PIP COURTNEY, PRESENTER: In November 2011, allegations of animal cruelty were levelled at an abattoir in regional Victoria. The consequences were far-reaching.

Authorities quickly shut down the abattoir, sending a ripple effect through the local community, leading to job losses and business closures. But the most serious charges were dropped before the matter ever went to court, raising questions about the tactics of the animal right groups, Animals Australia, and the behaviour of the Victorian Government body responsible for the prosecution, PrimeSafe.

Tim Lee has this special Landline investigation. And a warning, there are some scenes of a working abattoir.

TITLE: OVERKILL

TIM LEE, REPORTER: On the green rolling hills above the town of Trafalgar sits an abandoned abattoir. For 60 years it was a local landmark. A mainstay of a small town's economy, and the proud enterprise of three generations of one family. Now it's forlorn and fading facade conceals a poignant story of an episode that sparked a bizarre chain of events.

In its wake is a family shattered by accusations of cruelty, its reputation and business left in tatters, and a community clambering for answers to what it believes is a gross injustice.

COLIN GILES, ABATTOIR OWNER: It's all pretty hard to understand. We've been through two years of hell.

Monday November 21, 2011, dawned like most at LE Giles & Sons Abattoir.

The abattoir, small by modern standards, processed cattle, sheep, goats and pigs. On that day, it was killing pigs and 60 of them quietly awaited slaughter in the holding pen. Mid-morning a visitor arrived. She gave her name as Kate and was led up to the killing floor.

JAMES RODEWELL, FORMER ABATTOIR SUPERVISOR: On the way up I had a discussion with her and asked her what she was doing and she said, 'I'm just taking a few photos for a university project I'm doing.'

And basically that was it. And when I went to show her through, she said, 'That's alright, I know where I'm going. I just need somewhere to put my bag.'

COLIN GILES: She came in under the guise of being a photography student.

BRUCE GILES, FORMER ABBATTOIR WORKER: She lied who her proper name and everything. And we had let schools in before, we've had vets up here doing courses with, you know, senior vets. So we've never, ever been shy of showing the place off.

MORRIS GILES, FORMER ABBATTOIR WORKER: Unfortunately, Giles' have always taken people at face value. They've never denied anyone to access to the kill floor. They had nothing to hide. As far as we were concerned we were operating within the guidelines. We were happy for people to see how the process would happen.

TIM LEE: This time the Giles family's open approach to the public proved disastrous. Kate was in fact Sarah Lynch, a well-known animal rights activist.

She'd already tried to gain access to other Gippsland abattoirs, but was refused permission to one and given short shrift at another, when allegedly caught filming outside. With the Giles it seemed like she'd hit the jackpot.

(Directing question to James) Were you aware she was actually taking video?

JAMES RODEWELL: No, no, I don't think anyone was aware she was taking video. I actually seen her in the afternoon, just before she'd left, and I'd seen the camera around the neck and it was like a long lens normal photography camera.

TIM LEE: No-one could have realised then the lasting impact that those few minutes of video footage would have.

(Footage and voiceover from Sarah Lynch's video, "Final Moments")

SARAH: ... in an abattoir in Victoria...

TIM LEE: Sarah Lynch had spent the previous Friday at Giles photographing, and evidently filming surreptitiously, the processing of sheep and cattle.

But it seems her true focus was on pigs, and as the last few pens of 60 pigs were stunned electronically prior to slaughter, she got the footage she was seeking.

(Footage from Sarah Lynch's video, "Final Moments" Animals Australia Video, of pigs being slaughter)

ABATTOIR WORKER: Grab a sledgehammer, pig's out.

(Sound of pig squealing and man hitting pig)

TIM LEE: Sarah Lynch raced the footage back to Melbourne to Animals Australia, which contacted PrimeSafe, the statutory body whose role is to oversee the operation of meat processing facilities in Victoria. Animals Australia claimed to have evidence of widespread cruelty at Giles Abattoir.

PrimeSafe then contacted LE Giles & Sons and ordered an immediate halt to all work.

