pathway for dissipation of Solvesso would be evaporation into the air after application in a pesticide spray onto foliage.28 These opinions will be further considered when dealing with the issues of breach of duty and causation. [34] Having received the relevant off-label permits, the programmes for trapping and for eradication by male annihilation blocking and protein bait spraying were undertaken. Initially the activity was centred in and around the urban populations of Cairns, Mossman and Mareeba. But the monitoring was progressively extended throughout the quarantine area. Some activity was necessary in isolated places outside the quarantine area where it was thought that infected fruit carried through the quarantine boundaries had caused localised infestations. Eradication programme [35] The initial efforts were supervised by Professor Drew and Dr Hancock who had prior experience with the eradication of PFF. As well, they were the pre-eminent scientists in the Fruit Fly Research Centre at Indooroopilly. Other scientists from the centre as well as DPI scientists based in Cairns and the Atherton Tableland were involved. The scientists from Indooroopilly visited Cairns on a two weekly roster - Dr Drew leading one team, Dr Hancock the other – to set up laboratories and to train staff. The initial response was to identify the area of the PFF incursion and to limit its spread. [36] By 4 November 1995 Professor Drew’s thoughts had turned to strategies for the overall eradication of PFF. He wrote to Mr Ken Priestly who was conscious of the magnitude of the task, he said:- “This will be the second largest eradication attempt ever undertaken worldwide. It will be extremely difficult to co-ordinate and execute and has only a small chance of success.”29 He then enclosed a proposed schematic management structure with himself in charge of the eradication team. 30 [37] Professor Drew wrote again on 9 November 1995 to Mr Priestly with an eradication strategy prepared by himself and Dr Harry Fay, the entomologist with responsibility for North Queensland area. His concern was to ensure that an entomologist would be actively involved in the eradication programme. [38] In the up-shot the recommendations of Professor Drew concerning the management of the eradication programme were not adopted. The reason given by Mr Kevin Dunn was that the restructure was to fit a national model for this type of activity.31 This would not have been of much moment had scientific input been acted upon as intended. But, as will be seen, this did not always happen. [39] Male annihilation technique and protein baiting did commence on 13 November 1995 concentrating particularly around the urban areas of Cairns and its northern 27 Ex 98 3 rd statement at para [117] 28 Ibid at para [123] 29 Letter to Mr Ken Priestly – 4 November 1995 attachment “RD2” to ex 42 30 Ex 42 Annexure “RD2” 31 Transcript pp 835-8 -- 11 of 58 -- 12 beaches and Mossman. The results of these efforts were reported to the PFFCC meeting on 14/15 December 1995. That meeting authorised the development of an action plan by a group of experienced entomologists which was duly presented.32 A summary of the estimated costs of the eradication campaign was also revised at that meeting suggesting a need for a budget of $55,000,000. By this time Professor Drew had spoken to Dr Roy Cunningham, a leading world authority on fruit fly eradication strategies, based in Hawaii. Dr Cunningham was engaged by the defendant at a later time to advise on the eradication programme and to this end visited Queensland in May 1996 to interact with the Australian scientists involved in the undertaking. [40] Eradication of a pest species has to be distinguished from control where a pest threat is reduced to protect commercial orchards and from suppression where measures are aimed at an entire breeding population with a view to reducing a threat below the economic threshold. Eradication is aimed at the destruction of every individual breeding population.33 When eradication is required, flies have to be treated where they are found, regardless of whether they are regarded to be an economic pest or not. Even low numbers trigger eradication action. 34 [41] The initial eradication phase was an outstanding success. By early 1996 the PFF population had been reduced by 96% but there was a general understanding that eradication of the last vestiges of the PFF incursion would be both difficult and time consuming. Opinions differed about the methods to be used. Professor Drew expressed his concerns in letters dated 8 January 1996 and 23 February 1996. 35 The initial success continued through the first half of 1996. Trapping levels reported to the PFFCC meeting in June 1998 showed very significant reductions in PFF infestation.36 These factors underpinned confidence the eradication could be achieved using MAT alone. This was the view of Professors Drew and Meats and of Dr Cunningham. [42] The SAP met on 7/8 May 1996, 10 October 1996 and 14/13 January 1997. The minutes of the May 1996 meeting reveal that in the preceding three months there were no detections of PFF in a 4,500 square kilometre area as a result of some 360,000 blocks being in place. However, in the Mareeba area the blocking density was only about half that applied in the Cairns region. The committee concluded that eradication of PFF was achievable because of the success to that date, and also because of the evidence of there being no breeding populations in the rainforest.37 The panel recommended that male annihilation blocking should continue with particular attention to problem areas. Protein bait spraying was obviously an item of discussion and its continuance a matter of contemplation since revised budgets were sought in which allowance was to be made for protein bait spraying. [43] The next meeting of importance was that held between the principal scientists and Dr Roy Cunningham. He furnished a report to the defendant following his visit in which he opined “there is a very high probability that you can achieve complete 32 See Annexure D to “HF-10” the statement of Harry Fay ex 122 33 Ex 35 per V Bateman “Economic Fruit Flies of the South Pacific Region” p 115 34 Ex 146 per Dr Broughton 35 See Annexures “RD-5” and “RD-6” to statement of Professor Drew ex 42 36 Ex 54; Transcript 832/35 37 Annexure “HF14” to statement of Harry Fay ex 122 -- 12 of 58 -- 13 eradication of the Papaya Fruit Fly by Male Annihilation alone”.38 He went on to make a number of recommendations about where the cannite blocks should be located and the “coverage” to be achieved. On this latter aspect he said:- “The number and thoroughness of the distribution of (blocks) per unit area is an important facet of the MA programmes. This is the make or break of success. Less than sufficient coverage will result in small pockets of surviving populations which may re-infest the area if host and food conditions are favourable in the niche. The current “blocking” programme is on the right track but needs some expansion and very much needs a quality control element added to it. I suspect that there are areas in which blocks can and should be distributed which are not being addressed. An “entomological eye” needs to evaluate the block distribution pattern in each of the blocking routes and correct deficiencies and/or identify problem situations.”39 [44] That “entomological eye” would have best been provided by Professor Drew and/or Dr Hancock. Professor Drew felt strongly about the need for this specialised expertise. So much so that he felt even his esteemed colleague Dr Fay was not sufficiently experienced in this area.40 [45] Although Dr Cunningham’s report made no mention of protein bait spraying, Dr Annice Lloyd, who was present at the discussion and took handwritten notes during its course. She recalled Dr Cunningham using words to the effect that he had great faith in male annihilation but she recalled that not everyone agreed with this view. Dr Cunningham did not say that he was expressly against protein bait spraying. Her personal view was that if you wanted to get results quickly, protein bait spraying, which targets female flies as well, should be used in conjunction with male annihilation but that such baiting should be “aimed at sites identified as breeding hotspots for PFF by either trap catches or rearing from fruit”.41 [46] What is understood by a “breeding hotspot” is a plant or location where there is present ripening fruit. This was explained by Professor Drew in the following terms:- “…well, protein bait is a very – what we call a weak attractant, attracting over short areas – small areas and it only works when it is sprayed onto what we call the host fruit trees, the trees of which have fruit that the fly breeds in and it only works when it is applied to those host trees when they’ve got ripe – ripening fruit…the best fruit fly attractant in the world is a host tree with ripe fruit on it. And so the flies are attracted into the host tree with ripe fruit, then you can attack it with protein bait. Q: Host trees with ripening fruit? – Yes, and that’s what we would – in an eradication programme, that’s what we would call a hotspot. Where flies are breeding in fruit. Not where you’re trapping them, where they are breeding in fruit.”42 38 Annexure “RD4” to statement of Richard Drew ex 42 39 Ibid Annexure “RD4” 40 Transcript 595/35 41 Ex 106 statement of Dr Lloyd at [183.2] 42 Transcript 588/15-35 -- 13 of 58 -- 14 Because the protein bait was an effective attractant only over a distance of approximately one metre it was necessary that it be applied to the fruiting host tree itself. [47] Although frequent references were made to coffee plants being a host to PFF and to coffee generally as a “hotspot”, I am not aware of there being any challenge to Professor Drew’s statement of what in fact constituted a “breeding hotspot”. That it seems to me is the appropriate test for determining when the response of protein bait spraying was necessary. An exception was made for treating some urban settings and high risk trees.43 [48] Professor Drew’s opinion was the same as Dr Cunningham’s.44 What conditions caused the defendant to spray coffee plants? [49] The scientific opinion available in May 1996 to the defendant, and in particular to the managers of the eradication programme, was that MAT was an effective eradication technique but needed to be intensified by more dense and more strategic blocking in the Mareeba area. Protein bait spraying would be effective in treating plants bearing ripening – ripe fruit. For PFF, this time frame should, in my view, be extended by including a pre-ripening period. Whether the PFF was active would be determined by trap catches and fruit sampling. The immediate response would be to undertake and/or to intensify blocking in the area. [50] The presence of PFF in the coffee plantations was in fact established by trapping results and then confirmed by PFF emerging from coffee fruit samples. The full details of these results are found in Annexure “HF23” and in exhibits 125 and 126. This material discloses that the first discovery of PFF in coffee fruit was from a sample provided by Mr Colbran in March 1996. Three male PFF were found in the 60 coffee berries sampled. At that time Dr Fay, as advisor to the eradication team, recommended looking at “more effective distribution of blocks through that area – bikes through bush, dropped from helicopter maybe. It would be worth putting an extra effort into improving the coverage.”45 Whilst no reference was made to bait spraying in the affected coffee plantation in that contemporaneous note, Dr Fay in his statement (at para [61]) mentioned that the team only intensified protein bait spraying “if we could identify a breeding source or suspected one”. This is consistent with my understanding of the circumstances for attacking “hotspots”. In fact no blocking was undertaken at the Colbran property or indeed any of the other coffee plantations prior to the commencement of protein bait spraying in September 1996.46 Nor had traps been placed directly within the plantations.47 [51] The trapping data identified in Annexure “HF23” referring to traps within one kilometre of a coffee plantation, provides only equivocal information about the potential presence of PFF in coffee plants. The identification of PFF in fruit samples confirmed that coffee berries do act as a host to PFF in the right conditions (ripening – ripe fruit). Coffee therefore had the potential to be a “hotspot”. The 43 Per Dr Fay ex 122 at para [42] 44 Statement of Dr Drew at [21] (d) 45 Attachment “HT25” to ex 122 46 Per Dr Fay Transcript 1470/1 47 Per Mr McDonald Transcript 1551/10 -- 14 of 58 -- 15 fruit sampling shows that coffee fruit collected from the Jaques property on four separate days in July and August had been stung by PFF. Similarly, on one day in August stung fruit was collected from the Maloberti property. The actual attack by PFF would have occurred some time before the date of the collection. To determine whether these finds indicated any of these sites as an ongoing “hotspot” in September 1996 so as to indicate a need for protein bait spraying one needs to look at the production cycle of a coffee plant. [52] Dr Fay agreed that if there was no fruit on the trees there would be no point bait spraying.48 Dr Lloyd expressed a similar view. 49 It is necessary therefore to understand the cycle for the production of coffee. Growth cycle for coffee production [53] The evidence on this topic was provided by a number of witnesses and it is largely uncontroversial. The most convenient independent source is found in the report of Dr David Evans, entomologist, with direct experience in coffee growing. In 1998 he, together with David Peasley, was retained by the defendant to provide a report on the damage claims made by the plaintiffs. [54] The advent of mechanical harvesting in the 1980s led to the establishment of commercial coffee plantations in North Queensland. The success of mechanical harvesting depends upon coffee berries ripening at the same time, otherwise the coffee flavour is tainted by having immature beans mixed with mature ones. In those parts of the world where harvesting is done by hand there is no concern because the pickers simply take the ripe fruit as they pass along each row. [55] In a coffee plant, bud initiation occurs in late winter or early spring. Ordinarily, the flowering, triggered by spring rain, would occur randomly over a period of four to six weeks. Since the onset of flowering determines the timing of the fruit set, manipulation of flowering so as to happen in all plants simultaneously leads to maturing of fruit at approximately the same time. Simultaneous flowering is achieved by the practice of depriving the plants of water for a period of time. This is called “water stressing”. Watering the plant after the period of stress triggers both flowering and flushes of new shoot growth. This practice of water stressing does not alter the underlying cycle within the plant but simply modifies its timing. After watering, flowering is followed by fruit set and a period of rapid growth aided by fertilising. The flowering occurs from September to November and the berries start maturing from April to July in the following year. Harvesting would typically occur in June or July. There are some plant varieties which are late maturing e.g. dwarf catui, and are harvested after the winter season. Such was the situation with some of Mr Colbran’s plants. He was still undertaking the harvest whilst the defendant was conducting spraying operations on his property in September 1996.50 [56] The coffee plant in its natural state flowers in spring and produces a berry fruit (also known as ‘the cherry’) in the summer. This berry grows and ripens changing colour as it does so. The berry is a very deep green until autumn when it starts to change slightly and becomes a paler green and eventually develops into a really pale green and then yellow, then it deepens to a little bit of pink and then goes to a deeper pink 48 Transcript 1480/50 49 Transcript 1323/50 50 Ex 15 at [8] Transcript 262 [1] -- 15 of 58 -- 16 and red and finally crimson when it is harvested.51 If the flowering occurs over an extended period so does the ripening of the berries. It is a matter for the judgment of the grower to know when the water stressing is to cease in order not to damage the plant. Once water is supplied to a plant in this stressed condition the flowering occurs soon after and because that process has been delayed it happens vigorously and over a short period of time. The result is that the fruit set and the ripening of the berries in like vein occur over a short period of time. [57] The weight of berry harvested depends on a number of factors such as climate and weather conditions, the condition of soil and the tending of the bushes. On well cared for bushes the branches at harvest time should be covered with cherries. Typical of a bush in good condition at harvest time is the photo illustration in ex 24.52 [58] The berry, as harvested, is essentially dried fruit around a bean which has the commercial value. The coffee bean is surrounded by a husk which takes on the colour of, and is indeed called, parchment. Whilst the bean remains inside the parchment it does not deteriorate provided it is stored in a dry environment. The fact that the bean can be stored means that one year’s production may not be reflected in that year’s sale returns. This husk is removed by a process of pulping, fermenting and washing and the bean which is now separated from the husk is called “green bean”, and is ready for roasting. Growers may sell the bean in a green state to commercial roasters or may roast and package the bean for themselves. The latter course attracts a much higher price but the quantities that can be sold in this way are relatively small. That is why some growers (Jaques and Maloberti included) develop a tourist facility to attract larger numbers of customers who will buy these smaller quantities but for higher prices. There is a significant variation between the price paid for farm roasted coffee and the price a grower will receive by selling green beans to a commercial roaster. [59] It is against that background that justification for, and the effectiveness of, protein bait spraying of the plaintiff’s respective plantations has to be considered. Use of protein bait spray in orchards [60] The success of the eradication initiatives surprised many of the experts, particularly as it was achieved during the summer period when many of the fruits which play host to PFF were ripening. The only adverse note was sounded by a mango grower, Mr Bonel. On a day early in 1996 and when they were heavily in fruit, Mr Bonel’s trees were sprayed with protein bait by the defendant’s employees. The employees, one of whom he identified as Mr Emberg, were using ATV’s fitted with motorised spray equipment. Mr Bonel observed these men apply this spray to the whole of his trees, including the fruit.53 What he saw was consistent with the method of spraying later adopted on coffee plants by Mr Emberg who said this was done on instruction from the managers.54 [61] When Mr Bonel harvested the fruit he noticed that the skin had a stained appearance. He complained to the DPI by letter dated 13 February 1996 and 51 Transcript 349/10 52 Ex 24 “ACJ-4” 53 Ex 12 paras [1]-[6] 54 Transcript 52-53 -- 16 of 58 -- 17 received a response dated 16 February 1996.55 Mr Bonel stated that he suffered reduced yield from his trees in subsequent years but there is no evidence to satisfy me that there was any link between the spraying and that allegation, if it indeed be true. Mr Bonel only clamed for the reduced value of the damaged fruit in the sum of $747. 