Marsh v Baxter - [2015] WASCA 169

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: MARSH -v- BAXTER [2015] WASCA 169

CORAM: McLURE P
NEWNES JA
MURPHY JA

HEARD: 23 & 24 MARCH 2015

DELIVERED : 3 SEPTEMBER 2015

FILE NO/S: CACV 67 of 2014

BETWEEN: STEPHEN WILLIAM MARSH
First Appellant
SUSAN GENEVIEVE MARSH
Second Appellant
AND
MICHAEL OWEN BAXTER
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :KENNETH MARTIN J
Citation  :MARSH -v- BAXTER [2014] WASC 187
File No  :CIV 1561 of 2012

Catchwords:

Negligence - Pure economic loss resulting from decertification of organic farm and products connected with incursion of genetically modified canola swaths - Existence and scope of duty of care - Reasonable foreseeability - Knowledge - Risk of harm - Vulnerability - Breach - Factual and legal causation - Proper construction and application of NASAA Standard - Reasonableness of decertification - Regulatory framework - Gene technology - Export of organic produce

Private nuisance - Unreasonable and substantial interference with use and enjoyment of land - Whether harm to the appellants could have been avoided without appreciable prejudice to the respondent's interests - Hypersensitivity

Legislation:

Acts Interpretation Act 1901 (Cth), s 15AB
Agricultural and Veterinary Chemicals (Administration) Act 1992 (Cth)
Civil Liability Act 2002 (WA), s 5B, s 5C
Export Control (Orders) Regulations 1982 (Cth), reg 3
Export Control (Organic Produce Certification) Orders (Cth), O 1.02, O 1.05, O 1.06, O 2.01, O 2.02, O 2.04, O 3.01, O 3.03, O 3.04, O 3.09, O 3.11, O 3.12,
Export Control Act 1982 (Cth), s 7, s 20, s 23
Gene Technology (Recognition of Designated Areas) Principle 2003 (Cth), s 5, s 6
Gene Technology Act 2000 (Cth), s 5, s 10, s 21, pt 3, s 32, pt 5, s 40, s 50, s 55, s 56, s 61, s 194
Gene Technology Act 2006 (WA)
Gene Technology Amendment Bill 2001 (WA)
Gene Technology Bill 2000 (Cth)
Gene Technology Bill 2001 (WA)
Genetically Modified Crops Free Areas Act 2003 (WA), s 4, s 5
Genetically Modified Crops Free Areas Exemption Order 2010 (WA), cl 3
Genetically Modified Crops Free Areas Order 2004 (WA), cl 3
Plant Diseases Act 1914 (WA)
Plant Diseases Regulations 1989 (WA)

Result:

Appeal dismissed

Category: A

Representation:

Counsel:

First Appellant              :     Mr M J McCusker QC & Ms C Pierce & Ms L M Nichols
Second Appellant          :     Mr M J McCusker QC & Ms C Pierce & Ms L M Nichols
Respondent:     Ms P E Cahill SC & Ms F Vernon

Solicitors:

First Appellant              :     Slater & Gordon Lawyers
Second Appellant          :     Slater & Gordon Lawyers
Respondent:     Bradley Bayly Legal

Case(s) referred to in judgment(s):

Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26
Apache Energy Ltd v Alcoa of Australia Ltd [No 2] [2013] WASCA 213
Australasian Oil Exploration Ltd v Lachberg [1958] HCA 51; (1958) 101 CLR 119
Bamford v Turnley (1862) 3 B & S 67; 122 ER 27
Barclay v Penberthy [2012] HCA 40; (2012) 246 CLR 258
Bridlington Relay Ltd v Yorkshire Electricity Board [1965] 1 Ch 436
Brookfield Multiplex Ltd v Owners-Strata Plan No 61288 [2014] HCA 36; (2014) 88 ALJR 911
Bryan v Maloney [1995] HCA 17; (1995) 182 CLR 609
Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520
Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad' [1976] HCA 65; (1976) 136 CLR 529
Christie v Davey [1893] 1 Ch 316
Cox v Fellows [2013] NSWCA 206
Department of Housing and Works v Smith (No 2) (2010) 265 ALR 490
Donoghue v Stevenson [1932] AC 562
Dovuro Pty Ltd v Wilkins [2003] HCA 51; (2003) 215 CLR 317
Eastern and South African Telegraph Company Limited v Cape Town Tramways Companies Limited [1902] AC 381
Elston v Dore [1982] HCA 71; (1982) 149 CLR 480
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Gartner v Kidman [1962] HCA 27; (1962) 108 CLR 12
Giles v Walker (1890) 24 QBD 656
Goldman v Hargrave [1967] 1 AC 645
Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540
Hargrave v Goldman [1963] HCA 56; (1963) 110 CLR 40
Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
Hill v Van Erp [1997] HCA 9; (1997) 188 CLR 159
Hollywood Silver Fox Farm Ltd v Emmett [1936] 1 All ER 825
Hospitality Group Pty Ltd v Australian Rugby Union Ltd [2001] FCA 1040; (2001) 110 FCR 157
Kadian v Richards [2004] NSWSC 382; (2004) 61 NSWLR 222
Marsh v Baxter [2014] WASC 187
Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61; (2000) 205 CLR 254
Munro v Southern Dairies Ltd [1955] VLR 332
Mutual Life & Citizens' Assurance Co Ltd v Evatt [1968] HCA 74; (1968) 122 CLR 556
New South Wales v Fahy [2007] HCA 20; (2007) 232 CLR 486
Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd [1967] 1 AC 617
Perre v Apand Pty Ltd [1997] FCA 1275; (1997) 80 FCR 19
Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180
Pittar v Alvarez (1916) 16 SR (NSW) 618
Robinson v Kilvert (1889) 41 Ch D 88
Rylands v Fletcher (1866) LR 1 Ex 265; (1868) LR 3 HL 330
Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59; (1981) 150 CLR 225
Shaw v Thomas [2010] NSWCA 169
Short v City Bank of Sydney [1912] HCA 54; (1912) 15 CLR 148
Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management [2012] WASCA 79
Sparke v Osborne [1908] HCA 46; (1908) 7 CLR 51
State of New South Wales v Lepore [2003] HCA 4; (2003) 212 CLR 511
Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424
Swick Nominees Pty Ltd v Leroi International Inc [No 2] [2015] WASCA 35
Sydney Water Corporation v Turano [2009] HCA 42; (2009) 239 CLR 51
Tame v New South Wales; Annetts v Australian Stations Pty Ltd [2002] HCA 35; (2002) 211 CLR 317
Victoria Park Racing and Recreation Grounds Co Ltd v Taylor [1937] HCA 45; (1937) 58 CLR 479
Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375
Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515
Table of Contents

McLure P's reasons............................................................................................................. 8-83
Newnes & Murphy JJA's reasons......................................................................................... 83
Introduction

Background

The appellants - partnership and land
The appellants' contract with NASAA - 2007
2008
2009
GM canola
2010
The appellants' notices - late September/October 2010
Respondent's harvesting - late 2010
Canola swathes on the appellants' property and inspections including by NASAA - early December 2010
10 December 2010 - NASAA suspends certification pending investigation and testing
Decertification - 29 December 2010
Recertification 2013
The extent of subsequent growth of volunteer plants on the appellants' farm

The partnership's claims against the respondent
The issues in the appeal
Swathing by the respondent
Swathes on the Marshes' property
Organic produce - the National Standard
The 2007 contract with NASAA

Preliminary observations
Recitals and purposes of the contract
Grant of licence
Licensee's warranties
Licensee's obligations
NASAA's obligations
Procedures in the event of possible non‑compliance
Sanctions by NASAA

Termination
Dispute resolution
Additional conditions
The operation of the contract with NASAA

NASAA Standard - overview

Introduction
'General principles'; 'recommendations'; and 'standards'

Purpose
Aims and principles
Parallel production precluded
Labelling as organic
Precautions and general requirements

Other
The sanction of 'decertification'

NASAA Standard - Genetically Modified Organisms

Clause 3.2
Clause 3.2 - overview
Clause 3.2 standards imposing obligations on the operator

Clause 3.2 - no fault standards

Clause 3.2.9 of the NASAA Standard

Overview of the controversy
Clause 3.2.9
Conclusion on meaning of cl 3.2.9

The question of contamination by the swathes

Unchallenged findings as to health and genetic trait transfer
Alleged risks of contamination
Judge's findings relevant to alleged risks

Further findings of fact sought by the parties

Appellants' proposed findings of fact
The respondent's proposed findings of fact

The question of duty of care

Specific observations on Perre v Apand
General preliminary observations

Foreseeability
Salient features
Grounds 1 - 5 of the appeal

Conclusion

The question of breach of duty

Appeal grounds 6 and 7 and conclusion with respect to breach
Civil Liability Act
The probable incursion of swathes on to the appellants' property (s 5B(2)(a))
The probability of the appellants losing their organic status if GM swathes blew across to their property (s 5B(2)(a))
The likely seriousness of the harm (s 5B(2)(b))
The burden of taking precautions (s 5B(2)(c))
Social utility (s 5B(2)(d))
Other matters

Conclusion

Causation

Nuisance

The appellants' case
The reasons of the primary judge
The issues on the appeal
The relevant principles
The disposition of the appeal on the nuisance claim

Appendix 1 - the National Standard

Introduction

Certification
Scope of standard
Production requirements
Genetic modification
Plant production
Inspection certification

Sanctions

Decertification
Adventitious contamination

McLURE P:

Introduction

The appellants appeal from the dismissal of their 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 use of gene technology in agriculture, in this State and elsewhere, has long been highly contentious and divisive and remains so to this day. However, the determination of this appeal does not require the court to enter into this debate. The purpose and effect of the Commonwealth and State regulatory architecture provides the framework for resolving the significant matters in dispute.
I have concluded that the appellants' claims in nuisance and negligence arising from the incursion of GM canola swaths from the respondent's farm onto the appellants' certified organic farm in 2010 should be upheld. These are my reasons for that conclusion.