COLIN GILES: They rang us on the Thursday night and said, 'You will not kill on Friday morning.' We had to get round and let all our staff know because they start work at, you know, they'd be here at 6:30 in the morning, and we couldn't load out all the stuff that I'd taken orders for the Friday, we weren't allowed to touch any of it.

TIM LEE: Ray and Colin Giles were told to attend PrimeSafe's Melbourne offices on the Monday. But on the Friday morning PrimeSafe executives told them they had to be there by early afternoon.

COLIN GILES: They rang up on Friday morning and said, 'Can you be down here in two hours?' Which we just bundled up our QA man and Ray and I went down. But in hindsight we should have taken the lawyer with us, because we didn't realise any of this was going to happen.

TIM LEE: During the interview by three PrimeSafe personnel, the Giles brothers and James Rodwell were confronted with the video footage.

(Sound of pig squealing)

JAMES RODWELL: I think we were shown two films and he said there's more films he could show us.

TIM LEE: By then the story had hit the press. That same day a Melbourne newspaper reported:

(Herald-Sun, 25.11.2011)

NEWSPAPER REPORT (voiceover): "PrimeSafe chief executive Brian Casey told the Herald Sun it was his intention to close the abattoir permanently.'I am appalled by the treatment of animals shown in the video footage', he said."

TIM LEE: And they've got that power just to shut down a works...

COLIN GILES: Apparently so. But we've got nothing in writing off them at any stage, not even when we handed our licence in. In fact, they refused to give us a written.

TIM LEE: Colin and Ray Giles later testified:

VOICEOVER (statement): 'We went into the initial meeting without any legal adviser support. We felt stunned by the accusation we were treating our animals with cruelty. We felt under threat, bullied, confused and out of our depth in dealing with the legal terminology PrimeSafe was throwing at us. We agreed to surrender our licence without really knowing what our options were. All of the above directions were given verbally; no written notifications were ever received.'

TIM LEE: Speaking of the meeting three days later, PrimeSafe chief executive Brian Casey told a different version of events.

(ABC 7:30 November 2011)

BRIAN CASEY, PRIMESAFE CEO: And on Tuesday the family decided to agree to cancel their licence, submitted that advice to PrimeSafe and on that basis, PrimeSafe cancelled their licence.

REPORTER: So the family have admitted fault?

BRIAN CASEY: They didn't need to admit fault. It was a matter for them to decide the future of their licence. And what I'm saying is they decided to cancel their licence.

TIM LEE: Excluded from much of the meeting, James Rodwell recalls the reaction of Ray and Colin Giles when they finally emerged.

JAMES RODWELL: Both of them were pretty upset. I could see tears in their eyes and I said, 'Well, what's happening?' And Colin said, 'We've been given an ultimatum. We either hand our licence in or we're going to have it taken from us. And if we hand it in the matter won't go any further, and if we don't hand it in, they'll take it as far as they can.'

TIM LEE: Colin Giles alleges they were told by PrimeSafe that unless they complied they faced the possibility of jail.

News of the abattoir's closure amid the cruelty claims stunned the local community, and quickly echoed throughout the region and beyond.

MORRIS GILES: There was 25 full-timers working here, stock carriers for local business people. Most of the people that worked here, if they didn't live in the town, they still shopped in the town. It's affected many, many people. It was a service abattoir. There were people brought their own beasts in to kill for their own freezer. They've got to cart them miles and miles and miles now. It's just devastating.

HEATHER OSBORNE, GOAT PRODUCER: Instantly, overnight, a business that I'd been working on building for many years was shut down through events absolutely beyond my control. So of course so many people, like myself, thought it would be a temporary thing.

(Sound of goat bleating)

TIM LEE: As a medium-sized abattoir, LE Giles & Sons was vital to the small-scale livestock producers that dot the region. It was close by and could accommodate speciality consignments to gourmet outlets and restaurants.

BRONWYN COWAN, FREE RANGE PORK PRODUCER: Initially disbelief and then gut-wrenching terror at the fact that we had lost one of the key elements of our pig production system. And then knowing how that fallout would impact so many other people, not just the family that owned the business.

