Marsh V Baxter - A Legal Perspective

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Marsh v. Baxter –

a legal perspective

25 November 2014

Andrew Chalet

Principal, Russell Kennedy Lawyers

A look at the case of Marsh v. Baxter (2014) in the

Supreme Court of Western Australia before Kenneth

Martin J, and in particular a look at:-

> The legally relevant facts;

> The legal claims made;

> The Law;

> Observations;

> The Judgment;

> The current status; and

> The implications

Marsh v. Baxter – a legal

perspective

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Relevant Facts

> The Baxter farm, Sevenoaks and the Marshes farm,

Eagle Rest, are neighbouring farms 256 Kilometres

south-east of Perth

> They are, relevantly, separated by a road reserve of

20.9 metres

> Since 2002, the Marshes have taken steps towards

becoming a fully organic farming operation. In

practice, to sell Eagle Rest produce as ‘organic’,

they sought and received certification from the


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National Association of Sustainable Agriculture

Australia (NASAA). Certification is by way of a contract

between the Marshes and NASAA, and can be viewed

(amongst other things) as a trade mark (certification)

licence

> Certification was current in 2010

> Baxter, in 2010, planted genetically modified (GM)

canola

> In October 2010, Mr Baxter decided, on the advice

of a local agronomist, to use a particular orthodox

harvesting methodology that involved cutting the


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> canola plants and pushing them into standing

windrows in the paddocks.

> Between 8 and 10 November 2010, the canola was

cut and left to ripen in the paddock for 2-3 weeks

> The more dried-out canola plants were then

processed by a ‘header’ to harvest up the ripened

canola seeds from each cut plant

> By 29 November 2010, Mr Marsh noticed cut canola

plants outside Sevenoaks, then in the road reserve,

and then on his Eagle Rest Property


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> By 1 December 2010, Mr Marsh had notified

DAFWA of the presence of GM Canola on Eagle

Rest, and the next day informed NASAA

> It was not disputed that the canola came from

Sevenoaks

> As a result of the presence of the GM canola,

NASAA suspended the certification of Eagle Rest

until it could be verified that the GM material had

been entirely removed


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> The Claims made

The Marshes claimed from Mr Baxter:-

> damages in the sum of $85,000 representing losses

arising from the absence of NASAA certification

across 3 successive financial years up to June

2013;

> a permanent injunction against Mr Baxter’s future

‘swathing’ of GM canola on his land, that is the use

of the particular harvesting methodology that leaves

cut canola in the open to ripen for 2-3 weeks.


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The basis of the claim was 2 tortious causes of action,

namely:-

> Common law negligence

> Private nuisance

The Marshes made no claim regarding the planting,

growing or harvesting (using other methods) of GM

Canola

The parties and their respective experts accepted that

an escape of GM canola from Sevenoaks posed no

physical danger to persons, animals or property at

Eagle Rest.


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There was no transfer or dissemination of GM traits

from the GM canola for a number of reasons, including

that no canola was planted at Eagle Rest.

The damages claim and the claim for a permanent

injunction was based on compensation for, and

protection from future economic loss as a result of

decertification.

The claims made by the Marshes did not therefore

concern crop contamination, in the sense of transgene

movement, or against the planting, growing


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or harvesting (other than a particular method of

harvest) of GM canola.

The claims made only related to the economic

consequence to the Marshes of a loss of NASAA

certification.


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The Law

Common law Negligence

To bring a negligence claim, the plaintiff must prove:-

> The defendant owed the plaintiff a duty of care;

> The defendant breached this duty; and

> The breach caused damage to the plaintiff.

The level of care owed is generally the care a

‘reasonable person’ in that situation would take.


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Except in special circumstances (the settled special

circumstances not being present in this case), pure

(only) economic loss is not recoverable. However, the

plaintiffs ‘vulnerability’ to economic loss can be an

important factor in determining loss (Perre v. Apand

(1999))


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Nuisance

> A nuisance is committed when a person

substantially and unreasonably interferes with

another person’s rights to the use and enjoyment of

the land.

> Generally, a permanent injunction is available, and

there is no restriction on claiming damages for pure

economic loss.


