Citation : MARSH -v- BAXTER [2014] WASC 187

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

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)

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

Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1995] FCA 1368; (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

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] WASCA 25; (2010) 265 ALR 490

Donoghue v Stevenson [1932] UKHL 100; [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 [1966] UKPC 2; [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 [1963] UKHL 4; [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] VicLawRp 60; [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 [1966] UKPC 1; [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] NSWStRp 68; (1916) 16 SR (NSW) 618

Robinson v Kilvert (1889) 41 Ch D 88

Rylands v Fletcher [1868] UKHL 1; (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

1 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.

2 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.

3 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.

4 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).

5 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.

6 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).

7 It was accepted by the parties to the action that the NASAA Organic Standard (NASAA Standard) was incorporated by reference into the NASAA Contract.

8 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'.

9 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.

10 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.

11 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.

12 In March 2010 the respondent consulted Kojonup agronomist, Mr Christopher Robinson, who recommended that the respondent plant RR canola on Sevenoaks.

13 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).

14 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.

15 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.

16 In September or October 2010 Mr Marsh erected signs on Eagle Rest identifying it as 'certified organic' and 'strictly GM free'.

17 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.

18 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.

19 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).

20 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.

21 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.

22 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.

23 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.

24 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.

25 Another representative of NCO (Claire Coleman) visited Eagle Rest on 21 December 2010 and took further samples of the swathed canola located thereon.

26 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.

27 On 25 November 2013 paddocks 7, 8, 9, 10, 11, 12 and 13 of Eagle Rest were re-certified organic by NCO.

28 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).

29 The extent of the damage suffered by the appellants was agreed by the parties at trial to be $85,000.

30 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).

31 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].

32 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.

33 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].

34 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.

35 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.

36 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].

37 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.

38 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.

39 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.

40 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

41 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 Act 1901 (Cth).

42 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).

43 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.

44 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).

45 The GT Act establishes an independent statutory office holder, the Gene Technology Regulator (Regulator) (pt 3).

46 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.

47 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).

48 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.

49 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)).

50 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.

51 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.

52 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.

53 Economic, trade and/or marketing considerations are irrelevant in the Regulator's assessment of a licence application under the GT Act.

54 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[.]

55 The Ministerial Council issued the Gene Technology (Recognition of Designated Areas) Principle 2003 which relevantly provides:

1. 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.
2. Section 5 is not intended to compel a State to make a law mentioned in that section.

56 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.

57 On 19 December 2003, the Regulator granted a licence to Monsanto for the intentional release of 'Roundup Ready® canola' in Australia.

58 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.

59 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.

60 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

61 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.

62 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.

63 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.

64 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)

65 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.

66 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).

67 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.

68 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.

69 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.

70 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

71 NASAA is a non-profit company limited by guarantee. NCO is a wholly owned subsidiary of NASAA.

72 NASAA has developed and owns the NASAA Standard. NCO uses and applies the NASAA Standard and the NASAA label under licence from NASAA.

73 NCO is an 'approved certifying organisation' under the Export Control (Organic Produce Certification) Orders (Cth) (Organic Produce Certification Orders).

74 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).

75 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).

76 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.

77 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).

78 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.

79 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).

80 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.

81 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).

82 The expression 'QM system' is defined to mean the organisational structure, responsibilities, procedures, processes and resources for implementing quality management (order 1.06).

83 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).

84 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.

85 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).

86 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).

87 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)).

88 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).

89 The NASAA Standard forms part of NCO's QM system under the Organic Produce Certification Orders (G3/1156 [5]).

90 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.

91 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.

92 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).

93 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 Act 2000. The outcome was that common law allows for effective remedies for persons incurring damage from GM crops (G3/1391).

94 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.

95 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).

96 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).

97 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).

98 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.

99 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.

100 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).

101 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.

102 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).

103 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.

104 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)[.]

105 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).

106 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)).

107 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).

108 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).

109 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).

6.1 The Licensee must comply with the [NASAA Standard], all terms of this contract ... and any requirements laid out by NASAA in correspondence with the Licensee.

6.2 The Licensee must not use substances or methods prohibited under the [NASAA Standard].

...

6.4 The 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).

111 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)[.]

112 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).

113 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.

114 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.

115 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.

116 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.

117 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.

• 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).

119 Clause 2.20 deals with labelling. It relevantly provides:

2.20.12 Organic 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).

120 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

3.2.1 The 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

3.2.2 Operators 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.

3.2.3 The certification of organic crops will be withdrawn where genetically engineered crops are grown on the same farm.

3.2.4 Operators 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.

3.2.5 Operators must not knowingly permit exposure or fail to take action against the application of or exposure to GMOs.

3.2.6 Inputs, 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.

3.2.7 Operators 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

3.2.8 Planting 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.

3.2.9 Organic certification shall be withdrawn where NASAA considers there is an unacceptable risk of contamination from GMOs or their derivatives.

3.2.10 Any 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.

3.2.11 Contamination of organic product by GMOs that results from circumstances beyond the control of the operator may alter the organic status of the operation.