SANDRA MCPHEE, FORMER GOAT PRODUCER: We knew something strange had gone on when we'd brought the goats to the abattoir in the morning and the supervisor there said they were going into a meeting with PrimeSafe that afternoon and that they hadn't gotten legal advice or anything. They were devastated, there were people crying and it was awful. People turning up with their animals for slaughter...

TERRY MCPHEE, FORMER GOAT PRODUCER: We thought, well, apart from a cardboard...

SANDRA MCPHEE: And they were trying to keep themselves out of jail was the words they were told.

TERRY MCPHEE: There was a forlorn cardboard sign on the front gate that said 'Closed until further notice' and there went our business.

TIM LEE: For Terry and Sandra McPhee the closure spelt catastrophe. At Neerim South in the Eastern Ranges they'd built a fledgling, but thriving, enterprise raising prime quality meat goats. They'd adopted a holistic approach to farming, employing sustainable land use and practices. The operation was close to chemical free. Sandra McPhee put her formal academic studies in this field into practice. The venture marked a new beginning for the family.

The scarred trees on the ridgeline give a clue as to why.

The McPhee's farm was engulfed by the Black Saturday bushfires of 2009. It swept through their property, destroying outbuildings and pasture, but somehow the house and the family sheltering inside it were spared.

(Terry and Sandra showing Tim a map)

TERRY MCPHEE: The bushfire basically started just here and went straight up the middle of the place to the house and fortunately the wind changed when it got into this area of the paddock and blew it back on itself. So we were lucky.

SANDRA MCPHEE: The kids were actually with us when we were in the house. And, yes, we just said, 'Stay -' (starts to cry) I'm sorry. 'Stay in the house.' And they did. And it was really - a really stressful time.

TIM LEE: From that trauma they slowly rebuilt, turning down offers of financial assistance from government. By November 2011 the future seemed rosy.

Then came news of Giles' closure.

SANDRA MCPHEE: Devastating. You know, we'd worked really hard to get to that point and built up this great market. And it was really highly sought after, the meat, and we had customers to supply, and restaurants. And we had our meat and we were really proud of the fact that we could actually grow this beautiful product. And in order for it to pay for itself and to have a good income from it, we had to value add. And so we cooked the meat at the markets and we had a really good following of people.

But all of a sudden we couldn't supply all the orders. It was coming up to Christmas and we had a lot of Christmas orders ready to go, but we had no abattoir to slaughter the animals for us.

TERRY MCPHEE: And the nearest abattoir that could handle goats was in Kyneton, which was hours and hours and hours of transporting animals to get them there. And then to bring them back via refrigerated transport, was, that was where the cost was just through the roof. So, it just wasn't viable to do it.

TIM LEE: For the McPhee's their hard work was quickly unravelling. PrimeSafe promised a quick investigation into the cruelty allegations, but gave no time frame.

HEATHER OSBORNE: It's beyond comprehension that there was not a thorough investigation before the closure of the abattoir. So none of us can understand, given the excellence of the operation and the fantastic facilities that the folk had there, and that they were just terrific people to deal with, and I'm sure had they known that there were issues they'd have dealt with them.

(Heather talking to a goat) Now, that's being really naughty.

TIM LEE: Heather Osborne has been a stalwart of Australia's goat industry for decades.

HEATHER OSBORNE (talking to a goat): Come on, enough's enough. Off you go.

TIM LEE: She has pioneered better strains of meat-producing goats and developed new markets for goat farmers. Goats are her soul source of income.

Giles is one of the few abattoirs in the Gippsland region licensed to process goats. Like other producers, Heather Osborne was left with animals that couldn't be slaughtered. She was forced to consign her goats to an abattoir at Kyneton, north of Melbourne, meaning at least a four-hour trip. It was far costlier and meant she could not service all her markets.

(Talking to Heather) In your dealings with the Giles family, could you fault them with any of their animal welfare standards?

HEATHER OSBORNE: Absolutely not, absolutely not. They were, um, they were old-fashioned, friendly, country, business people who went out of their way to help. And the goat industry is small but they were very helpful.

TERRY MCPHEE: They were always considerate of how the animals were when they arrived. If it was cold and wet they were always left to get dry and not left out in exposed sheds but always put in undercover areas and that sort of thing. So I couldn't fault them on that score.

