On 2 June, the Federal Court found that the Commonwealth Government was liable to pay compensation to Brett Cattle Company Pty Ltd and others for the unlawful Ban Order placed on live cattle exports to Indonesia in 2011.

The Ban Order was made under the Export Control Act 1982 (Cth) which gave the Minister extensive powers to prohibit export of livestock absolutely or to particular places or on conditions.

Who were the applicants and what was the loss suffered?

The class action was taken by Cattle Producers, including Brett Cattle Company (the lead applicant) after the Labor Government suspended live exports to Indonesia following a release of horrific footage of cattle being beaten, whipped and kicked prior to being slaughtered in Indonesian abattoirs on 30 May, 2011 during a Four Corners program.
For context, in 2010 Australia exported nearly 520,000 head of cattle to Indonesia (worth about $400 million), out of a total of 875,000 head exported worldwide (worth about $684 million).
Brett Cattle Company was one of many live cattle exporters involved in the live export market to Indonesia who were affected by the Ban Order. It claimed that it had lost the opportunity to sell about 2,776 head, principally into that market in 2011 because of the impact of the Ban Order and to have suffered losses totalling approximately $2.5 million.

What was the claim?

Brett Cattle Company alleged that the Minister committed the tort of misfeasance in public office by making the Ban Order, in that the making of the Ban Order was an abuse or misuse of power by the Minister.
In the applicant’s arguments, it raised that the Minister did not care whether the Ban Order was valid or not and also that he knew or did not care that the Ban Order would cause significant economic harm to businesses involved in exporting live cattle to Indonesia.

To prove this allegation, Brett Cattle Company had to establish both that the Ban Order was invalid and that if it was, the Minister had acted recklessly in making it. The Commonwealth accepted that it would meet any damages or costs for which the Minister was found liable.

The History of Live Animal Export Issues

The live animal export trade has a history of instances where graphic television footage exposed examples of inhumane treatment.

In 2006, 60 Minutes broadcast footage depicting mistreatment of cattle in Egypt. That generated public debate which culminated in one of the Minister’s predecessors using his power under the Export Control Act to prohibit the export of livestock to Egypt. The Australian and Egyptian Governments then negotiated and reached a solution which involved a new feedlot and abattoir facility being built at an Egyptian port to operate as a “closed loop system”. Such a system requires each animal to be tagged before export to ensure that it can be traced and stays within the system at all times up to its slaughter. The tags are machine readable and their purpose is to guard against the risk of cattle being diverted out of the closed loop system and thus subjected to inhumane treatment of cattle. The Egyptian market imported only about 30,000 head, therefore was much smaller than the Indonesian market (which had about 80 to 90 feedlots and over 350 abattoir facilities).

Both Australia and Indonesia were members of the World Organisation for Animal Health “OIE”. The OIE had developed a code (the OIE Code) that set out guidelines of minimum standards for the humane and appropriate treatment of animals, including during transport, when in feedlots and up to and including the moment of slaughter.

In the evidence, it was shown that the Minister knew that Australia supplied 100% of Indonesia’s live export needs.The evidence also showed that the Minister had received notice that the Indonesia’s Ambassador had apologised for the mistreatment of the animals and the diplomats and Indonesian Department of Agriculture had said that they were keen to work with Australia to resolve the issue. There was no evidence to show that prior to making of the Ban Order, the Minister made any contact with his Indonesian counterpart or otherwise attempted to “work with” that nation on a resolution.

The Court’s Decision

The Judge’s findings were as follows:
“When the Minister made the Ban Order, the Minister knew that (among other things):
  1. it would prohibit any exports to Indonesia without any exception in an industry that in 2010 had exported over 500,000 live cattle worth about $400 million;
  2. the industry representatives had told him that there were supply chains in Indonesia that had, or readily could be, adjusted to have a “closed loop system” with animal welfare standards that were at least compliant with the OIE Code;
  3. he had made no attempt to explore an appropriate solution with the Indonesian Government and that an order prohibiting all exports would cause that Government concern…”
He also made the following comments:

“I have found that the Minister saw and read the various Departmental minutes. In addition, he had also received information about the situation in Indonesia relating to actual and potential closed loop supply chains that had, or readily could have, animal welfare standards at least consistent with the OIE Code.” 

“A regulatory measure, such as the Ban Order, must be a proportionate response to meet the situation that it is intended to address. The law requires a decision-maker, when using a wide power, like the Minister’s powers under the Export Control Act, not to make unnecessary limitations on the common law right of persons to carry on their lawful business. One test to ascertain if a provision is unnecessary, is to consider if there is an obvious and compelling alternative.”

“Here, the Minister had included an exceptions power in the First Control Order that banned trade to the 12 named abattoirs. Yet, 5 days later, in the Ban Order, he imposed an absolute prohibition on all livestock export to Indonesia for slaughter without considering including the same or a similar exceptions power in it. He gave no reasons for omitting an exceptions power. And, he knew that the omission would have a significant economic impact on persons who could comply, immediately or relatively quickly, with what his intended regulatory and compliance regime would require, namely a closed loop supply chain with animal welfare standards at least consistent with the OIE Code.”
“I have found that the Ban Order was invalid. That was because it prohibited all exports without any provision allowing him to make exceptions so as to allow exporters to carry on their lawful business where they already did, or readily could, have a closed loop supply chain in Indonesia with animal welfare standards at least equivalent to those in the OIE Code. Such a total prohibition was capricious and unreasonable and made the Ban Order invalid.”
The Australian Farmers’ Fighting Fund backed the case and teamed up with the Northern Territory Cattleman’s Association.
The case shows the power of farm lobby groups to hold governments to account for their actions.