3.2.12 Under the National Standard, NASAA will decertify any products that are tested and reveal the presence of GMOs (G4/1751 - 1752).

121 It is as well to deal with the findings sought by the parties before determining the construction issues.

122 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.

123 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.

124 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.

125 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].

126 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.

127 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.

128 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.

129 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.

130 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).

131 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)

132 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.

133 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.

134 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].

135 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.

136 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.

137 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.

138 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.

139 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).

140 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.

141 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).

142 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.

143 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.

144 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).

145 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).

146 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].

147 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.

148 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).

149 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.

150 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.

151 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)[.]

152 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).

153 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.

154 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.

155 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.

156 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.

157 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.

158 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.

159 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.

160 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.

161 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.

162 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.

163 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.

164 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.

165 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.

166 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.

167 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).

168 As the proposed finding is supported by Dr Preston's evidence, which the trial judge accepted, I would make finding 18.

169 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.

170 Proposed finding 21 is that in order to issue organic produce certificates under the Export Control Act, NCO determines whether the production system in which the goods the subject of an application for an organic produce certificate were produced or prepared complies with NCO's QM system. For the purposes of that determination NCO acts on the basis that goods will have been produced or prepared in accordance with the National Standard for Organic and Biodynamic Produce (National Standard) where the production system has been certified to the NASAA Standard.

171 That is not an entirely accurate statement of the regulatory framework. The NASAA Standard forms part of NCO's AQIS-approved QM system which is a necessary condition of NCO's status as an approved certifying organisation under the Organic Produce Certification Orders. As discussed below, the National Standard is not expressly referred to in any relevant Commonwealth Act, Regulation or Order.

172 Proposed finding numbered 23 is that supermarket businesses Coles and Woolworths require from producers and wholesalers of organic produce certificates of accreditation from AQIS-approved organic certifying organisations. The unchallenged evidence of Jan Denham, a primary producer of organic produce, is that wholesalers selling to the major domestic supermarkets will only buy organic produce from AQIS/DAFF-approved certified producers (G3/1144, 1159). I would make proposed finding 23.

173 Proposed finding numbered 22 is that in 2013 the Australian organic industry was worth more than $1.276 billion to the Australian economy annually. This was the unchallenged evidence of Ms Denham (G3/1152). I would make proposed finding 22.

Construction of NASAA Standard - grounds 9, 10

174 The trial judge construed the term 'contamination' in cl 3.2 of the NASAA Standard to mean 'genetic contamination' by which I understand him to mean the transfer of genetic traits to the genes of organic product by cross-pollination or out-crossing [435], [522]. It does not extend to successive generations of GM canola grown from a GM volunteer [186], [532], [667].

175 Contrary to the respondent's claim, on my reading of the reasons, physical contamination of organic product by mixing is also outside the scope of the trial judge's construction. In any event, it is indisputable that the trial judge held that the mere presence or use of GMOs in an organic farming system does not constitute contamination for the purpose of cl 3.2. He characterises that (without reference to extent or degree) as 'zero tolerance' which he regarded as unsupportable because GM canola itself is benign.

176 The trial judge construed cl 3.2.1 as confined to the deliberate use or negligent introduction of GMOs to an organic farming system by the organic operator, not by an outside third party such as the respondent [508], [510]. Moreover, the trial judge concluded that cl 3.2.9 does not apply to the adventitious presence on Eagle Rest of GM canola from Sevenoaks [528] - [529]. In context, 'adventitious' is intended to mean accidental (that is, not deliberate) presence attributable to the conduct of a person other than the organic operator (by himself, his servants or agents).

177 He also held that cl 3.2.5 was wholly inapplicable to the litigation between the appellants and the respondent 'other than contextually towards an assessment of the proper meaning of other provisions found in standard 3.2' [512].

178 As to the proper construction of cl 3.2.11 the trial judge said:

The use in [cl 3.2.11] of the word 'may' ... grates against any suggestion that circumstances delivering an adventitious presence of GMOs to an organic operation must occasion the automatic loss of 'certified organic' status for that organic operation. Moreover, the clear focus of [cl 3.2.11] appears to be at a (genetic) contamination of an organic 'product' by GMOs in the first instance, rather than the whole organic farming operation itself [522].

179 The trial judge concluded that for cl 3.2.9 to apply in this case:

[T]here needed to be some sensible risk of a contamination to an organic product then being grown or raised on Eagle Rest [532].

180 As the trial judge correctly observed, there was nothing to meet his criterion of genetic contamination of an organic product being grown or raised at the time of the decertification of part of Eagle Rest on 29 December 2010 [532]. It is significant that the trial judge does not address the risk of contamination of organic product grown in the future. I infer that is related to his conclusion that any risk of future genetic trait transfer from the pollen of volunteer GM canola on Eagle Rest could be avoided by the (hand) removal of GM volunteers before they set seed [738].

181 Finally, the trial judge held that NCO had misapplied the NASAA Standard with the consequence that the decertification of part of Eagle Rest was wrongful in the sense it constituted a breach of the NASAA Contract [529], [580], [739].