SANDRA MCPHEE: They've always handled our animals really, really well and sensitively. Couldn't have asked really for a better - a small abattoir, something local. 20 minutes for us to get the animals there.

TIM LEE: Bronwyn Cowan, who produces free range pork at Darnum in West Gippsland, was another small producer hit hard by the abattoir's sudden closure. She began the business 12 years ago in a quest to help ensure the survival of rare breeds of pigs such as Large Blacks, Tamworths, Wessex Saddlebacks and Berkshires.

(Talking to Bronwyn) How would you rate their animal welfare treatment?

BRONWYN COWAN: I'd have to say if we had even the slightest issue we could discuss it with them and always very obliging to cater for the specific needs of our animals, yep.

TIM LEE: And could you fault their animal welfare handling at all?

BRONWYN COWAN: No, no, I wouldn't have said that there was anything there that would have raised any sort of alarm with me at all. No.

(News footage)

NEWSREADER (voiceover): Michael and Bronwyn Cowan are one of the abattoir's 100 clients.

TIM LEE: From the outset Bronwyn Cowan publicly defended the reputation of the Giles family and like others, pushed for a full inquiry.

(Bronwyn talking to a news reporter)

BRONWYN COWAN: ... to me is just as cruel.

TIM LEE: In the days and weeks following the widespread publicity of the cruelty allegations, like the Giles family themselves, she was subjected to hate mail and abusive phone calls. But more vexing was the impact on her business. The loss of a local abattoir means she spends many more hours each week on the road to and from a Melbourne facility.

BRONWYN COWAN: The main reason for having the pigs is to breed the genetics and preserve them. The off-spin of that is about nine out of ten animals are not suitable to be kept as breeding animals. Those animals are then sold as free range pork. They are the nuts and bolts of financially keeping the business running and supporting that huge genetic pool of pigs we've built up.

So, you have a situation where, suddenly, if I'm spending as much time as I am away from the farm transporting animals for slaughtering purposes, that often if I'm not here if something happens - the electric fencing goes out - I've now got animals getting out, crossbreeding, which is just producing meat animals, it's not producing those genetic animals that I was interested in producing in the first place.

TIM LEE: The abattoir's closure had an immediate impact on stock markets the length of Gippsland and beyond.

As a buyer, Ray Giles was a familiar, much respected figure known for his honest and fair approach.

MORRIS GILES: Four days a week, every week and has done that all his life. That just came to a complete halt.

JIM FORSYTH, FORMER STOCK AGENT: To see Ray Giles that wasn't attending the markets was a, you know, a big hole in the district and in all the producers around in Gippsland.

I know Ray used to buy a lot of pigs out of Ballarat. They told me when Ray Giles lost his licence the Ballarat market was nowhere near as good as what it used to be. So, you know, it's affecting a lot of people right throughout Victoria.

COLIN GILES: They knew Ray everywhere. He was very well-respected around the sale yards.

TIM LEE: The butcher trade was a Giles family tradition.

COLIN GILES: Great-grandfather was in the gold fields. He thought there was more money in feeding miners than trying to scratch up a bit of gold. So, and then my grandfather and father and uncle, they all had butcher shops in Melbourne.

TIM LEE: Ray Giles was forced to leave school early when his father became seriously ill. When he later died aged 46, Ray was joined by younger brother Colin, then aged 14.

With their mother, Lavinia, during 65 years they built a thriving enterprise.

COLIN GILES: Been here all my life, yes. Ray and I sort of stuck it out together. The other boys went their own way and we've always stuck together.

(Colin and Ray walk into the abattoir)

RAY GILES: (talking to Colin) Go on and I'll follow you.

COLIN GILES: You going to come in with me.

TIM LEE: PrimeSafe had promised a speedy investigation into the cruelty allegations. But months after the abattoir's sudden closure, the Giles family and their livelihood remained in limbo.

RAY GILES: Where are we going?

TIM LEE: It took a terrible toll on Ray Giles.

