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Marsh v Baxter – Appeal of the Canola GM Case

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Marsh v Baxter – Appeal of the Canola GM Case

Angus McLeod

The case of Marsh v Baxter [2015] WASCA 169 (Marsh v Baxter) has gained a high level of attention across the legal, industry and public sectors.  There has been considerable coverage[1] of the long running dispute between neighbours, some considering that the case ‘was never about Marsh or Baxter’ but rather about anti GM interest groups and Monsanto.[2]   

This article follows on from our previous article titled ‘The Canola GM Case – Conflicting Land Use and Buffers’ which was published in June of last year.  Following the initial judgment against Mr and Mrs Marsh (the appellants) an appeal was lodged.  The Supreme Court of Appeal dismissed the appeal and ruled in favour of Baxter (the respondent).  The appellants have sought leave to appeal the decision to the High Court of Australia.

Background

The appellants claim for damages against the respondent arising from the escape of genetically modified (GM) canola from the respondent’s farm onto the appellants’ neighbouring certified organic farm.

The appellants’ farm, Eagle Rest (Eagle Rest), was organically certified for mixed grain, barley, oats, wheat, lupin and sheep. The certification did not extend to canola, which was not grown on Eagle Rest.

The respondent’s farm, Sevenoaks (Sevenoaks) held a conventional broadacre farming business that included growing cereal crops, canola and running sheep. Sevenoaks was separated from the western boundary of Eagle Rest by a 20.9 m wide road reserve. The respondent was aware that the appellants were organic farmers.

At the end of 2008, Mr Marsh spoke with the respondent about 12 volunteer canola plants on Eagle Rest. Canola seeds had been blown or carried onto Eagle Rest from Sevenoaks. Mr Marsh explained to the respondent that the appellants’ organic certification may be lost if GM canola made its way onto Eagle Rest because genetically modified organisms (GMOs) were not allowed in a certified organic system.

The respondent swathed the canola plants in late 2010, from which point on, canola swaths from the respondent’s farm were located on Eagle Rest. On 29 December 2010 NASAA Certified Organic (NCO) issued a decertification notice for paddocks of Eagle Rest. On 25 November 2013, the paddocks were re-certified organic by NCO.

In 2012, the appellants commenced Supreme Court proceedings against the respondent, claiming both negligence and private nuisance. The appellants pleaded that between December 2010 and November 2013, they were unable to sell crops grown or livestock raised on certain paddocks of Eagle Rest as ‘certified organic’. The sale of crops and livestock as conventional produce had resulted in lower prices than the sale of the same crops as ‘certified organic’. The extent of this damage was agreed by the parties at trial to be $85,000.

It was pleaded at trial that the respondent acted unreasonably in swathing rather than direct heading the canola crops.

Original decision

The trial judge, Martin J, ruled against the appellants, rejecting their claims that the respondent was liable in negligence and private nuisance.

On the issue of negligence it was found that the ‘airborne…incursion’ of swaths from Sevenoaks to Eagle Rest was not reasonably anticipated or expected by the respondent in November 2010. The risk of harm, identified as pure economic loss, was not reasonably anticipated or expected by the respondent in November 2010. The respondent did not owe the appellants a duty of care. It was further found that the NCO did not have the power or right to decertify Eagle Rest and acted unreasonably in doing so.

On the issue of nuisance it was found that there was no nuisance because there was no unreasonable interference with the use and enjoyment of Eagle Rest by the respondent swathing the GM canola, this being an essential element of the cause of action.

In summary, the four main reasons for the decision were that the:

·             growing of the GM canola in this case was not illegal;

·             cropping method was a legitimate farming practice;

·             cropping had been carried out competently; and

·             effect on the Appellants’ contract with NCO was not reasonably foreseeable.

 

Appeal

The appellants sought an appeal of the trial judges’ decision on 11 grounds. Five of these grounds related to the existence and scope of a duty of care, two grounds related to breach of duty, one related to causation, two related to the construction and application of the certification standards and one ground related to nuisance. By a 2:1 majority the appeal was dismissed.  McLure P, in dissent, found that the appellants’ claims in nuisance and negligence should be upheld, while Newnes and Murphy JJA found in favour of the respondent.  