182 The appellants challenge all of the above aspects of the trial judge's construction of cl 3.2. They contend (in ground 9) that 'contamination' for the purposes of the NASAA Standard includes the presence or use of GMOs in an organic farming system and not merely in the product or products derived from that system; cl 3.2.1 applies to the conduct of any person, not just the organic operator; cl 3.2.5 would have applied to the appellants if they had purported to sell as 'certified organic' crops grown in paddocks in which GM canola seeds were known to have been scattered or germinated after the GM canola swath incursion in November 2010; and cl 3.2.9 applies to the risk of the presence in an organic farming system of materials containing or derived from GMOs, whether or not GMOs were detectable within the product of that system.

183 The appellants also contend the trial judge should have held that NCO's decertification of Eagle Rest was pursuant to NASAA Standard 3.2.9 and was a sanction open to NCO (ground 10).

184 The respondent claims that contamination in cl 3.2.9 means genetic or physical contamination of an organic product. Otherwise, he supports the construction and conclusions of the trial judge.

Disposition - construction and application of NASAA Standard

185 On the proper construction of the NASAA Standard as a whole, 'contamination' in cl 3.2 includes the presence or use of GMOs, or products derived from GMOs, in an organic farming system. My reasons are as follows.

186 The term 'contamination' features prominently throughout the NASAA Standard. Significantly, it is not confined to contamination which manifests itself as a constituent, or part, of an organic product. A particular focus is on preventing contamination of organic soil (cl 3.1, cl 3.6, cl 4.4, Annexure 1, cl 4.6.1). There should be management strategies to minimise contamination risks that impact on the integrity of not only the certified produce but also the land (cl 3.1). The integrity of the land is one of the reasons why conversion from conventional production to organic production takes a minimum of four years (cl 2.1.1, cl 2.3.1).

187 The NASAA Standard regulates more than just the production of organic product. It regulates the processing (cl 4.15, cl 4.16), transport and handling (cl 4.17) and storage and warehousing (cl 4.18) of organic product. The purpose and effect of the standards applicable to those stages in the supply chain is the protection of the integrity of the organic product by ensuring no contamination by mixing with, or exposure to, non-organic product.

188 For example, in transport and handling, every precaution must be taken to avoid the possibility of contaminating organic produce with conventional goods (cl 4.17.1); transportation systems must be able to be cleaned with ease to ensure product integrity during transport (cl 4.17.3); organic and non-organic products may not be transported together unless packaged and sealed (cl 4.17.6); non-dedicated containers must be cleaned or lined and covered with an approved protective material (cl 4.17.7). In storage and warehousing, organic products in bulk form must be in physically sound and easily cleaned storage areas (cl 4.18.2); organic produce must not be co-stored with conventional produce under controlled atmosphere (cl 4.18.5); and sacks or bags must be dedicated for organic use only (cl 4.18.6).

189 Clause 3.2 has to be construed against that broader background in which it is manifest that contamination includes mixing with, use or presence of, or exposure to non-organic inputs, product and produce. There is no justification for a narrower construction of contamination for the purposes of cl 3.2.

190 Indeed, limiting contamination to genetic trait transfer or to that detectable in organic product is inconsistent with the text of the general principles in cl 3.2 (GMOs have no place in organic production systems), standards cl 3.2.1 (which applies to both 'organic farming systems or products'), cl 3.2.8 (which focuses on the land not the produce), and the express limitation in cl 3.2.1, cl 3.2.4 and cl 3.2.11 to contaminated product.

191 There is no sense in prohibiting GMOs and GMO derivatives in an organic production system if contamination is confined to its presence in organic products. On that basis, sheep could eat GM seeds because GM material will not be present in their meat or wool. Yet cl 6.5.1 requires that the diet of organic animals comprise 100% organic feed. Further, GMOs or their derivatives could be used in the soil or on crops provided it was not detectable in the product. All that is clearly inconsistent with the purpose and effect of the NASAA Standard.

192 Moreover, cl 6.4 of the NASAA Contract, like cl 3.2 of the NASAA Standard, refers separately to contamination of the land and contamination of the specified products.

193 Finally, a construction of 'contamination' in cl 3.2 that includes the presence or use of GMOs in an organic farming system is consistent with the definition of contamination adopted by the Senate report on the Commonwealth GM Bill and the Legislative Council Committee report on the State GM Bills. The definition used by both is as follows:

Contamination is the unintended and/or unwanted presence of a substance, organism or part of an organism in a particular environment, including within organisms. In the context of genetically modified organisms (GMOs), contamination is the unintended/unwanted presence of a GMO, or the genetic material of a GMO or product of a GMO in an organism, environment or product (Senate report [6.2]; Legislative Council Committee report [9.9]). (emphasis added)