MORRIS GILES: He withdrew into himself. We had trouble getting him out of the house. He just was... just was traumatic, absolutely traumatic to see what it's done to him. You know he's, at the moment he's at the Warringal Hospital undergoing therapy. We don't know whether he will ever be the man he was.

Dad had a stroke Christmas Eve, Christmas Day, we're not quite sure exactly.

COLIN GILES: Treating him for depression before he had the stroke and he just sat down. We can show him things in the paper and that now and he just doesn't relate to it. He's just shut it all out of his mind, I think.

DEBBIE DI SISTO, RAY GILES GRANDDAUGHTER: Especially when my grandfather had his stroke on Christmas Day, like it was really hard up until then. But for him to then have a stroke that was, that's what put us into, 'No, this isn't right. This isn't fair, it shouldn't - this shouldn't have happened to us.' We've always said that we don't think we did anything wrong, but they took us to court anyway. So financially they've just pushed us to our limits. I think that that was their intention to begin with. They wanted us to roll over and we wouldn't.

(Debbie going into shops to gather support)

TIM LEE: As the months dragged on, Debbie Di Sisto started a community-led campaign for answers. Eventually more than 3,000 people signed a petition protesting against the treatment of her family and seeking a full investigation.

COLIN GILES: We'd have commission buyers vying for us.

TIM LEE: By now Colin Giles, quality assurance manager James Rodwell and three of the abattoir slaughtermen had been charged with a number of offences under the Prevention of Cruelty to Animals Act.

The Giles family engaged a solicitor, then a barrister for its expected day in court.

In September 2012 the three slaughtermen pleaded guilty to charges that they failed to ensure pigs did not endure: 'unreasonable pain and suffering', during slaughter. The judge found that any cruelty was not deliberate and noted the: 'significant penalties', the trio had already endured, including the loss of their jobs.

All three escaped conviction and were each given a twelve-month good behaviour bond.

NEVILLE GILPIN, FORMER SLAUGHTERMAN: It come down to a financial thing, where my solicitor said it could cost me a fair bit of money to fight this charge and not having a job and a daughter to put through uni I just took the easy way out, yes.

TIM LEE: However, Colin Giles and James Rodwell were determined to have their day in court.

But that day never came. The case was due to be heard here at the Morwell Magistrates' Court on Monday, April 15. But on the Friday the Giles family was told all charges against them had been dropped because the DPI's lawyers believed there was little chance of a successful prosecution.

But beyond that the Giles family and those involved in the case know nothing more.

COLIN GILES: They dropped the charges and won't explain why.

JAMES RODWELL: I would have loved to have gone to court. To be ruled not guilty, rather than just have the charges dismissed, because it leaves it open. Why have they dismissed the charges and - you know, ideally I'd like to see the Giles family compensated, I mean but how much compensation can you put on it? What's it worth?

DEBBIE DI SISTO: We've been defamed in the papers. It's been said we've had no standards. That, to be in business for 60 years and have no standards? And the defamation against our family's name and the business - it was just completely inappropriate and the public's owed an explanation.

We've been told we've got no standards, yet they've dropped the charges against us. So if we've got no standards they need to explain why we've got no standards, or why we do have standards and what went wrong along the way.

TIM LEE: Funding their legal defence had cost the Giles family more than $150,000. It had meant the forced sale of a commercial property in Trafalgar.

The week in court contesting the charges was likely to cost another $35,000, and it was pitted against the bottomless resources of the State Solicitor's Office acting for the Department of Primary Industries.

The cost of justice appeared prohibitive, so the family reluctantly accepted the legal truce. But the sudden abandonment of such a high-profile case has only fuelled speculation of gross injustice.

COLIN GILES: What I know now, I would have handled it differently, for sure. All our audits - we were getting four audits a year - had come through without a blemish on them.

MORRIS GILES: It's very hard to understand how a business that was regulated and audited and had a quality assurance program and all these things were happening right up until the day dot, until the hammer fell. 65 years just bowled arse over turtle.

FRANK HERNADI, FORMER LIVESTOCK AGENT: And there's a strong feeling that there should be some action taken against the Department, because natural justice wasn't done. And there's a lot of losers in this and if it was only one loser it's a travesty as it is, but in this case there's three parties that have lost and it's not right.