Background

In 2010 Mr Marsh was the registered proprietor of 477 ha of farm land in the Kojonup region, known as Eagle Rest, 476 ha of which was certified organic by NASAA Certified Organic Pty Ltd (NCO), a wholly owned subsidiary of National Association of Sustainable Agriculture (Australia) Ltd (NASAA).
Eagle Rest was organically certified for mixed grain, barley, oats, wheat (spelt), lupins, and sheep (meat and wool). The certification did not extend to canola, which the appellants had never grown on Eagle Rest.
The organic certification was the subject of an agreement in writing dated 24 September 2007 between the appellants on the one hand and NASAA and NCO on the other (NASAA Contract).
It was accepted by the parties to the action that the NASAA Organic Standard (NASAA Standard) was incorporated by reference into the NASAA Contract.
At the relevant time, the respondent was the registered proprietor of 900 ha of farm land in the Kojonup region, known as 'Sevenoaks'. The eastern boundary of Sevenoaks was separated from the western boundary of Eagle Rest by a 20.9 m wide road reserve. The respondent also owned land to the south east of Eagle Rest known as 'Baxter's Block'.
The respondent carried on a conventional broadacre farming business on Sevenoaks and Baxter's Block that included growing cereal crops, canola and running sheep. At all material times the respondent knew the appellants were organic farmers.
In November 2008, Mr Marsh spoke with the respondent about 12 'volunteer' canola plants on Eagle Rest. Volunteers are plants that germinate after harvest from fallen seed. It was accepted that the canola seeds had come from Sevenoaks. Mr Marsh told the respondent that if cultivation of GM canola was permitted in Western Australia in the future and grown by the respondent, and if it was blown or carried onto Eagle Rest, the appellants' organic certification may be lost because GMOs (genetically modified organisms) were not allowed in a certified organic system.
In January 2010, a State statutory prohibition on the cultivation of GM canola licensed for intentional release into the environment under the Gene Technology Act 2000 (Cth) (GT Act) was lifted. Monsanto Australia Ltd (Monsanto) was licensed under the GT Act for the intentional release of its GM canola, called 'Roundup Ready® canola' (RR or GM canola), into the environment.
In March 2010 the respondent consulted Kojonup agronomist, Mr Christopher Robinson, who recommended that the respondent plant RR canola on Sevenoaks.
In March 2010 the respondent attended a RR canola seminar conducted by Monsanto. Following the seminar, the respondent entered into a standard form agreement with Monsanto, called the 'Roundup Ready Canola Grower Licence and Stewardship Agreement' (Monsanto agreement).
In May 2010 the respondent sowed RR canola in two paddocks on Sevenoaks called Range and Two Dams. Those paddocks were immediately adjacent to the road reserve separating Sevenoaks from Eagle Rest. As required by the Monsanto agreement, the respondent planted the crop 5 m from his boundary. There were trees on either side of the road reserve. The respondent sowed non‑GM canola elsewhere on his farm in 2010. He had grown canola on Sevenoaks for the preceding 10 years.
In response to the respondent's communicated intention to plant GM canola, the appellants altered their 2010 crop rotation plan and planted organic wheat on the upper northern part of paddock 11 to create a greater buffer zone. The appellants grew rye and spelt on paddock 12 and ran sheep on pasture in paddocks 7, 8, 9, 10 and 13 of Eagle Rest. The sheep and the produce from paddock 12 could not be sold as organic in the 2010 season because the sheep had been drenched for parasites and quarantined in paddock 12 for a month.
In September or October 2010 Mr Marsh erected signs on Eagle Rest identifying it as 'certified organic' and 'strictly GM free'.
On or about 1 October 2010 Mr Marsh hand delivered to the respondent a three‑page notice concerning the potential consequences if GMOs entered Eagle Rest (October notice). An extract from the NASAA Standard was attached to the October notice.
In October and November 2010 Mr Marsh published notices in local community newspapers stating that Eagle Rest was GMO free and that any contamination with GMOs resulting in any forfeiture of its organic certification could result in legal action.
On 8 to 10 November 2010 a contractor engaged by the respondent swathed (cut) the RR canola growing on Range and Two Dams. Canola can be swathed then harvested later or directly harvested (direct heading).
Ordinarily, a canola plant has multiple stalks. Swathing involves cutting the canola stalks approximately 15 ‑ 20 cm above ground level before the canola seed is fully ripe and dry and laying them in windrows on top of the stalks left in the ground. A 'swath' (exhibit 33) is a bundle of canola stalks each of which have a large number of pods with each pod containing an even larger number of canola seeds (which bear some resemblance to poppy seeds in size and colour). A windrow is a row in which the canola swaths are laid for drying by exposure to the sun and wind.
Prior to the 2010 harvest, the respondent had always harvested his canola crop by direct heading. In 2010, the respondent direct headed his non‑GM canola crop on Sevenoaks.
On 2 to 4 December 2010 the respondent harvested the swathed RR canola on Two Dams and Range. From late November 2010 canola swaths from the respondent's farm were located on Eagle Rest.
On 4 December 2010 a representative of NCO (Kathe Purvis) inspected Eagle Rest and observed the swathed canola in the paddocks. She took samples for testing.
Eagle Rest was at the material time divided into paddocks numbered 1 to 13. Canola swaths were present on paddocks 7, 8, 9, 10, 11, 12 and 13. On 10 December 2010 NCO notified Mr Marsh that organic certification for those paddocks had been suspended.
Another representative of NCO (Claire Coleman) visited Eagle Rest on 21 December 2010 and took further samples of the swathed canola located thereon.
On 29 December 2010 DTS Food Laboratories reported to NCO that the canola samples collected from Eagle Rest had tested positive to genetic modification. On that date NCO issued a decertification notice under the NASAA Standard for paddocks 7, 8, 9, 10, 11, 12 and 13 of Eagle Rest.
On 25 November 2013 paddocks 7, 8, 9, 10, 11, 12 and 13 of Eagle Rest were re‑certified organic by NCO.
In 2012 the appellants commenced Supreme Court proceedings against the respondent, claiming in both negligence and nuisance. The loss and damage suffered by the appellants is pleaded in the amended statement of claim as follows:
Between December 2010 and November 2013 the Marshes were not able to sell crops grown or livestock raised on paddocks 7 to 13 of Eagle Rest as 'certified organic'. The sale of crops and livestock as conventional produce has achieved lower prices than sale of the same crops would have achieved as 'certified organic' (B 169).
The extent of the damage suffered by the appellants was agreed by the parties at trial to be $85,000.
It was no part of the appellants' case at trial that the respondent should not have grown GM canola on Sevenoaks. Their pleaded case was that the respondent acted unreasonably in two respects: first, in growing the GM canola crop in paddocks which were in close physical proximity to Eagle Rest and second, in swathing rather than direct heading the GM canola. In the appeal, the appellants confined their case to the method of harvesting (swathing).

The trial judge's reasons

The trial judge made a number of unchallenged findings of fact. They are as follows. GM canola is entirely benign, it not being in any way toxic, harmful or otherwise dangerous to humans, animals or land [659].
The GM canola from the respondent's farm did no physical damage to persons, animals or property on Eagle Rest [711]. Accordingly, the loss the subject of the appellants' claims in negligence and nuisance was pure economic loss.
Two hundred and forty five GM canola swaths were blown onto Eagle Rest from Sevenoaks. Canola seeds from broken seed pods from those swaths were spilt over the soil on Eagle Rest [662]. Eight volunteer GM canola plants were detected on Eagle Rest following the incursion in late 2010 [669].
None of the crops or sheep on Eagle Rest could, by cross‑pollination or otherwise, acquire the genetically modified traits of GM canola. There was no real risk of cross‑pollination or outcrossing with weeds or other plants on Eagle Rest.
Finally, there would have been no windborne incursion of GM canola from Sevenoaks to Eagle Rest in 2010 if the respondent had direct headed, instead of swathing, the GM canola crop.
The trial judge ruled against the appellants on all the significant issues in contest at trial. In particular, the trial judge ruled that:
-the 'airborne … incursion' of swaths from Sevenoaks to Eagle Rest was not reasonably anticipated or expected by the respondent in November 2010 [717];
-the risk of harm, identified as pure economic loss arising from swaths being blown from Sevenoaks onto Eagle Rest, was not foreseeable;
-the respondent did not owe to the appellants a duty of care as formulated by the appellants (which is described as smacking of an absolute duty) [334], [343], [741];
-even if there was some lesser level of duty of care (such as to take reasonable measures to inhibit the movement by wind of GM canola from a boundary paddock of Sevenoaks) there was no breach [742];
-on the proper construction of the NASAA Standard, NCO did not have the power or right to decertify any part of Eagle Rest;
-if NCO did have the power to decertify, it acted unreasonably in doing so;
-even if there was a duty of care that had been breached, the breach did not factually or legally cause the loss, it being caused by NCO unreasonably applying the NASAA Standard;
-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 [733].

Grounds of appeal and contention

There are 11 grounds of appeal, five relating to the existence and scope of a duty of care (1 ‑ 5), two relating to breach of duty (6 and 7), one relating to causation (8), two relating to the construction and application of the NASAA Standard (9 and 10) and one relating to nuisance (11). Most of the grounds contain multiple alleged errors.
The grounds of appeal do not concisely and succinctly identify the issues. That is best left to a discussion of their merits. The same approach will be taken to the six grounds raised in the respondent's notice of contention.
The parties had failed to comply with all the requirements in Practice Direction 7.4 relating to the identification of all evidence for and against the findings of fact sought or challenged in the appeal. In schedules filed after the hearing of the appeal, the appellants seek 26 findings and the respondent 16.
Before addressing the grounds of appeal, it is necessary to detail the relevant Commonwealth and State regulatory framework in which the issues arise for determination.

Gene technology - Commonwealth regulatory framework

The history, nature, issues and depth of the controversy and division relating to the use of gene technology in agriculture is evident in the report of the Senate Community Affairs References Committee on the Gene Technology Bill 2000 (Cth) (the Commonwealth GM Bill) entitled A cautionary tale: Fish don't lay tomatoes (Senate report). The court can have regard to this report under s 15AB of the Acts Interpretation Act1901 (Cth).
The GT Act is part of a nationally consistent scheme for the regulation of certain dealings with GMOs by the Commonwealth and States (s 5).
A GMO is defined in s 10, relevantly, as an organism that has been modified by gene technology or an organism that has inherited particular traits from an organism (the initial organism), being traits that occurred in the initial organism because of gene technology.
The expression 'gene technology' means any technique for the modification of genes or other genetic material, but does not include sexual reproduction, homologous recombination or other prescribed techniques (s 10).
The GT Act establishes an independent statutory office holder, the Gene Technology Regulator (Regulator) (pt 3).
The implementation of the GT Act and the role of the Regulator is overseen by the Gene Technology Ministerial Council (Ministerial Council) which was established by the 2001 Gene Technology Agreement between the Commonwealth, States and Territories (GT Intergovernmental Agreement). Commonwealth, State and Territory Ministers comprise the Ministerial Council.
The GT Act prohibits dealings with GMOs unless, relevantly, the person undertaking the dealing is authorised to do so by a GMO licence, being a licence issued under s 55 of the GT Act (s 32).
Part 5 of the GT Act sets out the processes to be followed by the Regulator in relation to applications for two kinds of dealings, being those that involve the intentional release of a GMO into the environment and those that do not involve the intentional release of a GMO into the environment. The latter relates to research involving GMOs.
Part 5 div 4 applies if at least one of the dealings the subject of an application for a licence made under s 40 would involve the intentional release of a GMO into the environment. In that event, the Regulator must prepare a risk assessment and a risk management plan (s 50(1)).
Under s 50(3)(c), the Regulator must seek advice on matters relevant to the preparation of the risk assessment and risk management plan from, inter alia, Food Standards Australia New Zealand, which sets the standards for safety and labelling of foods for human consumption, and the Australian Pesticides and Veterinary Medicines Authority (APVMA), which is responsible for assessing the safety and ensuring the efficacy of, inter alia, all agricultural chemicals. APVMA is established under the Agricultural and Veterinary Chemicals (Administration) Act 1992 (Cth). Herbicide use on GM crops must be registered by APVMA as well as the GMO being licensed for release into the environment by the Regulator.
Under s 56(1), the Regulator must not issue a licence unless satisfied that any risks posed by the dealings proposed to be authorised by the licence are able to be managed in such a way as to protect:
(a)the health and safety of people; and
(b)the environment.
Under s 61, a GMO licence is subject to specified conditions and any further conditions imposed by the Regulator at the time of or after the issue of the licence.
Economic, trade and/or marketing considerations are irrelevant in the Regulator's assessment of a licence application under the GT Act.
However, under s 21(1)(aa) of the GT Act, the Ministerial Council may issue policy principles in relation to:
[R]ecognising areas, if any, designated under State law for the purpose of preserving the identity of one or both of the following:
(i)GM crops;
(ii)non‑GM crops;
for marketing purposes[.]
The Ministerial Council issued the Gene Technology (Recognition of Designated Areas) Principle 2003 which relevantly provides:
5.An area is recognised as an area that is designated for the purpose of preserving the identity of GM crops, non‑GM crops, or both GM crops and non‑GM crops, for marketing purposes, if the area is so designated under a State law.
6.Section 5 is not intended to compel a State to make a law mentioned in that section.
In June 2002, Monsanto applied under the GT Act for a licence for the intentional release of GM canola (Brassica napus) into the environment. The subject of Monsanto's application was 'Roundup Ready® canola' which is tolerant to the broad‑spectrum herbicide, glyphosate. As a result of the genetic modification, glyphosate can be used to control post‑emergent (after crop planting and germination) weeds in a canola crop. Glyphosate is the active constituent of Monsanto's herbicides marketed under the trade names 'Roundup®' and 'Roundup Ready®'. It was inspired marketing to incorporate the trade name of Monsanto's herbicide in the name of the GMO the subject of its licence application under the GT Act.
On 19 December 2003, the Regulator granted a licence to Monsanto for the intentional release of 'Roundup Ready® canola' in Australia.
On the same date APVMA also approved the use of Roundup Ready® for weed control in RR canola crops. APVMA imposed a number of conditions on registration to ensure responsible management of glyphosate herbicide use on RR canola and to minimise the risk of developing herbicide resistance. The conditions included implementation of Monsanto's RR canola resistance management plan (the Monsanto Management Plan) and reporting of resistance incidents to APVMA.
By cl 1.16 of the Monsanto agreement, which includes the Monsanto Management Plan, the respondent was obliged to comply with all regulatory requirements of APVMA and the Regulator.
Pursuant to s 194 of the GT Act, an independent review of the operation of the GT Act was carried out in 2006 and a report submitted to the Ministerial Council (GT Act Review).