194 I turn to the proper construction of cl 3.2.1. The general principles in cl 3.2 expressly state that GMOs have no place in organic production or processing systems. The recommendations recognise there is a risk of contamination from the use of adjacent land by third parties. The purpose of the NASAA Standard is to provide a guarantee to consumers of the correctness of the description of produce as organic; it is also to protect and maintain the reputation of Australian organic products in the market place. These matters together reveal that the primary concern of the NASAA Standard as a whole is the fact or risk of contamination of both the organic production system and finished product, not who is responsible for the creation of the fact, or risk, of contamination. That context compels the conclusion that cl 3.2.1, which refers to the deliberate use or negligent introduction of GMOs or their derivatives to organic farming systems or products, is not confined to the conduct of the organic operator. The absence of any reference to the organic operator in the text of cl 3.2.1 stands in stark contrast to cl 3.2.2, cl 3.2.4, cl 3.2.5 and cl 3.2.7, all of which are confined to prohibitions or obligations placed on the organic operator.

195 Having regard to the text, context and purpose of cl 3.2.1 and the NASAA Standard as a whole, cl 3.2.1 applies to the deliberate or negligent introduction of GMOs by any person. However, it does not apply to the accidental, non-negligent presence of GMOs, which is an irreducible risk of the policy of co-existence of GM farming in proximity with non-GM or organic farming. I infer this is one reason for the requirement in cl 2.20.12 that organic products not be labelled as GMO free.

196 Clause 3.2.9, which provides that '[o]rganic certification shall be withdrawn where NASAA considers there is an unacceptable risk of contamination from GMOs or their derivatives', is also informed by the immediate context in cl 3.2 and the broader context of the NASAA Standard. Contamination has the meaning for which the appellants contend and does not exclude accidental contamination, negligent or otherwise. The term 'negligent' in cl 3.2.1 does not mean tortious liability for negligence, the focus being solely on the character of the conduct.

197 The obligation under cl 3.2.9 to withdraw organic certification only arises where NASAA has formed an opinion that there is an unacceptable risk of contamination. That is, the condition enlivening the obligation is wholly subjective. As a matter of construction, the opinion does not have to be based on reasonable grounds although it would be subject to an obligation to act in good faith.

198 It follows from the proper construction of the term 'contamination' and cl 3.2.1 that if the appellants had, without NASAA's knowledge and approval, sold produce grown in the GM canola contaminated paddocks as 'NASAA certified organic', they would have been in breach of cl 3.2.5. Moreover, the appellants' use of that label on their produce would convey the (mis)representation to consumers that it had been produced in accordance with NASAA requirements.

199 I turn now to the question whether it was open to NCO to decertify paddocks 7 to 13 of Eagle Rest. At the time of decertification, the paddocks had been contaminated by the presence of canola swaths. All but the unattached seeds and pods could have been easily removed without any arguable justification for decertification of the land. The difficulty was with the seeds because of their small size and colour, potentially huge quantity, widespread but not precisely identifiable distribution on and in the soil and (crucially) their capacity to produce successive generations of GM canola. It was this capacity that was the source of the risk of future continuing contamination. Moreover, whilst the soil was contaminated with GM canola pods and seeds, sheep could not in the future graze on those paddocks and be certified as organic. Having regard to these matters, it was open to NCO to be satisfied in good faith that the risk of contamination was unacceptable. Accordingly, if so satisfied, NCO was required to decertify. I would uphold grounds 9 and 10.

Reasonableness of decertification under NASAA Standard (contention 4)

200 The respondent contends that if the accidental presence of GM canola on Eagle Rest is within the definition of contamination in cl 3.2.9, the weight of the evidence is that NCO acted unreasonably in determining that there was an unacceptable risk of contamination of paddocks 7 - 13 of Eagle Rest, or alternatively acted unreasonably in failing to recertify those paddocks in 2011, 2012 and 2013.

201 It is important to distinguish between the proper construction and scope of application of cl 3.2.9 of the NASAA Standard and its reasonableness from a policy perspective. Assessments of its policy reasonableness will differ between supporters of genetic engineering in agriculture on the one hand, and many who support organic and perhaps conventional farming methods, on the other. For the reasons discussed below, the determination of the respondent's contention does not require this court to make a value judgment as to the policy reasonableness of the NASAA Standard.

202 However, it is clear from the trial judge's reasons as a whole that he regarded the construction of cl 3.2.9 contended for by the appellants as wholly unreasonable from a policy perspective. That view informed his construction of cl 3.2 and the findings of fact relied on by the respondent to justify a further finding that NCO acted unreasonably in decertifying any part of Eagle Rest.

203 At the root of the trial judge's approach is his view that the stance taken by the NCO decision-makers (Ms Stephanie Goldfinch, Ms Denham and later Mr Sachin Ayachit) against the accidental presence on certified organic land of GMOs and their derivatives, which he refers to as zero tolerance, is unsupportable [578], [583], [603].

204 The courts in this country are the last place in which there is any proper scope for scepticism, denialism or contrarianism in relation to evidence-based expert scientific consensus on scientific matters, whether the issue be the cause and probable effect of climate change or the safety and environmental risks associated with genetic engineering in agriculture. There is no challenge in this case to the assessment of the Regulator under the GT Act, confirmed by the expert evidence at trial, that GM canola poses no risk to the health and safety of people (or other animals) and, subject to compliance with conditions, the environment.

