On Wednesday 28 May 2014, Justice Kenneth Martin of the Supreme Court of Western Australia handed down his decision in the landmark case of Marsh v Baxter.

The case concerned Western Australian organic farmers Steve and Susan Marsh suing their conventional farmer neighbour Michael Baxter for growing a Genetically Modified (GM) canola crop which caused ‘contamination’ of the Marsh property, that produced organically certified cereal crop and lamb.

The Marshes had claimed $85,000 damages plus a permanent injunction against Baxter after the Marshes’ farm lost its organic certification.

Justice Martin dismissed the Marshes’ causes of action in common law negligence and private nuisance.

Evidence during the trial also revealed that there had been a prior incident of canola seeds being transported from Baxter’s farm to the Marsh property via rabbit droppings years before the GM canola had been planted. This made it difficult for the Marshes to sustain an argument advocating the need for a buffer zone against wind-borne contamination of a GM crop.

GM canola

The approximately 245 cut canola that blew seed into the Marsh property were of a particular variety of GM canola known as Roundup Ready or (RR canola). The genetic modification to this variety of canola gave the canola plant the engineered property of being immune to the effects of a herbicide manufactured by the Monsanto Group, namely glyphosate (sold under the brand name Roundup). Immunity of a growing canola crop to glyphosate delivered the agricultural advantage to the canola grower of being able to treat a late developing weed problem in a growing canola crop before harvest by that herbicide.

The Marshes claimed that the GM canola seeds that blew onto their property from Mr Baxter’s caused them to lose their contractual rights to apply the label ‘NASAA Certified Organic’ – when selling their organically grown cereal crops or organic meat (lamb) grown or raised upon the Marshes’ property.

Yet, Justice Martin’s judgement indicates that ‘it was shown by scientific evidence led at the trial that none of the Marshes’ crops or sheep at Eagle Rest could acquire any genetic traits of RR canola’ (at para 667).

Buffer zones uncertainties

The Judge noted (at para 726) that the organic farming plaintiffs before, and throughout the course of the trial, fluctuated over identifying the precise dimensions of an appropriate buffer distance that they were seeking for the purposes of an injunction between the boundary paddocks of the two farms. At one point they had sought a buffer distance of 2.5km, which was subsequently truncated to 1.1km and shortly after 1km. By the closing submissions, the plaintiff was left seeking an injunction, unable to specify any actual linear distance for a buffer.

Decertification was “unreasonable”

Following the occurrences of the seed ‘contamination’, the National Association of Sustainable Agriculture Australia (NASAA) and NASAA’s subsidiary certifying organisation NASAA Certified Organic Pty Ltd (NCO) decertified approximately 70 per cent of the Marsh property. This deprived the Marshes of the status required for labelling a large portion of their production as ‘organic certified’.

In dismissing the Marshes’ causes of action in common law negligence and private nuisance, Justice Martin found that the decertification of the Marsh property was due to the “erroneous application” of the governing NASAA Standards applicable to NASAA organic operators as regards GMOs (genetically modified organisms) at the time.

Justice Martin found that the GM crop being grown by Mr Baxter was lawfully grown and that Baxter could not be held responsible for contamination of Marshes’ land or the decision made by NASAA to decertify the Marshes.  (In January 2010 it had become lawful in Western Australia for farmers to grow GM canola.)

Justice Martin also rejected the Marshes’ cause of action in common law negligence (ie, breach of the asserted duty of reasonable care). The Court found that the Marshes’ action for an exclusively financial loss, in the presenting circumstances, was without precedent. In prior Australian cases the courts had adopted a cautious attitude when allowing claims for pure economic loss. Justice Martin said no basis in principle was shown to extend the law to these events. Furthermore, Justice Martin said Mr Baxter had not been shown to have acted negligently, either by growing or then by swathing the lawfully grown GM canola crop in 2010.

The Judge said that the only cause of the Marshes’ woes were a poorly drafted contract entered into with the organic certifier and the unreasonable and erroneous decisions by the organic certifying body. Justice Martin noted that ‘the legal cause of the economic loss was the work of NCO in unreasonably (erroneously, it presents) applying NAASA Standard 3.2.9’ (at para 743).

Some commentators on the case have told Australian Food News that the Judge’s findings in this regard raise the interesting prospect that the losing plaintiffs might now be in a position to initiate legal action against the organic certifier.

NASAA releases statement to defend its role

In the aftermath of the judgment, NASAA called on State and Federal regulators to provide greater certainty on the application of National Standards for Organic and Biodynamic Produce and maintained that the organization had acted responsibly in withdrawing Organic Certification rights to the Marshes’ farm.

NASAA General Manager Ben Copeman said that the Court’s decision not to recognise NASAA’s decertification as warranted, highlighted a need for greater regulatory certainty for organic producers.

NASAA said Australia’s most important grain customers, such as Japan, China and Korea, did not want GM in their food products and had “zero tolerance” for GM contamination.

“Without any legally recognised form of protection, Australian organic farmland and produce is left vulnerable to contamination from conventional farming methods including GM crops,” Mr Copeman said. “This could seriously threaten the sectors access to domestic and international organic markets,” he said.

“Farmers across Australia, are left with an uncertain future,” Mr Copeman said. “The need to recognise and support greater commercial security for both organic and conventional farming is now an issue of national importance,” he said.

Decision a ‘significant blow’ for the organic industry

Mr Joe Lederman, food law specialist of Melbourne-based food law consultancy FoodLegal, agreed that the judgement was a “serious blow” to the organic industry.

“If any organic food consumers or producers want to maintain a strict and rigid “GM-free” standard for their ‘organic’ products, the judgement means it will be harder to do this,” Mr Lederman said. “It is not impossible but there will be a huge cost in doing so,” he said. GM-free status would be more achievable in the States of South Australia and Tasmania, he said, as these States had not authorised the growing of GM crops at present.

Mr Lederman said the judgement showed that it was not the legal responsibility for a conventional farmer to abide by his organic farming neighbour’s organic standard.

“The price premium for organic products relies to a great extent on highlighting the differentiation of the organic product from its conventionally produced equivalent,” Mr Lederman said and “GM free status was one point of differentiation that is considered important to the organic industry, both philosophically and from an economic standpoint”.

Decision welcomed by biotechnology groups

The decision has been welcomed by plant technology and biotechnology organisation CropLife Australia.

“The decision however reinforces the need for the Federal Government to take urgent action to prevent future unnecessary conflict caused by Australia’s flawed organic standards,” said Matthew Cossey, Chief Executive of CropLife Australia.

“We want to ensure that all Australian farmers have a choice to grow any approved crop on their land,” Mr Cossey said. “No farmer should have to change their farming methods simply because of unreasonable, illogical and internationally inconsistent organic marketing rules,” he said.

Mr Cossey said CropLife Australia was continuing to work with policy makers and farmer organisations, and welcomed engagement with the organics industry to improve the regulatory framework for farming systems, to prevent unnecessary risk for all farmers and their neighbours.