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Observations

> Both the Marshes and Mr Baxter acted lawfully

> That is, there is nothing unlawful with the Marshes

choosing to be organic farmers at Eagle Rest;

> Likewise, since 2010 there is nothing unlawful about

Mr Baxter planting, growing, harvesting and selling

GM canola;

> Mr Baxter’s harvesting methods were considered

orthodox and undertaken on advice received from a

local agronomist.


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> No physical damage or injury occurred. While GM

Canola was present on Eagle Rest, it had not

‘contaminated’ any crop grown on Eagle Rest.

> The loss suffered by the Marshes resulted entirely

from the decertification of their farm by NASAA

pursuant to a contract they had chosen to enter into

with NASAA.


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Judgment

The Marsh’s action was wholly dismissed and

(pending the appeal) an award of cost is expected on

an unlimited but taxed basis.

The Court set out nine underlying, cornerstone

conclusions which led to the dismissal of the case, as

follows:-

First

Courts resolve litigation on the evidence before it.


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Second

No evidence was produced or argument put forward

that the GM canola was in any way toxic, harmful or

otherwise dangerous to humans, animals or to land.

Third

The only injury or loss suffered was economic loss

resulting from the decertification by NASAA, and the

consequent inability to sell farm produce as ‘NASAA

certified organic’, although it could still be sold.


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Fourth

None of the Marshes’ crops or sheep at Eagle Rest

could immediately acquire any genetic traits of GM

Canola because there can only be a genetic transfer

via pollen to a compatible species, and there weren’t

any.

Fifth

As regards longer-term seed mediated transfer of GM

canola, only 8 volunteer GM canola plants were ever

detected on Eagle Rest in a subsequent growing

season and, as readily identifiable, were pulled out.


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Sixth

Mr Baxter could have used a different harvesting

method, known as ‘direct heading’, that would have

significantly reduced the risk of cut GM canola blowing

in the wind onto Eagle Rest.

Seventh

From a causation perspective, arguing against

growing GM canola would not be sustainable. The

grievance, if any, would be against the harvest

methodology.


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Eighth

Growing GM canola became lawful in WA in 2010.

Therefore there was some uncertainty regarding GM

canola cropping exposure.

Ninth

An earlier transportation of canola seeds by rabbit

droppings was not relevant, as the grievance in this

case was against the harvesting method.


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Therefore:-

1. Negligence

In a wholly novel case, there is no established duty of

care to avoid a foreseeable economic loss. There is no

particular vulnerability of the Marshes, as the NASAA

contract was ‘wholly self-inflicted’

Further, even if there was a duty of care to take

reasonable measures to inhibit the movement by wind

of the GM canola, as this was an unexpected first time

event, the duty was not breached.


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Finally, the ‘cause’ of the loss was not the harvest

methodology, but the ‘unreasonable’ and’ ‘erroneous’

work of NASAA in applying one of the NASAA

standards to decertify Eagle Rest.


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2. Nuisance

> No unreasonable interference caused by growing

GM canola.

> No physical damage, only economic loss arising

from a contract.

> Orthodox and recommended harvest methodology.

> Unexpected strong winds.

> First time growing GM canola.

> No recommended linear buffer distance.


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The Implications

Negligence

Left open possibility of different outcome if:-

> Unorthodox harvesting method

> Correct and reasonable application of certifying

standards

> Some actual physical loss


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Nuisance

Left open possibility of different outcome if:-

> Physical damage

> Unorthodox harvesting methodology

> Advice from agronomist or seed provider not

adhered to

> Not first time


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Appeal

> As of 20 November 2014, an appeal had been

lodged, grounds not made public and we are

awaiting outcome.


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Other cases

> French v. Auckland City Corporation

> actual damage must be caused

> actions must amount to excessive use of the land and

unreasonable interference

> where a defendant can take reasonable steps to

avoid a nuisance and fails to do so, can be nuisance.


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QUESTIONS

The information contained in this

presentation is intended as general

commentary and should not be regarded as

legal advice. Should you require specific

advice on the topics or areas discussed

please contact the presenter directly.

Disclaimer

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Andrew Chalet

Principal

Telephone: 03 8602 7243

Email: [email protected]

Dr Peytee Grusche

Senior Associate

Telephone: 03 8602 7242

Email: [email protected]