205 However, the evidence at trial established that there are economically significant domestic and export markets for non-GM agricultural produce, both conventional and organic. Indeed, the long delay between the approval of RR canola under the GT Act in December 2003 and the lifting of the prohibition on the cultivation of GM canola in December 2010 in this State is explained in the second reading speech to the GM Free Act. The purpose of this State's moratorium was to delay the introduction of GM crops in order to give effect to a government policy of supporting the establishment of proven segregation and identity preservation systems for different types of agricultural produce in order to avoid any prejudice to its markets, particularly this State's large export market for agricultural produce. At the time of trial, Tasmania's moratorium on GM crop cultivation was still in place in order to protect its 'clean green' reputation overseas and in Australia.

206 On the publication in January 2010 of the GM Exemption Order, the Ag Department published advice to farmers which reflected the government policy that different types of farming (GM cultivation, non-GM cultivation and organic cultivation) co-exist and of the need to manage the risks to the integrity of the respective crop supply chains. That objective was also incorporated into the Monsanto Management Plan set out above.

207 The State Government policy is consistent with the Commonwealth regulatory framework for exporting product labelled as organic. It is of particular significance that the NASAA Standard, including cl 3.2 relating to GMOs, is part of the AQIS audited and approved QM System under the Organic Produce Certification Orders.

208 The findings made by the trial judge and those sought by the respondent for the claim of unreasonableness, are as follows. First, the canola swaths on Eagle Rest from Sevenoaks were readily identifiable, capable of being removed before April 2011 and ought to have been removed before then [438] - [439], [686] - [687]. Second, NCO could have monitored and reviewed the incursion and possible spread of GM canola seed once all swaths had been gathered up [533]. Third, volunteers could be removed by hand before they set seed which would in turn control the development of further volunteers [738]. The evidence establishes (and I would find) that the primary means of controlling the development of further volunteers is by hand removal prior to the plant developing pollen and seeds (Van Acker, ts 480 - 481). Fourth, the organic wheat crop in paddock 11 could have been machine cleaned to remove any GM canola seeds [536], [738]. Fifth, only eight volunteer GM canola plants were ever detected on Eagle Rest, all of which occurred during 2011 (four in paddock 10, three in paddock 12 and one in paddock 13) [138], [611], [669], [700] - [701].

209 Finally, the respondent seeks a finding that the person who inspected Eagle Rest in April 2012 (Ms Coleman) reported that the appellants were relevantly compliant with the NASAA Standard (G3/1469, 1478 - 1480). However, Ms Coleman was reporting on the parallel production of conventional and organic produce forced on the appellants by decertification. Further, Ms Coleman was not an NCO decision-maker in respect of decertification.

210 My findings 9, 10, 11, 12A, 13, 14, 15, 16, 17, 18 and 20 are also relevant to an assessment of the reasonableness of the fact and length of the decertification of paddocks 7 - 13 of Eagle Rest.

211 Reasonableness of the decertification is to be adjudged at the time it occurred in December 2010. Having regard to the number of swaths, the very large but otherwise indeterminate number of GM canola seeds, the movement around Eagle Rest of the GM swaths and seeds by wind and sheep, the difficulty in detecting seed in and on the soil, and the fact that volunteers were not the only issue associated with GM seed infested soil, the decertification was both open and based on reasonable grounds.

212 As to the alleged unreasonableness of not recertifying Eagle Rest in or after 2011, that cannot go to the existence of a duty of care in negligence, only to the extent of the damage which is not in issue in the appeal, it having been agreed at trial. Further, I am not persuaded it is relevant to nuisance either. The cause of action in nuisance accrued when the damage (suspension then decertification) occurred. In any event, having regard to the extent of the seed incursion and movement around Eagle Rest and the length of time in which canola seeds can remain viable, I am not persuaded that NCO acted unreasonably in failing to recertify for three growing seasons.

213 As a result, the respondent's further claim that NCO's unreasonable conduct was the sole factual and legal cause of the appellants' pure economic loss must also fail. I would dismiss contention 4.

Construction of the National Standard and ACO Standard - contentions 1, 2 and 3(a)

214 The respondent contends the trial judge ought to have held that NCO should have applied the NASAA Standard consistently with the National Standard; the National Standard did not permit NCO to decertify paddocks 7 - 13 of Eagle Rest as a result of the accidental incursion of GM canola swaths onto Eagle Rest; and the above matters provided an additional basis for concluding that NCO was not permitted to decertify paddocks 7 - 13 of Eagle Rest; alternatively, the decertification was neither reasonable nor reasonably foreseeable (contention 1).

215 In contention 2, the respondent claims the trial judge erred in relying on the definition of 'contamination' in the 2012 version of the IFOAM Basic Standards when he ought to have relied on the definition in the 2005 version which provided:

Pollution of organic product or land; or contact with any material that would render the product unsuitable for organic certification (G4/1927).