56 This claim was not admitted and no compensation was paid. [62] The only relevance of Mr Bonel’s evidence was his confirmation of the manner of spraying by Mr Emberg and the fact that the defendant had been made aware of concerns by a commercial fruit grower that bait spraying might be implicated in the damage to the fruit. Whilst the cause of the damage has never been confirmed the yeast autolysate was suspected.57 This caused Mr Sing to request that no orchard like Bonel’s be sprayed in the future.58 That request gives some indication of his attitude to his duty of care which will be discussed later in these reasons. It also ought to have raised a concern about the lack of any prior testing of the protein bait spray in the concentration then being used. [63] The defendant caused no other commercial plantation or orchard to be protein bait sprayed apart from the spraying of the coffee plantations. Consequently, it is important to look at the justification for singling out the coffee crop. The response to finding PFF in coffee [64] Firstly, although the coffee plant is a proven host to a number of species of fruit fly, particularly in other countries, it is not usually regarded as a commercial pest, such as to warrant the expense of pesticide spraying. This was certainly the position of the growers on the Atherton Tableland. By contrast other commercial crops are subjected to a regime of pesticide spraying which has the effect of inhibiting, if not entirely suppressing, infestations of the fruit fly. In some circles it was thought that coffee berries were not a host to fruit flies. This belief, contradicted by the literature in any event, was certainly dispelled by the fact that in April 1996 positive findings of PFF were found in coffee berries on the Colbran property. [65] PFF was in the first instance found in traps near coffee rather than actually in the coffee plantation. One particularly productive trap near to Gambino’s coffee plantation traced the source of the PFF to a cumquat tree.59 This raised questions about trap placement and the analysis of trap data. When questioned about what would constitute a high trap catch, Mr Sing was unable to be specific but said as an approximation that 10 trapped flies would provoke an intensified response.60 Such a find, he said, would trigger an intensive effort to find the source of the flies. In short, the immediate response to finding the presence of PFF in any area was to increase the monitoring and if the increased monitoring finds flies then this would justify additional blocking or bait spraying.61 [66] Professor Drew, whom I regard as the most qualified local PFF eradication expert, could find no justification for bait spraying. He was asked what technical expertise was required to design an eradication programme. He replied:- 55 Ex 13 56 Transcript 203/10-204/5 57 Statement of Neil Sing [69] – ex 62 58 Ex 64 2 nd statement para [149.13] 59 Transcript 1533/30 60 Per Mr Sing Transcript 920/50 61 Per Mr Sing Transcript 923/1 -- 17 of 58 -- 18 “Yes, you do need experienced fruit-fly scientists, there is no doubt about that. They need to know the species of fruit-fly, they need to know something about its biology, it’s – it’s host fruit range. Many fruit-fly species have different host fruit ranges. You need to know the host fruit range of the species, what it will be breeding in out there. You need to know the geographic area, the terrain, how you’re going to get in there and attack it and one of the important things with papaya fruit-fly is that it responded to methyl eugenol. It’s one of the few pest species that do respond to methyl eugenol. So it is the best – so methyl eugenol male annihilation based on the blocking is the best treatment to knock out papaya fruit-fly. Were you the person whose proposal it was that protein bait spraying be used in the eradication program in 1996? -- Definitely not.” 62 [67] The decision to spray the coffee plantations was made at the level of the LPCC. This body took the responsibility for the day to day operations for the monitoring and eradication of PFF. 63 The members of the team reported to Mr Sing. As the Operations Manager he was connected to all of the other decision making and advisory bodies. He was a member of the State Pest Control Headquarters (“SPCHQ”), the PFF Consultative Committee (“PFFCC”) and he had associate status at the Scientific Advisory Panel (“SAP”). He was therefore in a position to make inputs to those groups and to take information to, and bring recommendations from, each of them. In this connection he was well aware of the concerns expressed by Professor Drew, Professor Meats and Dr Cunningham about the lack of expert entomological input into the eradication programme. 64 [68] The personnel of LPCC varied from time to time depending on the business to be discussed and who was available at the time of the meeting. The meetings were held in Cairns. Sometimes an entomologist visiting from Brisbane might attend if that person happened to be in Cairns. Dr Fay, the entomologist residing in North Queensland, attended more frequently. But the absence of any person, even one with specific expertise, did not, it seems, cause a decision to be deferred. [69] The agenda items discussed at an LPCC meeting were listed on electronic whiteboard together with some comments made during the course of the meetings. Usually this was in Mr Sing’s handwriting. A copy of the writing was taken at the end of the meeting. The available, but incomplete records, of LPCC meetings are found in Annexure 28 to the statement of Mr Sing. 65 Apart from Mr Sing the persons usually at the meeting were the eradication Manager, Mr Bill McDonald and his second in charge Mr John Thompson. The number of entomologists were identified as attending different meetings66 but the most frequent of these was Dr Harry Fay until he was replaced by Dr Hancock. From early 1997, Ms Sonja Broughton attended but by this time the spraying had ceased. Some entomological input related only to the monitoring side of the activity.67 62 Transcript 587/40-588/3 63 Per Mr Sing Transcript 915/3 64 Per Mr Sing Transcript 940-946 65 Ex 64 66 Transcript 915/22 67 Transcript 915/55 -- 18 of 58 -- 19 [70] From the contemporaneous meeting notes of the LPCC, the first mention of the spraying of coffee plantations was found on 9 May 1996. There is no clear record of when, or by whom, the decision to spray the coffee plantations was taken. Nor is there any record of specific discussions leading to the decision. As a consequence the grounds upon which the decision was made have to be inferred from the evidence generally. [71] The general background and the then state of the eradication programme are best gleaned from the minutes of the May 1996 meeting of SAP. These relevantly include:- “2.1 Technical Assessment of Eradication Program to May 1996 a) The numbers of B. papayae trapped, area wide, have been reduced by approximately 98% which indicates the effectiveness of eradication treatments to date. Trapping levels in the major breeding areas, Cairns, Mareeba and Mossman have been reduced by 99.9%, 97.7% and 100% respectively. Increasing trap catches in some outer areas (e.g. Tully) indicate potential breeding hot spots which are currently being intensively treated. 2.2 Conclusions and Recommendations of the Advisory Panel 1. Based on the success of the suppression program to date, the chances of achieving complete eradication are very high; significantly higher than the critical Cost Benefit analysis cutoff point for $55 million expenditure. … 4. The Scientific Advisory Panel recommends that Eradication procedures based on a combination of Male Annihilation and the Sterile Inspect Technique should be resourced and introduced as quickly as possible. … 5. Outside of the eradication zone, any new satellite populations will probably require protein bait spraying in addition to Male Annihilation and SIT treatments.” 68 [72] The very favourable (and unexpected) eradication outcome to this point was the direct consequence of the high level of expertise and the very significant dedication and hard work by DPI staff. The total eradication was achieved by 1999 and all quarantine restrictions were able to be lifted. The remarks which follow criticising particular aspects of the decision making are not to be taken as suggesting any general criticism of the total effort which had such beneficial results. [73] The coffee plantations were within the eradication zone. The justification for the decision to spray appears to have been the fact that the coffee was identified as a host plant by reason of the positive finding in Colbran fruit collected on 28 March 1996 coupled with the fact that coffee plants were generally not treated with pesticides. Those circumstances would certainly have justified increased blocking and increased monitoring of the plantations but this did not happen. There appears to have been an approach to treat all coffee growers as a group notwithstanding the distances separating their respective plantations. Some plantations were in excess 68 Ex 64 annexure “NCS-31” -- 19 of 58 -- 20 of 30 km from others. The Colbran property was approximately 7 km from the Jaques property and in excess of 15 km from the Maloberti property.69 [74] Mr Sing did not have academic qualifications to advise on eradication methods, nor did Mr McDonald, Mr Thompson or anyone else directly involved with the sprayers. Mr Sing claimed to have been informed by his own experience. He said, “I believe I had experience, but that’s really not to me the issue. I never made decisions by myself in that regard.”70 He claimed that normally there was one or more entomologists at each LPCC meetings. But at the meeting most proximate to the commencement of protein bait spraying (16 August 1996) he was unable to recall whether an entomologist was in actual fact present but concluded that the person most likely to be there was Dr Fay. 71 Mr Sing gave the following evidence:- “You accept that you shouldn’t have made any decision about spraying coffee with the protein bait spray without first consulting an entomologist about it, don’t you?” – “I accept that I would not have made the decision about spraying the coffee without contacting an entomologist about it”. “And that’s because it would’ve been inappropriate for you to do so without such advice?” – “That’s – it would have been because that was not the way I worked.” 72 [75] Mr Sing did not seek advice from Professor Drew.73 He did not seek the advice of Dr Hancock but had he done so, it is likely it would have been as it was in January 1997.74 To the best of his recollection Mr Sing thought he contacted Dr Fay. However, Dr Fay did not recall giving any such advice.75 At various meetings of the SPCHQ which Mr Sing attended the question of the need for greater scientific input into eradication programme was raised usually by Professor Drew.76 The handwritten notes of Mr Dunn, who chaired the SPCHQ meetings, makes no reference to any instruction from that body to undertake protein bait spraying of coffee. Had the topic been raised it would most certainly have been opposed by Professor Drew. [76] Mr Sing attended the SAP meeting in October 1996. By this time there had been the increase in PFF emergence from Jacques’ fruit and spraying had commenced. He was aware of the expert opinion there expressed that bait spraying was unnecessary. In response to questioning about this he said:- “Well, I can’t explain that – it means it wasn’t my decision whether or not bait spraying was done.”77 The continuation of bait spraying after October 1996 seems to me to be directly contrary to the advice of SAP. 78 69 Exs 1 and 123 70 Transcript 927/58 71 Transcript 930/25 72 Transcript 930/30-40 73 Transcript 946/12. 74 Transcript 967/10 75 Transcript 1518/22-50 76 Transcript pp 843-850 and ex 54 77 Transcript 971/40 78 Ex 64 Annexure 31 -- 20 of 58 -- 21 [77] There was no increase in the level of male annihilation blocking in the areas around the coffee plantations. Dr Fay explained because it was still relatively early in the programme, that the crop had not been harvested and it “was heading into winter when the populations generally decline somewhat”.79 This explanation is unconvincing when the Colbran property had not been subjected to increased trapping or blocking.80 Dr Fay conceded that there was no “quality control aspect to the programme at that stage”.81 He said that the decision to protein bait spray all the coffee crops in the Mareeba area was taken during his absence.82 He nonetheless expressed the opinion that the decision to do so was “sound” given the escalating problem in coffee and the likely disaster that could have occurred if something had not been done before the mango season. When challenged about this opinion, he conceded that the PFF had been significantly reduced during mango fruiting season in 1995 but said that there were still some areas near Mareeba where the fly had not been eradicated. He identified an area near to the Jaques plantation which is known as Emerald End where there are located a number of hobby and organic farms where fruit fly control measures are not normally undertaken. That area also had not been subjected to intensive male annihilation blocking. [78] Increased monitoring after establishing the presence of PFF in a particular location was necessary because the analyses of trapping data could be inaccurate unless the source was better defined. The PFF caught in a particular trap might not necessarily suggest widespread infestation in a particular crop. The incident of the cumquat tree was an example.83 Dr Fay placed greater reliance for his opinion on the fact that PFF emerged from fruit samples. [79] Dr Fay agreed, consistently with other experts, that the appropriate response to discovering PFF emerging from fruit was to increase the level monitoring to determine the source of infestation. That being the case he had to concede there was no increased monitoring at Colbran’s property to justify the spraying, apart from its proximity – 6 km – to the Jaques property. Dr Fay was not asked by the eradication team to advise as to what the proper course should be.84 He agreed that the appropriate course in respect to the Colbran property following the positive results on the Jaques property was to increase fruit sampling and monitoring. It was put to Dr Fay that there was no basis for the spraying of Colbran’s property in September, his response was, “I would have regarded it as a risky strategy to ignore it, but there were other – there were other circumstances at Colbran’s which included cherry tomatoes which were sprayed”.85 Asked to disregard the tomatoes, it was put to Dr Fay there was no justification for carrying out protein bait spraying on coffee crops, he responded, “If there were no emergences from fruit or no flies from traps it would have only been for insurance”. The following exchange occurred:- “There’s no justification, you wouldn’t have justified it (the spraying)? – I would have had my doubts. 79 Transcript 1471/40; 1473/20 80 Transcript 1472/1 81 Transcript 1472/30 82 Ex 122 Annexure “HF-2” 83 Transcript 1496/20 84 Transcript 1500/1 85 Transcript 1500/25 -- 21 of 58 -- 22 But you weren’t asked to provide advice on this topic? – I was away during this period when these other places were discussed.” [80] When asked about the spraying of the Maloberti property where the last emergence of PFF occurred from fruit collected on 14 August 1996, Dr Fay agreed that the spraying of Maloberti’s property was a decision which was contrary to the hot-spot policy. He played no part in the decision to spray and said that he “had no control over what these people [LPCC] wanted to do.”86 [81] Dr Annice Lloyd, entomologist, was also identified as a sometime attendee at the LPCC meetings in the early stages. She was involved in a training programme for eradication staff but she did not give advice on the operational activities.87 [82] Mr Bill McDonald was designated the Principal Eradication Officer for the programme. He had no scientific qualifications but held various licences associated with his prior positions as acting Manager of certain DPI research stations. According to the agenda notes of LPCC meeting of 16 August 1996, it is likely Mr McDonald (Bill) was in attendance together with John Thomson. He claims that he did not make the decision to spray the coffee but that it was a committee decision.88 He later suggested the decision may have come from SPCHQ 89 . This seems to be at odds not only with the diary notes of Mr Dunn but also with the statement of Mr Sing, to the effect that the decision to spray coffee was made by the LPCC. 90 Mr McDonald said he was never advised of the expert opinions expressed by SAP or of Dr Cunningham. 