Gene technology - State regulatory framework

Pursuant to the GT Intergovernmental Agreement, in 2001 the State Government introduced into Parliament the Gene Technology Bill 2001 and the Gene Technology Amendment Bill 2001 (the State GM Bills). In June 2002 the State GM Bills were referred to the Environment and Public Affairs Committee of the Legislative Council. In its final report dated 8 July 2003, the Legislative Council Committee recommended that Western Australia maintain its moratorium against the commercial release of GM crops until at least 2006.
The Genetically Modified Crops Free Areas Act 2003 (WA) (GM Free Act) commenced in December 2003. Section 4 of the GM Free Act relevantly provides:
(1)The Minister may, by order published in the Gazette, designate an area of the State as an area in which ‑
(a)a genetically modified crop must not be cultivated; or
(b)a genetically modified crop specified in the order must not be cultivated.
(2)An order, or a combination of orders, may designate the whole of the State.
It is an offence under s 5(1) of the GM Free Act for a person to cultivate a GM crop in an area designated under s 4 if that person knows, or is reckless as to whether or not, the crop is a GM crop.
The background is explained in the second reading speech for the GM Free Act as follows:
In May 2001, the minister announced an interim five-year moratorium on the commercial production of GM food crops. He stated that the moratorium would allow issues associated with market impacts, identity preservation and feasibility and the risks and benefits of establishing GM and GM free zones to be fully debated in the community.
…
The Bill will allow the State Government to designate areas of the State, or the whole of the State, as areas where specified genetically modified food crops may not be grown. This will be done, by ministerial order, if it is believed to be necessary to protect the State's markets for conventional crops and to protect our reputation as a 'clean, green' source of agricultural products. The State's markets and its good reputation could be seriously damaged if the introduction of GM crops is allowed before proven segregation and identity preservation systems are in place.
…
The Gene Technology Regulator is currently considering applications for the commercial release of GM canola varieties by Monsanto Australia and Bayer CropScience. The Regulator's decision will be made after a comprehensive assessment of the risks to human health and safety, and to the environment, of the release of GM canola and the management of those risks. However, the regulator's decision will not take into account any risks to agricultural production systems or markets from the commercial release of GM canola; yet these are matters of great concern to the State, the community in general and farmers in particular.
…
The State's role in regulating for production and marketing risks associated with gene technology is acknowledged in section 21 of the Commonwealth's Gene Technology Act 2000.
…
The [Commonwealth] legislation will not prohibit field trials of GM crops. These are subject to stringent licensing conditions and extensive monitoring by the [Regulator] in the trial and post trial phases; nor will it prohibit contained laboratory or greenhouse research involving GM food crops.
…
The Government's public consultation on GM-free zones found little support for the concept of GM-free areas interspersed throughout the landscape with areas where GM crops could be grown. Such a system was considered to be difficult and costly to establish and manage, and unlikely to be very effective. On that basis, the minister does not envisage using the legislation to designate either individual local government areas, or groupings of these, as GM-free zones.
…
In respect of GM canola, it is likely that the minister will designate the entire State as an area where GM canola may not be cultivated commercially. The Government will continue to adopt a cautious approach to the introduction of GM crops to Western Australian farming systems. It is not opposed to GM crops, but is prepared to intervene for marketing purposes. (emphasis added)
As foreshadowed in the second reading speech, the relevant Minister (Mr Kim Chance) published in the Gazette on 22 March 2004 the Genetically Modified Crops Free Areas Order 2004, cl 3 of which provides:
For the purpose of preserving the identity of non‑genetically modified crops for marketing purposes, the whole of the State is designated as an area in which genetically modified crops must not be cultivated.
On 25 January 2010 the then Minister (Mr Terry Redman) published in the Gazette the Genetically Modified Crops Free Areas Exemption Order 2010 (GM Exemption Order), cl 3 of which provides:
A person who cultivates genetically modified canola in Western Australia is exempt from the application of section 5(1) of the [GM Free] Act if the genetically modified canola is licensed for intentional release into the environment under the Gene Technology Act 2000 (Commonwealth).
In January 2010, the Western Australian Department of Agriculture and Food (Ag Department) published four information sheets (two described as a 'factsheet' and two as a 'farmnote') in connection with the permission to use GM canola. The content of those information sheets is considered below.
Eventually, the Gene Technology Act 2006 (WA) (the State GT Act) was enacted. Complementary State legislation is needed to cover gaps in the coverage of the GT Act arising from limitations in the Commonwealth's constitutional powers. However, by mid‑2012 not all appropriate administrative and legislative steps had been taken to make the State GT Act a corresponding State law for the purposes of the (Commonwealth) GT Act. See the June 2012 Report of the Review of the State GT Act. The gaps are of no significance in this case.

Herbicide tolerant canola

Traditional breeding techniques have enabled herbicide tolerant genes to be bred into conventional (non‑GM) canola. This has occurred for the herbicides atrazine (TT canola) and imidazolinone (IT canola). However, that tolerance is not passed on to successive generations of the canola.
RR canola has been genetically modified to be tolerant to glyphosate by the introduction of two new genes, one of which (the CP4 EPSPS gene) produces a version of an enzyme which is essential to the metabolism of the plant that, unlike the plant's natural enzyme, can still function in the presence of glyphosate; the other (the goxv247 gene) expresses a protein that breaks down the glyphosate herbicide into harmless compounds. Significantly, the new genes will be incorporated into successive generations of GM canola.

Organic produce - the export regulatory framework

NASAA is a non‑profit company limited by guarantee. NCO is a wholly owned subsidiary of NASAA.
NASAA has developed and owns the NASAA Standard. NCO uses and applies the NASAA Standard and the NASAA label under licence from NASAA.
NCO is an 'approved certifying organisation' under the Export Control (Organic Produce Certification) Orders (Cth) (Organic Produce Certification Orders).
The Organic Produce Certification Orders are made under the Export Control (Orders) Regulations 1982 (Cth) (the Export Control Regulations) which are, in turn, made under the Export Control Act 1982 (Cth) (Export Control Act).
Under s 7 of the Export Control Act, regulations may prohibit the export of prescribed goods from Australia. Regulations may also provide for the issue by the Secretary of the relevant Department, an authorised officer or a person approved in writing by the Secretary, of a certificate in relation to goods that relates to requirements that must be satisfied before the goods may be exported from Australia (s 23).
Regulation 3 of the Export Control Regulations provides that the Minister may make orders, not inconsistent with regulations made under the Export Control Act, with respect to any matter for or in relation to which provision may be made by regulations made under the Export Control Act.
The object of the Organic Produce Certification Orders, which were made under reg 3 of the Export Control Regulations, is to ensure that produce exported under the trade description 'organic', 'bio‑dynamic', 'biological', 'ecological' or any other word of similar indication is properly so described (order 1.02).
Order 1.05 of the Organic Produce Certification Orders provides:
For subsection 7(1) of the [Export Control] Act, the export of organic produce is prohibited unless an organic produce certificate has been issued under these Orders for the produce.
An application for an organic produce certificate may be made by the exporter of the produce to, inter alia, an 'approved certifying organisation' order 2.01). An approved certifying organisation is defined to mean an organisation in respect of which a QM certificate is in force under order 3.04 (order 1.06).
Under order 2.02, an approved certifying organisation must issue an organic produce certificate in relation to a quantity of organic produce that is intended to be exported if (a) the produce has been subjected to the organisation's QM system; (b) the production and preparation of the produce has complied with the QM system; and (c) the produce and its preparation satisfy the organic produce importing requirements of the relevant importing country authority.
An organic produce certificate may be revoked by the approved certifying organisation that issued it if, inter alia, the holder of the certificate has failed, in relation to the organic produce, to produce or prepare the produce in a manner compatible with the relevant QM system (order 2.04).
The expression 'QM system' is defined to mean the organisational structure, responsibilities, procedures, processes and resources for implementing quality management (order 1.06).
The expression 'relevant QM system' in relation to organic produce is defined to mean the QM system applying to the produce during its production and preparation (order 1.06).
Under order 3.01(1), to be eligible for the issue of a QM Certificate, an organisation must:
(a)be operating a QM system that will ensure that organic produce subject to the system:
(i)conforms to trade description of the produce; and
(ii)complies with the requirements of importing country authorities; and
(b)have prepared a QM manual, in relation to the QM system, that complies with Division 3.
An authorised officer must conduct an audit of an applicant's QM system to determine whether it is a system of the kind described in par 3.01(1)(a) (order 3.03).
A QM manual must describe in detail the measures in the QM system to which the manual relates that are designed to ensure, inter alia, compliance with par 3.01(1)(a) (order 3.09).
A QM system must not be modified in a way that substantially changes the system in any way without the written approval of an authorised officer (order 3.11). The relevant QM manual must be amended to describe accurately the system as modified (order 3.11(3)(c)).
An approved certifying organisation must, inter alia, maintain current and accurate records of each operator whose production or preparation of organic produce is subject to the QM system operated by the approved certifying organisation (order 3.12).
The NASAA Standard forms part of NCO's QM system under the Organic Produce Certification Orders (G3/1156 [5]).
At all material times, a Commonwealth Government agency, the Australian Quarantine and Inspection Service (AQIS) (now a part of the Department of Agriculture Fisheries and Food (DAFF)) was the accrediting and authorising authority under the Organic Produce Certification Orders.

Ag Department information sheets

The Ag Department information sheets published in January 2010 were not tendered to prove the truth of their contents but as evidence of what was actually or constructively known or understood at the time. However, most of the statements of fact are established by other evidence adduced at trial. The correctness of the statements of opinion on matters of law in the information sheets are matters for this court.
An Ag Department factsheet headed 'Organic farming and genetically modified crops' relevantly states:
Throughout the world, standards for organic farming prohibit the use of

GM materials in the production or processing of organic products. Australian standards also prohibit the use of GM material in organic products. International organic standards vary on their tolerance of accidental presence of GM material in organic product. Some standards, such as in Australia, have no defined tolerance, whereas the European Union standards limit the accidental presence of up to 0.9 per cent GM material.
Some Western Australian organic producers are concerned that GM canola may lead to accidental presence of GM material in their farming systems and organic products (G3/1390).

The factsheet states that organic livestock must be raised on organic pastures and/or fed organic feeds and continues:
Organic certifiers assess GM contamination risk on a case‑by‑case basis. Under organic certification in Australia:
•The use of GM inputs is prohibited (including animal feed inputs)
•Growing GM crops is prohibited
•Presence of GM in product is prohibited
•Neighbours must be notified of the organic status of the farm
•Organic operators must notify their certifier of any GM crop within a 10 kilometre radius
•Organic operators must have a risk management plan to avoid accidental GM introductions ‑ on farm, in product, and in handling, storage, transport and processing
•Any GM contamination may alter the organic certified status
…
Legal liability is a GM crop‑related issue that was assessed independently in 2005-06 during the review of the Commonwealth Gene Technology Act2000. The outcome was that common law allows for effective remedies for persons incurring damage from GM crops (G3/1391).
The factsheet ends with a statement that all producers have a duty of care towards their neighbours and the best way forward for all is to discuss issues and come to mutually agreeable solutions.
A second Ag Department factsheet is headed 'Genetically Modified Crops and Farmer Liability'. It notes the conclusion in the GT Act review that the common law allows for effective remedies for persons alleging damage from GM crops and then discusses in detail the scope and application of the law of negligence and nuisance in relation to liability for GM crop‑related issues. It states that 'the spread of GM seed or pollen to a non‑GM neighbour could compromise the neighbour's … organic status' (G3/1393).
Farmnote 409 is headed 'On‑farm segregation of GM and non‑GM canola'. It notes that:
In 2008, the Australian Oilseeds Federation established a trading standard for non‑GM canola. There are two national standards: canola standard (CSO1) which may contain any level of GM‑approved canola and non‑GM canola standard (CSO1-A) which must contain less than 0.9 per cent adventitious (accidental) presence of an approved GM canola. Effective segregation of GM and non‑GM canola on the farm is the key to ensuring growers can confidently deliver CSO1-A non‑GM canola (G3/1399).
Farmnote 409 also refers to swathing in the following terms:
Once canola crops are swathed and awaiting harvest, there is a risk that strong winds can move the drying plants into adjacent paddocks. It is necessary to plan for this before planting and develop a plan to manage any resultant GM volunteer plants. The management plans should be discussed with neighbours when planning to grow GM canola in boundary paddocks (G3/1400).
It also notes that a variety of herbicide options are available for the management of GM volunteers and cautions that livestock that eat GM canola may excrete viable GM seeds for up to seven days after last eating GM seed.