216 The respondent also claims the NASAA Standard was required to be consistent with the 2005 IFOAM definition which required that contamination in cl 3.2.9 of the NASAA Standard mean contamination of organic product.

217 In contention 3, the respondent claims the trial judge ought to have found that it was open to the appellants to have sought licences to sell organic product labelled 'certified organic' from either Australian Certified Organic (ACO) or AUS-QUAL Pty Ltd; there was no evidence the appellants had attempted to seek alternative licences; AUS-QUAL operated under the National Standard, which would not have permitted decertification, and the ACO Standard would also not have permitted decertification. The first two matters were not put to Mr Marsh.

218 The respondent's submissions reflect a misunderstanding of the regulatory framework. As noted above, the NASAA Standard forms part of NCO's QM System approved by AQIS in accordance with the Organic Produce Certification Orders. The National Standard has no statutory or regulatory underpinning. It is, in effect, a minimum benchmark used by AQIS under its Administrative Arrangements for Approved Certifying Organisations (Administrative Arrangements) for conferring the status of an 'approved certifying organisation' under the Organic Produce Certification Orders.

219 In any event, as is made clear in the introduction to the National Standard, it sets out minimum requirements, noting that '[i]ndividual certifying organisations may stipulate additional requirements to those detailed' in the National Standard (G4/1843).

220 In the absence of positive inconsistency with an express provision in the National Standard, there is no basis for the respondent's claim that NCO could not rely on any additional requirements in the approved NASAA Standard. There is no arguable positive inconsistency in this case. Indeed, I am unable to discern any relevant inconsistency.

- the use of GMOs or their derivatives is prohibited in organic agriculture and that includes but is not limited to, animals, seed and farm inputs such as fertilizers, soil conditioners, vaccines, crop production materials, food additives or processing aids (cl 3.3.1);

- where GM crops 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 the National Standard (cl 3.3.4);

- the certification of organic crops, livestock or agricultural products will be withdrawn where GM crops, livestock or agricultural products are grown or produced on the same farm (cl 3.3.5);

- the use of genetically modified/engineered seed or the application of GMO-derived substances for treating plants is prohibited in organic farming (cl 3.7.3); and

- livestock systems shall provide 100% of the diet from feed produced according to the National Standard and for livestock products to be labelled as organic, the livestock diet must be sourced from organic feed (cl 3.14.1).

222 Of particular significance in this case are cl 3.1.7 and cl 3.1.8 of the National Standard, which provide:

3.1.7 The operator must address the potential risks from prior operations and consequences of external contamination with substances not permitted by this Standard. This may require the implementation of buffer zones/barriers and withdrawal of contaminated product/land from certification.

3.1.8 In case of reasonable suspicion of land and/or product contamination, the certified operator shall advise their certification organisation, and provide all factual evidence to support this (G4/1853). (emphasis added)

223 Further, the National Standard does not state the grounds for decertification. Clause 6.4 of the National Standard, which deals with decertification, is confined to the consequences of decertification. As is apparent from the Administrative Arrangements, the QM manual of approved certifying organisations must include the details of that organisation's rules and procedures for granting, maintaining, withdrawing and suspending certification (cl 4.1.1(c)). That includes the relevant provisions in cl 3.2 of the NASAA Standard. Contention 1 should be dismissed.

224 As to contention 2, the appellants concede that the 2005 version of the IFOAM Basic Standards was applicable in December 2010. However, the IFOAM Basic Standards do not form part of the mandatory Commonwealth legislative framework. Further, they do not require that NCO's powers under the NASAA Standard be sourced in, or reflect, the IFOAM Basic Standards. Accordingly, it is unnecessary to determine the appellants' claim that the definition of 'contamination' in the 2005 IFOAM Basic Standards is consistent with the definition for which they contend, which extends to the presence of canola swaths and seeds on Eagle Rest in December 2010. I would dismiss contention 2.

225 That leaves the question whether the ACO Standard would not have permitted decertification of Eagle Rest in the circumstances that occurred in 2010. The respondent relies on the evidence of Ms Goldfinch for his contention. However, the proper construction of the ACO Standard is to be determined objectively, in the usual way. The respondent relies on cl 3.3.4 - cl 3.3.13 and cl 4.8.16 - cl 4.8.20. Having read the specified clauses, it is not clear whether cl 4.18.19, which prohibits GMOs and their derivatives 'in all aspects of the organic production and consumption chain', would be breached by the circumstances on Eagle Rest in December 2010 (G4/2057). If there was no breach, it would then be necessary to determine whether the omission was filled by the application of the National Standard. However, it is unnecessary to determine these issues. Even if decertification was not permitted under the ACO Standard, for the reasons discussed below, it is not reasonable to conclude that the appellants were therefore not relevantly 'vulnerable' for the purpose of determining whether the respondent owed a duty of care to the appellants.