TIM LEE: Sarah Lynch took footage of one pig which escaped from the killing pen and got onto the abattoir floor.

COLIN GILES: There was four or five blokes along here with knives and pouches and things on, and they'd left a sledgehammer up against the hide puller because they were doing a job and it had jammed or something, and the blokes just grabbed it and - which it says in the regs that, you know, in those sort of circumstances, as a safety thing, blunt trauma can be used. And there was an educated person from Melbourne that hadn't viewed the thing and said what he'd done was right.

It was the quickest and most effective way of doing it. There was no cruelty in it. And that was the first charge that the DPI dropped, was the blunt trauma one.

(Neville showing Tim the pig pen)

TIM LEE: Neville Gilpin alleges that Sarah Lynch caused that pig to escape. He claimed she'd stressed them by being far too close.

NEVILLE GILPIN: We bring the pigs into this pen here. I'm at this doorway here making sure that they don't come through. Well, for a start she stood right at the edge here, which was a nightmare to try and stop the pigs, because it virtually chasing them that way. I asked her to stand back. Which she moved back a couple of times, but throughout the filming it was a couple of times I had to ask her to move back because it made a very difficult job more difficult.

TIM LEE: And in your mind that contributed to the incident with her...

NEVILLE GILPIN: The pig escaping and I wouldn't, yes - I've, definitely, I think it would have.

TIM LEE: For some days after the cruelty allegations were first aired, the Animals Australia website boasted how:

(Animals Australia website, November 2011)

VOICEOVER: "Kate had been given unprecedented open access to an abattoir. And that her footage had shocked and appalled authorities who, within hours of receiving a formal complaint and video from Animals Australia, shut the slaughterhouse down and launched a full investigation. In her witness statement Kate also described how stunning equipment was routinely stabbed into the eyes and ears of pigs."

TIM LEE: Neville Gilpin, a slaughterman for 30 years, disputes that. He said the technique was to stun them between the eyes and the ears.

(Talking to Neville) So the claim, then, that there was a stunning probe stuck in the eye, was that correct? Could that have happened?

NEVILLE GILPIN: It could have happened, but it's a hundredth of a second thing that happens. Like, they wouldn't have got to close the eye before they were stunned and out of it.

(Watching Sarah Lynch's video)

SARAH LYNCH: ... in an abattoir in Victoria...

TIM LEE: Landline had Trevor Stever, a former meat inspector of 40 years experience, assess the footage.

TREVOR STEVER, FORMER MEAT INSPECTOR: I've got experience licensing, I wrote and designed the safety programs. I worked for some years with the equivalent to PrimeSafe as a licensing inspector for, yes, a number of years. So my experience in the meat industry is extensive.

(Sound of Sarah's video)

TIM LEE: The video claims that a stunned pig, though unconscious, lay kicking for six minutes.

Trevor Stever says there's obvious blood loss from where the slaughterman has cut the animal's throat seconds earlier.

TREVOR STEVER: So that animal would be dead, completely bled out, stunned, bled out within less than 25 seconds. There's no way that pig would be alive after six minutes. It just can't physically happen. So that six minute claim is, to be honest, it's a lot of rubbish.

NEVILE GILPIN: Did she add to the problem? Yes.

TIM LEE: He supports Neville Gilpin's claim that Sarah Lynch's close presence spooked the pigs.

TREVOR STEVER: The photographer is in the stick pen and that's a very confined space and that's why that pig's bolted. He's bolted away from her because the sticker is over there in the left-hand corner, so that photographer has been this back here right against the wall. And being such a confined area, the pig just saw one way to go and that was out, and that's why he's run.

(Tim talking to Colin Giles)

TIM LEE: Colin, one of the claims made by Animals Australia, which was on their website for some days, was an escaped pig ran into the scalding vat behind us. How would that be possible?

COLIN GILES: It's not possible. It's physically impossible for them to get through there. That door wasn't open until they were ready to put the pigs into the scald. So it didn't happen.

TIM LEE: So for that claim to be true, a pig would have to leap about what, 1.5 metres?

COLIN GILES: Yes. No, it didn't happen. None of the boys can understand why she even come up with that one.