Monsanto agreement

The Senate report and Legislative Council Committee reports relating to Commonwealth GM Bill and the State GM Bills respectively establish that Monsanto's standard form stewardship agreement and the Monsanto Management Plan were developing in tandem with the proposed legislation.
As noted above, compliance with the regulatory requirements of the Regulator and APVMA is achieved by Monsanto imposing contractual obligations on the persons it licenses to use RR canola (cl 1.16).
One concern identified in the regulatory process was the potential for the development of resistance to glyphosate herbicides. In accordance with the APVMA conditions, Monsanto licensees are contractually obliged (cl 1.7) to read and strictly comply with the Monsanto Management Plan which in turn requires licensees to complete a Paddock Risk Assessment Management Option Guide (PRAMOG) as a condition of the licence. PRAMOG is a tool that identifies existing risk potential for glyphosate resistance and suggests additional management options to minimise that risk in the years after growing RR canola.
Another objective of the Monsanto Management Plan is to '[e]nable different production/market systems to concurrently operate in a profitable and sustainable way, in response to changing market and non‑market requirements' (G4/1688).
The Monsanto Management Plan also contains obligations relating to the management of open pollinated RR canola and states that a key objective of the RR canola stewardship strategy is to maintain product integrity within the RR canola crop and that of surrounding crops. The focus is on reducing the risk of the new genes introduced into RR canola being transferred to non‑GM canola crops, including organic canola, and other plants and organisms (known as cross‑pollination or outcrossing). Multiple herbicide resistant canola volunteers can result from outcrossing between canola crop varieties.
There is also much emphasis in the Monsanto Management Plan on the identification and control of volunteer canola:
It is essential to monitor and manage the appearance of volunteer canola in both crop and non‑crop situations. The primary aim of volunteer management should be to limit the spatial and temporal distribution of Roundup Ready canola by preventing pollen movement and seed set in years subsequent to growing of the crop.
Volunteers are likely to be found for three years after growing the crop and should be controlled prior to flowering. Burial of canola seed to a depth greater than 5 cm is not recommended as this can substantially delay the emergence of volunteers …
The following situations must be assessed for the presence of volunteers:
…
•In a paddock immediately adjacent to where Roundup Ready canola has been grown
…
•In areas where grazing animals excrete for 7 to 10 days after digesting seed
•Any areas where physical movement of seed may result in volunteers (G4/1675)[.]

The NASAA Contract

The NASAA Contract provides that NASAA is accredited by AQIS and the International Organic Accreditation Service (IOAS) on behalf of the International Federation of Organic Agriculture Movements (IFOAM) to offer certification services to suitably qualified persons (cl 2.2).
Accreditation requirements of NASAA require that certification programmes offered by NASAA require compliance by the Licensee with, relevantly, the NASAA Standard (cl 2.3(i)).
The appellants are the Licensees. Clause 2.4 relevantly provides:
NASAA has certified the Licensee's land and/or facilities specified in Schedule 4 to this contract … under the certification programme specified in Schedule 5 to this contract in respect of the products or processes specified in Schedule 6 to this contract … to the level specified in Schedule 7 to this contract (G3/1377).
Schedule 4 identifies 'The Licensee's facilities' as 476 ha of the 477 ha property known as Eagle Rest; schedule 5 specifies 'AQIS/IFOAM'; schedule 6 specifies products, being mixed grain, barley, oats, wheat (spelt), lupins, sheep (meat, wool) (the specified products) (G3/1387).
NASAA granted to the appellants a non‑exclusive licence to use the 'NASAA certified organic' label and name in respect of the specified products (cl 3.1).
Clause 6 relevantly provides:
6.1The Licensee must comply with the [NASAA Standard], all terms of this contract … and any requirements laid out by NASAA in correspondence with the Licensee.
6.2The Licensee must not use substances or methods prohibited under the [NASAA Standard].
…
6.4The Licensee must notify NASAA in accordance with paragraph 18 of this contract if the Licensee's facility or the specified products or processes are contaminated or potentially contaminated by any substance or method not specifically allowed under the [NASAA Standard] (G3/1378).
Clause 8 contains procedures in the event of possible non‑compliance with the NASAA Standard. Clause 8.1 relevantly provides:
Where NASAA has reason to believe that the Licensee's facilities or the specified products have been affected by chemicals, processes, practices and/or treatments not specifically allowed under the [NASAA Standard], NASAA may …
(i)suspend the Licensee's certification (G3/1379)[.]
Clause 9 provides for sanctions, one of which is immediate suspension if 'NASAA reasonably believes that there has been a breach of the compliance of the Licensee … with the [NASAA Standard] or this contract' (cl 9.1, G3/1380).
Clause 10 provides for termination of the NASAA Contract for breach. The NASAA Contract does not itself provide for decertification of all or part of the certified land and/or specified products. Any entitlement to do so must be found in the NASAA Standard. It is accepted by the parties, correctly in my view, that the NASAA Standard governs the rights and obligations inter se of the parties to the NASAA Contract.
It is incorrect to characterise the relationship between the appellants and NASAA/NCO as a solely private law relationship. NASAA/NCO are authorised and approved by AQIS/DAFF to perform a public function, being the provision of certification to its licensees which enlivens their right to export products under s 7 of the Export Control Act. Under order 2.02 of the Organic Produce Certification Orders, certification depends upon the production and preparation of produce in accordance with the NASAA Standard, which forms part of NCO's approved QM system. The purpose of certification under the Organic Produce Certification Orders is to provide a guarantee to potential consumers of the correctness of the description of the produce. That furthers the broader public interest in protecting and growing Australia's export markets.

NASAA Standard

The construction of the NASAA Standard is central in the appeal. The issues include the meaning of contamination in cl 3.2 and whether cl 3.2.1 and cl 3.2.9 apply to the accidental presence on Eagle Rest of GM canola swaths from Sevenoaks. NCO decertified part of Eagle Rest under cl 3.2.9.
The NASAA Standard provides for a holistic system of organic production built upon natural ecological processes (cl 1.4). The maintenance of soil health by ecologically sound means is at the heart of organic production systems (cl 1.4). The use of genetic engineering is precluded. In particular, use of GMOs or GMO derived product in an organic production system is prohibited, as are synthetic pesticides and herbicides.
The NASAA Standard contains 'General Principles', 'Recommendations', 'Standards', which are the minimum requirements which must be met, and 'Derogations', being possible exceptions to a standard.
Relevant definitions are as follows:
•Buffer Zone: a clearly defined and identifiable boundary area bordering an organic production site that is established to limit application of, or contact with, prohibited substances from an adjacent area.
…
•Decertification: the total withdrawal of certification by NASAA.
…
•Detectable Residue: the amount or presence of chemical residue or sample component that can be reliably observed or found in the sample matrix by current approved analytical methodology.
…
•Genetic Engineering: genetic engineering is a set of techniques from molecular biology … by which the genetic material of plants, animals, micro‑organisms, cells and other biological units are altered in ways or with results that could not be obtained by methods of natural mating and reproduction or natural recombination.
…
•Ingredient: any substance used in the preparation of an agricultural product that is still present in the final commercial product as consumed …
•Input: any product or material applied or used in the course of production.
…
•Organic: a labelling term that refers to an agricultural product produced in accordance with the NASAA Standard.
…
•Prohibited: substances that are not permitted under this Standard. The NASAA Standard is 'positive' therefore unless a substance is listed as being permitted, it is not permitted.
…
•Synthetic: produced by artificial processes and not the ordinary processes of nature (G4/1735 ‑ 1738).
Clause 2.20 deals with labelling. It relevantly provides:
2.20.12Organic products shall not be labelled as GMO free in the context of this Standard. Any reference to genetic engineering on product labels shall be limited to the production and processing methods themselves having not used GMOs (G4/1749).
Clause 3.2 deals with GMOs. It is in the following terms:
GENERAL PRINCIPLES
Organisms, which are derived from recombinant DNA technology, are genetically modified organisms and have no place in organic production and processing systems.
Even where evidence of GMOs is not detected in finished organic product, the deliberate or negligent exposure of organic production systems or finished products to GMOs is outside organic production principles.
RECOMMENDATIONS
Every potential source of GMOs in the supply and input chain, and any sources from historic or adjacent usage, should be identified and operators should familiarise themselves with the vectors and modes of potential transfer of material with modified DNA to avoid contamination.
STANDARDS
3.2.1The deliberate use and or the negligent introduction of genetically engineered organisms or their derivatives to organic farming systems or products are prohibited. This includes, but is not limited to:
•   seed
•   feed
•   propagation material
•   farm inputs such as fertilisers and compost
•   vaccines
•   crop protection materials
3.2.2Operators using input materials at risk of containing GMOs must obtain signed statements from the suppliers of these materials that they do not contain GMOs or their derivatives, backed up by laboratory analysis where NASAA deems it necessary.
3.2.3The certification of organic crops will be withdrawn where genetically engineered crops are grown on the same farm.
3.2.4Operators must not use ingredients, additives or processing aids derived from GMOs in certified products. Processing operations that handle GMOs in conventional products will need to notify NASAA and detail a risk strategy for prevention of contamination of certified product.
3.2.5Operators must not knowingly permit exposure or fail to take action against the application of or exposure to GMOs.
3.2.6Inputs, processing aids and ingredients shall be traced back one step in the biological chain to the direct source organism from which they are produced to verify that they are not derived from GMOs.
3.2.7Operators must conduct an assessment of risks from contamination with GMOs and take action where appropriate. These actions may include, but are not limited to:
•knowing about contaminant risks
•    implementing distances/buffer zones from potential contaminants
•    implementing special handling, transport and storage arrangements
•maintaining samples
•testing of crops perceived at risk
3.2.8Planting or sowing for organic production will not take place until 5 years after the harvest (or removal) of any genetically engineered crop that may have been planted on the land.
3.2.9Organic certification shall be withdrawn where NASAA considers there is an unacceptable risk of contamination from GMOs or their derivatives.
3.2.10Any certified production area within ten (10) kilometres of a site used to grow genetically engineered crops is perceived to be at risk of contamination and certified operators must inform NASAA of any such sites known to be within that radius.
3.2.11Contamination of organic product by GMOs that results from circumstances beyond the control of the operator may alter the organic status of the operation.
3.2.12Under the National Standard, NASAA will decertify any products that are tested and reveal the presence of GMOs (G4/1751 ‑ 1752).
It is as well to deal with the findings sought by the parties before determining the construction issues.