91 [83] The fact that no further PFF infestation was evidenced at the Colbran property after April 1996 and no evidence of any existing hotspot at the Maloberti property makes it difficult to understand what was the justification for the protein bait spraying of either of these properties in September 1996. [84] Separate consideration must be given to the Jaques property where there were only two positive PFF finds in coffee fruit before the decision was made to use protein bait spray. These occurred on 11 July and 6 August 1996. There were later finds but these emerged after the spraying had commenced. What was known at the time of the 16 August 1996 meeting of LPCC certainly called for increased monitoring and blocking and, if appropriate, a later assessment as to whether a “hotspot” existed. [85] But at the time the decision was made there is not, in my view, any justification for spraying the Jaques plantation. The emergency phase of the infestation had passed.92 Whilst it was important to deal decisively with breeding populations of PFF, the methods adopted should have followed the directions given by experts and adopted as matters of policy. The recommendations of the SAP meeting in May 1996 and the consultation with Dr Cunningham shortly thereafter ought to have been adhered to in the absence of any expert advice to the contrary. As can be seen from the forgoing comments, no expert, indeed no single person, accepts 86 Transcript 1494/12-50 87 Transcript 1307/15 88 Transcript 1551/30-40 89 Transcript 1594/30 90 Ex 64 at para [64] 91 Transcript 1566/1 92 Per Dr Fay Transcript 1503/30 -- 22 of 58 -- 23 responsibility for making the decision to spray the coffee plantations. The finds from intensified monitoring were not indicative of a need to take precipitated action93 nor indeed were other factors such as the use of Jaques’ harvester on other properties. I am left with the impression that once PFF was found in the coffee fruit there was mindset on the part of the LPCC managers that eradication efforts would have to be made against the coffee crop as a whole, notwithstanding that it was not a high order host94 and regardless of whether it was at the relevant time a “hot spot”. [86] Against this background, I find that the decision to spray the coffee plantations was made without recourse to expert opinion which was readily available to the eradication managers and in fact was against the scientific advice which had already been provided by SAP. The spraying was undertaken when the plants could not possibly be regarded as a hot spot. [87] The off-label permit allowed for the application of Maldison 500 as a spot spray of 100-200 mL of bait per tree. The pesticide was to be mixed with a bait autolysate in a proportion determined by scientists, particularly Professor Drew. Neither Mr McDonald nor Mr Cunningham who instructed the employees engaged in spraying recall ever seeing the off-label permit.95 However, because he understood the spray had not been used on coffee plants previously, Mr McDonald decided to conduct a trial spraying at the Colbran property.96 He was not instructed to do this, nor did he seek any expert advice as to how it should be done. His prior experience as a research assistant did not qualify him particularly for this task.97 The trial was limited to a single application of the spray and observed over a 14 day period. Mr Cunningham claimed that he did some trial on four plants with Mr Colbran.98 In neither case did these gentlemen detect any damage in the plants sprayed99 and was thus reassured to pursue the spraying. Mr McDonald also requested Dr Lloyd to undertake a literature search on the chemicals but this ultimately was limited to an investigation of malathion. He also made an enquiry of the manufacturer’s representative to be told the product was not systemic. [88] The efforts of Mr McDonald and Mr Cunningham, though well intentioned, were not a proper substitute for a reasoned scientific approach to the concerns they obviously held. Why their concerns were not discussed with scientific advisors or raised in the various advisory committees remains unexplained. But the result is that the component constituting almost 50% of the spray product was never assessed for its sensitivity in coffee plants. [89] The dates on which the spraying of the coffee plantations was carried out and the personnel involved, are detailed in attachment to the Statement of Mr Cunningham. 100 The task was carried out by teams of sprayers led by a person variously described as a foreman or team leader. The instructions as to how the spray was to be applied appears to have been left to the leaders who had been 93 Transcript 1553/1-1555/20 94 Transcript 1600-1 95 Transcript 1558/40; 1696/20 96 Transcript 1596-1605 97 Transcript 1602/40-60 98 Transcript 1703/10 99 Transcript 1605/10 100 Ex 136 annexure “JHC-5”. See also ex 128 annexure “WJN-18” -- 23 of 58 -- 24 briefed by either Mr Cunningham or Mr Thompson. Their instructions appear to have been informed by tests which they themselves carried out by noting the time it took to spray a particular volume of liquid in that spot. [90] The methodology for spraying coffee was not included in the general instruction provided by Mr Robert Stewart who trained sprayers needing to obtain a licence to use agricultural sprays. Nor was it included in the more specific instructions given by Drs Fay and Lloyd about coffee plants. All instructions about spraying appear to have been given verbally by the eradication team managers. The SPCHQ recognised the need to formalise the instructions and sought the production of an Eradication Procedure Manual. This work was still in progress at the time of the subject spraying. I am not prepared to rely on its terms as defining what was in fact done on the coffee plantations. [91] The schedule of spraying activity shows that the work commenced on the Jaques plantation on 1 September 1996, after discussion with Mr Jaques who stipulated he wanted the same sprayers to be involved each time on his property. In the initial stages the spray teams on his property used hand operated equipment, delivering a genuine spot spray in accordance with the off-label permit. [92] At some point before 9 September 1996, a decision was made to spray using motorised all-terrain vehicles (ATVs). There is some confusion also as to when and by whom this decision was made. Mr Sing does not remember the decision being made. 101 Mr McDonald said he did not participate in the decision.102 Mr Cunningham said he did not do so but that it was “passed down from above”,103 but that he would have discussed it with others.104 Mr Thompson said the decision was a committee decision made by four persons namely, Mr Sing, Mr McDonald, Mr Cunningham and himself. 105 There is no record of the decision being made at the SPCHQ level. [93] The rationale offered for the use of ATVs was that the job could be done more quickly and that it was more efficient because coffee plants were different to individual trees because they were more like a hedge.106 [94] Quite apart from the fact that one does not know when, where or by whom the decision was made, it is clear that the change in method of delivery of the spray was done without the benefit of expert scientific opinion. The application of protein bait spray [95] The rate of delivery of the bait spray depends on a number of variables – the speed of the ATV, the setting of the spray nozzle, the area of the plant at which the spray was directed and more particularly the care with which the sprayers went about the task. Some basic testing of this system was apparently undertaken by Mr Thompson who concluded that if the ATV travelled at 4-5 km per hour and the nozzle was set at 40 psi the proper spray rate would be achieved. This, according to 101 Transcript 913/25 102 Transcript 1561/50 103 Transcript 1701/35; 1721/15 104 Transcript 1703/58 105 Transcript 746/25; 749/30 106 Transcript 748/55 -- 24 of 58 -- 25 Mr Thompson, became the form of instruction107 although on another occasion 20 psi was said to be the appropriate pressure. Proper compliance with even these limited instructions was difficult because sometimes the calibrated nozzles were found to be too small and the bore was drilled out to a larger size.108 The speed at which the ATV travels could not be standardised because of the differing terrain and width of access between the rows of plants. The tendered photographs indicate these differences. The band width could vary markedly also depending on nozzle setting and its distance from the plant. [96] Accepting the fact that volume of spray applied to each plant and the frequency of spraying were critical matters, proper control of the spray personnel was essential. The hand spraying procedure described by Ms Elizabeth Bors gave same chance of achieving the goal of a measured application of the spray to the target tree. I do not accept that this could be achieved using ATVs even with the best of intentions. The evidence of some of the sprayers, and of Mr Colbran who observed them, satisfies me that the volumes of spray applied exceeded what was intended or instructed. Mr Jon Emberg who performed both hand and ATV spraying as a member of the Mareeba spray crew, spoke of his concern about the volume of spray being applied when using ATVs. 109 He said he was instructed to use all the spray provided and he achieved this by “raising the pressure settings and varying the nozzle distance to put out more spray”. To much the same effect was the evidence of Mr Guiseppe Alifraco who shared concerns about the volume of spray being used.110 He raised his concern with his team leader and supervisors but was assured the spray was safe.111 [97] I do not propose to deal with each of the witnesses who gave similar evidence on this topic save to note Mr Colbran’s observation of the spraying of his plants on 30 September 1996, whilst he was engaged in harvesting the coffee berries. He said:- “During one of the early sprayings I noticed a mist emanating from my coffee trees as they sprayed. I was concerned at the time by the smell but I assumed the applicators of the spray knew what they were doing. The spraying was very heavy. It was definitely not a case of the bottom 1.5 metres of the trees being sprayed but the entire tree in a form which I would describe as “cover spraying”. I frequently would see this spray dripping off the leaves. On one occasion I collected about a litre in the catcher trays on the harvester.”112 [98] That description was not challenged in cross-examination and the records tendered later identified the sprayers on that day to be Peter Amesbury and Terry Ritchings.113 The sprayers were effectively under the control of team leader Paul Smithwick and managers Mr Thompson and Mr Cunningham. The evidence of Mr Thompson was that he only observed sprayers in action at the Colbran’s property on two or three occasions for a total period of 10 minutes.114 Mr Cunningham visited 107 Transcript 759/10 108 Transcript 766/20 109 Ex 2; transcript 52/40; 55/20 110 Ex 4 111 Transcript 102/20-40 112 Ex 15 Statement 13 September 2007 para 72 113 Ex 119 Attachment 7 114 Transcript 757/1 -- 25 of 58 -- 26 the spray teams “occasionally” but could not say how often. 115 The supervision it seems was left to team leaders such as Paul Smithwick. He could not recall ever having to correct the sprayers’ operation.116 Other sprayers, particularly Mr Terry Ritchings and Peter Amesbury maintained that they followed the instructions given and applied a band spray and took precautions against over spraying. Each agreed that they sprayed to point of “run-off”.117 In cross-examination Mr Amesbury was tested concerning the width of the band spray, the speed of the ATV, the volume of spray used per acre and the choice of the rows to be sprayed. It is clear from the number of variables as Mr Amesbury himself admitted, that he did not have “any idea of what volume of spray he was spraying on individual trees”.118 [99] Other instructions included a reference to spraying “to run off” which is quite a different spray technique compared with spot spraying of 100 ml per sq metre. Spraying “to run off” is a most inappropriate application of the subject chemicals being applied. The effect of the change to the ATVs was at best to change from spot spraying to band spraying. This, I find, led to more chemical being applied to each tree in the spraying process. [100] Neither Mr McDonald, Mr Thompson nor Mr Campbell had any prior experience with coffee production or coffee plants. Mr Cunningham for example did not know about “water stressing”.119 In this state of knowledge and with the ready availability of wide ranging expert opinion within the DPI, it is surprising that the managers of the eradication programme did not seek help of this kind before commencing the spray programme or during it when changing the method of spraying. [101] I find, also, there was no meaningful supervision of the sprayers in the field. Mr Thompson only saw the operation at Colbran’s property on two to three occasions for a period of about 10 minutes.120 Mr Cunningham said he occasionally visited spray teams but otherwise relied upon team leaders to ensure the instructions were carried out.121 [102] The plaintiffs also challenge the accuracy of the spray data which the defendant claims was collected and collated on a daily basis. Whilst there are some inconsistencies between the evidence of Ms Dyer and Mr Cunningham as to how the primary records were kept, I hold a greater reservation about the accuracy of the reports from the team leaders as to the volumes of spray actually used. In the end result I am satisfied that it is more probable than not that the volume of protein bait spray applied to the plaintiffs’ coffee plants by the defendant’s employees exceeded the volumes that were permitted by the off-label permit. I accept that the frequency of application was in accordance with the records tendered as annexure “TCR-4” to statement of Terrence Ritchings (ex 127). The growers and their observations of damage [103] Mr Benjamin Colbran and Mrs Norma Colbran commenced farming in partnership at Emerald Creek via Mareeba on 1 July 1991 under the trade name 115 Transcript 1697/40 116 Transcript 1678/5 117 Transcript 1396/30 118 Transcript 1415/25 119 Transcript 1706/5; 1707/38 120 Transcript 756/60-757/5 121 Transcript 1698/10-40 -- 26 of 58 -- 27 “Tablelands Coffee” 122 . They had leased the property at Emerald Creek for five years with a right to negotiate for a further lease of five years. The new lease was granted in 1996. But for the events which followed in that year the Colbrans would most likely have extended the term beyond 2001. In fact, they abandoned the plantation in 1998. [104] Mr Colbran has had a lifelong experience in horticulture – as a child on his father’s farm in New Zealand, undertaking agricultural studies at the Southland Technical College in Invercargill, and then growing coffee in Papua New Guinea from the 1960’s and in Mareeba in the 1980’s. He has visited coffee growing areas around the world particularly in Kenya and Brazil. In 1984 he imported from Brazil the first mechanical harvester to be used in Australia. He later designed and built a new harvester which achieved the removal of ripe cherries only.123 This prevented the spoiling of the taste of coffee which occurs if unripe cherries are mixed with ripe ones. Mr Colbran was President of the Australian Coffee Growers’ Association between 1987 and 1998.124 The history set out in the evidence satisfies me that Mr Colbran was an experienced and dedicated coffee grower. He appears to have been a person to whom other growers resorted when in need of advice. [105] An issue was raised as to his farming ability and care of his coffee plants as observed by Officers of the Department of Primary Industries in 1996. Mr Cunningham described the coffee trees as being “stunted”. He and others described an area between the rows of coffee plants as being infested with weeds and wild tomatoes which required separate spraying with a herbicide to kill the plants.125 Mr Colbran denies these allegations and maintained that the coffee plants were not “stunted” but said that what the Officers observed was the catuai plant which was a semi-dwarf variety. He referred also to the fact that the average yield from these trees exceeded the typical yields set out in the DPI’s own publications.126 He explained also that there was a more vigorous growth of weeds in the area of coffee growing because he used a method of overhead irrigation. But that this weed growth was part of his husbandry method in which the weed growth was slashed and added to the build-up of black humus for the benefit of the plants.127 Mr Colbran also suggested that there may have been some confusion about areas of his property which were not given over to coffee production which were not maintained to the same high standard as the producing areas. [106] I accept Mr Colbran’s explanation of the condition of his property. The observation about the weeds was made during the harvest of Mr Colbran’s crop and at the end of the growing cycle. It was not necessarily indicative of poor farming practice. I do not regard the yield for the 1996 harvest as being reduced by this factor nor did it have any impact on the expectation of future years. Before the Colbran’s arrival at Emerald Creek property in 1991, some 25 acres of the property had been used for coffee growing during the previous five years. The plants were then in poor condition. Despite the application of fertilisers and nurturing the plants were slow to recover. In 1994 Mr Colbran established that there was a molybdenum 122 Mr Colbran’s evidence is found in three separate statements (ex 15); an affidavit sworn on 30 May 2007 (ex 16) and an affidavit sworn 16 October 2006 (ex 17). 123 Ex 15.1 at p 15 and p 27 124 Ex 17 at para [2] 125 Ex 48 Statement John Thompson at [60]; Ex 136 Statement Dr Cunningham at [35]-[40] 126 Ex 15.2 para [4] 127 Ex 15.2 paras [7-9] -- 27 of 58 -- 28 deficiency in the soil. Once this was corrected the plants flourished, resulting in a harvest of 2.5 tonnes per hectare in 1995. [107] He was in the process of harvesting the 1996 crop when the spraying occurred. He claimed that 3,350 kilograms were harvested after the spraying but the beans had a bad taste and were unsaleable. He did not complete the harvest after that, leaving on the trees an estimated 5 tonnes of coffee bean. He claimed that the plantation in a typical production year had a capacity to produce 5 tonnes per hectare but this could not be demonstrated by his previous returns. [108] The Colbrans’ growing practice differed slightly from the other growers. He water stressed his plants to achieve flowering in November/December with the harvest commencing in February for the SL 34 variety and for the other varieties in the following July-September. Other growers who also water-stressed aimed for a flowering at different times. 