BY JANINA BOUGHEY

Justice Rares’s judgment in Brett Cattle Company Pty Ltd v Minister for Agriculture [2020] FCA 732 (“Brett Cattle”) has attracted a lot of attention for being a “landmark” ruling on the tort of misfeasance in public office. Claims of misfeasance are “rarely successful in practice”, due to the high bar for proving the mental element of the tort. To prove that a public official has acted with misfeasance, a plaintiff must show that the official, in the course of their public duties, has:

  • acted unlawfully; and
  • knew that they were acting unlawfully or were recklessly indifferent to that fact; and
  • by that act caused loss or harm to the plaintiff; and
  • either:
    1. intended to cause that harm to the plaintiff; or
    2. knew or were recklessly indifferent as to whether their action would cause harm to the plaintiff.

As you might expect—and hope—it is uncommon for a public official to meet even the lowest of these thresholds and act with reckless indifference about both the lawfulness of their actions and the harm that they are likely to cause. Or, for the cynics, it is at least rare that an official will be careless enough to leave a record showing that they likely had that mental state. It is not enough for a public official to be incompetent—not even spectacularly so. The bulk of misfeasance applications are either struck out, or ultimately fail due to the “sheer improbability of ever proving bad faith”.

In Brett Cattle, Rares J held that the then Minister for Agriculture, Fisheries and Forestry, Senator the Hon Joe Ludwig, acted unlawfully in making an Order totally banning live cattle exports, without exception, to Indonesia in June 2011 (“the Ban”). Justice Rares held that the Minister was recklessly indifferent about the risk that the Ban might be unlawful (at [378]) and that the Minister knew of, or was recklessly indifferent to, the harm that the Ban could cause to persons and businesses involved in the live cattle export industry (at [384]). Justice Rares said (at [53] of the judgment summary) that the plaintiff, and others in their class, would be entitled to “substantial damages” from the Commonwealth as a result of the Minister’s Ban. Jason Varuhas has reportedly described these conclusions as controversial, and said that “there may be questions whether the evidence can support the weight of such a serious imputation [of bad faith]”. It has also been reported that the Commonwealth is considering an appeal.

I will leave the dissection of these issues to the experts in the tort of misfeasance and to the appellate court/s. In this post, I focus on Rares J’s finding that the Ban was unlawful which, in my view, may be an even more controversial aspect of the judgment than his Honour’s findings as to the Minister’s state of mind.

In making the Ban, the Minister had purported to exercise his powers under Export Control (Orders) Regulations 1982 (Cth), reg 3, which provides that

The Minister may, by instrument in writing, make orders, not inconsistent with regulations made under the Act, with respect to any matter for or in relation to which provision may be made by regulations made under the Act.

The Export Control Act 1982 (Cth), s 7 relevantly provides that:

(1) The regulations may prohibit the export of prescribed goods from Australia.

(2) Regulations made for the purposes of subsection (1) may:

(a) prohibit the export of prescribed goods absolutely;
(b) prohibit the export of prescribed goods to a specified place;
(c) prohibit the export of prescribed goods unless specified conditions or restrictions are complied with; or
(d) prohibit the export of prescribed goods to a specified place unless specified conditions or restrictions are complied with.

(3) Without limiting the generality of subsection (2), regulations made for the purposes of subsection (1):

(a) may provide that the export of prescribed goods, or the export of prescribed goods to a specified place, is prohibited unless a licence, permission, consent or approval to export the goods or a class of goods in which the goods are included has been granted as prescribed by the regulations; and…

The Minister made the Ban on 7 June 2011, completely prohibiting the export of live cattle to Indonesia for six months; though the complete Ban only ended up being in effect for one month. The Ban was made in response to an ABC Four Corners report, which aired on 30 May 2011, exposing the horrific treatment of Australian cattle being slaughtered in Indonesia, and the resulting public outcry. Three days after the Four Corners report aired, the Minister made an initial, more limited Order, which prohibited live cattle exports to the 12 facilities mentioned in the Four Corners program, subject to exceptions. That is, this first Order allowed the Minister to grant approval for the export of cattle to those 12 facilities if satisfied that the animals would be treated in accordance with the World Organisation for Animal Health’s code of conduct (“the OIE standards”). In the days which followed that first Order being made, public pressure continued. Among other things, GetUp, the RSPCA and Animals Australia launched an advertising campaign calling for a ban of live cattle exports, and the Greens introduced Bills into Parliament with this effect. The Minister received further advice from lawyers and public servants about the regulatory options he could take to ensure Australian cattle were slaughtered in accordance with the OIE standards.

Justice Rares’s judgment goes into the advice that the Minister received during this period in great detail. That detail was crucial to ascertaining the Minister’s state of mind. However, this comprehensive study of the material the Minister had before him also allowed Rares J to see that there were “a range of reasonable, but very diverse, available responses to address the [issue]” (at [317]). While animal welfare groups advocated a total ban, others pushed for solutions which may have caused less damage to the Australian cattle industry while still ensuring that Australian cattle were treated according to OIE standards. For example, the Minister was told by the cattle industry that it would have been possible, within a fairly short timeframe, for some exporters to establish a “closed loop supply chain”, in which cattle remained in trusted hands and facilities until after they were slaughtered (at [320]). Instead of absolutely banning live exports to Indonesia, the Minister could have allowed for exceptions where a closed-loop supply chain was in place. This was the regulatory regime that was ultimately put in place when the Ban was repealed, a month after it was put in place. The Minister did not give a reason for not having taken this option instead of the complete Ban (at [321] and [326]), and none of the advice he had received expressly contemplated a Ban that applied solely to Indonesia (at [324]-[325]). Thus, the Minister’s reasons for issuing the Ban rather than a more flexible scheme were not apparent. This ultimately led Rares J to conclude that the Ban went beyond the scope of the regulation-making power under the Act and hence also, the Minister’s power to make Orders under the Regulations.