McLure P in dissent

McLure P found the interference with the appellants’ use and enjoyment of their property was both substantial and unreasonable and constituted a private nuisance. At [241], McLure P professed uncertainty regarding the appellants’ primary choice of claim:

for reasons that are unclear, the appellants’ primary claim at trial and in the appeal is that the respondent was negligent, relying on (private) nuisance in the alternative.

It is clear that McLure P considered that a greater emphasis should have been placed by the appellants on the tort of nuisance instead of negligence.  This was fundamentally because the tort of nuisance seeks to protect an occupier’s interest in the use and enjoyment of land and is primarily concerned with the reciprocal rights and duties of private individuals in instances of conflicts over competing uses of land.  A similar observation was made by Martin J in the decision at first instance. 

McLure P dissented from the judgment and would have allowed the appeal, finding that organic farming was not ‘hypersensitive’, noting that the organic farming was regulated by a Commonwealth backed regime and was a recognised market. McLure P, found, at [292]:

…that there was uncontradicted expert evidence…that direct heading is the better and more responsible practice when GM canola needs to be contained.

McLure P concluded that the respondent would not have suffered any prejudice by utilising the direct heading method.

Newnes and Murphy JJA in the majority

In a joint decision, Newnes and Murphy JJA upheld the earlier judgment, finding that the damage done to the appellant was not reasonably foreseeable by the respondent. They found at [695]:

the respondent was not in breach of the Monsanto licence and on the unchallengeable findings of fact by the judge, the swathing was done in the legitimate pursuit of the respondent’s interests.

They also found that the respondent had ‘sound financial and farming reasons for swathing his canola crop’ and that the onus was on the appellants to prove this was negligent, at [745].

Deciding in favour of the respondent, Justices Newnes and Murphy stated that the respondent’s lawful use of his own land did not constitute a wrongful interference with the appellants’ use or enjoyment of their land.

Newnes and Murphy JJA found that the respondent’s use of swathing was not unreasonable, but was the preferred method of harvesting in the surrounding district. They found the use of swathing was not an interference beyond what an ordinary resident of the district would expect, stating at [785-6]:

the fact that the appellants chose, for their own, presumably commercial, reasons, to conduct their farming operations subject to contractual conditions of that kind, did not mean that the lawful use by neighbouring landowners of their own land in a way which affected the appellants’ ability to comply with those conditions, constituted a wrongful interference with the appellants’ use or enjoyment of their land…

…the appellants were, of course, entitled to enter into arrangements which had the effect that their land was being put to an abnormally sensitive use, but their neighbours did not then fall under an obligation to limit their farming activities on their own land so as not to interfere with that use of the appellants’ land.

The appellants were deemed to have put their land to an abnormally sensitive use and they could not unilaterally enlarge their own rights and impose limitations on their neighbours to a greater extent than would otherwise be the case.

Our thoughts

Marsh has sought leave to appeal the Court of Appeal’s decision to the High Court of Australia.  It will be interesting to see whether the application for leave focusses on the elements of nuisance or negligence, in light of the observations of both Martin J and McLure P. 

In the seminal negligence case of Donoghue v Stevenson[3], Lord MacMillan pithily stated ‘the categories of negligence are never closed’.  This sentiment was adapted by the High Court in the equally seminal nuisance case of Victoria Park Racing v Taylor[4] in which it stated ‘the categories of nuisance are not closed’.  Whatever the final outcome of Marsh v Baxter, it is clear that the common law actions of negligence and nuisance are continually being developed by the varying forms of land use conflict facing land owners and occupiers today.

 

 

[1] http://www.farmweekly.com.au/news/agriculture/cropping/general-news/gm-cost-appeal-on-hold/2727662.aspx; http://www.abc.net.au/news/2015-09-03/organic-farmer-steve-marsh-loses-gm-appeal/6746108

[2] http://www.mccullough.com.au/page/Media/GM_crop_test_case/

[3] Donoghue v Stevenson (1932) AC 562 at [619]

[4] Victoria Park Racing & Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479