128 This differing approach was simply a matter of grower preference and did not have any effect on yield. In the end result I am satisfied that Mr Colbran was an experienced, well informed and dedicated coffee grower. [109] Mr Colbran first noticed a problem with his coffee plants about two weeks after the spraying commenced in September 1996. He saw that those berries that were just starting to ripen would drop off the trees.129 He was harvesting this variety at that time. Another variety SL34 had, at that time, advanced flower spikes which simply disappeared.130 By November 1996 there were other signs – leaves were twisting and changing colour, the wax cover on flower buds turned black and the buds dropped.131 There was also a problem with the formation of the embryonic berry which is called a “pinhead”.132 Another unusual feature occurred where new growth sprouts from the plant – the cotyledons. Normally there are two cotyledons but now some sprouts were showing three or four. 133 [110] Mr Colbran brought these problems to the attention of the DPI and in particular Dr Drinan who suggested he should cease water stressing where that was occurring. The remedial action taken by Mr Colbran was to apply heavier quantities of fertiliser in the ensuing years but this was to no avail. [111] Mr Colbran also noticed on a visit to Walkamin Research Station that a plot of coffee plants maintained there did not show any similar damage. No similar damage was observed on coffee plants at Lotus Glen prison which were not sprayed. Other growers also contrasted damaged coffee plants with those which had not been sprayed and which showed no damage. This suggests to me that the damage was not caused by any climatic or environmental factors. [112] The important impact was in the yield from the next harvest and the following harvest. Mr Colbran said on a number of plants the berries would not ripen or the beans did not form. Some of the beans from those harvests had a bad taste and were not saleable. The variety SL34 was particularly affected such that its crop was 128 Transcript 253, 256-257, 335-334 129 Transcript 262/50 130 Transcript 263/50 131 Transcript 264/10 132 Transcript 266/10 133 Transcript 268/45 see photos 2.5.1 to ex 19 -- 28 of 58 -- 29 abandoned. Ultimately, the pressures associated with trying to manage the plant damage and falling returns resulted in Mr Colbran not renewing his lease. [113] Mr Anthony (Nat) Jaques and Mrs Lynda Jacques are, and were at all material times, the directors of the plaintiff companies Hatmill Pty Ltd and Jaques Australian Coffee Pty Ltd. The companies are trustees for the Raja Trust which holds beneficial interests in the undertakings carried on in the names of the companies. For convenience of reference I will identify the property and the undertakings of both companies as the Jacques property or the Jacques business. [114] Mr Jaques is an experienced coffee grower. He was raised on a coffee plantation in Arusha, Tanzania and later attended an agricultural college in England. He thereafter managed the family plantation in Africa for six years before migrating to Australia. He commenced coffee growing in the Atherton Tableland in the 1980’s at Paddy’s Green. Over a period of 10 years he established a plantation which had 180 acres of growing trees. The business then traded under the name of Jaques Brothers but had some financial difficulties which resulted in the property having to be sold.134 Although the business failed the plantation continues to prosper and today and is part of the large Skybury Coffee business conducted by the McLaughlin family. [115] The move to Emerald Creek was a new venture undertaken by Mr and Mrs Jaques. They purchased the property in an undeveloped state in 1990 with the intention of establishing a coffee plantation. In the first six months they set up a nursery and cleared and contoured the land. The plan was to establish the plantation in three stages, planting out 50 acres (20 hectares) at a time. The creation of a coffee plantation takes time. For the first three years whilst the trees grow there is no fruit and each year thereafter there is a small but increasing harvest with the tree reaching maturity at seven years. [116] By 1996 the Jaques’ harvest was approximately four tonnes which was not sufficient to generate a profit but was enough to create the expectation for increasing returns in the ensuing years. The expected cash flow was critical to the planned expansion of the enterprise. The planting was done with limited financial resources but with a view to establishing a successful, high quality plantation. Care was taken for the trees to establish a deep root system so as to withstand cyclones. The photos of the property and video images indicate that the Jaques were highly competent growers of coffee. They did not spray the coffee trees for insects135 and in fact had noticed no prior insect damage to coffee crops in the time that they had been to Australia.136 Even when spraying herbicide to control weeds, great care was taken to avoid the spray affecting the leaves of the coffee plants.137 This property is close to the area of Emerald End where there are located a number of small hobby farms. [117] The Jaques had harvested their 1996 crop between May – August 1996. Consequently, there was very little coffee remaining on the trees at the time that PFF was discovered in the coffee plantations and the spraying programme carried out. The coffee cherries remaining on the trees after harvest would dry off, harden 134 Transcript 333/5; 368/10 135 Transcript 395/1 136 Transcript 396/50 137 Transcript 395/45 -- 29 of 58 -- 30 and fall off the trees.138 The PFF was found in fruit samples collected between July- August 1996. [118] When the spraying commenced on the Jaques property the plants were in flower spike. Because of Mr Jacques’ experience he had concerns about any spraying of coffee plants at this time of the cycle.139 But he believed that the spraying was only going to occur on every tenth tree. Within days of the spraying Mr Jaques noticed that there were blackened tips on the spikes.140 [119] He complained immediately to DPI officers but the spraying continued. After the ninth application of the spray he was so concerned about the damage he refused to allow the sprayers back onto his property.141 The damage was inspected soon after by Mr Sing and later by Dr Drinan and by the independent assessors Messrs Evans and Peasley. [120] That initial damage to flower spikes translated into damage in the berry formation that followed. The young berries did not go through the normal colour changes but just went black.142 The number of berries was reduced as a result of the flowering having “aborted”.143 Mr Jacques took photographs of the damage to the plants which photos are annexed to ex 24. In summary, these photographs depict the berries not ripening normally and in small clusters, leaves crinkled and showing signs of stress. [121] The coffee beans harvested in 1997 – some 7 tons – were unsaleable. Mr Jacques described his attempts to rescue the damaged plants by fertilising and pruning but in the next season similar problems were encountered. Photographs Nos. 23, 24, 25 and 26 annexed to ex 24 were taken a few years after the spraying programme and they continued to depict the ongoing damage to the plants. As a consequence Mr Jaques undertook a programme of stumping – by which plants are cut back to the stump and then go through a growth cycle producing vigorous regrowth and a regenerated plant which is productive after two years. The time to achieve production after replanting is five years.144 Initially Mr Jaques stumped every sixth row and later four of the remaining rows.145 The plants treated in this way produced a deformed regrowth and so that process was abandoned. The whole area was replanted in the year 2000. [122] Mr Jaques described the new crop as “very good” 146 and it did produce well. This suggests that the problems experienced after spraying should not be attributed to the soil condition. As well, at the Jaques’ homestead there was a coffee tree which was unfertilised and unattended but allowed to grow naturally. It was not sprayed in any way and it was not visited by any of the damage of the kind observed on plants in the plantation.147 138 Transcript 392/30 139 Transcript 347 140 Ex 23 Statement 29 May 2006 at para [52] 141 Ibid at para [54] 142 Transcript 349/15-35 143 Transcript 349/50 144 Ex 23 para [67] 145 Transcript 385/20 146 Transcript 361/50 147 Transcript 353; photograph 11 -- 30 of 58 -- 31 [123] The third claimants are Mr Bruno Maloberti, Louisa Maloberti and their daughter Maria Maloberti. Each of them is a director of the corporate entity North Queensland Gold Coffee Pty Ltd. Mr and Mrs Maloberti are in advanced years and the principal decision maker and organiser of the business is now Maria Maloberti. The Malobertis were tobacco farmers on the Atherton Tableland until licences for the production of that crop were phased out. In 1979 the family commenced to grow coffee which was then a new industry on the Tablelands. Since then they have proven themselves to be very successful coffee growers and have received considerable publicity for the manner in which they have set about the marketing of their crop. Prior to 1996 they grew their crop using an organic approach and this was a marketing advantage. The spray of the pesticide put an end to that claim. From 1992 they sold all their coffee in roasted form which protected them from the vagaries of the open market. [124] The Malobertis typically harvested in the June/July months. 148 The 1996 harvest was excellent and the plants remained in good condition.149 By September 1996 there were very few coffee berries on the plants which were undergoing water stressing. By no measure could the plantation be seen as a “hot spot”. [125] After the spraying Ms Maloberti noticed the unharvested berries were actually turning black and falling off. She noticed also that in the new growth, the pin heads did not form properly but turned black.150 Early in 1997, Mrs Maloberti noted that the berries did not go through the usual colour changes but rather turned black and dropped off. 151 The plants appeared to be unhealthy and the tips of the branches turned black.152 The yield from the harvest was significantly reduced and the weight of the beans per bag was much lower than usual.153 Because of the low yield she could not supply her regular customers. [126] At the time of the next fruit-set in late 1997 Ms Maloberti noted that again the ‘pin heads’ were not forming properly and the trees remained unhealthy. She also noted abnormal cotyledon formation. 154 As well, she noted rotting surface roots which gave off a smell.155 As a result of this she had to cease her practice of water stressing the plants.156 Other damage is depicted in the video (ex 29) taken on 23 June 2003. 157 The reduced yields from the coffee plants continued for the ensuing harvest. Duty of care [127] The duty of care which the plaintiffs contend for is set out in paragraph 10 of the Third Further Amended Statement of Claim as follows:- “10. In the premises, by reason of the matters particularised aforesaid the defendant owed a duty of care to the plaintiffs to: 148 Transcript 413/1 149 Transcript 412/40 150 Ex 28 para [51]; transcript 416/22 151 Transcript 415/50 152 Transcript 416/10 153 Ex 29 Affidavit sworn July 2007 154 Transcript 776/50 155 Transcript 417/50; photos ex 31 156 Transcript 777/55 157 Transcript 774/30 -- 31 of 58 -- 32 (a) Undertake appropriate trials and testing and pursue proper investigations to ensure the product intended to be utilised in the spraying was suitable, effective and safe for use on coffee crops such as the plaintiffs; (b) Ensure that the product utilised in the spraying was the correct strength and used in accordance with the recommendations of the manufacturer (as expressed on the label affixed to the drum containing the product) or otherwise in compliance with the permits granted by the NRA; (c) Ensure the product used in the spraying program would not cause damage to the coffee crops of the plaintiffs or otherwise that the risk of any damage to the coffee crops was minimised; (d) Undertake the spraying of the coffee crops in an appropriate and safe manner being at such frequency in such quantities and at such strength so as to avoid or otherwise minimise the risk of any damage being done to the coffee crops of the plaintiffs. (e) Ensure that the servants or agents of the defendant retained by the defendant to undertake the spraying of the plaintiffs’ coffee crops were adequately trained, had appropriate experience, were properly instructed and were at all times adequately supervised in carrying out the spraying of the coffee crops.” [128] The alleged breaches of those duties are found in paragraphs 11, 11A and 14 which cover some 15 pages of a mixture of allegation, particulars and evidence. The defendant’s response, taking up 9 pages and following much the same pattern, challenges the existence of a duty of care which might be summarised as follows:- (a) The defendant did not owe a duty of care to the plaintiff because – (i) the decision to spray was a policy or planning decision relating to the PFF emergency; (ii) the defendant acted in the public interest and owed no duty to the plaintiffs at all; (iii) the defendant had no duty to conduct trials, testing or investigation but, in the alternative, it did in fact seek advice and carry out trials and investigations. (b) Whilst admitting that it had a duty of care to ensure that the spray product was used in accordance with the NRA off-label permits, it denies that it owed such duty to the plaintiffs as the duty was limited to acting in the public interest. (c) & (d) Denies it owed any duty of care to the plaintiffs either to ensure the product would not cause damage or to undertake spraying in any particular manner because, in the public interest, its obligation was to spray in order to maximise the prospect of the eradication of PFF. (e) Denies it had any duty to the plaintiff to ensure training of staff but says, in the alternative, it complied with such duty if it existed. [129] The contest between the parties framed in this way invited a consideration of the principles upon which the Court must determine whether a duty of care existed at the time of the spraying. As is seen from the pleadings, the defendant’s first line of defence against the plaintiff’s assertion of a breach of duty of care is that it owed no duty at all to the plaintiffs. This, the defendant asserts, flows from the fact that the decision to spray was properly characterised as a planning/policy decision in response to a public emergency. This raises the distinction between policy -- 32 of 58 -- 33 decisions and planning decisions to which Mason J referred in Sutherland Shire Council v Heyman158 , His Honour said (at p 469):- “The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will be observed if we recognize that a public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints. Thus budgetary allocations and the constraints which they entail in terms of allocation of resources cannot be made the subject of a duty of care. But it may be otherwise when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness.” [130] Counsel for the defendant relied also upon statements from the judgments of the High Court in Graham Barclay Oysters Pty Limited v Anor 159 where claims were made by consumers against the producers of oysters shown to be contaminated and as well, against the local authority and the State Government departments having some oversight of the commercial farming of oysters in the area where the contamination occurred. The question whether a local authority or a government owes a duty of care when acting under statutory authority was discussed by the members of the Court. Gleeson CJ said:- “There are forms of government activity, which courts in the past endeavoured to describe by the term “operational”, where there is no reason for hesitating to assimilate the position of governments to that of citizens imposing duties and standards of care. Such activity might involve budgetary considerations, but that does not prevent such assimilation. Individuals and corporations also have to watch budgets, and decisions about what is reasonable may have to take account of that. As the other extreme, reasonableness of legislative or quasi legislative activity is generally non justiciable.”160 McHugh J said:- “Ordinarily, the common law does not impose a duty of care upon a person to protect another from the risk of harm unless that person has created the risk. And public authorities are in no different position. A public authority has no duty to take reasonable care to protect other persons merely because the legislature has invested it with the power whose exercise could prevent harm to those persons. Thus, in most cases, a public authority will not be in breach of a common law duty by failing to exercise the discretionary power that is invested in it for the benefit of the general public. But if the authority has used its powers to intervene in a field of activity and increase the risk of harm to persons it will be ordinarily come under a duty of care.”161 158 [1985] 157 CLR 424/456 159 [2002] 211 CLR 540 160 Ibid at para [14] 161 Ibid at para [81] -- 33 of 58 -- 34 His Honour went on to pose a list of questions by answers to which the existence of a duty may be determined.162 Gummow and Hayne JJ (with whom Gaudron J agreed) said:- “An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend upon the proper exercise of the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute… The factor of control is of fundamental importance in discerning a common law duty of care on the part of a public authority.”163 [131] The reference in the above quote to the salient features is taken from the approach adopted by the High Court for determining the existence of a duty in Perre v Apand Pty Ltd164 which flowed through to the decision in Sullivan v Moody 165 where the High Court said:- “The circumstances that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable. A medical practitioner who examines, and reports upon the condition of, an individual, might owe a duty of care to more than one person. But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities or their officers are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations.”166 The circumstances in Sullivan related to the statute imposed obligation on certain medical personnel to report suspicions held about the abuse of children examined by them. The public interest factor in that obligation