Former chief health officer Brett Sutton unfairly shut down a Melbourne catering business after an outbreak of listeria, the Supreme Court has ruled, but a judge has dismissed the company's bid for millions of dollars in damages.

In a case dubbed "slug gate", business owners Ian and Ben Cook walked tearfully out of the Supreme Court on Monday claiming vindication in their long-running fight against the state government, but conceded they would not receive the major financial payout they were after.

 

Ian Cook said he would consider an appeal after the court rejected financial compensation. (ABC News)

"It's a bittersweet victory," Ian Cook said, as his son Ben wrapped his arm around his father's shoulder.

"From my own point of view, this judgment can't stand, otherwise you can just close businesses without any consequence. You can just destroy lives without any consequences."

Mr Cook said he would consider an appeal.

Despite reopening, the company says it lost clients

The focus of the Supreme Court civil trial was a 2019 decision by former chief health officer Brett Sutton to order the temporary closure of I Cook Foods, after the death of an 86-year-old woman who contracted listeria and died at the Knox Private Hospital.

"The overwhelming weight of evidence to me suggests that it was from I Cook Foods," Dr Sutton testified.

I Cook Foods was one of the caterers who provided food to the hospital, and the dangerous listeria meningoencephalitis bacteria was later found in the company's kitchen.

Staff from the City of Greater Dandenong also reported finding a slug in the kitchen, however I Cook Foods claimed the gastropod had been planted by the health inspectors.

 

The long-running saga has involved an accusation that a slug was planted in the kitchen of I Cook Foods by council inspectors.(Supplied)

At the trial, I Cook Foods' lawyers argued Dr Sutton breached the legal tort of misfeasance in public office.

To succeed, they needed to prove two things: that Dr Sutton's shutdown order was invalid, and that he was recklessly indifferent to the invalidity of the order.

On Monday, Justice Michael McDonald ruled Dr Sutton's order was invalid because the department failed to observe the requirements of procedural fairness.

"[I Cook Foods] was not given any opportunity to be heard prior to the closure order being made," Justice McDonald ruled.

However, he rejected that Dr Sutton was recklessly indifferent.

"I accept Dr Sutton's evidence that once he was satisfied that food being prepared at [I Cook Foods] was unsafe there was an urgent need to make an order for cessation of production," Justice McDonald said.

"Prior to making the order, Dr Sutton sought advice from a senior departmental lawyer. He did not receive advice that he was subject to any obligation to observe the requirements of procedural fairness prior to making the order."

 

Victorian Chief Health Officer Brett Sutton was the authority to ultimately sign the closure order for the caterer.(AAP: James Ross)

While the shutdown was temporary, the department's decision to publicly name them proved to be a terminal blow.

I Cook Food lost its clients and had to lay off all 41 of its staff.

Dr Sutton said he was aware his decision would have major consequences, but said he considered material from a number of preliminary reports and acted urgently in the interests of public safety.

"I was absolutely devastated by the need to make that decision to protect vulnerable individuals," he told the trial.

Justice McDonald said the woman's death certificate stated that the listeria contributed to her death, which was ultimately caused by a lung condition. She also had a history of heart disease.

Unproved allegations a slug had been planted

Following the judgment on Monday, Ben Cook lashed the department for the way it handled the incident and the aftermath.

"Sutton was wrong, the Department of Health was wrong. They knew it," he said.

"We've fought every day, side-by-side, all the way, and we've been vindicated here."

Ian Cook added: "This government has spent millions trying to destroy us".

 

The kitchen of Melbourne catering company I Cook Foods which was shut down in early 2019 over a listeria scare.(ABC News: Patrick Rocca)

The allegations of the slug being planted and a theory that the council wanted to see I Cook Foods shut down because it supported a rival business have been the subject of investigations and inquiries since 2019.

A parliamentary committee examined the matter, and while it delivered some criticisms of the council, it did not make findings as to whether the discovery of the slug was a set-up.

Victoria Police also conducted a criminal probe, but closed the case and did not lay any charges.

The City of Greater Dandenong had been named as a co-defendant in the case, until I Cook Foods dropped its action against the council on the eve of the trial.

In 2022, Ian Cook ran against Daniel Andrews in the former premier's seat of Mulgrave on an anti-corruption platform. Mr Cook pulled 18 per cent of the primary votes and outperformed the Liberal candidate.

With Mr Andrews now gone, Mr Cook is running for the seat again at Saturday's by-election.