Findings sought by the parties

It is convenient to deal with all the findings sought or challenged by the appellants together. With the exception of two matters, I will address the findings sought by the respondent in the course of dealing with his contentions.
The respondent claims the appellants cannot contend for all or part of proposed findings 1, 3, 5, 7, 9, 10, 11, 12 (x 2), 13, 14, 15, 16, 17, 18, 20, 21, 22 and 23 because they are not contended for in their grounds of appeal or written submissions. It is correct that most of the proposed findings do not figure in the appellants' case. However, they are relevant to both the negligence and nuisance claims and were litigated at trial. In large measure, the matters were not addressed by the trial judge because of his approach to the law. As no prejudice is occasioned to the respondent by the issues being raised at a late stage in the appeal, I would grant leave to do so.
The appellants seek findings that the respondent had actual knowledge and foresight: (1) that GM canola plant material is not permitted in organic farming; (2) of the risk that the appellants' organic certification might be affected or lost if GM material got onto Eagle Rest; and (3) of the risk of GM canola plant material being blown from Sevenoaks onto Eagle Rest.
Proposed finding 3 is linked with a challenge in ground of appeal 3 to the trial judge's finding that 'an airborne GM canola swathe incursion emanating from the windrows of Sevenoaks was not … reasonably anticipated or expected by [the respondent] in November 2010' [717]. The trial judge found that in the conversation between Mr Marsh and the respondent in November 2008 concerning the volunteer canola plants on Eagle Rest, it was likely that rabbits were thought responsible for the movement of canola seed from Sevenoaks [452]. He also said he was unable to reach a finding about the actual prevailing wind directions or what would be an unusual wind event at the relevant time [724].
Having regard to the centrality of the claim that the respondent acted unreasonably in swathing his GM crop, what he knew and foresaw at or before the commencement of swathing in November 2010 is the relevant timeframe.
The October notice hand delivered to the respondent, particularly items 6, 8 and 9 thereof, establishes that the respondent had actual knowledge and foresight that GM material is not permitted in organic farming.
The evidence also establishes that the respondent had actual knowledge and foresight of the risk that the appellants' organic certification might be affected or lost if GM material got onto Eagle Rest. I would make proposed findings 1 and 2.
The respondent's evidence also establishes that he had actual knowledge and foresight of a risk of GM canola plant material being blown from Sevenoaks onto Eagle Rest. However, he did not regard the risk as real. The relevant evidence is as follows.
The respondent acknowledged in his evidence‑in‑chief that wimmera ryegrass and other weeds are readily spread by wind and animals from farm to farm (G3/1181). He acknowledged in cross-examination that the risk of GM canola being blown from Sevenoaks onto Eagle Rest was higher with swathing than with direct heading (ts 829 ‑ 830).
The respondent also accepted that the canola swaths would get lighter as they dried during the three or so weeks before they were harvested (ts 828). The cross‑examination continued:
And it would have been obvious to you, wouldn't it, that by leaving the windrow crop in that way that it might get blown about by the wind?---Well, it's not obvious but there's always some little chance it can move a bit.
Well, move a bit. You knew then that one of the things that could happen would be that the windrow would be disturbed by the wind and the swathes would be blown?---Well, they can always move a little bit, the swathes, with a bit of wind blowing.
Yes. And once they're dislodged, you knew that they could be then blown further?---There's always a chance.
Yes. And given that the Marsh property was next door, you knew that there was a chance that the - over the weeks that it's left there, that the windrows would be dislodged by the wind and blow onto Eagle Rest?---Well, with our buffer zones and our road and the tree lines, I expected we had a further enough distance.
…
There was a real chance that it would blow off your property?---No.
You didn't think that there was a real chance that it would blow off your property?---No.
Why is that?---Well, I had never swathed before. It's the first time I had swathed. I hadn't noticed in previous years windrows blowing around and with the buffer zones and the border lines I left between Mr Marsh, I presumed nothing would get on his property.
…
Now, you observed during the swathing period - after you had swathed and before you had harvested, you observed that some windrows had been disturbed by the winds, did you?---Had I observed?
Yes?---I - just a little bit, yes.
Yes. And once disturbed, it was likely - there was a real chance that that would blow onto - off your property and onto the road. Do you agree with that?---Well, no, not necessarily.
Well, when you say not necessarily, it was a real prospect that that would happen, given that- - - ?---Not a real prospect.
You took the chance, did you, Mr Baxter, that it wouldn't happen?---Yes.
Did you turn your mind to the fact that it might happen?---No (ts 829 ‑ 830). (emphasis added)