JAMES RODWELL: I was there for seven years, never seen that.

TIM LEE: In fact, it would be physically impossible, wouldn't it?

JAMES RODWELL: Yes well, there's a wall there, so, was it running through the wall? I couldn't see it being done.

TIM LEE: Is that possible?

NEVILE GILPIN: I haven't seen it in ten years I've been here, so I don't think so.

TIM LEE: So the pig would have to go through that trapdoor, would have to open the trapdoor above to do that?

NEVILE GILPIN: Yes.

TREVOR STEVER: There is a barrier. From memory, it's about 1.2 metres high. So that - for a pig to jump 1.2 metres is near impossible. I mean they're very, very short legged.

TIM LEE: Sarah Lynch's video, 'Final Moments', remains on the Animal Australia's website, on YouTube and several other animal welfare sites. Social media carries numerous comments condemning the Giles family as cruel.

(Images of online response comments to video)

WOMAN: I couldn't do it; I don't know how you do it.

BRUCE GILES, FORMER ABATTOIR WORKER: Me and my wife even got told to change our name when we went to the dole office, because they said you might get a better chance to get a job.

JAMES RODWELL: People still read my name and they associate it with Giles' animal cruelty, even though we were proven, we weren't proven to be doing anything wrong.

TIM LEE: The Giles family remain baffled and perplexed as to how it ever got to this.

COLIN GILES: Prided ourselves on the way the finished article went through. It was always clean and the butchers were always happy with it.

TIM LEE: And there were always lots of rules and regulations, but there'd been nothing to suggest there was anything wrong with any of the practices here?

COLIN GILES: No, we were audited four times a year and was never pulled up for it, and we've never done it any different.

TIM LEE: PrimeSafe argued the abattoir breached the ruling that pigs must be placed individually in a restraining box for slaughter. But since 1996 Giles had been permitted to stun pigs while the animals remained in their familial groups, a method many, including scientists, regard as far more humane.

If this method was wrong, PrimeSafe's own audits had failed to recognise it.

DEBBIE DI SISTO: Their own DPI welfare officers had viewed from housing the pigs to leading them up the race into where they were processed, the way they were processed, and never said anything was incorrect. And that was two weeks before the incident actually occurred. Why wasn't anything said then?

TERRY MCPHEE: I don't understand how they went from closing the abattoir to a 15-month investigation for no result. It doesn't make sense.

(ABC 7:30 November 2011)

TIM LEE: At the time, PrimeSafe head Brian Casey explained why his department had acted against Giles.

BRIAN CASEY: The issue was that the video footage showed evidence that the requirements of the quality assurance program were being just totally ignored. All abattoirs are subject to a regular audit schedule. If there are deficiencies identified that audit frequency is increased. In addition to that, PrimeSafe conducts random sampling programs where we may attend the facility at any time.

We also have a very, very comprehensive system of complaints and the issue that was raised by Animals Australia was actually dealt with under exactly that system.

TIM LEE: Animals Australia is unwilling to discuss the case.

ANIMAL AUSTRALIA STATEMENT (voiceover): "We feel it is inappropriate for us to be caught up in this particular issue, since our role was limited to lodging the complaint. The complainant was not known to us, nor was this matter in any way instigated by Animals Australia. As you will have seen, the cruelty that occurred at this abattoir was significant. The fact that workers pleaded guilty to cruelty offences reiterates the appropriateness of Animals Australia lodging a complaint."

TIM LEE: Many believe PrimeSafe's zealous approach was because such authorities were especially jumpy in the wake of the Indonesian live export cattle story.

MORRIS GILES: With the Indonesian live export fiasco it just couldn't have happened at a worse time for us. You know, it was a knee jerk reaction and it just happened at the wrong time as far as we were concerned. Our way of thinking was if there was a problem, why not re-train our staff? You know, don't pull the plug like they did. Just re-train us. Surely that was part of PrimeSafe's job towards the trade.

BRONWYN COWAN: The timing was absolutely impeccable when you look at what stages we were at for getting pork and hams and that sort of thing prepared for Christmas, yes.