was very high. The question was whether the health personnel at the same time owed a duty to the person who might be suspected as the child abuser. The Court held that such duties were 162 Ibid at para [84] 163 Ibid at paras [149] [150] 164 [1999] 198 CLR 180 165 [2001] 207 CLR 562 166 Ibid at para [60] -- 34 of 58 -- 35 clearly irreconcilable and as a consequence there was no duty of care owed to the suspect. [132] In Barclay Oysters the claimant attempted to establish a case of non-feasance against the authorities in an environment of industry self regulation. The testing regime allowed by the statutory authorities was clearly a policy decision and the protection the scheme offered was for the general protection of public health and not for any particular person or class. [133] The salient features of the relationships between the parties in the present case are quite distinct. The starting point is the scope of the relevant legislation (“the Act”). Whilst the Act has the purpose of preventing, controlling or removing pest infestation of plants and is therefore prima facie for the protection of the public, it also impacts more directly on persons whose plants are affected. Counsel for the defendant points to the scope of the powers of an inspector appointed under the Act, these include giving directions to the landowner regarding treatment, quarantine, destruction of pests, plants etc.167 This may include, as has been seen in another area, the destruction of all trees in an orchard. The Act gives power to take measures necessary to carry out the destruction and to charge the landowner the cost of so doing. The powers given to the Chief Executive and to inspectors include rights of entry, powers to search and seize and the Act creates offences for interference with the inspectors’ tasks. [134] From this base the defendant argues the authority to act is necessary in the public interest and the primary duty of care in the circumstances of this case was to take all reasonably necessary steps to eradicate PFF. Consequently the decision to implement the PFF eradication programme is not a judicially reviewable decision because it was a decision that involved such issues as the use of public resources, community needs and competing economic risks. For example, the defendant points to the inconvenience and expense which members of the public and commercial hauliers were put to, by having to go through roadside checks at quarantine stations. [135] The defendant further argues that if there was an obligation to prevent ‘collateral’ damage to crops then that related to a secondary duty, that it conflicted with the primary duty to eradicate the PFF and was irreconcilable. As a consequence no duty was owed in the specific circumstances of this case. [136] Against this counsel for the plaintiffs argue that the duties imposed by, and the powers given to Chief Executive and inspectors under, the Act are not such as to exclude the prospect of claims being made against them. The plaintiffs point particularly to the express terms of the Act which considers compensation and the circumstances in which compensation for negligence might be awarded. Section 28(1)(b) provides:- “28(1) … (b) done or omitted to be done bona fide for the purposes of this Act and without negligence.” [137] The plaintiff submits that this is sufficient to preclude any suggestion that no duty arises because the decision was of a planning or policy nature. More directly, in my 167 See s 13 -- 35 of 58 -- 36 view, the action of spraying crops and the decision on which that activity was based was clearly at the operational level. [138] There can be little doubt that the decision to eradicate PFF from Queensland was a policy decision and one clearly taken in the public interest but that does not mean that all decisions made under the umbrella of that task are protected by the Act. The terms of the Act itself suggest otherwise. Ultimately, the question of the duty will depend upon all of the circumstances. Those circumstances other than the provisions of the Act to which reference has been made, in my view, include the following:- (a) The emergency situation brought about by the incursion of PFF had passed. By May 1996 the operation was more in the nature of mopping up the remaining 5% of PFF. Whilst this was expected to be a difficult task and requiring the commitment of ongoing resources there was less urgency for wide spread action. (b) The scientific advice was that the eradication could be achieved by male annihilation blocking alone together with protein bait spraying of hot spots.168 There is no suggestion spraying of all coffee plantations was necessary for eradication. (c) The number of hot spots where protein bait spraying was required was limited to where there was ripening – ripe fruit. There was no indication for protein bait spraying except in those circumstances. On this basis, the single finding of PFF at Colbran’s property and the Maloberti’s property would not provide a basis for them to be assessed as a hot spot. The findings at the Jaques’ property would have warranted closer investigation and monitoring before the application of protein bait sprays. (d) Scientific advice was readily available to the decision makers. The circumstances warranted the seeking of such advice. (e) The spray product was not a benign substance. The defendant was not aware of any other agent or authority using Maldison 500 at that strength in any other prior pest eradication or control campaign. (ex 40). The risks arising from any of its constituent parts ought to have been assessed. (f) The spray product had never before been used on coffee plants. The formulation of the spray and the effects of the components on coffee had not been tested by the manufacturer. Coffee plants were not included on its suitability list.169 (g) The components of the spray and the concentration at which it was to be applied was not known to be suitable for coffee. (h) The experts agreed that it was proper to have regard to the effect of the spray on humans, on the environment and on plants.170 (i) The importance to the success of the eradication programme of the growers’ support by acknowledging the need to care for the growers’ interests. In this connection Mr Dunn, who was the senior government officer for the eradication programme, said:- 168 Minutes of SAP meeting May 1996, see N38 169 See exhibit 107 170 See transcript per Dr Lloyd; p1296, per Dr Broughton; p 1632/35 per Mr Stewart; p 1716/12 per Mr Cunningham -- 36 of 58 -- 37 “It was vital that we maintained the cooperation of industry which we did to a very large extent through the program. Had – had there been viable alternatives around and had that hypothetical scenario at the time arisen we – I would have certainly ensured that we did explore what alternative options may have been available.”171 [139] Those features in combination lead me to conclude that the defendant owed a duty to the plaintiffs to take reasonable care to avoid damage to their crops. I am satisfied also that by taking steps consistent with the fulfilment of that duty would not be inconsistent with the defendant’s duty to eradicate PFF in the public interest. [140] Having determined that there was a duty to take reasonable care, I am satisfied that the specific matters pleaded in paragraph 10 of the Further Amended Statement of Claim fell within the scope of that duty. Breach of duty [141] The plaintiff contends that the defendant breached that duty in a number of ways which I might summarise as follows:- (a) Failing to make proper inquiry as to whether the spray product used would be likely to cause damage to the coffee crop; (b) Using the spray product in such combinations and strength that it was likely to cause damage to the crop; (c) Using the product in circumstances where it was likely to have a cumulative detrimental effect on the crop; (d) Not following the permitted regime for spot spraying but using a method (cover spraying) which was unsuitable for that product; (e) Not training or supervising staff or implementing a procedure to ensure the proper quantity of the product was sprayed; (f) When advised of damage to the crop, failing to suspend the operation. [142] The plaintiffs allege that the damage to the crop was caused by the combination of the use of the spray product by a method and at quantities and frequencies employed such as to cause the damage. I shall firstly deal with the level of inquiry about the spray product which was a mixture of yeast autosizate and Maldison 500. The concern is only with the latter product. [143] The choice of Maldison 500 as a pesticide spray was made during the emergency phase of the PFF incursion. The active pesticide, malathion, was known to be effective against PFF from the defendant’s experiences in the Torres Strait Islands in 1995. There was no need for consideration there of any impact it would have on coffee plants or commercial plantations and no criticism could be made about its use then. The product or an equivalent was needed urgently. The evidence of Ms Wright and Annice Lloyd provide testimony to this. There does not appear to have been any review of this choice when the decision was made to commence spraying the commercial coffee plantations. [144] What the defendant knew about Maldison 500 was what was shown on the label. Relevantly, the label showed that the product applied in certain concentrations was 171 Transcript 821/20 -- 37 of 58 -- 38 safe to use on various plants including fruit trees, apples and pears and citrus but the list did not include coffee.172 [145] As at May 1996 the defendant knew that Maldison 500 had been used in various parts of the quarantine zone and was, together with other eradication techniques, outstandingly successful. As to the one occasion of its use on a commercial crop the defendant did not accept any connection between the damage to Mr Bonnell’s mangos and the spray and, in fact, none has been shown. [146] As regards the use of protein bait sprays on coffee plants, the defendant knew, or ought to have known, that the spray product was untested. The active component malathion was known not to be a source of concern in coffee crops but no information was sought about the other components - the solvent and the emulsifier. The solvent being almost 50% by volume was a major component. The solvent used in Maldison 500 was not always the same. In some products it was the chemical Solvesso 150 (Nu Farm) and in others it could be one or other of three chemicals including Solvesso 150 (Rhöne-Poulenc).173 [147] As mentioned in paragraph [88] above, the only persons in the defendant’s employment to show concern about applying the spray product to coffee plants were Mr Bill McDonald and Mr Cunningham. Apart from the four plant physical trial they conducted, Dr Lloyd and Mr Colin Bevis at the behest of Mr McDonald conducted a literature search on the effects of malathion on coffee plants. This search established that there were no adverse effects from that chemical. But no inquiry was made specifically about the product Maldison 500 or of the other chemicals in its formulation. Dr Fay gave evidence that he, as an entomologist, had researched the effects of protein bait sprays on fruit flies together with Professor Drew and Dr Lloyd, in 1985. He was not aware of any risk of plant damage from such a source.174 [148] The plaintiff relies upon the evidence of Dr Beattie who was a professor at the Centre for Plant and Foods Science at the University of West Sydney. His expertise is wide ranging but relevantly includes the use of spray oils to control plant and pest diseases. This includes the study of the phytotoxicity of mineral oil sprays (hydrocarbons). Dr Beattie did not see the damaged coffee plants nor the manner in which they were sprayed. He has knowledge of the components of Solvesso 150 and its exposure in scientific literature. He expressed the view that the damage to the coffee plants described to him and depicted in the photographs and videos which have been tendered was due to “the unwise and inappropriate over-use of the spray which contained the highly phytotoxic Solvesso 150”. 175 Should the defendant have been aware of this risk? [149] When Dr Beattie was first contacted about giving an expert opinion in the properties of Maldison 500, he did a computer search for the components of that spray including Solvesso 150.176 In his draft report of December 2004, he described phytotoxicity characteristics of each of them. The information was readily available 172 Ex 36 173 Ex 36 174 Transcript 1461/55; 1526/20 175 Ex 32 176 Transcript 473/10 -- 38 of 58 -- 39 through access to documents used in the registration of such products – the Material Safety Data Sheet (MSDS) and the Chemical Advisory Service (CAS) number. These would show the presence of saturated hydrocarbons which Dr Beattie said were known to move within plants. Dr Beattie explained in detail the mechanism by which such products entered through the stomata of plant leaf and there, under the influence of sunlight, oxidise to form acids which are toxic to plants. In the Solvesso 150 the molecular volumes are smaller and therefore move faster within the plant.177 He referred extensively to scientific literature by which knowledge of these features had been disseminated for much of the 20th century. See ex 32 Volume 2. The literature details experiments involving a range of plant types – from tubers (potatoes), apricots and peas. Dr Beattie could not “think of any reason why a coffee plant would differ from other plants in its response”.178 [150] Relevant to the kind of damage observed in the subject coffee plants, Dr Beattie described the chemical products produced by the process of oxidisation of hydrocarbons as “plant growth regulators”. Or plant hormones.”179 When asked what effect this can have on a plant, he said:- “It can have in some cases, mild stimulatory effects and in excess they can be toxic to the plant. So naphthalene is a good example, in that where naphthalene breaks down its – when its oxidised, it can be – it can stimulate plant growth when it is applied at very low doses, but at high doses, as with benzene, it can be toxic to the plant.”180 In some cases the derived products from oxidisation have a mutogenic result.181 [151] Dr Beattie’s attention was drawn to a table from a scientific publication - Maas (1971) – which identified the properties of high-boiling point aromatic hydrocarbons into which class Solvesso 150 falls. That group is identified with high phytotoxicity. Dr Beattie referred also to an article by Krenek et al (1987) which considered the relative phytotoxicity of 20 solvents in the United Kingdom (20 in USA). Solvesso 150 (Aromatic 150 in USA) ranked the second highest. Dr Beattie’s reference to scientific articles was quite extensive. Many of them were available before 1996 when the defendant’s officers might have undertaken their literature research. For others it is not clear when the articles were available and for some they clearly relate to studies after 1996. The use made of these later articles by the plaintiffs was to support Dr Beattie’s opinion that the damage to the plants caused by the components of Solvesso 150 is systemic. To this end, the more recent studies have not undermined any of the conclusions drawn by Dr Beattie based on the earlier scientific articles.182 [152] Dr Beattie acknowledged that normal field use of Maldison 500 -.2% concentration - would not be phytotoxic.183 But if the Maldison 500 concentration in the spray increases to the level of the off-label permit it does carry the risk of being phytotoxic. If the frequency of spraying increases so too does the risk. 184 In 177 Transcript 455/20 178 Transcript 457/50 179 Transcript 458/50 180 Transcript 495/1 181 Transcript 465/20-35 182 Transcript 468/40 183 Transcript 490/55 184 Transcript 476/5 -- 39 of 58 -- 40 ordinary field applications a grower would be unlikely to treat the same plant twice.185 However, at the volumes which the defendant claims it applied – 8–12 litres per hectare – and with the almost weekly frequency as set out above Dr Beattie regarded the application as a risk to the crop and opined that the application was inappropriate where safer alternatives were available. [153] He expressed the view that the more appropriate method was to use male annihilation technique186 or an alternative spray product which did not include Solvesso 150. Such a product was the malathion based Hymal. A wettable powder would also be safer but malathion in that form would not have been available in the required quantities.187 [154] The defendant challenges Dr Beattie’s opinions on a number of grounds. Firstly, because his expert opinion has been delivered in a series of reports or responses to questions, there is difficulty in establishing the factual bases for his opinion. It argues therefore that little weight should be given to the opinion. Secondly, Dr Beattie’s more comprehensive report was furnished only at trial and there was no opportunity to test the scientific publications relied upon. In that regard I note that Dr Beattie gave evidence on 16 July 2007 and the final witness for the defendant was not heard until 13 September 2007. Any disadvantage to the defendant by the later receipt of the report could have been rectified in that time and if necessary, by recalling Dr Beattie. No such application was made. [155] Of more substance, are the submissions that Dr Beattie’s focus was too narrow looking at the situation only from the perspective of crop safety and not from the quest of the eradication of PFF. Further, the defendant contends that he was offering only personal opinion about the inquiries he would have made and not what was appropriate for the defendant which had, in fact, established a number of committees comprising various experts. Finally, the defendant argues, that Dr Beattie’s opinions as to causation and damage are so superficial as to be useless. [156] The views expressed by Dr Beattie have been contradicted by three experts relied on by the defendant, namely, Dr Osgood, Mr Hood and Mr Denis Hamilton. Dr Osgood is an agronomist and a private agricultural consultant. Before his retirement in 2003 he was the Assistant Director of the Hawaii Agriculture Research Centre (HARC). His background was in research and experimentation particularly with coffee and sugar cane. He has authored or co-authored an impressive list of publications which are detailed in his primary statement dated 26 February 2006.188 Dr Osgood’s fifth report dated 25 May 2007 dealt specifically with the properties of Maldison 500 and its components of Solvesso 150. He stated that “Solvesso 150 is not reported to be systemic in coffee … Solvesso is considered non-phytotoxic which is the reason it is used in insecticides formulation.”189 The reason why there is no report of adverse effect of this formulation in coffee, is simply that there has not been any studies specific to that plant. Dr Osgood also expressed the view that the damage observed in the coffee plants after spraying may be explained by causes other than the spray itself. 