Introduction

In a recent landmark case the Supreme Court of Western Australia found against an organic farmer who accused a neighbour of contaminating his organic cereal crop with genetically modified (GM) canola seeds. This development, which has been monitored worldwide, has also brought the National Association for Sustainable Agriculture Australia’s (NASAA’s) certification practices into the spotlight.

In this Alert Tracey Rundle, Ryan White and Andrew Clements explore the outcomes and implications of this closely-observed case and look at the application of this development for the broader farming community.

Background

Steve Marsh’s property was certified organic by the NASAA in 2010. Marsh lost his certification for more than half of his property after herbicide tolerant GM canola seeds made their way onto his property from neighbour Michael Baxter’s farm.

Marsh alleged that Baxter’s decision to use swathing, a two phase harvesting process, resulted in GM canola seeds blowing onto his property. Marsh complained that this decision ultimately caused him to lose the contractual right to apply the label ‘NASAA Certified Organic’.

Further background details are included in our earlier Alert.

The claim

Marsh claimed financial compensation after losing an estimated $85,000 in earnings and the organic certification for about 70 percent of his farm. He argued that being denied the marketing advantage of labeling the product ‘NASAA Certified Organic’ would result in lower prices for his product.

He also sought an indefinite injunction, initially to stop Baxter from growing GM canola and later reduced to stop Baxter swathing canola within specified neighbouring paddocks. This application is important for the broader farming community.

Baxter maintained he complied with the relevant regulations and “best practice” recommendations, including maintaining buffer zones between his and Marsh’s property. The Court also considered whether he owed further duties to his neighbour.

In essence, the issue was to what extent the use of GM crops carries with it a fiduciary duty to ensure that no damage is caused to neighbouring farms.

Justice Kenneth Martin noted parallels to the earlier case of Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management where it was found that the Department did not owe a duty of care to grape growers to avoid the risk of damaging grapes by smoke taint while carrying out prescribed burning on adjacent land.

It was noted by the Court that in both cases any duty to avoid the risk of wholly financial loss from smoke taint damaging grapes or GM canola contaminating organic crops are duties which do not generally arise out of a relationship between neighbouring farmers. These circumstances do not amount to an “unreasonable interference” with the enjoyment of the land.

The decision

The Court dismissed both the claim for damages and the claim for an indefinite injunction.

Justice Martin ruled that Baxter’s method harvesting (swathing) was not “unreasonable interference” with Marsh’s property. Baxter was not to be held responsible as a broadacre farmer merely for growing a lawful GM crop and choosing to adopt a harvest methodology, which was entirely orthodox in its implementation.

Justice Martin found that any risk of genetic transference of GM canola would only occur with a compatible species. There was no evidence of any genetic transference risks posed by the GM canola swathes which blew onto Marsh’s property, and His Honour noted that Marsh had never grown Canola in the particular paddocks in question.

The NASAA assessment

The Court said the decision by the NASAA to decertify Marsh’s organic status was a decision made pursuant to the Marsh private contract with NASAA and Baxter could not be held responsible.

Justice Martin was critical of the NASAA assessment that the airborne swathe incursion and the GM canola seeds scattered across Marsh’s property posed an “unacceptable risk” of “contamination” and resulting decision to decertify Marsh’s property. It was found that the governing standards applicable to organic operators were misapplied. In Marsh’s case a zero tolerance approach was taken, rather than the terms of the NASAA standards as written. His Honour noted that with regard to economic loss, Marsh was better served directing his concerns in that contractual quarter.

The decision is certain to generate discussion both within Australia and worldwide as farmers and the courts come to terms with the regulatory regime around GM crops.