The respondent's evidence about the prospect post‑swathing is difficult to reconcile with his evidence‑in‑chief that there were strong winds blowing towards Eagle Rest on 25, 26 and 30 November 2010 (G3/1196). There is nothing in the respondent's evidence to hint that the strength or direction of the wind was unexpected or unusual. If that were the case, it is reasonable to expect the respondent would have given that as a reason for his assessment as to the magnitude of the risk of swaths being blown onto Eagle Rest. On my review of the evidence, it was no part of the defence case that the strong winds blowing towards Eagle Rest in late November 2010 were unexpected or unusual.
Proposed finding 4 is that there was in fact a risk that, once swathed, GM canola could be blown by strong winds from Sevenoaks onto Eagle Rest. A finding to that effect is established by the overwhelming weight of the evidence, in particular, that of Mr Robinson, the respondent's farm adviser who in 2010 was employed by 'Farmanco' (ts 921, 922, 933); Professor Rene Van Acker (G3/1291, 3/1301, 3/1318 [5]); Professor Patrick Rudelsheim (G3/1352); Professor Stephen Powles (G3/1370 [14]); and the March 2010 edition of the 'Farmanco Facts' client newsletter (Farmanco newsletter), which refers to the possibility of 'strong winds moving swaths into … your neighbour's paddocks' (G4/2033). The evidence at trial established the factual basis for the Ag Department's warning in Farmnote 409 relating to the windborne movement of swaths.
Further, the trial judge found that if Mr Robinson had been aware of the October notice, he would have advised the respondent in terms of the content of the Farmanco newsletter (that is, of the need to discuss management options ‑ I infer with the neighbouring farmer ‑ and also of the possibility of strong winds moving swaths into neighbouring paddocks when a GM crop is planted on a boundary fence) [715] ‑ [716].
The evidence establishes that the respondent had actual knowledge of a risk of GM swaths being blown by the wind from Sevenoaks to Eagle Rest, but he did not regard the risk as real. However, the proven existence of the risk, the warnings given in the Farmanco newsletter and the Ag Department's Farmnote 409, the warning that Mr Robinson would have given to the respondent if informed of the October notice together with knowledge of the basic facts as to the purpose and effect of swathing, establish that a reasonable person in the position of the respondent ought to have known that there was a real risk that GM canola swaths could be blown by strong winds from Sevenoaks onto Eagle Rest. I would make findings in these terms which I will designate as 3A and 3B respectively.
Proposed finding 5 is that the respondent had no compelling reason to harvest his GM canola in late 2010 by swathing. This proposed finding is linked with grounds of appeal 7 and 11 which claim the trial judge erred in finding that the respondent had legitimate agricultural reasons for swathing. It is clear from the appellants' submissions at the hearing of the appeal that the finding they seek is relative, not absolute. That is, it is to be considered and weighed in the context of the finding that swathing involved a risk of GM canola being blown by wind from Sevenoaks to Eagle Rest whereas there was no such risk with direct heading.
The respondent's evidence‑in‑chief is relevantly as follows. The main reason he decided to grow RR canola on Range and Two Dams in 2010 was because of a severe problem with herbicide resistant wimmera ryegrass on those paddocks. In previous years he had, without success, used a host of pre‑emergent and post‑emergent herbicides on wimmera ryegrass in paddocks used for cropping, from which he concluded it was herbicide resistant (albeit without testing to confirm his opinion). The respondent made no attempt to control wimmera ryegrass in the 570 ha of paddocks he used for farming sheep because it was excellent sheep fodder. That is, wimmera ryegrass is only a 'weed' when it competes for nutrition and water with crops. That accords with Dr Christopher Preston's evidence that the usual definition of a weed is a plant that is not wanted at a particular time and place (ts 792). Dr Preston is an expert in plant biochemistry and Associate Professor of Weed Management at the University of Adelaide.
The respondent was advised by Mr Robinson (but was already aware) that he would achieve a superior yield by growing RR canola because spraying Roundup would significantly reduce the competition from herbicide resistant wimmera ryegrass and lead to superior cereal crop yields in the same paddock in following years.
Before and after planting the RR canola seed in 2010, the respondent sprayed Range and Two Dams with a variety of herbicides: before planting he sprayed 'Sprayseed'; immediately before planting, he applied a mix of the herbicides 'Paraquat' and 'Trifulim'; and after planting he applied Roundup at the two leaf stage and again at the six leaf stage for the specific purpose of killing late germinating wimmera ryegrass and other weeds. The Roundup achieved a very good 'kill' and very few wimmera ryegrass plants survived, although a small number germinated after the second spray (an average of one or two plants per square metre) (G3/1192).
On Mr Robinson's recommendation, the respondent decided to swath the RR canola crops because he wanted to reduce the risk of late damage to the crop and seed loss. Some late germinating wimmera ryegrass also played a role in his decision to swath. In previous years the respondent had considered but decided against swathing his canola crops because he did not own a swathing machine or a 'pick up front' for the harvester (required for gathering the windrows) (G3/1194). In 2010 the respondent engaged a contractor to swath the GM canola crop and hired a pick up front to harvest the windrows. In 2010 the respondent direct harvested all his conventional (TT) canola.
In cross‑examination, the respondent accepted that he had not had any real problem with pod shattering in the past and was able to get an evenly ripened crop by direct heading (ts 736).
Expert witnesses Peter McInerney (an agricultural consultant) and Professor Van Acker gave evidence about the benefits of swathing canola. It assists even ripening, allows earlier harvest, reduces pod shattering and can assist in the management of wimmera ryegrass if it is swathed before its seed is set (McInerney ts 390 ‑ 392; Van Acker G3/1290). According to Professor Van Acker, growers who wish to prevent wind generated movement of canola swaths pull a roller behind the swather to push the swath into the canola stubble to help hold it in the wind: G3/1291. That did not occur in this case. However, Professor Van Acker and Mr McInerney both agreed that when GM canola needs to be contained, direct heading is the better and more responsible practice (G3/1260, 1291, ts 412). I will deal with proposed finding 5 in the context of the nuisance claim.
Proposed finding 6 relates to what the respondent told Mr Robinson about the risk to the appellants' organic certification if GM canola got onto the appellants' farm. There is a conflict of evidence on this subject.
Mr Robinson's evidence was that the respondent did not tell him that Mr Marsh had told the respondent that if GM canola got onto Mr Marsh's farm his organic certification would be at risk or that Mr Marsh was worried about losing his organic certification; the respondent did not show him the October notice; in early 2010 the respondent said his neighbour was an organic farmer and asked whether that was a problem, to which Mr Robinson responded that if they followed Monsanto's stewardship programme and followed the guidelines set by the people who made planting GM canola lawful, there should not be a problem (ts 936, 940 ‑ 941, 955 ‑ 956).
The respondent's evidence was that he 'would have' told Mr Robinson that Mr Marsh was concerned about canola getting onto his place and 'would have' told Mr Robinson that Mr Marsh was concerned he might lose his organic certification if GM canola went onto Eagle Rest (ts 760 ‑ 761); in January 2010 he told Mr Robinson that he wanted to avoid canola going from Sevenoaks to Eagle Rest and Mr Robinson said that as long as the respondent followed the Monsanto protocols there should not be any problem (ts 761); he had not given a copy of the October notice to Mr Robinson but Mr Robinson 'would have' read it at the respondent's home before harvest (ts 824 ‑ 825). His evidence continued:
Did you discuss [the October notice] in the context of your decision to swath?---Would have been very briefly.
…
Well, you said you had a very brief discussion. What did you say in the context of the decision to swath, to Mr Robinson?---Well, the swathing process was a decision we made to best effect our harvest.
And [the October notice] didn't have any influence on you at all, did it?---Not to our decision of swathing. No (ts 825).
In his evidence, the respondent uses the language of reconstruction rather than recollection in relation to his conversations and dealings with Mr Robinson. Further, at the material times in 2010 Mr Robinson had actual knowledge of the possibility of strong winds moving swaths to neighbours' paddocks and of the advice in the Farmanco newsletter of the need to discuss management options for that scenario (ts 933). Knowledge of those matters is not consistent with the respondent's evidence as to the largely dismissive nature of Mr Robinson's advice to him. Mr Robinson's evidence should be preferred to that of the respondent. That is consistent with the trial judge's acceptance of Mr Robinson's evidence that he was not aware of the October notice and the finding of what Mr Robinson's advice to the respondent would have been if he had been aware of it [715] ‑ [716].
Proposed finding 7 is related to finding 6 and has two elements. The appellants say the trial judge ought to have found that (a) the risk that GM canola grown by the respondent might be blown onto Mr Marsh's property and jeopardise his organic status was not in fact discussed between the respondent and Mr Robinson in the course of Mr Robinson advising, and the respondent deciding, to harvest his GM canola by swathing; and (b) the respondent did not give any real consideration to the risk that GM canola grown by him might be blown onto the appellants' property and jeopardise its organic status when deciding to harvest his GM canola by swathing.
Mr Robinson's evidence, summarised above, supports both aspects of the proposed finding. It is also supported by Mr Robinson's evidence of what he would have said if he knew of the risk of loss of certification:
And had [the respondent] told you that, that is, that Marsh could lose his certification if the GM canola plant went on his property, and that there had been canola volunteers in the past; you would have told him that he had to be careful planting on the boundary, wouldn't you?---Yes.
And you would have told him that if you plant on the boundary, there was a risk of swathing material moving onto your neighbour's property?---Yes. A small risk. Yes.
…
And you didn't tell him that because those topics about certification wasn't [sic] raised, and there was no reason for you to tell him, was there?---No (ts 941).
Moreover, the respondent's evidence that he presumed the swaths would not get onto Eagle Rest and that he did not turn his mind to that prospect (ts 829 ‑ 830) supports both findings. I would make findings 6 and 7.
The appellants contend (item 8) the trial judge erred in finding that the respondent gave considerable thought to the work of a protective buffer and trees [742]. The respondent is cross‑examined about the Monsanto Management Plan and his management strategies for minimising the risk of his GM canola escaping onto Eagle Rest at ts 810 ‑ 811, 818. It is clear that his evidence relates to the original decision to grow canola on his boundary paddock, not to the additional risk associated with swathing. To the extent the trial judge's finding relates to the decision to swath, it is against the weight of the evidence, including that underpinning findings 6 and 7.
Proposed finding 9 is that once canola swaths were blown from Sevenoaks onto Eagle Rest in late November 2010, they continued to be blown about Eagle Rest and moved around by livestock. The finding is established by the uncontradicted evidence of Mr Purvis, Ms Coleman and Mr Marsh. In her written report dated 4 December 2010 Ms Purvis relevantly states that:
-Extensive incidents of canola swathe plants with full and broken seed head sighted in paddock 7, 8, 10 and 12 …
-Sheep were grazing in paddock 7. Here canola heads had obviously been eaten with only stalks remaining in place.
…
-A strong southerly wind was blowing at the time of the inspection … [The presence of swaths] seemed to affect around 50% of the property but there were concerns for areas further into the property due to the volume of plants [sic] material on site, the way it was moving along with the wind and the continuing strong wind that was blowing from the south.
...
-In paddocks with sheep it was noted that seed heads had been eaten and only stalks remained.
…
-During the inspection a strong southerly wind was blowing and some plants noted in paddock 10 were blowing like tumbleweed.
…
-The total of paddock 7 would be affected by manure drop as sheep have eaten the canola and have access to the whole paddock (G3/1409, 1412)[.]
Ms Coleman's report of her inspection on 21 December 2010 states that as they drove into paddock 10 there were many stems of canola blowing around in the pasture (G3/1427).
Mr Marsh's unchallenged evidence was, relevantly, that on at least one occasion in 2010 he noticed canola swaths being blown across Eagle Rest by a southerly wind, that he saw cracked canola pods and seeds on paddocks 7 ‑ 13 (G3/1114) and that on 1 December 2010 paddocks 7, 8 and 9 were stocked with sheep and he observed the sheep eating the canola swaths (ts 265, 287, 290, 336). I would make finding 9.
Proposed finding 10 is that by 4 December 2010 canola swaths were present on paddocks 7, 8, 9, 10, 11, 12 and 13 of Eagle Rest. The trial judge found that no canola swaths were found on paddocks 8 and 9 [537]. He also found that three swaths were found in the uncropped area of paddock 11, but not in the wheat crop itself [536], [691], [693], [736]. The combined evidence of Mr Marsh, Ms Purvis and Ms Coleman support the finding sought by the appellants. The trial judge relied on exhibit 10 (a map of Eagle Rest showing the GPS locations of the swaths in April 2011) in support of his comment that '[n]o swathes appear to have been found on paddocks 8 and 9' [537]. Exhibit 10 does not expressly record swath locations on paddocks 8 and 9. Swaths in or close to those paddocks are recorded under paddock 7. However, that is not consistent with Ms Purvis' report (G3/1412), Ms Coleman's report (G3/1427) and Mr Marsh's evidence (ts 257 ‑ 258). I would make finding 10.
Proposed finding 11 is that seed pods from the canola swaths blown onto and observed at Eagle Rest had shattered. That is the uncontradicted evidence in Ms Purvis' report (G3/1412) (some swath plant material was noted with seed pods cracked and numerous seeds scattered on the ground) and of Mr Marsh (ts 262 ‑ 263; G3/1114). I would make finding 11.
Proposed finding 12 is that in early December 2010 Mr Marsh had attempted to contain the swaths by fencing those he found but by 4 December 2010 the canola swaths were too numerous to enable him to continue to try and contain them in this way.
Mr Marsh gave unchallenged evidence that he tried to contain the original swaths he found by fencing them (ts 272 ‑ 273). He said he discontinued the attempt because '[t]here was [sic] too many to contain' (ts 272). I would make finding 12.
The second proposed finding numbered 12 (hereafter 12A) is that each seed pod on the swathed canola plants blown from Sevenoaks onto Eagle Rest would hold between 20 and 80 canola seeds.
Professor Powles, an expert in plant and agricultural science, gave evidence that typically a pod will contain between 20 and 80 seeds, depending on the season (ts 974). I would make finding 12A.
Proposed finding 13 is that canola seed held within seed pods would have been mature and germinable at the time when the swaths were carried onto Eagle Rest. Professor Powles gave uncontradicted evidence that when harvested, canola seeds are fertile and could germinate (ts 975). I would make finding 13.
Proposed finding 14 is that as a result of the movement of swaths from Sevenoaks onto Eagle Rest, a large indeterminant number of RR canola seeds would have been scattered on paddocks 7, 8, 9, 10, 11, 12 and 13. Dr Preston makes the point that the likely 'seed rain' going down onto a paddock is determined by the number of seed heads (pods) not the number of plants (ts 791). The canola swath in evidence at trial (exhibit 33) had multiple canola stalks with a large number of pods (at least 440). With 245 swaths on Eagle Rest the potential seed rain would be of an order of magnitude in the millions. I would make finding 14.
Proposed finding 15 is that it is unlikely the distribution of seeds shed from canola swaths carried onto Eagle Rest would have been uniform. That finding is supported by the uncontradicted evidence of Dr Preston (ts 789). There is no evidence to the contrary. I would make finding 15.
Proposed finding 16 is that an indeterminate amount of viable canola seed shed from the swaths blown onto Eagle Rest from Sevenoaks would enter the seed bank on Eagle Rest. That is the evidence of Professor Rudelsheim (G3/1355), Professor Van Acker (G3/1311, 1319) and Professor Powles (G3/1373). There is no evidence to the contrary. I would make finding 16.
Proposed finding 17 is that the scattered seed would have been difficult to detect on the soil due to its small size and dark colour. That finding is supported by the swath in evidence at trial and confirmed by the evidence of Professor Powles (ts 975). I would make finding 17.
Proposed finding 18 is that canola seed would remain viable for at least two growing seasons. Research conducted by Dr Preston determined that canola seed banks in commercial fields decayed quickly after canola harvest and no viable seed remained after 2.5 years (G3/1325). That was accepted by the trial judge [642] and is consistent with the evidence of Professor Rudelsheim that dispersed seeds are likely to become part of the seed bank and while a large portion will decay, survival over a longer time is possible leading to the presence of canola plants in subsequent seasons (G3/1355). A seed bank is the reservoir of germinable (not germinated) seeds in the soil. There is no evidence to the contrary.
The respondent seeks a finding that large populations of volunteer canola do not persist from year to year. Most of the evidence relied on relates to roadside populations from grain truck spills. I am not satisfied that is equivalent to seeds in farm soil.
Mr Andrew Bishop, a Tasmanian public servant, explained Tasmania's position on GMOs. The criteria developed in Tasmania to determine when a site can be identified as GMO clear is cultivation at least twice over a period of two years without GM canola emerging (ts 361).
As the proposed finding is supported by Dr Preston's evidence, which the trial judge accepted, I would make finding 18.
Proposed finding 20 (there is no 19) is that volunteer canola plants could have been expected to appear around three years after the incursion of the canola swaths onto Eagle Rest. That finding is consistent with the evidence of Dr Preston, the Monsanto Management Plan (which states that volunteers are likely to be found for three years after growing a crop) and the evidence of Professor Van Acker (G3/1287, 1300, 1311). The respondent seeks a finding that most of the canola seed shed in one year would be expected to germinate in the next 12 months. There is no necessary inconsistency between this and proposed findings 18 and 20. I would make finding 20.

On the unchallenged and unchallengeable findings of the trial judge, the fact was that the respondent had sound financial and farming reasons for swathing his canola crop in late 2010. The onus was on the appellants to prove negligence. The language of 'necessity', 'imperative', and 'compulsion' is inapposite. We are not persuaded that the appellants have established that it should be inferred that any financial benefit to the respondent from the decision to swathe was only 'marginal'.

Social utility (s 5B(2)(d))

Although farming no doubt has social utility, we do not think this to be a factor of any real significance for present purposes in an overall assessment of liability for negligence.

Other matters

Section 5B(2) does not provide an exhaustive list of the matters which the court is to take into account in considering whether a reasonable person would have taken precautions against the risk of harm. The appellants also submitted that it was relevant that organic farming itself had social utility, and provided considerable economic benefits to the Australian community. Accepting that to be the case for present purposes, again we are not persuaded that that factor has any real significance in the overall assessment of whether the respondent breached any duty of care.

Conclusion

Having regard to the matters referred to above, we are not persuaded that the appellants established that a reasonable person in the position of the respondent would have taken the precaution, for the benefit of the appellants, of direct heading rather than swathing his GM canola crop in early November 2010.

Causation

In connection with the claim in negligence, the appellants allege, by ground 8, that the judge ought to have held that the respondent's swathing of the GM canola crop caused the appellants' loss within the meaning of s 5C of the Civil Liability Act. Two matters were raised. One was that the judge erred insofar as he found[267] that the appellants had not established 'factual causation' within the meaning of s 5C(1)(a) of the Civil Liability Act.The other was that the judge erred in finding that the appellants had failed to establish that it was appropriate for the scope of the respondent's liability to extend to the harm so caused within the meaning of s 5C(1)(b) of the Civil Liability Act.
[267] Primary reasons [743].
In relation to the second of those matters, the contention was, in effect, that the judge ought to have answered the question of legal causation in favour of the appellants 'because, on the proper construction of the NASAA Standards, [NASAA] was entitled to decertify Eagle Rest pursuant to [cl] 3.2.9'.[268]
[268] Appellants' submissions pars 60, 62, WB 28 - 29.
As noted earlier, grounds 9 and 10 deal with the appellants' submissions as to the proper construction and application of cl 3.2.9 of the NASAA Standard.
Section 5C(1) of the Civil Liability Act provides:
A determination that the fault of a person (the tortfeasor) caused particular harm comprises the following elements -
(a)that the fault was a necessary condition of the occurrence of the harm (factual causation); and
(b)that it is appropriate for the scope of the tortfeasor's liability to extend to the harm so caused (scope of liability).
Whatever may be the proper construction of cl 3.2.9, it may nevertheless be accepted that its proper application would involve, at the least, the formation of an opinion by NASAA that there was an unacceptable risk of contamination. The respondent alleges, inter alia, that withdrawal of certification occurred in this case not on the basis of any opinion formed as to the risk of contamination, but on the basis of the fact of contamination as perceived by NASAA's executive officer.[269]
[269] Respondent's submissions pars 30, 147, WB 49, 62.
Although the witness statement of the executive officer of NASAA impliedly referred to cl 3.2.9 of the NASAA Standard, the judge had misgivings about her evidence unless it was reliably and independently supported elsewhere.[270]
[270] Primary reasons [591].
NASAA's letter of 29 December 2010 stated, in effect, that paddocks 7 ‑ 13 and all crops on them were 'decertified', 'following the contamination' of the appellants' farm. It did not state that certification was being 'withdrawn' because NASAA had formed the opinion that there was a 'risk' of contamination. The letter made no express or implied reference to cl 3.2.9, and at least arguably could not fairly be read as invoking cl 3.2.9.
Also, various aspects of the executive officer's evidence[271] may provide some basis for the respondent's contention that decertification occurred on 29 December 2010 not because NASAA had formed an opinion that there was an unacceptable risk of contamination, but rather on the basis of the fact of contamination as conceived by the executive officer.
[271] GB 456 - 457 (primary reasons [581]); GB 521 - 522 (primary reasons [585]); GB 523, 529, 541, 546.
However, for the reasons given earlier, the appeal may properly be disposed of without making a final determination of the proper construction and application of cl 3.2.9, in the absence of NASAA as a party to these proceedings.