185 Transcript 476/30 186 Transcript 504/20; 556/15 187 Transcript 505/25 188 Ex 80 189 Ex 80 Fifth report Volume 1 para 4 -- 40 of 58 -- 41 [157] Dr Osgood’s expertise to give these opinions was directly challenged. It was established that he has not participated in any programme for the eradication of fruit flies;190 he has had no experience in using bait sprays in coffee;191 he has not carried out any research in the properties of hydrocarbons in plants;192 and his experience on coffee growing is mainly in Hawaii where soils and conditions are different. Water stressing, for example, was not commonly practised in Hawaii.193 Dr Osgood’s expressed opinions on methods of chemical bait spraying and the effects of temperature were not based on any personal expertise194 and his opinions were often expressed using malathion and Maldison interchangeably. 195 [158] Dr Osgood’s literature search was limited. It focussed on malathion rather than the components of Maldison 500 and it did not enquire into the topic of phytotoxicity.196 In the end result Dr Osgood could find no explanation for the types of damage to the coffee plants present after the spraying but not present previously.197 I can find nothing in his expressed opinions which challenges the validity and accuracy of the opinions expressed by Dr Beattie. [159] Mr. Hood who died prior to the trial was a consultant agronomist with expertise in crop protection and pesticide development and registration. His reports were tendered pursuant to s 92 of the Evidence Act and are marked ex 117. Relevantly, he noted that Maldison products had been widely used for 40 years and that Solvesso has been used as a solvent for over 10 years replacing more toxic and flammable solvents. He criticised Dr Beattie’s opinion as depending “upon theoretical biochemical argument, much of it speculative”.198 In cross-examination Dr Beattie pointed to Mr Hood’s analysis as to the movement of oils within plants and their potential for phytotoxicity as being contrary to the scientific literature.199 He also suggested that Mr Hood did not take account of the frequency of the bait spraying.200 I have come to the view that Mr Beattie has a great deal more experience in the research of the impact of hydrocarbons on plants. In the circumstances I prefer his analysis of how the damage was caused in the coffee crops. [160] Mr Hamilton is a principal scientific officer employed by the DPI. His opinion that there was no supporting evidence for the view that the naphthalene compound in Solvesso 150 will be transferred into compounds which have “auxin like activity”201 - a reference to the systemic changes referred to above. Mr Hamilton’s opinion appears to have been based on the fact that Maldison 500 is registered for use on auxin sensitive crops and has been used on such crops without detrimental effects. If the use was under normal field conditions with infrequent application then as Dr Beattie consistently stated there would be no risk of damage. But the question which remains is whether there was a proper assessment of the risk in choosing 190 Transcript 1130-40 191 Transcript 1131/20 192 Transcript 1131/40 193 Transcript 1141/50 194 Transcript 1152/30-60 195 Transcript 1151/50 196 Transcript 1144/45 197 Transcript 1153/6 198 Ex 117 second report dated 19 June 2007 at para [20] 199 Transcript 544/41-545/10 200 Transcript 546/1 201 Transcript 549/20-30 -- 41 of 58 -- 42 Maldison 500 and then applying it in the volumes and with the frequency authorised by the defendant. [161] The evidence of Mr Hamilton is tendered in the form of three statements with attachments occupying seven arch binder volumes. Mr Hamilton holds a Masters Degree in Science and is a Fellow of the Royal Australian Chemical Institute. His expertise is in the field of agricultural chemicals, particularly pesticides and pesticide residues. When the PFF outbreak occurred Mr Hamilton was involved in the quest to obtain the off-label permit to use various chemicals to combat the pest. He requested a literature search for papers on the impacts of those various chemicals on a range of plants, particularly varieties used for export. The relevant search related to malathion and not Maldison 500. As there is now no suggestion that any damage to the coffee crops was caused by malathion the Court record has been unnecessarily burdened with the results of that literature search.202 [162] Significantly, it appears that no search was done at that early stage on any of the other components in the formulation of Maldison 500. After the defendant received reports of damage to coffee plants, Mr Hamilton also carried out further inquiries in an attempt to prove/disprove the relationship between the spray product and the damage. But in cross-examination Mr Hamilton conceded that he didn’t know much about Maldison 500; 203 did not go looking for products which contained malathion as he did not know which one would be used;204 he had no experience in the use of protein bait sprays;205 and whilst he worked with aromatic solvents he had not done any work on phytotoxicity from solvents.206 The basis of his opinion as put to Dr Beattie is established with the following questions and answers:- “Your opinion concerning the benign nature of Solvesso 150 – you know that’s the solvent in Maldison 500 – your opinions regarding the benign nature of Solvesso 150 are based on your understanding that there is no literature suggesting that it is phytotoxic? – That’s correct, yes. And it is also based on your understanding that there is no literature suggesting that it is systemic? – Yes, that’s correct.”207 [163] That basis for Mr Hamilton’s opinion is clearly erroneous having regard to the extensive published material to the contrary. The scientific literature supporting Dr Beattie’s opinion has not been challenged for its accuracy or reliability. I am satisfied that the opinions of Dr Beattie, based as they are on the identified scientific literature and his own research efforts and his general experience in the field of pest eradication, are to be preferred. I found Dr Beattie to be an impressive witness who spoke frankly about the safety of the spray product when used within normal limits and who was prepared to acknowledge some errors in his earlier reports. I am satisfied that he has correctly assessed the plant damage was caused by the application of the spray product in excessive quantities and with too high a frequency. 202 Ex 98, volumes 1, 2 and much of volume 3 need not be considered 203 Transcript 1240/30 204 Transcript 1242/1-15 205 Transcript 1241/45 206 Transcript 1252/20-30 207 Transcript 1254/25 -- 42 of 58 -- 43 [164] In similar vein I accept the evidence of Professor Drew that protein bait spraying was unnecessary and ought not to have been undertaken except in connection with attacking hotspots. I find that no hot spots, as properly understood, existed in any of the plaintiffs’ properties at the time the spraying was undertaken. The decision to spray the coffee plantations was contrary to the expert advice provided by SAP. [165] I am satisfied that had a rudimentary search of the formulation of Maldison 500 been undertaken and a consequential inquiry made as to the characteristics of the various components of that spray product, then the risk to plants of its use outside normal limits would have been identified. By not making this preliminary inquiry the defendant never properly identified the risk to plants and thus gave no consideration to the undertaking of trials nor to inquiring as to how the product might be sprayed in a way that was consistent with the eradication of PFF and with safety to the coffee plants. This risk was not limited to coffee plants but to any plant that was likely to be sprayed frequently. In most situations where the plant had no commercial value, the risk was of no consequence. But in the commercial setting the duty to take reasonable care to avoid the risk did exist. That duty arose specifically when the eradication programme involved for the first time protein bait spraying in commercial coffee plantations. [166] As a further consequence of the failure to enquire, the decisions at the local level to spray in high volumes and with excessive frequency using ATVs and motorised spray equipment, were made in ignorance of the risk. Were the risk known, the alternative strategies by which the PFF eradication could have been achieved would most likely have been employed. In my view, it is this combination of factors which establishes the breach by the defendant of its duty of care. [167] The findings I have made with respect to the method of spraying and the likelihood of spray being applied in volumes and at frequencies beyond what was permitted, also results in findings of breach of duty of care as contended for in paragraphs (b), (c), (d) and (e) above. The continued spraying after the first damage was reported is simply a continuation of the breach and, in the circumstances, requires no further consideration. Causation [168] The observed damage to the coffee plants is quite varied and affected the plants on the different properties to different degrees. Because of the contemporaneity of these events it was no doubt attractive to attribute the damage to the spraying. Were there other causes? From the growers’ perspective they did nothing differently in terms of their husbandry to what they did in previous years. Ms Maloberti in particular was questioned about other factors which might have explained the damage on her farm. 208 I am satisfied that there was no action on the part of any of the plaintiffs nor any climatic or environmental factors which explained the damage to plants which they observed. [169] Following the making of claims of damage by various coffee growers, including the three plaintiffs, the defendant undertook a range of investigations and simulated research efforts. Consequently, a great deal of material tendered in evidence relates to these investigations particularly those of Dr Sonya Broughton and Dr Kathy Grice. These investigations were carried out in 1997 soon after the growers 208 Transcript 778/25-780/10 -- 43 of 58 -- 44 complained of the damage. In 1998 the defendant commissioned an independent expert report from Messrs Evans and Peasley which came to different conclusions about the cause of damage to the plants. This sparked discussions between the consultants and the departmental experts.209 One issue was whether the trials had taken into account that the plants had been water stressed at the time of the spraying. Dr Broughton said that she had done so. But, according to Dr Evans, the effects of water stressing are complex. The processes within the plant “which in nature might occur over several months are condensed into very small time frame”.210 The attempts at reconstruction would be unlikely to achieve the same conditions of plant status, water stressing, soil characteristics, the weather temperature and sunlight that existed at the time of the spraying. Moreover these tests were unlikely to have replicated the volumes of spray applied to the trees. [170] In short the results of these tests, apart from some suggestion of mineral deficiency in the soil and over-stressing of the plants, did not disclose any conclusive explanation for the damage. [171] Counsel for the defendant contended that the causal link between the spraying and the damage was not established simply because Dr Beattie provided a possible explanation. He referred to the principles relating to causation identified in Chappel v Hart 211 and relied particularly on a decision of the Full Court of the Federal Court in Schneider v Hoeschst Schering Agrevo Pty Ltd212 . Counsel argued that there was no evidence that the chemical Solvesso 150 causes either acute damage or long term damage to coffee plants. Schneider was a case where after a spray had been applied to a growing wheat crop a small percentage (0.01%) of the area sprayed showed some damage. The remainder of the crop was unaffected. Subsequent investigations as to the cause were inconclusive causing the primary judge to find “even hindsight cannot tell us what features or combination of factors caused the damage”. Reliance upon the temporal link was not sufficient to establish causation. [172] In Schneider there was little to establish causation other than the temporal relationship between spraying and damage. There were other explanations, though inconclusive, which would have exonerated the spray. That is not the case here. The damage to the coffee plants was widespread but varying in its intensity. This was observed by Dr Evans who inspected the damage in late 1998 and reported to the defendant that “unusual symptoms… were common to all farms visited but varied in intensity. The nature of the damage indicated that the crops had suffered major trauma; and that trauma was being reflected to varied degrees on all farms (6 in number) some two years after the fruit-fly treatment”.213 Dr Evans did however believe that the affected plants could be restored. The variation in damage to different parts of the plant is explained by Dr Beattie by the fact that the plants on different properties were at different stages of development in their cycles when the sprays were applied and moreover the oxidised components of the hydrocarbons will attack plants in different ways. This brings about a substantial change in the genetics and physiology of the plant.214 That damage is permanent. 209 Ex 46 annexures 11-15 210 Transcript 710/5 211 [1998] 195 CLR 232 at 247 (per McHugh J) 212 [2001] FCA 102 213 Ex 46 paras [13]-[18] 214 Transcript 501/15 -- 44 of 58 -- 45 [173] I am satisfied that the damage observed by the growers has a direct relationship with the application by the defendant of the spray product. I am further satisfied that the damage continues to reduce the yield in the affected plants. [174] I will turn now to the question of damages. Damages [175] The assessment for damages for each of the plaintiffs, Colbran and Jaques, is complicated by the fact that at the time of the spraying their potential productions levels had not been established by reference to previous cropping. Colbran’s plants had, for many years, been suffering from soil deficiency which he had only rectified a short time before the spraying. [176] Jaques’ plantation was still in the development stage and he was, in accordance with a business plan, intending to treble the number of plants he then had. Obtaining a good return from each harvest was critical because that determined the financial capacity to extend the planted area. At the time of spraying some of the Jacques’ plants had not reached their prime production level but were expected to do so in the next harvest. [177] The Maloberti harvest had been relatively stable for four years prior to the spraying but the Malobertis did not sell all their beans each year, preferring to hold some back to be used for blending at later harvests. Because the beans in parchment form can be stored for a number of years, a particular season’s harvest was not always sold in one financial year. Consequently, sales are not necessarily a guide to the weight of product harvested. [178] The task of assessing production levels necessitates reliance upon some figures given by the plaintiffs which were not the subject of any record keeping. This feature has been heavily criticised by the defendant in relation to the Colbrans and Jacques. For this reason the defendant contends that the Court should not rely on the figures put forward by those plaintiffs. The defendant also contends that even relying on their own figures, shows that neither venture was profitable and the Court should not conclude that they would be profitable in the future. [179] Because of the developmental state of these two properties the historical yield records are not of critical importance. What is critical is to establish the potential yield when the plants are fully productive. In this regard I find the evidence of the yields at the Maloberti property to be reliable. The Malobertis did keep a record of coffee production year by year. This was done by weighing samples of bagged parchment bean and calculating then the total weight of the harvest. They estimated that the process of husking the parchment bean reduced the weight by 20%. The process of roasting reduced the weight of the bean by a further 15%. The extent of these reductions were not challenged. By this process I am satisfied that reasonably accurate production figures have been identified for the Maloberti property. These figures were given to their accountant Mr Shirvington. Although the original documents by which they recorded these production totals have been destroyed, I accept as accurate the figures referred to in the Coffee Production/Inventory Schedule annexed to the statement of Mrs Maloberti sworn in -- 45 of 58 -- 46 July 2007.215 This schedule shows that in the four harvests prior to the spraying green bean was produced in the following quantities:- 1993 33,800 kg 1994 30,400 kg 1995 32,160 kg 1996 32,256 kg 126,616 kg [180] The average therefore was 31,904 kg per annum. This production was achieved from 32 acres (13 ha) used by the Malobertis for coffee growing. This equates to 1 tonne per acre or 2.5 tonnes per hectare. Mr Colbran spoke of a potential of harvesting 7 tonnes per hectare as being possible.216 But that is not established by any independent record. For the purpose of assessing damages, I will rely upon an average yield of 2.5 tonnes per hectare unless there is evidence to suggest a higher yield. The guidance available from established production levels and from industry standards is important in assessing the reliability of the other plaintiffs’ yields. [181] Then there is the factor that plants which provide a good yield in one year may, despite similar conditions, provide a lighter yield in the following season. For the future, there are also seasonal variations to be anticipated as well