And this is where it caught so many small producers out on a limb. They had the animals ready to go. Suddenly that stopped, so they were left with them, yep.

COLIN GILES: We were in the middle of the busiest part of the year. We had two tonne of legs of pork in the freezer that were to come out and be cured into hams and we were given 24 hours to get rid of them.

TIM LEE: PrimeSafe's primary role is to oversee the safety of Victorian meat and seafood for all consumers. There was no suggestion that there was anything wrong with Giles products which was still sold to the public by other retailers.

The Giles family raised their case before Victorian parliamentary hearings, to no avail. Despite the prominence of the case, PrimeSafe's past annual reports make no mention of the episode. The Victorian Opposition has promised to pursue the matter.

JOHN LENDERS, VICTORIAN STATE OPPOSITION: There's one way from PrimeSafe - 'it's my way or the highway.' That is the response I have had from a number of people who've dealt with it as a regulator. So from what I have seen, it certainly has an issue of - a relationship issue with the people it regulates, because I have yet to hear anybody actually praise PrimeSafe.

But it's hard for me to be more definitive when the Government does not let me be briefed by PrimeSafe.

TIM LEE: Sarah Lynch, whose surreptitiously-gained video sparked the entire affair, has refused all attempts from the media to speak to her about the case.

NEVILLE GILPIN: It was funny, because I'd just got a house loan. I went to see my father and tell him about my house loan and he said, 'Oh, so Giles' is shut.' I said 'What?!'

TIM LEE: In the time since, some of those who lost their jobs, including Neville Gilpin, have struggled to find employment.

NEVILLE GILPIN: ... fell in a hole.

TIM LEE: Livestock producers throughout Gippsland have endured some tough times.

BRONWYN COWAN: It's taken away our innocence of our rural lifestyle. Now we have to view every person as possible person who may put our business at jeopardy, whether it was intentional or non-intentional. So we no longer can comfortably relax and go about our work in a relaxed fashion every day.

We have to constantly think, 'Is this person genuinely coming here to look at the animals? Or is their intention to close our business down?'

HEATHER OSBORNE (Talking to goats): Morning, girls. How is everybody?

In the space of seven months I lost a lot of income and that's pretty hard to deal with when, and a lot of stress involved, when you don't know how you're going to pay your bills; and you've still got to keep all the stock going as well.

TIM LEE: Ultimately an abattoir at Warrigal agreed to get a licence and build a facility to process goats.

For Terry and Sandra McPhee it came too late. Struggling under mounting debt, nine months after the Giles closure, they gave up on their much-cherished dream. They now live on a small town block.

SANDRA MCPHEE: To shut something down and to have so many little people affected - that's just not right. PrimeSafe and SGS really needed - that process needed to be looked at a whole lot harder and some answers given, because we're still suffering with it. It's, you know, you try to move on but it's a real sore point.

TIM LEE: They've been advised that as a third party, they have little chance of successfully suing the Government in this matter.

Landline has had Melbourne University law expert Brad Jessup assess the Giles case.

BRAD JESSUP, MELBOURNE LAW SCHOOL: In this case, there's a possibility of the Giles bringing a negligence claim or a claim of public misfeasance. So they'd be going to the Supreme Court and they'd make a claim for compensation arising from a breach of the law and that breach would be the commission of a public misfeasance.

And to make out a case of public misfeasance, the Giles would need to prove that PrimeSafe didn't have the powers that they sought to exercise. And either they knew they didn't have those powers, or that they exercised those powers in a way that was malicious.

TIM LEE: Colin Giles says they'll pursue that course of action if they can find the money.

His nephew reflected in the days following the abandonment of the court case and the dropping of cruelty charges.

MORRIS GILES: Went to the Anzac Day morning parade and they talked about our, the soldiers and they fought for our rights and we were lucky to have a democracy and freedom of speech and I'm standing there at the service thinking, it would be pretty hard to tell my family that what we're listening to is what those soldiers fought for. You know, it was hard to fathom how it's all come about.

PIP COURTNEY: That report from Tim Lee. And we should add, PrimeSafe, the government agency which took action against the abattoir, declined an invitation to talk to Landline about the case.