Nuisance

The appellants' case

The appellants pleaded case was that the presence of the swathes and seeds constituted an unlawful interference with the appellants' use and enjoyment of their land, and was a nuisance.
In support of that allegation, the appellants said that since 2004 they had used their land to raise and cultivate certified organic produce. As a result of the presence of GM canola seeds and the consequential loss of certification, they cannot use the land to raise 'certified organic' crops or livestock.

The reasons of the primary judge

The primary judge concluded that there had been no unreasonable interference with the appellants' use and enjoyment of their property by reason of the incursion of GM canola swathes, for the following reasons:
(a)There was no physical damage from the 245 swathes to persons, animals, land or chattels, the damage being purely financial and arising out of a private contract between the appellants and NASAA,[272] to which the respondent was not privy.[273]
(b)The respondent had legitimate agricultural reasons for swathing the GM canola crop.[274]
(c)Swathing was not a novel or aberrant method of harvesting a canola crop, but generally the preferred method in the district.[275]
(d)The respondent swathed the crop on the recommendation of a local agronomist, Mr Robinson, although if told of the Notice of Intention to Take Legal Action, Mr Robinson's advice would probably have been to discuss 'management options' in accordance with the Farmanco publication.[276]
(e)The respondent did not anticipate or expect an airborne swathe incursion from his property, which was caused by strong winds,[277] and no airborne incursion of canola plants onto the appellants' property had occurred previously.[278]
(f)There was a certain measure of novelty in the incursion as the respondent had neither grown GM canola or swathed a canola crop before.[279]
(g)The respondent's canola crop was already up and at about the flowering stage when the appellants' Notice of Intention to Take Legal Action was delivered to him.[280]
(h)At the time there was no recommended or accepted swathing buffer distance suggested for canola grown in a boundary paddock and there was no evidence about likely prevailing winds in November and December.[281]
[272] Primary reasons [711].
[273] Primary reasons [712].
[274] Primary reasons [713].
[275] Primary reasons [714].
[276] Primary reasons [715] ‑ [716].
[277] Primary reasons [717].
[278] Primary reasons [731].
[279] Primary reasons [718].
[280] Primary reasons [720].
[281] Primary reasons [721] ‑ [723].
His Honour went on to say:[282]
Had the underlying facts been different, by an incursion of a physically dangerous substance such as, for instance, burning embers, or a pesticide or herbicide, thereby causing physical damage, the nuisance evaluation would, of course, be quite different. But here my evaluation concerns only the incursion of a wholly benign substance in a physical sense.
[282] Primary reasons [730].
The primary judge concluded there was a further ground for the conclusion he had reached. He considered that while the NASAA Standard may have supported a suspension of the appellants' certification for a short period, there appears to have been no legitimate contractual basis to decertify the appellants. That appears to have been an overreaction by NASAA and based on the application of 'zero tolerance', rather than the terms of the NASAA Standard.[283]

The issues on the appeal

[283] Primary reasons [733] ‑ [740].

Ground 11 of the appellants' grounds of appeal challenges the finding of the primary judge that the respondent was not liable in nuisance. The allegations are that the judge erred in:
(a)taking into account an 'irrelevant consideration'[284] in making findings to the effect that there was no physical damage from the 245 swathes to the persons, animals, land or chattels at Eagle Rest;[285]
[284] Ground 11.38, WB 13.
[285] Primary reasons [711].
(b)failing to 'consider' whether the incursion of GM canola swathes interfered with the appellants' use and enjoyment of Eagle Rest, and in considering instead the question of the reasonableness of the respondent's conduct in choosing to harvest his GM canola crop by swathing;[286]
[286] Ground 11.39, WB 13.
(c)failing to consider factors such as the nature and extent of the interference; any social or public interest value in the respondent's activities; the nature of established uses in the locality; and whether all reasonable precautions were taken to minimise any interference;[287]
[287] Ground 11.40, WB 13.
(d)taking into account the contractual relationship between the appellants and NASAA;[288]
[288] Ground 11.41, WB 13.
(e)failing to find that harvesting of GM canola was not amongst the 'ordinary usages' of broadacre farming in Kojonup;[289]
[289] Ground 11.43, WB 14.
(f)taking into account an irrelevant matter when he found that the respondent did not deliberately cause the swathes to be released onto the appellants' land;[290]
(g)taking into account irrelevant considerations in connection with the respondent's decision to swathe, these considerations being findings to the effect that:
(i)the respondent had legitimate agricultural reasons for swathing;[291]
(ii)the respondent did not make a 'unilateral or uninformed decision' to swathe his crops, given that he acted upon advice from his agronomist;[292]
(iii)the respondent had not been familiar with 'swathe incursion events' in 2010 as he had not done swathing before;[293]
(iv)the swathing was done professionally;[294] and
(v)the canola crop was already flowering when the appellants served their 'Notice of Intention to Take Legal Action' of 29 September 2010;[295]
(h)finding that there was no unreasonable interference with the appellants' use and enjoyment of Eagle Rest 'as the result of the respondent's conduct in permitting an incursion of GM canola swathes from Sevenoaks'.[296]
[290] Ground 11.44, WB 14.
[291] Ground 11.42, WB 14.
[292] Ground 11.45, WB 14.
[293] Ground 11.46, WB 14 - 15.
[294] Ground 11.47, WB 15.
[295] Ground 11.48, WB 15.
[296] Ground 11.37, WB 13; ground 11.49, WB 15.
By a notice of contention, the respondent contended (contention 6), in effect, that the primary judge ought to have found that the respondent did not unreasonably interfere with the appellants' use and enjoyment of their property on the further ground that the appellants were abnormally sensitive to the presence of GM canola swathes on their property because they chose to farm organically and to label their products 'NASAA Certified Organic' under licence from NASAA.

The relevant principles

The essence of the wrong in private nuisance is the detraction from the occupier's enjoyment of the natural rights belonging to the occupation of the land (or in the case of easements, detraction from the enjoyment of the acquired rights annexed to the land).[297]
[297] Victoria Park Racing and Recreation Grounds Co Ltd v Taylor [1937] HCA 45; (1937) 58 CLR 479, 507 (Dixon J).
In Hargrave v Goldman,[298] Windeyer J said:
In nuisance liability is founded upon a state of affairs, created, adopted or continued by one person (otherwise than in the reasonable and convenient use by him of his own land) which, to a substantial degree, harms another person … in his enjoyment of his land.
[298] Hargrave v Goldman [1963] HCA 56; (1963) 110 CLR 40, 62.
However, not every detraction from the occupier's enjoyment of the rights belonging to its land will constitute an actionable nuisance. In Gartner v Kidman,[299] Windeyer J referred to the observations of Bramwell B in Bamford v Turnley[300] to the effect that 'acts necessary for the common and ordinary use and occupation of land and houses may be done, if conveniently done, without subjecting those who do them to an action'.[301] Windeyer J observed that by 'conveniently done', Bramwell B meant, no doubt, 'done in a reasonable and proper manner', and that Bramwell B had contrasted such use with a use 'not unnatural nor unusual' but 'not the common and ordinary use of land'.[302]
[299] Gartner v Kidman [1962] HCA 27; (1962) 108 CLR 12, 44.
[300] Bamford v Turnley (1862) 3 B & S 67; 122 ER 27.
[301] Bamford.
[302] Gartner (44).
While negligence is not essential to a claim in nuisance, fault of some kind is almost always necessary.[303] Fault generally involves foreseeability.[304]
[303] Elston v Dore [1982] HCA 71; (1982) 149 CLR 480, 487 ‑ 488.
[304] Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd [1967] 1 AC 617, 639.
As the learned authors of Fleming's The Law of Torts[305] point out:
Legal intervention is warranted only when an excessive use of property causes inconvenience beyond what other occupiers in the vicinity can be expected to bear, having regard to the prevailing standard of comfort of the time and place.
[305] 10th ed [21.80].
Whether a particular use of land substantially interferes with the use and enjoyment of another's land is to be judged objectively. At least in the absence of physical injury to land, the locality of the district will generally be relevant to what constitutes substantial interference with the use and enjoyment of land, and regard is had to what an ordinary average resident of that district ought reasonably to have expected under the circumstances.[306]
[306] Pittar v Alvarez (1916) 16 SR (NSW) 618, 625, 627.
An interference which 'alone causes harm to something of an abnormal sensitiveness does not of itself constitute a nuisance': Clerk & Lindsell on Torts.[307] A person is not, therefore, entitled to relief merely because they may happen to be unduly sensitive to noise or smell or any other form of interference with their property: Munro v Southern Dairies Ltd;[308] albeit, the position will be different if the activity causing the interference was done maliciously: Christie v Davey;[309] Hollywood Silver Fox Farm Ltd v Emmett.[310]
[307] 20th ed par 20 ‑ 11; see also Fleming's The Law of Torts (10th ed) [21.100].
[308] Munro v Southern Dairies Ltd [1955] VLR 332, 335.
[309] Christie v Davey [1893] 1 Ch 316.
[310] Hollywood Silver Fox Farm Ltd v Emmett [1936] 1 All ER 825.
As Lord Robertson, delivering the opinion of the Privy Council, explained in Eastern and South African Telegraph Company Limited v Cape Town Tramways Companies Limited,[311] a person cannot increase the liabilities of his neighbour by applying his or her own property to special uses, whether for business or pleasure. A person who puts their land to an abnormally sensitive use cannot thereby unilaterally enlarge their own rights and obtain a higher right to limit the operations of their neighbours than someone who does not put their land to such a use.
[311] Eastern and South African Telegraph Company Limited v Cape Town Tramways Companies Limited [1902] AC 381, 393.
Thus, in Robinson v Kilvert,[312] the defendant had remained in occupation of a cellar but had leased the premises above to the plaintiff who kept there a stock of paper which was sensitive to heat. The landlord carried on in the cellar the business of manufacturing paper boxes which required hot, dry air. The heat from the cellar raised the temperature of the plaintiff's premises, damaging the plaintiff's stock of paper. A claim in nuisance was dismissed. Cotton LJ said:[313]
It would, in my opinion, be wrong to say that the doing something not in itself noxious is a nuisance because it does harm to some particular trade in the adjoining property, although it would not prejudicially affect any ordinary trade carried on there, and does not interfere with the ordinary enjoyment of life.
[312] Robinson v Kilvert (1889) 41 Ch D 88.
[313] Robinson (94).
In Bridlington Relay Ltd v Yorkshire Electricity Board,[314] the plaintiff carried on the business of providing a relay system for sound and television broadcasts, and erected a mast on its land for that purpose. Subsequently, the defendant erected a 66kv overhead power line on its land, which the plaintiff alleged interfered with the reception of sound and television broadcasts at the mast. It was held, among other things, that the plaintiff's business was exceptionally sensitive to interference and, applying Robinson, the interference from the power line did not constitute an actionable nuisance.[315]

The disposition of the appeal on the nuisance claim

[314] Bridlington Relay Ltd v Yorkshire Electricity Board [1965] 1 Ch 436.

