Government decision makers should think twice before jumping on the ban-wagon: lessons from the Brett Cattle class action
By James Smart & Bridie O'Shannessy, Amelia French• 22 June 2020 • 7 min read
On 2 June 2020, the Federal Court of Australia handed down its decision in Brett Cattle Company Pty Ltd v Minister for Agriculture  FCA 732 in favour of the applicant. The court held that the 2011 decision of the former Minister for Agriculture prohibiting live exports of cattle to Indonesia was invalid and constituted misfeasance in public office.
Successful challenges to delegated legislation on the grounds of unlawfulness and misfeasance are uncommon. Justice Rares’ judgment potentially lowers the bar for those impacted by government decisions to claim there has been an unlawful exercise of power and shows that even broad government powers have limits.
The current COVID-19 crisis has caused governments to make important judgement calls in a rapidly evolving landscape. Decision makers should be aware that policy decisions under delegated legislation, as opposed to legislation created by parliament, are particularly susceptible to challenge. Government decision makers may be left more vulnerable to misfeasance claims, particularly in situations where policy decisions are made in high pressure situations.
- On 30 May 2011, the ABC’s Four Corners aired graphic footage of the slaughter of Australian cattle in Indonesian abattoirs.
- On 7 June 2011, in response to public outrage and pressure from animal welfare organisations including the RSPCA and Animals Australia, the Minister implemented the first control order and shortly after, the second control order banning live cattle exports from Australia to Indonesia for 6 months (Ban).
- The class action was led by Brett Cattle Company (Applicant), one of the many farming businesses affected by the Ban.
- The Applicant contended the Ban was an unlawful exercise of power by the Minister and, in making the decision, the Minister acted in misfeasance of his office.
Invalidity of the Ban
To be a valid exercise of power, the Minister’s decision must be reasonable for the purpose it serves. In this case, the Minister implemented a Ban on all live exports of cattle to Indonesia, notwithstanding the fact that Indonesian abattoirs were already meeting Australian standards or could adopt measures quickly to adhere to these standards.
Based on previous authority, the court confirmed that Ministers must exercise their power ‘according to the rules of reason and justice, not according to a private opinion’ and ‘within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself’.
The court applied a 3 part test to assess the proportionality of the Ban. First, whether the Ban was suitable; secondly, whether the Ban was necessary; and thirdly, whether the Ban was adequate in its balance.
The court found that the total prohibition was suitable. The purpose of the Ban was to address strong concerns regarding the inhumane treatment of Australian livestock in Indonesia and to enable the government to develop a robust regulatory compliance regime.
The court held that whilst the Ban was suitable, it was not necessary. This was due to the fact that the Minister knew it would have an immediate and significant detrimental economic impact on people and businesses in the live export industry.
The court looked to whether there were other obvious and compelling means that would have been equally effective but less restrictive on the Applicant. Justice Rares stated that it was ‘illogical, to the point of irrationality, to suggest that no exporter would be able, immediately or within a reasonable time well short of six months’ to ensure that it could comply with the relevant animal welfare standards.
The court found that an exception to the prohibition to permit exporters that did have, or could take steps to comply with Australian standards was ‘reasonably practicable, obvious and compelling’, especially as the Minister had taken this approach with the first control order just days before.
As a result, the court considered that there was a less restrictive, yet equally effective, measure to achieve the government’s purpose and a complete prohibition could not be justified.
The court determined that the Ban was not reasonably appropriate as a means of preventing inhumane treatment of livestock in Indonesia. Justice Rares found that it was disproportionate and impermissibly burdensome on the freedom of individuals and businesses already meeting requirements and not posing any risk to animal welfare.
The court concluded that the absolute prohibition order imposed by the Ban was ‘capricious, irrational and unreasonable’ and was therefore invalid.
Tort of misfeasance in public office
To show that a public officer has acted in misfeasance, it must be established that the public officer intentionally abused or misused their office by either intending to cause harm or knowingly acting beyond their power. The public officer’s intention or state of mind is critical to determine misfeasance. The public officer ‘must be aware of, or recklessly indifferent to, the fact that the applicant or plaintiff will suffer harm as a result’ of their decision.
The court found that the Minister acted in misfeasance of his office for the following reasons:
- The Minister had not received specific advice from his department or lawyers to confirm whether or not it was lawful to impose the Ban. The advice he received was general only and did not advise on the actions required to ensure a prohibition order was valid. The Minister introduced the Ban without exception and this was unreasonably burdensome.
- The Minister was informed by industry representatives that there were supply chains in Indonesia that had, or readily could be, adjusted to Australian animal welfare standards.
- The Minister failed to obtain advice on the impact on relations with Indonesia and made no attempt to discuss possible solutions with the Indonesian Government, even though he expected the disruption to Indonesia to be extreme.
- The Minister exercised his power recklessly because he ‘closed his mind’ to the risk that the Ban would be invalid and had knowledge of or was recklessly indifferent to the economic harm of the Ban. He deliberately took the risk of omitting exceptions to the Ban causing significant economic harm to the live cattle export industries in Australia and Indonesia when exercising his power.
Where to from here?
- The court is seeking submissions from the parties including in relation to the calculation of loss.
- The Commonwealth will be required to pay the costs of the proceedings.
- According to newspaper reports, members of the class action may be entitled to up to $600 million in compensation.
- It is not clear whether the Commonwealth will appeal this decision.
- Key lessons:
- The powers of government decision makers including Ministers are not unlimited. Even where legislative powers have no specific qualifications or restrictions, they still need to be exercised reasonably and proportionally.
- Before a decision is made, broad consultation should be undertaken across relevant stakeholders likely to be affected by the decision, including individuals, business and industry. Failing to take this preliminary step could mean a decision is found to have been made recklessly.
- Careful consideration should be made to determine whether there are less restrictive alternatives to a decision likely to adversely affect individuals, businesses or industry.
- Decision makers should ensure that policy reasons for a decision are documented and supported by evidence.
  following Graham v Minister for Immigration (2017) 263 CLR 1 at 30  which cited R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 117 at 189.
Commencement of reforms to Australia’s foreign investment framework
Outlines the commencement of reforms to Australia’s foreign investment framework
Victorian Government outlines tax measures to drive recovery
By Andrew Wright & Ari Armstrong
Outlines the tax measures in the 2020 Victorian Government’s recovery effort.