226 For these reasons, I would also dismiss contention 3(a).

227 The trial judge identified the relevant question to be whether there had been an unreasonable interference with the appellants' enjoyment of Eagle Rest in 2010 [705], [709] - [710]. He answered that question in the negative. There is a reference to the appellants' 'use' of Eagle Rest later in the reasons [733].

228 The trial judge identified eight factors for his conclusion. They are first, there was no physical damage from the swaths to persons, animals, land or chattels at Eagle Rest. The damage was purely financial 'arising out of a private contractual relationship the [appellants] voluntarily entered into with NCO/NASAA', which the trial judge describes as 'idiosyncratic contractual arrangements' to which the respondent was not privy [711] - [712].

229 Second, the respondent held legitimate agricultural reasons for swathing his GM canola crop. The trial judge refers to the respondent's evidence that it assisted his weed control of problematic ryegrass in Two Dams and Range.

230 Third, swathing itself is not a novel or aberrant method for harvesting a canola crop.

231 Fourth, the respondent did not make a unilateral or uninformed decision to swath, it being recommended and supported by Mr Robinson. As noted above, the trial judge accepted that Mr Robinson was not aware of the October notice and that if he had been, Mr Robinson's advice would, in all probability, have been consistent with what was contained in the Farmanco newsletter, which referred to the need to discuss management options and the possibility of strong winds moving swaths onto neighbours' paddocks [715] - [716]. However, as the trial judge noted, that was not a statement to growers that they should not swath or not swath in a border paddock adjoining a road.

232 Fifth, an airborne GM canola swath incursion from Sevenoaks to Eagle Rest was not reasonably anticipated or expected by the respondent in November 2010. Further, the respondent did not deliberately release the swaths onto Eagle Rest and would have been unhappy at losing part of his crop.

233 Sixth, there was a certain measure of first-time novelty in the escape of swaths onto Eagle Rest as the respondent had never previously grown a GM canola crop nor swathed a canola crop.

234 Seventh, when Mr Marsh delivered the October notice to the respondent, the GM canola crop was already well out of the ground and had flowered.

235 Eighth, in 2010 there was not any recommended 'swathing buffer distance suggested for GM canola grown in a boundary paddock' [721]. In the context of determining an appropriate buffer distance, the trial judge said there was a deficiency in the evidence in respect of the likely strengths of the prevailing winds in the Kojonup area at the relevant time.

236 In concluding that there was no unreasonable interference with the appellants' enjoyment of Eagle Rest, the trial judge said:

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 [730].

237 The trial judge's conclusion that there was no unreasonable interference with the use and enjoyment by the appellants of Eagle Rest was reached without reliance on his finding that NCO breached the NASAA Contract in decertifying 70% of Eagle Rest on 29 December 2010. That was later described as a further and independent factor supporting his conclusion that the respondent's interference was not unreasonable [733] - [740].

Grounds of appeal and contention - nuisance (ground 11, contentions 5 and 6)

238 Ground of appeal 11 takes the unusual form of a challenge to the ultimate finding of no unreasonable interference based in large measure on claims that the trial judge took into account irrelevant considerations and failed to take into account relevant considerations. That is an orthodox approach in a claim for judicial review of a discretionary decision which (save for errors of law on the face of the record) is confined to jurisdictional errors of law which entitle a court to quash a decision but not (ordinarily) substitute its own decision. It is an unorthodox approach in an appeal to this court by way of rehearing, which entitles the court to intervene and substitute its own decision where there is a material error of fact or law.

239 Ground 11 contains numerous individual challenges to the trial judge's reasoning and fact-finding. In summary, the appellants contend the trial judge erred:

(a) in taking into account irrelevant considerations, being that:

(i) there was no physical damage to persons or property;

(ii) the swath incursion was not the result of deliberate conduct by the respondent to release the swaths and that the respondent would be unhappy about losing part of his GM canola crop;

(iii) the respondent did not make any unilateral or uninformed decision to swath;

(iv) there was a certain measure of first-time novelty in the swath incursion;

(v) there was no indication that the swathing of the respondent's canola crop was carried out other than professionally;

(vi) at the time when Mr Marsh delivered the October notice to the respondent, the respondent's canola crop was already flowering;

(b) in failing to take into account the nature, extent and unreasonableness of the interference with the appellants' use and enjoyment of Eagle Rest;

(c) in holding that the conduct of NCO/NASAA in the context of their contractual relationship with the appellants was relevant in the determination of whether or not the respondent unreasonably interfered with the appellants' use and enjoyment of Eagle Rest;

(d) in finding that the respondent had legitimate agricultural reasons for swathing; and

(e) in finding that by electing to swath the respondent did not engage in conduct that was unique or aberrant in the context of the ordinary usages of broadacre farming in the Kojonup district.

240 In contention 6 the respondent claims the trial judge ought to have found that the appellants were abnormally sensitive to the presence of GM canola on their land because they chose to label their product 'NASAA certified organic' and that the Australian Oilseeds Federation (AOF) established a trading standard for non-GM canola which sets a limit of 0.9% adventitious presence of an approved GM canola in conventional canola seed.