as natural disasters such as cyclones and unseasonal rain. [182] An issue arose about the decline in the bearing capacity of a normal coffee plant over time. Reference was made by some witnesses to plants having a peak bearing period between 7-10 years of age (“the honeymoon years”). It was suggested that proper husbandry requires that after this period as a plant’s productivity declines, it should be cut back to a stump and allowed to regenerate. This generally results in a loss of production for two to three years. That suggestion was rejected by the plaintiffs. Mr Jaques said there was no such thing as “honeymoon years” for a coffee plant.217 Stumping was undertaken as required with only limited impact on production.218 Mrs Maloberti said she knew no such thing as “honeymoon years”, describing a process of pruning the plant being sufficient to keep the plants with a high level of productivity.219 I am satisfied that the practice adopted by growers on the Atherton Tableland was that as described by each of the plaintiffs. Nevertheless, the fact that plants can lose productive capacity over time is a factor that must be kept in mind in estimating what the future yields might have been had the plants not been damaged. Financial evidence [183] The plaintiffs obtained an expert opinion from Mr Delaney of Horwath, Chartered Accountants, and the defendants engaged the services of Mr Carter of 215 Ex 28 216 Transcript 296/35 217 Ex 23 statement 8 June 2007 at para [20] 218 Ibid at paras [7]-[10] 219 Ex 28 Statement 19 July 2008 paras [26]-[27] See also Colbran to similar effect at ex 15 statement 31 May 2007 [26]-[28] -- 46 of 58 -- 47 PriceWaterhouse Coopers. The experts were provided with the financial records and tax returns of the various entities through which the plaintiffs’ respective businesses were undertaken. In an attempt to find some common ground for the basis of assessing damages, I directed the expert accountants to confer and to provide statements of points of agreement and areas of disagreement. They also gave concurrent oral evidence. [184] The experts acknowledged that their opinions involved making some assumptions but they have agreed on the appropriateness of those assumptions. Their opinions have also involved the use of industry standards for production costs, modified where appropriate by such actual costs as could be relied upon. There were features in the financial documents which made them unreliable, particularly as to the treatment of retained stock. I found difficulty also in deriving any reliable view of the costs declared which would identify the true cost of production. My approach is therefore to rely mainly on industry standards. I am indebted to each expert for his efforts which has produced some agreement which has assisted in the calculations and which has also significantly reduced the areas of conflict. [185] When considering the industry standards on cost of production on 1 kg of green bean, Mr Delaney relied particularly upon the financial analysis of Hassell and Associates.220 Their modelling was based on coffee production in North Queensland which accounts for some 90% of the Australian output. Mr Carter referred particularly to the report of Dr Stewart de Jong221 which relates to coffee production in northern New South Wales. The costs in each instance was standardised to a 20 hectare plantation so the results are comparable. The main difference relates to harvesting costs. In North Queensland mechanical harvesting has been used efficiently over a number of years because of the flat terrain. Most growers own their own harvester. In New South Wales some growing areas are on steep slopes which might add to this item of cost. Whether it does so depends on the number of passes made along the rows by the harvester and this has not been the subject of evidence.222 [186] It is appropriate however to consider the ranges of costs identified in both these reports, though in my view greater weight must be given to the report directly referrable to North Queensland by reason of this area’s dominance in coffee production in Australia and the commonality with the plaintiffs’ location. [187] The most significant difference between the experts concerns what cost items are to be included in any cost analysis. Mr Delaney takes the view that costs should be confined to the true recurring costs of the production cycle. Mr Carter opines that if the Court is considering an assessment over a longer period e.g. 10 years or more, then cost of the turnover of capital cost items should be included.223 If one confines the comparison to recurring costs Mr Delaney, using the Hassell report and making modification based on actual costs at the Maloberti property, assessed the average cost to produce green bean at $3.33 per kilogram. Mr Carter, more influenced by the de Jong reports, suggested an average cost for the same item at $4.54 per kilogram. However, when one takes account of the items of a capital nature, his estimate of costs on an “all in” basis is within the range of $5.20-$7.28 per 220 Ex 142 221 Ex 143 222 Transcript 1787/50-1788/10 223 Transcript 1781/30 -- 47 of 58 -- 48 kilogram. Mr Carter would adopt the average as being a little under $6 per kilogram. 224 [188] The resolution of this difference of approach depends upon the duration of the impact the spraying had on the production. In the case of Colbran, the period is short because after trying assiduously to rehabilitate the plants, he could not justify the expense or the effort of continuing. He ceased producing after the 1998 harvest, surrendering his lease at the end of its term. There is no warrant in his case of making any allowance for the costs of the kind identified by Mr Carter. The losses have to be assessed on an individual case basis. [189] It seems to me that when the loss is being assessed over a relatively short period, the costs of a long term capital nature should not be taken into account. Long term losses in most circumstances are more properly determined on a loss of opportunity basis which will include replacement of capital cost items. To pursue a detailed compilation of revenue and costs over a period beyond seven or eight years would give a false sense of precision, when such precision cannot in truth be achieved. [190] Ultimately, the Court’s task is to compensate each plaintiff for the loss each has suffered by reason of the tort. In the main the plaintiffs’ claims are for pecuniary loss though with some elements of reinstatement of damage and diminution of value. The general principle was enunciated by the majority (Mason CJ, Dawson, Toohey and Gaudron JJ) in Haines v Bendall in the following terms:- “The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed: Butler v Egg and Egg Pulp Marketing Board (25); Todorovic v Waller (26); Redding v Lee (27); Johnson v Perez (28); M.B.P. (S.A.) Pty Ltd v Gogic (29); Livingstone v Rawyards Coal Co. (30; British Transport Commissions v Gourley (31). Compensation is the cardinal concept. It is the ‘one principle that is absolutely firm, and which must control all else’: Skelton v Collins (32), per Windeyer J. Cognate with this concept is the rule, described by Lord Reid in Parry v Cleaver (33), as universal, that a plaintiff cannot recover more than he or she has lost.” 225 [191] In Johnson v Perez226 Mason CJ said:- “There is a general rule that damages for torts or breach of contract are assessed as at the date of breach or when the cause of action arises. But this rule is not universal; it must give way in particular cases to solutions best adapted to giving an injured plaintiff that amount of damages which will most fairly compensate him for the wrong he has suffered… The general rule that damages are assessed as at the date of breach or when the cause of action arose has been applied more uniformly in contract than in tort and for good reason. But even in contract cases 224 Ex 144 225 (1991) 172 CLR 60 at p 63 226 [1988] 166 CLR 351 -- 48 of 58 -- 49 courts depart from the general rule wherever it is necessary to do so in the interests of justice.”227 [192] Where the damage affects property there is often a choice between claiming either the cost of reinstatement of property or the diminution of its value. In Port Stephens Shire Council v Tellamist Pty Ltd, Santow JA said:- “[203] It is wrong to say that the plaintiff has an untrammelled election between the alternative bases for assessment. As shown in Minter v Eacott, a plaintiff will be denied the cost of re-instatement if it is disproportionate either to the injury suffered or to the diminution in value. It seems that in such cases, the Court will refuse to overcompensate the plaintiff, and will reject re-instatement cost if it is not in accordance with the compensatory principle. This does not mean that re-instatement will be refused merely because it exceeds diminution in value. The plaintiff may recover re- instatement cost in excess of diminution in value where there is evidence of special value, such as the need of the plaintiff and his family to occupy their home: Hollebone v Midhurst and Fernhurst Builders Ltd [1968] 1 Lloyd’s Rep. 38. In such cases, there is clearly no over-compensation. But it is true that if re-instatement is disproportionate, it will not be awarded even despite the plaintiff’s desire for it. [204] There does not appear to be, however, any authority to the converse; namely that the diminution in value will not be awarded if it grossly exceeds the cost of repair or re-instatement.”228 [193] The plaintiffs’ claims extend over a long period of time. This gives rise to considerations of when the damage in each instance has sufficiently crystallised to allow a compensatory assessment to be made. The relevant principles are set out in Burns v MAN Automotive (Aust) Pty Ltd 229 Gibbs CJ said (at p 658):- “Notwithstanding the much criticized decision in Liesbosch, Dredger v Edison, S.S.(Owners) (17), any damage which resulted from a breach of the contract, and was reasonably within the contemplation of the parties when the contract was made, is recoverable even though the appellant’s impecuniosity contributed to it… …The question arises whether it should be held that the appellant is debarred from claiming such part of the damages as is attributable to his failure to take the necessary steps in mitigation, when he was unable to take those steps because of his lack of means. That question must be answer in the negative. …However, a plaintiff’s duty to mitigate his damage does not require him to do what is unreasonable and it would seem unjust to prevent a plaintiff from recovering in full damages caused by a breach of contract simply because he lacked the means to avert the consequences of the breach.” 227 Ibid at pp 355-6 228 [2004] NSWCA 353 229 [1986] 161 CLR 653 -- 49 of 58 -- 50 The majority (Wilson, Deane & Dawson JJ) upheld the approach taken below stating (at p 665):- “In the Full Court, Connolly J (in whose judgment Andrews CJ concurred) accepted the proposition there advance for the respondent that it was not reasonably foreseeable that a person in the position of the appellant, exercising good commercial sense, would persist over a period of years with a prime mover which, to his knowledge, was not as represented and which did not meet his requirements. If that knowledge existed soon after he took delivery of the vehicle in August 1977 then the appropriate measure of damages would be the cost of fully reconditioning the engine together with the profits lost whilst the work was carried out, subject perhaps to additional considerations arising from the impecuniosity of the appellant causing the repair work to be delayed.” [194] Relevant to the claims before me, Jaques attempted to mitigate his loss by initially undertaking stumping of the plants and then by replacing them. The Malobertis, for reasons of physical incapacity, have not mitigated but have accepted ongoing reduced yields. [195] I turn then to the assessment of loss for individual plaintiffs. The Colbran claim [196] Mr and Mrs Colbran leased the coffee plantation in partnership from Mr and Mrs Milan on 1 July 1991 for a period of five years with an option to negotiate a further lease for five years. Coffee plants had already been established on 25 acres (10 ha) of the land but the plantation had been abandoned. The plaintiffs’ quest was to reinstate coffee production.230 As mentioned previously the soil was deficient in some trace elements so the historical production levels were no indicator of the property’s potential. By 1996 the effects of the plaintiffs’ husbandry was evident. The coffee plants were in good condition and they were mature plants between 7-10 years of age. On 1 July 1996 the plaintiffs entered into a further lease for a period of five years. [197] The 1996 crop grew well and according to Mr Colbran was expected to produce 2.5 tonnes per hectare. This rate of production obviously cannot be verified by reference to past harvests. It is, however, consistent with the yields enjoyed by the Malobertis as referred to in above. Prior to the spraying, the Colbrans had harvested 11,634 kg of green bean. After the spraying he harvested a further 3,350 kg but this bean had a bad taste and was unsaleable. Realising this taint would be in other berries he did not harvest the remainder of the crop. He claims in respect of that crop the loss of approximately 10,000 kg. It was his practice to sell most of his crop as roasted coffee and the lesser quality green beans to a wholesaler. Sale of green bean results in a faster return and this would have been attractive to the Colbrans at that time.231 For the 1996 year I would apportion 6,000 kg of the lost production to roasted bean and 4,000 kg to green bean. Using the respective net prices of ($12- $1.75) for roast coffee 232 and $5 per kg for green bean,233 the raw assessment takes the following form:- 230 Transcript 290/1 231 Transcript 254/40 232 Ex 144 -- 50 of 58 -- 51 Roasted bean (6000-15%) (5100 kg @ $10.25 - $52,725.00 Green bean 4000 kg @ $5 - $20,000.00 $72,725.00 [198] In the growing year of 1997 the amount of fertiliser used on the crop was reduced “because the crop wasn’t there”234 but watering costs increased because “there were no roots left on the trees”.235 Mr Colbran on the advice of DPI officers, had stopped the practice of water stressing. The Colbrans attempted to maintain production but the plants remained in poor health. It was not viable for him to replace the plants as the new ones would not come into production before the end of the lease. With these factors in mind and because of the low yield, Mr Colbran ceased production in 1998 and retired altogether from farming in September 2001. Had he wished to stay on I am satisfied the lease would have been renewed for a further five years.236 [199] I am satisfied that Mr Colbran is a competent and capable farmer. For the remaining years of the lease I find that but for the spraying the Colbrans would have obtained a good yield from their reinvigorated plants and would likely have exceeded 2.5 tonnes per hectare. I regard a harvest of 25,000 kg of green bean per annum to have been likely for this remaining period of four years on the lease. The Colbrans are entitled to be compensated for the loss of production over this period together with some minor allowance for the loss of a chance to continue beyond the expiration of the lease. With the increasing demand for roasted coffee over this period, a notional apportionment of 80% to roasted and 20% to green bean would be reasonable. This would suggest an annual gross revenue of:- Roasted bean – (20,000 kg less 15%) 17,000 kg @ (12-1.75) $10.25 $174,250 Green bean 5,000 kg at $5 $ 20,000 $194,250 [200] That figure is to be compared with the actual income between $15,000-$20,000 in the tax returns for that period. Because the harvest period extends over two financial years and sales can be delayed there can be no correlation between notional harvest revenue and actual declared income. I have assumed that income identified as received after 1996 was derived from sales of stock on hand. Similarly, there is no correlation in relation to actual costs. If $3.50 per kg is applied as the notional recurring costs, the resulting $87,500 is more than double what the Colbran taxation returns show their annual recurring costs.237 As discussed above because the land is leased it is not necessary to give any consideration to capital contribution costs. [201] Taking these matters into account and allowing for general contingencies, I would allow a potential loss in the first year of $70,000 rising to $100,000 for each of the remaining four years. I would allow $150,000 for the loss of the chance to continue production after the term of the lease. These allowances total $620,000. 