[315] Bridlington Relay Ltd (448).

The appellants' contention at trial that the presence of the GM canola seeds from the respondent's property interfered with the appellants' use and enjoyment of their land was based upon the proposition that the presence of the seeds was contrary to the NASAA Standard for the cultivation of certified organic produce and that that had led to decertification. It was not part of the appellants' case that the decertification was permitted or required by the National Standard, or that it was necessary, in order to produce products to be sold as organic, for the appellants to enter into a contract containing the terms of the NASAA contract.
The appellants' case in nuisance depended upon establishing that the presence of the GM canola seeds from the swathes exposed them to the risk of decertification under the NASAA contract. Even if that proposition were correct, in our view, the claim in nuisance should still fail for the reasons set out below.
Adopting the language of Windeyer J in Hargrave referred to in [766] above, it may accepted that the 'state of affairs' was, relevantly, the swathing of the GM canola crop. That 'state of affairs' was 'created' by the respondent. The question remains whether that 'state of affairs', 'created' by the respondent involved an actionable nuisance.
Organic farming was, as the primary judge found, at best, an isolated practice in the Kojonup area. Broadacre farming operations, it is to be inferred of a conventional nature, were the norm and on the evidence, the only other organic farm was 25 km to the south.[316] Canola was widely grown and there was at least one other farmer growing GM canola, some 3 km away. Swathing was the preferred method of harvesting canola in the district and the respondent used that method of harvesting the GM canola crop for legitimate agricultural reasons, and, indeed, in the belief that it would not lead to any incursion of GM canola onto the appellants' land.
[316] Primary reasons [708].
In the circumstances, in our opinion, in the district of Kojonup, crop farming, including canola farming, was a common and ordinary use of the land, and harvesting was integral to or a necessary part of crop farming. Swathing was a conventional and moreover the generally preferred method of harvesting canola crops, and formed part of the common and ordinary use of the land in the district. The question then is whether the incursion of swathes involved an interference which was beyond what an ordinary average resident of the district ought reasonably to have expected under the circumstances.

There was no evidence that in the usual farming activities carried on in the district, an incursion of GM material, as in this case, would contaminate the produce of, or otherwise significantly affect, the farming operation where an incursion occurred. The GM canola swathes which were transferred to the appellants' land were benign in the sense that there was no risk of any genetic transfer to any species of animal, crop or produce.[317] There was also no prospect that the GM canola seeds could germinate and become a volunteer plant before the appellants harvested their wheat in early 2011,[318] and if they germinated and became volunteer plants subsequently, they were readily identifiable and capable of being pulled out.[319] Even if volunteer plants were overlooked, the GM canola seeds could easily and economically be screened out of any harvested grain.
[317] Primary reasons [688].
[318] Primary reasons [531].
[319] Primary reasons [669].
The evidence in relation to expectations more broadly in the district as to the possible adverse effect of adventitious GM material was reflected in a WA Department newsletter which said that non‑GM canola and GM canola crops should be segregated, in the context of a trading standard for non‑GM canola seed, which required a presence of less than 0.9% of an adventitious approved GM canola in the seed.[320]
[320] GB 1399.
In light of the foregoing, we are of the opinion that the judge did not err in his conclusion that there was no unreasonable interference with the appellants' use and enjoyment of Eagle Rest as a result of the incursion of GM canola swathes from Sevenoaks.
In the alternative, the appellants' claim should fail because the appellants' organic farming operation was abnormally sensitive to such an incursion.
On the appellants' case, the effect of the NASAA contract was that the presence of any GM material on their property, whether carried there by native animals, wind or by other means, exposed them to the risk of decertification, so that the swathing of the respondent's crop, with the consequence that some swathes and seeds blew over into the appellants' property, constituted an actionable nuisance.
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. That is, the appellants could not, by putting their land to an abnormally sensitive use, thereby 'unilaterally enlarge their own rights' and impose limitations on the operations of their neighbours to an extent greater than would otherwise be the case.
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. It is not to the point that the appellants sought to make the respondent aware of the relevant terms of the NASAA contract. Nor is it to the point that the appellants were carrying on their organic farming activities under the contract before the respondent commenced, or even was permitted to commence, to grow GM canola. Neither enabled the appellants to enlarge their rights at the expense of their neighbours. We would uphold contention 6 of the respondent's notice of contention.
As to the specific allegations in ground 11 not otherwise addressed above, it was clearly relevant that the respondent did not deliberately cause the swathes to be released on to the appellants' land, but that the decision by the respondent to swathe the GM canola crop was based on legitimate agricultural considerations, and done properly, without any expectation of an incursion onto the appellants' land. A deliberate, or even reckless, release of the swathes onto the appellants' land, in circumstances where the respondent knew of the appellants' sensitivity to the presence of any GM material, would have raised a question of malice. The contractual relationship between the appellants and NASAA was also a relevant consideration, as was the purely economic nature of the loss, and the absence of any physical injury to the appellants' land. The contractual relationship was the basis upon which the risk of decertification arose, and upon which the claim of nuisance rested.
Ground 11 should be dismissed and, in any event, the judge's ultimate conclusion should be sustained by reason of the appellants' abnormal sensitivity as alleged in par 6 of the respondent's notice of contention.
On the question of causation, neither party contended that s 5C of the Civil Liability Act applied to the claim in nuisance.

Appendix 1 - the National Standard

Introduction

The introduction to the National Standard states:
The Standard stipulates minimum requirements for products placed on the market with labelling which states or implies they have been produced under organic or bio-dynamic systems. In this Standard, the production procedures are an intrinsic part of the identification and labelling of, and claims for, such products.
The Standard provides a framework for the organic industry covering production, processing, transportation, labelling and importation. Furthermore the Standard aims to ensure conditions of fair competition in the market place by distinguishing those products produced according to the Standard from those produced by other means. Use of this Standard provides transparency and credibility for the industry and protects the consumer against deception and fraud.
Certifying organisations which have been accredited by the Australian competent authority, apply this Standard as a minimum requirement to all products produced by operators certified under this system. This Standard therefore forms the basis of equivalency agreements between approved certifying organisations and importing country requirements. Individual certifying organisations may stipulate additional requirements to those detailed here.
The introduction to the National Standard also refers to it containing three distinct components:
•The first component identifies 'general principles' that 'are intended to give the reader a general appreciation of what the Standard intends to achieve'. (emphasis added)
•The second component stipulates the specific conditions, ie 'Standards', that must be met by an operator.
•Derogations - these define a situation in which 'a temporary digression to the Standard may be made'.

Certification

Clause 6.2 provides:
Standards
6.2.1Any person who produces or prepares or markets, organic or bio‑dynamic or in‑conversion products must be certified for the activity through an approved certifying organisation.
6.2.2An operator must apply to an approved certifying organisation for certification.
6.2.3On being accepted as certified in‑conversion, organic or bio‑dynamic, an operator will sign a contract or agreement with the approved certifying organisation that contains a commitment of compliance to this Standard.
6.2.4An operator who elects to transfer to another approved certifying organisation will be subject to an initial inspection by the second approved certifying organisation before being certified by that organisation.
6.2.5An operator leaving, or decertified by, one approved certifying organisation has to include in the application to another approved certifying organisation details of any sanctions imposed by the former certifier.
6.2.6Sampling and analytical testing will be conducted by the certifying organisation as part of the certification process. This may be soil or product, or both.
6.2.7An operator will retain all records that relate to the certified operation for a period of at least five (5) years. (emphasis added)

Scope of standard

Clause 1.1 provides that the National Standard stipulates the 'minimum criteria' that must be met by operators before any certified product can be labelled as organic.
Clause 1.5 provides that products or by‑products that are derived from genetic modification technology are not compatible with the principles of organic agriculture and are not permitted under the National Standard.

Production requirements

Section 3 is headed 'Production requirements' and s 3.1 is headed 'Farm'. Clauses 3.1.1 ‑ 3.1.12 contain 'standards'.
Clause 3.1.4 provides that only inputs listed in the National Standard are permitted, and cl 3.1.5 provides that the use of products comprised of, or derived from, genetic engineering is prohibited.
Clause 3.1.7 provides that the operator must address the potential risks from consequences of external contamination with substances not permitted by the National Standard, and that this may require the implementation of buffer zones/barriers and the withdrawal of contaminated product/land from certification.
Clause 3.1.9 provides that where 'product' has been contaminated as a result of factors beyond the control of the operator then, in the case of product contaminated by genetically modified organisms, such 'product' must be 'excluded from sale'.
Clause 3.1.12 provides that where genetically modified crops have been grown on a production unit, a minimum of at least five years must elapse before products grown or produced on that area can be certified according to the National Standard.

Genetic modification

Clause 3.3 is headed 'Genetic modification'. It provides:
General Principles
(i)Products or by‑products that are derived from genetic modification, are not compatible with the principles of organic … agriculture.
(ii)Before purchasing or committing new production areas to organic … operations, operators should assess the risk from production areas that have previously grown or produced crops or livestock that were subject to genetic engineering … to ensure they are able to meet the expectation of freedom of their organic … products from genetic engineering contamination.
Standards
3.3.1The use of genetically modified organisms … is prohibited. This includes … animals, seed and farm inputs …
3.3.2Operators shall implement a risk management process to assess how they will avoid the accidental introduction of genetically modified organisms to the organic farm. These actions may include, but are not limited to:
(a)knowing about contaminant risks;
(b)implementing distances/buffer zones from potential contaminant;
(c)implementing special handling, transport and storage arrangements;
(d)maintaining samples;
(e)testing a crop perceived at risk.
3.3.3Inputs … shall be traced back one step in the biological chain to the organism from which they were produced to verify that they are not derived from genetically modified organisms.
3.3.4Where genetically modified crops or livestock have been grown or used on a production unit … a minimum of at least five years must have elapsed before products grown in or on that land can be certified according to this standard.
3.3.5The certification of organic crops, livestock or agricultural products will be withdrawn where genetically modified crops, livestock or agricultural products are grown or produced on the same farm.
(emphasis added)

Plant production

Section 3.7 is headed 'Plant production'. Clause 3.7.3 provides, as a standard, that the use of genetically modified seed and transgenic plants, or the application of GMO‑derived substances for treating plants, is prohibited.

Inspection certification

Section 6 is headed 'Inspection and certification'.
Clause 6.2.1 provides that any person who produces or markets organic products must be certified for the activity through an approved certifying organisation.

Sanctions

Clause 6.3 is headed 'Sanctions'. It provides as follows:
General Principles
(i)Sanctions are imposed on certified operators for any breach of this Standard. Depending on the severity of the breach, the sanctions may range from a direct instruction to correct a minor discrepancy; additional inspections; suspension of operations; or de‑certification of the certified operation where the infringement is significant.
Standards
6.3.1An inspection report may result in a condition … being imposed on the operator with timelines for compliance.
6.3.2Failure of the certified operator to comply with any condition may result in additional inspections …
6.3.3Suspension must be applied at any time to the certified operator by the approved certifying organisation where there is reason to believe that the organic … integrity of the product has been compromised.
6.3.4The right to use labelling indications covered by this Standard is withdrawn during the suspension period …
6.3.5Where the right to label … is withdrawn, any packaging that describes produce as being produced in accordance with this Standard, must be destroyed, or de‑faced to ensure that the packaging is not used for products not complying with this Standard.
(emphasis added)

Decertification

Section 6.4 is headed 'Decertification'.
Clause 6.4.1 provides that where an operator is 'de‑certified' by an approved certifying organisation for an infringement against the National Standard, the operator will not be eligible for re‑certification until all requirements of the National Standard are met.

Adventitious contamination

Under the heading 'Definitions' in the National Standard, the term 'adventitious contamination' is defined to mean contamination that has come from outside, accidental, or occurring in an unusual place. However, that term is not then used in the text of the National Standard.