Cattle exporters are mounting a class action, potentially worth hundreds of millions of dollars, against the Commonwealth over the 2011 live export ban.
The lead entity in the class action claim is Brett Cattle Company Pty Ltd of the Northern Territory, and the claim is backed by the Australian Farmers' Fighting Fund. A statement lodged in the Federal Court alleges that an Export Control Order made by then Agriculture Minister Joe Ludwig on June 7, 2011 - restricting exports to Indonesia for six months - was "invalid".
An earlier claim was rejected by the Australian Government Solicitor in May 2012.
Independent legal advice from a prominent QC has emboldened moves to litigate a massive class-action compensation claim against the commonwealth over the former Labor government's snap live cattle export suspension in June 2011.
A Neutral Evaluation of the claim conducted by former Federal Court of Australia judge and Royal Commissioner Roger Gyles, was filed in the Federal Court yesterday (Monday) along with other documents, to initiate legal proceedings.
Sources close to the case say Mr Gyles is perfectly placed to make an independent assessment of the claim, given his previous experience in presiding over legal disputes involving the commonwealth's intervention on commercial dealings.
His 33-page evaluation outlines specifics of the claim that's being made against the commonwealth by Minter Ellison lawyers and points to its potential to prove liability.
In the document signed September 10, 2013, Mr Gyles concludes his views by saying, "I regard the draft statement of claim as disclosing a cause of action which has at least a meaningful prospect of liability being established".
The lead entity in the class action claim is Brett Cattle Company Pty Ltd, of Waterloo Station, Timber Creek, NT, and proprietors Emily and Dougal Brett.
Others are expected to join in the legal fight to regain losses from the trade suspension which cut off cattle supply to the critical northern export market during the industry's peak trading and stock-movement time-frame.
They include multiple cattle producer entities and other related businesses like transport operators seeking recourse for potentially hundreds of millions of dollars in combined losses due to the sudden suspension.
Significantly, the case is also being strongly backed by the Australian Farmers Fighting Fund (AFFF) which takes on legal cases of specific interest to the farming sector.
The AFFF has already contributed about $750,000 to support the claim's evolution and its executive met last week and agreed to provide further financial backing to help progress the case to court, if necessary.
The claim was rejected by the Australian Government Solicitor in May 2012 as Minter Ellison pushed for an out of court settlement with the Gillard government.
The lawyers subsequently provided the draft statement of claim to the AGS in a push to claim damages for "malfeasance (misfeasance) in public office".
The statement alleges the second Export Control Order made by then Agriculture Minister Joe Ludwig on June 7, 2011 - restricting exports to Indonesia for six months - was "invalid".
Andrew Gill, partner of Minter Ellison's Canberra office who is running the matter, has stated the group has tried to engage the federal government in alternative dispute resolution of the claims but to no avail, hence filing court proceedings this week.
"Notwithstanding, paragraph 2(b) of Appendix B to the Legal Services Direction, the Commonwealth has declined to enter into alternative dispute resolution as it takes the view that there is no meaningful prospect of liability being established," the Evaluation says.
Freedom of Information applications have been used to gather evidence surrounding the events that transpired leading up to the government's first Control Order on June 2, 2011, and the complete trade suspension several days later.
The independent evaluation offers a scathing assessment of the government's actions after the initial suspension stopped trade to a number of Indonesian abattoir facilities identified in the ABC 4Corners program, which triggered the unprecedented public and political controversy over animal welfare standards, in live export markets.
"There is a substantial chance that the decision to make the Order of June 7 would be held to be so irrational as to be both unreasonable and out of proportion to the subject in the sense outlined in the authorities and so invalid," it says.
"The fundamental difficulty with the Minister's position is that he departed without any apparent basis from his own decision of 2 June with extreme urgency and secrecy without explanation, apparently regardless of the extraordinary adverse consequences which would inevitably flow and apparently going beyond anything recommended by the Department or contemplated by industry.
"The early repeal of the Order without any decisive animal welfare solutions in the meantime underlines the problem.
"If the situation was adequately dealt with by the Orders of 7 July, it is difficult to understand why trade needed to be completely suspended in the meantime, bearing in mind the long history of the matter."
Speaking to Fairfax Agricultural Media, Ms Brett said it was a huge relief that Minter Ellison had finally initiated legal proceedings in the Federal Court after the commonwealth avoided discussions to negotiate a potential out of court settlement.
"I'm just glad we've finally got some action on this case because it's been a long time coming," she said.
"It's disappointing the government hasn't acted on this matter so far and we've got to the stage where we have to take them to court over it."
Ms Brett said the worst aspect of the suspension was the long-term damage it had inflicted on peoples' confidence in northern-Australia.
"But if we have success with these proceedings, our hope is that it may reinstate a bit of that confidence and protect the industry for the future and ensure the government can't do anything like it again to us or any other industry," she said.
The case is expected to continue evolving over several years and potentially ignite further political tensions between the government and opposition over live exports.
However, the commencement of legal proceedings could also assist with bringing the commonwealth to the table for mediation discussions, potentially via a court order.
The commonwealth has been preparing for the likelihood of action being filed in court with the last three federal budget papers referring to a potential compensation payout.
This year's budget listed the claim under "significant but remote contingencies" for agriculture.
"The Australian government has received correspondence that indicates there are a number of potential claimants who are alleging losses due to the temporary suspension of exports of live animals to Indonesia that was put in place on 7 June, 2011," the budget papers said.
"The Australian government is not currently a party to any litigated claims where legal liability for financial compensation is being claimed in relation to this suspension.
"No final quantum of damages has been calculated.
"The Department of Finance, which has responsibility for Comcover (the Australian government's general insurance fund) is managing these matters on behalf of, and in cooperation with, the Department of Agriculture."
In October last year, former National Farmers Federation President Duncan Fraser said, "Basically this case is about whether the government and government representatives were legally within their guidelines of remit on how to do these sorts of things."
"We believe we have a good case and it's just a matter now for the lawyers to nut it out - it's not something you want to see drag on and on," he said.