To reach this conclusion, Rares J applied a three-step, structured proportionality test: the kind that has become familiar in jurisdictions with bills of rights, and which a majority of the High Court has started using to test whether legislation breaches the implied freedom of political communication (albeit with some controversy). As Rares J pointed out, courts have long held that reasonableness is a condition of validity with respect to delegated legislation, just as it is an implied condition for the validity of individual administrative decisions. In the context of delegated legislation, the test for unreasonableness has traditionally been framed as one of disproportionality. In Kruse v Johnson [1898] 2 QB 91, Lord Russell CJ explained that delegated laws will be unlawful if:

they were partial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; [or] if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men. (At [99]-[100]).

It is also established that the principle of legality applies in interpreting the scope of delegated law-making powers. That is, it is presumed that Parliament did not intend to confer power to make delegated legislation which infringes fundamental rights; but this presumption can be rebutted by clear language. Dan Meagher and Matthew Groves have shown that the case law “remains equivocal, if not contested” on whether the principle of legality limits the scope of delegated law-making powers. However, the weight of academic commentary, including the leading treatise on delegated legislation in Australia, argues convincingly that it should.

Thus, Rares J was on solid ground in assessing whether the order was disproportionate, and whether it unlawfully interfered with fundamental rights: both are limits on the scope of the Minister’s power to make Orders under the Regulations. What was novel about Rares J’s approach was his Honour’s use of structured proportionality. Previous cases in which courts have considered whether delegated legislation is a reasonable and proportionate exercise of the delegated law-making power have adopted a more fluid, less structured approach. Courts have emphasised the high threshold of the test and repeatedly warned that “a reviewing court is not entitled to substitute its own view of what would be a reasonable law for that of the legislature or a body exercising delegated legislative power.” It is easy to see why his Honour took the more structured approach that he did: it is a small step to combine the above, established principles. The structured test is also appealing because of its methodological transparency.

Yet, the application of structured proportionality in the Brett Cattle case highlights how it can prompt a greater degree of judicial scrutiny than has typically characterised judicial review of delegated legislation. Justice Rares was convinced that the Ban met the first step of structured proportionality, being “suitability”. It had a rational connection to the regulatory purposes of the Act (at [328]). However, he was not convinced of its “necessity”—being the second limb of structured proportionality. Justice Rares found that there was undisputed evidence before the Minister that two companies could have established closed-loop systems “if not immediately, then within a relatively short time” (at [338]). The Minister was also aware of the economic impact of a total ban, and of the option of banning live export subject to exceptions (at [332] and [342]). This led Rares J to conclude that there was an alternative, “equally effective and less restrictive means” of achieving the ends that the Minister sought to achieve by the Ban (at [352]). Justice Rares said it was “irrational, capricious or unreasonable” to have ignored the option of banning live exports subject to exceptions for those operating closed-loop systems (at [347]). He added that the Ban also failed the third limb of the structured proportionality test, that of being adequate in balancing the legitimate objective against the burden the law places on rights. Justice Rares found that the Ban “imposed an undue or impermissible burden on the common law right to carry on business” (at [358]), and there was no reasonable justification for not allowing for exceptions (at [360]).

Justice Rares’s analysis of the alternative regulatory options that were available to the Minister, as set out in the various submissions, departmental and legal advice the Minister had before him when making the Ban, involved a level of scrutiny of the Minister’s decision-making process that is not usually seen in judicial review of delegated legislation. The reasons Rares J gives for finding that the Ban was excessive are certainly compelling. But, historically at least, courts have taken a more deferential approach to review of delegated legislation.

In part, this deferential approach is justified by the fact that delegated legislation is (usually) subject to parliamentary oversight, through the processes of scrutiny and disallowance. Judicial review is not the only accountability mechanism for delegated legislation. With respect to the Minister’s Ban in Brett Cattle, the (then) Senate Standing Committee on Regulations and Ordinances had raised questions about the Ban, in particular whether the Minister had consulted adequately with industry before making it (at [228]). The Ban was repealed and replaced with a new Order which allowed for exceptions for those operating closed-loop systems before the Senate Committee finished its inquiry.

However, there is a significant amount of delegated legislation which is now excluded from parliamentary disallowance. The Senate Committee on Regulations and Ordinances has expressed concern that the quantity and range of excluded instruments has increased. And there is very worrying evidence that the Minister sought advice on making the Ban non-disallowable (see [115]). There are, therefore, rightly questions about whether the current scrutiny regime for delegated legislations provides adequate accountability: see submissions by Gilbert + Tobin Centre of Public Law members to Senate inquiries here and here. Perhaps, given these significant limitations, more intense scrutiny by the courts is necessary and justifiable. However, the application of structured proportionality as occurred in Brett Cattle does raise important questions as to where the line between judicial and executive power lies, and the point at which a court crosses the line from assessing legality to exercising discretionary, subordinate law-making powers.

Janina Boughey is a Senior Lecturer in Law at the University of New South Wales

Suggested Citation: Janina Boughey, ‘The Brett Cattle Case: Exploring the limits of delegated law-making powers’ on AUSPUBLAW (03 July 2020) <https://auspublaw.org/2020/07/the-brett-cattle-case>