Introduction

A (previously certified) organic farm operation in Western Australia is currently suing its neighbour, a farmer who had planted genetically modified crops. This is the first major trial in Australia to deal with alleged negligence causing contamination of organic land with GM material.

This landmark case raises a whole body of issues concerning the limits of the duty of care of agricultural neighbours, the burden of maintenance of organic certification, responsibility for crosscontamination and the zero tolerance standards of the organic accreditation body, NASAA.

Marsh v Baxter came before the Western Australian Supreme Court in 2014; at time of going to press, the court’s decision is still pending.

The facts

The setting for the dispute is Kojonup, a picturesque farming area in the south-west of Western Australia. The key players are:

  • The plaintiff, Stephen Marsh, the owner of Eagle Rest, which was certified by the National Association of Sustainable Agriculture (NASAA) as an organic grain and livestock farm.
  • The defendant, Michael Baxter, who grows genetically modified (GM) canola on the neighbouring farm, Sevenoaks.

GM cropping was banned in Western Australia in 2004. After some controlled trials, an exemption for GM canola was authorised in 2010. Baxter started growing GM canola that year.

Eagle Rest and Sevenoaks are separated along their common boundary by a road reserve. Marsh claimed that Baxter negligently failed to take precautions to prevent the escape of genetically modified canola seeds from Sevenoaks to Eagle Rest, which caused de-certification of the organic status of Eagle Rest and financial loss as a result of the inability, of Marsh to market his crops as ‘organic’.

Marsh also sought a permanent injunction against Baxter, restraining him from planting or harvesting by swathing any GM canola on Sevenoaks within one kilometre of Eagle Rest.

The arguments

Marsh alleged that:

  • Baxter knew of Marsh’s certification as an organic farm and did not take reasonable steps to prevent the movement of his GM canola seeds to Eagle Rest.
  • Baxter did not have any specific reason for introducing GM canola, and that his claim that he introduced GM canola because some of his crops had developed weed resistance to other commonly used pesticides was not supported by the evidence.
  • In September 2010, he, Marsh, had sent Baxter an ‘Intention to take legal action’ which specifically referred to the risks of a form of harvesting called swathing.
  • Swathing leaves windrows of canola open to the weather, enabling canola pods to be carried by the wind.
  • In October 2010, Baxter chose to engage in swathing for the first time, having previously always used a direct harvesting method to harvest canola crops.
  • GM canola swaths containing seeds were subsequently found in paddocks on Eagle Rest (and NASAA then de-certified those paddocks).

Baxter’s defence

As well as challenging the factual basis for the claim (particularly causation), much of Baxter’s defence focused on the fact that the claim was for pure economic loss – i.e. the loss suffered by Marsh was not the contamination of his paddocks but the loss of income from being disentitled to sell his product as ‘organic’.

Under Australian law, where pure economic loss is claimed a defendant will only owe a duty of care if the loss could reasonably have been foreseen by the defendant. Baxter argued that the relevant question was not, ‘Could it reasonably have been foreseen that GM canola from Sevenoaks would be blown onto Eagle Rest?’ – which he said would be ‘unremarked upon and unremarkable, were it not for the alleged effect on the organic certification of Eagle Rest’ – but, ‘Could it reasonably have been foreseen that Marsh would suffer economic loss?’

Baxter argued that NASAA was not required, under the National Standard for organic certification, to de-certify Marsh’s paddocks and in fact was not entitled to or alternatively acted unreasonably in doing so. He claimed that the ‘zero tolerance’ policy applied by NASAA to accidental incursion of GM product to organic farming areas was inconsistent with its own standard, given that accidental contamination of paddocks had not resulted in the demonstrated presence of GM material in Marsh’s agricultural products.

Baxter said that it was not reasonably foreseeable that NASAA would decertify Marsh’s paddocks, as it was not permitted to do so.

In addition, Baxter argued that his decision to grow GM canola on those parts of Sevenoaks which bordered Eagle Rest and then to harvest by swathing were both reasonable decisions. This was because, if the relevant standards were correctly applied, the risk of de-certification due to the accidental incursion of some GM canola plants to Eagle Rest was minimal, if the risk existed at all.

He also raised the broader issue as to whether the burden asserted by the plaintiff – of requiring farmers to refrain from planting GM canola and/ or harvesting with the swathing method to avoid the risk of de-certification of nearby properties which may be growing organic produce – is too great to warrant imposing liability on the defendant.

Implications

The court’s decision, when handed down, will have implications for Australia’s agricultural community at large. The decision will have a significant impact on the future landscape of the GM/ organic farming debate and may produce a rethink of the organic certification process. It will also affect the expectations of agricultural operators whose purposes may be at odds with the known purpose of a close neighbour.

Codes of practice

At present, the steps required to satisfy the duty of care to neighbouring farms in preventing the escape of material from a property are informed by codes of practice that operate in various industries. The low rate of matters proceeding through to trial means that judicial comment on this matter is scarce. In 2013, Justice Kenneth Martin (the same judge who heard Marsh v Baxter) presided over two weeks of a trial concerning alleged negligence involving the escape of chemical spray from a vineyard in Western Australia. The proceeding, Moore & Ors v Landsdale Pty Ltd & Ors, gave the court an opportunity to consider the application of the law of negligence to the agricultural sector. However, the matter settled out of Court on the basis that the claim was dismissed with an order that the plaintiffs pay a contribution towards the defendants’ costs.

Protection from contamination

In Marsh v Baxter, the court has to balance the delicate issue of whose responsibility it is to prevent movement of material from property to property, and subsequent contamination. This is perhaps the most complex of all the issues. In an ever shrinking and diversifying agricultural world – where space is becoming ever more scarce, neighbours are living closer than before and whole areas are no longer devoted to one common purpose – this decision will help parties to determine who bears the burden of keeping unwanted material out of the other’s hallowed realm.

A fact of life in agriculture is that plant material moves, heedlessly ignorant of pre-determined intentions or manmade boundaries. If a farmer wants to earn a premium by gaining organic certification, is it the responsibility of that farmer or the responsibility of the world at large to prevent plant material getting into the farmer’s paddocks? Or does the responsibility fall on both? What steps should farmers take to protect the crop that they are hoping to keep unsullied by outside matter? What steps should a farmer take to protect another’s crop from their own material?

Likelihood of appeal

Given the significance of the decision on Marsh v Baxter for GM farmers and organic farmers in Australia, the decision is likely to go to appeal, regardless of the outcome. Passionate supporters of each side are facing off in an epic battle between the organic farmers and the GM croppers. The court’s decision could light the fuse.


**“The Court delivered its decision on 28 May 2014, just prior to this issue going to print. The Court dismissed the plaintiff’s action for damages and injunctive relief. It found that Mr Baxter was not to be held responsible for growing a lawful GM crop and harvesting it using orthodox methodology (swathing), or for the reaction of the organic certification body, which was unjustified. An update on the decision and its implications will be published in the next issue of Cultivate.”