233 Transcript 303/45 234 Transcript 311/15; 316/30 235 Transcript 311/30 236 Ex 27 attachment ATM1 237 Ex 144 -- 51 of 58 -- 52 [202] I assess damages for the Colbrans at $620,000. I allow interest on this sum at 9% per annum for 8 years (July 2000 – 30 June 2008) which sum amounts to $446,400. The Jaques claim [203] At the time of the spraying of the Jaques property the area given over to coffee production was 20 hectares containing some 50,000 coffee plants. As mentioned previously the property was in the first stage of a progressive development. The rate of development depended on the cash flow from the plants which were planted in 1991-2. The first harvest of those plants was in 1996 when 4 tonnes of green bean was produced. This was a satisfactory result for trees so young and gave an indication that normal yields would occur in the following years. There is no prior production history upon which to base immediate future projections. However, I am satisfied that Mr Jaques is an experienced coffee grower with a very clear objective of successful development of the business for the long term. This is evident from the business plan prepared in 1987.238 The aim was to supply the high end of the market with roasted coffee beans. I am satisfied that, had the spraying not occurred, these plants would have reached maturity in 1997 and production yields would have been no less than those obtained from the mature plants at the Maloberti property. In fact, in more recent years, the Jaques plantations yield has exceeded 3 tonnes per hectare. [204] The harvest in 1997, the first after the spraying, resulted in 7 tonnes of damaged beans which were not saleable. In the following years the yield was less than 2 tonnes and none of the coffee was saleable. In order to mitigate his loss Mr Jaques carried out the process of “stumping” referred to above.239 The purpose in doing this was so that the plants would regenerate with vigorous regrowth and be producing within two years. This was to be compared with loss of production for five years if the tree was pulled out and replaced. What Mr Jaques observed was that the regrowth was half of what was expected and that regrowth showed irregularities.240 He took advice from Mr Ted Winston, horticulturalist, and as a result decided to abandon the rehabilitation effort and to plant in another area. I am satisfied that this attempt at mitigation of damage by attempted reinstatement was reasonable in the circumstances. [205] In 1999 Mr Jaques propagated 25,000 new plants in the nursery. One year later he planted these out in an area of 10 hectares the process taking a few months to complete.241 Adherence to the business plan would have seen a planting of 20 hectares at this time. But because of the losses sustained in the previous years, Mr Jaques was not able to act in accordance with that plan. These new plants first produced coffee beans in 2003 and in the following years produced successive yields of 4 tonnes, 10 tonnes and 4 tonnes. [206] In 2006 Jaques harvested 31 tonnes and estimates that some 5 tonnes of fruit dislodged by cyclone Larry was lost.242 The impact of cyclone Larry was felt the following year because of the fact that 50 trees were uprooted and many branches stripped from the plants. His yield in the full harvest following the cyclone was 8- 238 Ex 23 annexure 1 to statement 29 May 2006 239 Para [182] above 240 Transcript 368/1 241 Transcript 362/35 242 Transcript 363/1 -- 52 of 58 -- 53 10 tonnes. This was in part compensated by two separate relief grants totalling approximately $29,000. The next season after that showed the plants in good health with an estimated increased yield of 30-40 tonnes because of the favourable secondary growth on the trees following the cyclone damage. [207] The other change in the Jaques fortunes was the fact in 1996 he pursued the development of a tourist business at the coffee plantation. As a consequence increasing numbers of tourists visit the property and they buy roasted coffee directly. The price obtained from selling roasted coffee in this way has resulted in his receiving $20 per kilogram in 2005 and $22 per kilogram in 2006.243 The visitor numbers have now reached 65,000 per annum. The total business is obviously on a sound footing. The question is, in what way, did the spray damage impact on the profitability of the business. [208] The plaintiff seeks the assessment of damages under the following headings:- (a) The difference between the profit which would have been earned from the 20 hectare plantation area (now abandoned) between 1 July 1996 to the present, and the profits and losses in fact generated; (b) The present value of the difference between the profit that would have been earned from the as yet unplanted 10 hectares between the present and the end of the financial year in which these unplanted trees would come into full production. (c) The cost of approximately $185,000 in treating and maintaining the original trees damaged by the spray; and (d) Allowance for the lost opportunity of developing the full area of 60 hectares in accordance with the business plan. [209] The defendant points to the lack of production records prior to the spraying and to the fact that the business produced losses averaging $27,000 per annum in the years 1993-1996. The defendant relies on this fact and also the history that the plaintiff was involved in a failed coffee growing venture in the 1980s to suggest that the plantation would not be successful and that the Jaques have not suffered any loss at all as a consequence of the spraying. [210] The coffee growing venture in which Mr Jaques was previously involved was the establishment of the coffee plantation which is now owned by the Skybury organisation, one of the largest plantations on the Atherton Tableland. This fact rather confirms Mr Jaques expertise as a coffee grower. Any prior business failure did not relate to his farming capacity. I am satisfied that the establishment of coffee plants on the original 20 hectare plot was successfully undertaken and that it would have produced economic returns in 1996 and following years had the spray not damaged the plants. [211] I am satisfied that some 7 tonnes of green bean was lost from the 1996 harvest and the whole of the potential yield for 1997. Thereafter the schedule to the accountants joint report (ex 144) shows sales of coffee from retained stock, though the value ascribed to the stock is not free from doubt. My concern is more with loss of profits from reduced yields. For this reason losses have to be calculated on a notional basis. The question then is at what point did the plaintiffs’ ongoing loss materialise. 243 Ex 23 statement 8 July 2007 para [22] -- 53 of 58 -- 54 This area of the plantation was abandoned in 2000 having produced no yield in the previous three seasons. [212] It seems to me that the claim in respect of this area crystallised at that point. The allowance should be for the pecuniary loss of profits from 7 tonnes of green bean in 1996 and for 3 tonnes of green bean per hectare in each of the next three years. Thereafter I assess the projected loss over a period of 8 years to allow adequate compensation for the damage. I am satisfied that virtually all of the yield would have been disposed of as roasted bean. There may have been occasions when some green bean might have been sold for cash flow reasons but on balance any reduction in revenue would be more than offset by the conservative approach that I have adopted. The sales of smaller packages of roasted beans command a much higher price than the $12 per kilogram which I will adopt. [213] The quantity of green bean lost for this period would be 187,000 kg. the potential revenue would be – (187,000 less 15% 158,950 kg at ($12-1.75) $10.25 $1,629.237.50 Less costs of production at $3.50 per kg $ 654.500.00 $ 974,737.50 [214] Between 2000 - 30 June 2008, the sale price for roasted coffee increased to $17 per kg. I shall adopt an average of $15 per kg. For the future period, costs should be reckoned on an “all-in basis” as suggested by Mr Carter I assess potential annual loss of net revenue in the region of $300,000.244 I will make some allowance for having received some returns from the damaged crop and the need to provide for other general contingencies including the one-off effect of cyclone Larry, and the fact that the plaintiffs’ efforts were directed to other pursuits. The growing conditions over this period are largely known to be favourable and there is evidence of more recent sales of coffee at $20 per kg. For this future period I would allow the sum of $2,000,000 which when added to earlier loss of profits results in a combined rounded off allowance of $3,000,000. [215] The second category of loss is the delay in completing the second half of the planned second stage expansion. It is reasonable to proceed on the basis that the expansion by adding the second 20 hectare parcel to the plantation would have occurred by the year 2000. The hard work of preparing the land and designing the irrigation system had been done. This would have coincided with the generally favourable improving coffee market. The planting of only 10 hectares in 2000 was dictated by necessity of having to establish some new production to replace the abandoned plantation. But it was limited to 10 hectares because of the straitened financial resources of the plaintiffs consequent upon the destruction of the original plants. It would have been within the contemplation of the defendant that interruption to the plaintiffs’ cash flow would impact upon expansion plans which would have been obvious from the earlier preparation and the DPI involvement in developing coffee production on the Atherton Tableland. The plaintiffs’ 244 The notional calculation is:- (60,000 less 15%) 51,000 at ($15-1.75) $13.25 – 675,750 Less costs 60,000 at $6.00 360,000 315,750 -- 54 of 58 -- 55 impecuniosity was a direct result of the defendant’s breach of duty and this limited his capacity to mitigate his loss to any greater extent. Burns v MAN (supra). That consequence was, to my mind, a foreseeable outcome of the defendant’s actions and the losses flowing from it are recoverable. [216] These losses however would only be realised in the future. Had the missing 10 hectares been planted in year 2000 it would only now have commenced to produce an economic yield. The burden of the expense of planting and nurturing the plants would have been incurred at once. In those circumstances it seems appropriate to make a global assessment of this loss of potential profit. I do so against the background, firstly that the market for high quality Australian coffee remains buoyant. The benefits and risks in this market are identified in the Drinnan and Peasley report (2004)245 but the outlook remains favourable, particularly for tourist focussed businesses such as that now developed by Jaques. I regard $15 per kg of roasted coffee as the appropriate measure. Secondly, Jaques has a proven level of yield from this newly established plantation in the 2006 harvest and his expectation for the 2008 harvest is of the order of 3 tonnes per hectare. Thirdly, the raw calculations of net revenue from such an undertaking would show a net revenue of approximately $200,000 per annum or of approximately $150,000 if one applied the $6 per kilogram “all in” cost.246 [217] The loss to be assessed is the delay in realising the profit of this magnitude for a period which should be no more than seven years. I would allow $1,000,000 in respect of this loss. [218] The third item of costs relates to the maintaining and treating of the initial 20 hectare plantation. The claim is for $185,000 thrown away as a direct result of the defendant’s negligence. This level of claim is argued and can be assessed by reference to the start-up costs referred to in the Drinnan and Peasley report (2004). This land could of course be replanted but this is unlikely to happen as part of the area is now used as part of the extended light aircraft runway established on the property. The claim to cover the costs thrown away by the establishment of the plantation and the attempted regeneration of the plants is reasonable and should be allowed in full. I therefore allow the sum of $185,000 on this account. [219] The final basis of claim is for the loss arising from the delay in the third stage of the development. It is not clear to me when this part of the development was to begin. In his statement Mr Jaques described the programme in these terms:- “12. The business proposal for the land was initially to plant 50 acres of coffee. From there the intention was to expand into two 50 acre increments provided there was an established cash flow. 13. Initially my wife and I were starting from scratch on a shoestring budget. I was responsible for doing the planting. It was done on a progressive basis throughout 1991 to 1992. 50 acres was planted at that time. The creation of a plantation to be sustainable on a commercial basis can take up to seven years depending on the environment.”247 245 Ex 113 246 Transcript 1784/40 247 Ex 23 statement 29 May 2006 -- 55 of 58 -- 56 [220] In the absence of any clearer statement of intent it seems to me, that the starting time for this development could be the present. I am not satisfied that there has been any delay which could be attributed to any impact from the spraying of the plants. [221] In summary, therefore, I assess the Jaques damages as follows:- Loss of production 1 July 2006-30 July 2008 $3,000,000.00 Delay in the establishment of 10 ha of the of the second proposed plantation $ 1,000,000.00 Costs thrown away by establishment and attempted regeneration $ 185,000.00 $4,185,000.00 [222] I assess damages at $4,185,000 by agreement, interest is allowed on this sum at 4.5% for 11 years (July 1997 – June 2008) which amount to $2,071,575.00. The Maloberti claim [223] At the time of the spraying the Malobertis, as has been observed, were highly efficient producers of coffee. The coffee plantation as of 20 hectares and was consistently producing in the region of 32 tonnes of green bean per annum. These plaintiffs have established a successful tourist facility so as to maximise their returns from coffee production. They sold only roasted coffee. This state of affairs had been reached by the physical contributions of the three members of this family partnership. However, Mr and Mrs Maloberti are now in their 80s and Mr Maloberti has health problems. There was no plan to extend the operation apart from developing the tourist facility. [224] The Malobertis had harvested their 1996 crop prior to the spraying and it yielded 32 tonnes of green bean. As a consequence of the spraying the 1997 harvest fell to approximately 5 tonnes of poor quality bean. In 1998 the yield was 1 tonne of unsaleable coffee. The production details are set out in ex 28.248 The plantation has never returned to the pre-spraying production levels. Over the nine years of recorded yield since that time some 33,335 kg have been harvested. That is an average of 3,700 kg per annum. In that same time the business sales of roasted coffee has risen from approximately 9,000 kg in 1998 to 16,400 kg in 2005. [225] The sales had been achieved by the Malobertis drawing upon their existing stock at 1996 and thereafter coffee beans have been purchased from outside to make up the shortfall. Apart from the additional expense of this approach there has been a loss also of a marketing advantage of presenting a product which is home grown and pesticide free. [226] The Maloberti claim is framed as a loss of profits for the period of 1 July 1996 to 30 June 2008 and for a global assessment of the reduced value of trees because of their reduced productivity. 248 Statement July 2007 annexure 1 -- 56 of 58 -- 57 [227] Given the consistency of the reduced yields over nine years, it is safe to conclude that production will not return to the pre-spraying levels. The cause for this cannot be attributed to climate or any other changed circumstances. The Jaques property, for example, with new plants has returned to normal production. The Malobertis were in a different position. Because they did not have the physical capacity to replant they have accepted these reduced yields and this state of affairs will continue. They were entitled to wait in the hope (and in accordance with some advice) that plants would regenerate. [228] It is appropriate to measure the loss by taking the diminution in the potential yield for three years and notionally determining the loss of net revenue for that period and thereafter by making a global assessment of the continuing loss of revenue from the plants. The pre-spray average yield was 31,900 kg and the post-spray average was 3,700 kg. The difference being 28,200 kg. The primary calculation is as follows:- (28,200 – 15%) 23,800 kg @ (12-1.75) 10.25 $243,950.00 Less recurring costs of production @ $3.50 $ 83,300.00 $160,150.00 Because the shortfall has incurred the expense and inconvenience of identifying and dealing with suppliers of coffee both in Australian and overseas, I have taken the view that this would more than offset any consideration of applying a capital costs contribution to the expense of production. For the period of four years post spraying, I assess the loss at $640,000. [229] For the future I accept the fact that the coffee plants are less valuable as a result of the defendant’s negligence. Diminution of value of land as an alternative to reinstatement of damage is a recognised approach to the assessment of damages in circumstances such as this. Jones v Gooday; 249 Evans v Balog.250 The difficulty however is that there is no evidence of what is the value of coffee plants in good condition nor in their damaged state. I must have regard to the fact that these plants were probably planted in the early 1990s and are more than 15 years old. Some of them, at least, may well have been in need of stumping or of replacement notwithstanding the Malobertis’ approach to regeneration by constant pruning. In normal operation, if this was necessary, it could have been done progressively with minimal impact. The alternative consideration was to do as Mr Jaques did and re- establish a new plantation, that would have had the effect of resulting in a claim for re-establishment costs, loss of profits during the 6-8 period of the plants’ growth and the loss of such yield, as has been achieved with the plants in their present state. On this comparison it cannot be said that the plaintiffs’ claim is greater than it would have been had they pursued that alternative. [230] The starting point is to note that the yield from these plants has been at 10% of its former level. If the sale of roasted coffee is at the $15 per kg price, the resulting revenue loss is in the range of $150,000-$230,000 per annum depending on the cost structure. The cost of maintaining the damaged plants has presumably been the same. It is a matter of capitalising the annual loss out of the estimated productive life of the plant loss which might go on for a number of years. I will adopt as an 249 [1841] 8 M W 146 250 [1976] 1 NSWLR 36 at 39-40 per Samuels JA -- 57 of 58 -- 58 average for the purpose of calculation seven years. I must also make some deduction for contingencies which would include, for example, the impact of unseasonal weather and cyclones. Upon this basis I assess the loss at $1,200,000. [231] In summary then, I would allow the Malobertis’ loss as follows:- Loss of profits for 4 years $ 640,000.00 Diminution of future profits $1,200,000.00 $1,840,000.00 I assess damages at $1,840,000.00. By agreement the question of interest upon damages is to be reserved. Orders: 1. In action No S 441 of 2002 I give judgment against the defendant n favour of Benjamin Colbran and Norma Violet Colbran in the sum of $1,066,400.00 2. In action No S 437 of 2002 I give judgment against the defendant in favour of Jaques Australian Coffee Pty Ltd in the sum of $6,256,575.00 3. In action No S 458 of 2002 I give judgment against the defendant in favour of Maria Maloberti, Bruno Maloberti and Luisa Maloberti in the sum of $1, 840,000.00 plus interest, the assessment of which is reserved. 4. I direct that the parties prepare submissions on costs, such submissions to be exchanged and delivered to the Court within 28 days. -- 58 of 58 --