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

242 Yet nuisance is the field of tort liability that protects an occupier's interest in the use and enjoyment of their land; its primary concern is with the reciprocal rights and duties of private individuals, usually neighbours, where there is a conflict over competing uses of land.

243 The gist of private nuisance is the interference with an occupier's use and enjoyment of their land. Public nuisance is an interference with a public or common right.

244 Nuisance covers property damage and personal injury (compendiously referred to hereafter as 'physical damage') and also extends to non-physical damage to an occupier's use and enjoyment of land, including that caused by air pollution, vibration, noise or dust. To that list, the appellants would add 'GM canola'.

245 The interference, in public and private nuisance, must be both substantial and unreasonable. This is in recognition of the fact that the existence of communities depends on the principles of give and take, and live and let live.

246 As stated in Fleming's The Law of Torts (9th ed):

The paramount problem in the law of nuisance is therefore to strike a tolerable balance between conflicting claims of neighbours, each invoking the privilege to exploit the resources and enjoy the amenities of his property without undue subordination to the reciprocal interests of the other ... Reasonableness in this context is a two-sided affair ... It is not enough to ask: is the defendant using his property in what would be a reasonable manner if he had no neighbour? The question is, is he using it reasonably, having regard to the fact that he has a neighbour? (467).

247 The test of whether an interference is unreasonable is objective. The approach to unreasonableness bears some similarity to the negligence calculus. However, unlike the tort of negligence, liability in nuisance is strict in the sense it is not necessarily discharged by the exercise of reasonable care, although it may be: Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management [2012] WASCA 79 [119], [126].

248 In making a judgment as to whether interference is unreasonable, regard is had to a variety of factors including the nature and extent of the harm or interference, the social or public interest value in the defendant's activity, the hypersensitivity (if any) of the user or use of the plaintiff's land, the nature of established uses in the locality, whether all reasonable precautions were taken to minimise any interference, and the type of damage suffered: Southern Properties [118].

249 An abnormally sensitive person (or use) is not entitled to additional protection by reason of his or her sensitivity: Munro v Southern Dairies Ltd [1955] VicLawRp 60; [1955] VLR 332, 335. Thus, where a use to which a plaintiff puts his land is abnormally sensitive, it would be unfair to allow the plaintiff to enlarge his rights at the expense of the defendant, unless the defendant failed to adopt a precaution which would have made it possible to avoid the damage without appreciable prejudice to his own interests: Hollywood Silver Fox Farm Ltd v Emmett [1936] 1 All ER 825; Robinson v Kilvert (1889) 41 Ch D 88.

250 In Robinson v Kilvert, the defendant carried on the business of manufacturing paper boxes which required hot, dry air. He heated his premises for that purpose which raised the temperature on the plaintiff's floor above, which had the effect of diminishing the value of special quality paper warehoused there. The action was dismissed because there would have been no damage but for the plaintiff's 'exceptionally delicate trade' (97).

251 The concept of an occupier's interest in the use and enjoyment of land is broad and comprehensive. It clearly includes an occupier's actual use of the land for agricultural purposes.

252 The law of nuisance has traditionally protected a wider range of interests than negligence. In particular, damages have been consistently awarded for pure economic loss in both public and private nuisance. There is no challenge to the trial judge's acceptance of this proposition [301]. It was expressly acknowledged by Gleeson CJ in Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 [14].

253 It is not contended in this case that the law of nuisance exclusively defines neighbourly relations. That is, it is not suggested the law of negligence has no application. Moreover, it was accepted that the Civil Liability Act 2002 (WA) (CLA) has no application to the appellants' claim in nuisance.

254 In seeking to uphold the trial judge's decision, the respondent relies on Victoria Park Racing and Recreation Grounds Co Ltd v Taylor [1937] HCA 45; (1937) 58 CLR 479. In that case the defendant, without the plaintiff's permission, broadcast descriptions of races conducted on the plaintiff's land, which he observed from his adjoining land. As a result of the broadcasts, attendances at and profits from the races fell. The claim in nuisance was dismissed. The High Court rejected any general right to privacy and held that the use of an unimpeded view of neighbouring land did not constitute an actionable interference with the use or enjoyment of that land. Victoria Park Racing is distinguishable. In this case physical objects brought onto Sevenoaks by the respondent escaped onto Eagle Rest.

255 Before leaving the subject, it is relevant to note the history of the common law of nuisance. It was formerly the law that the spread or escape of things naturally on land (such as wild thistles and prickly pear) through natural agencies (such as wind, rabbits or birds) to neighbouring land was not actionable in nuisance (or negligence): Sparke v Osborne [1908] HCA 46; (1908) 7 CLR 51; Giles v Walker (1890) 24 QBD 656. This line of authority concerned an omission to act (not a nuisance created by the defendant) and was overruled in Goldman v Hargrave [1966] UKPC 2; [1967] 1 AC 645.

256 The law relating to the escape of things brought onto a person's property which were not naturally there became known as the rule in Rylands v Fletcher [1868] UKHL 1; (1866) LR 1 Ex 265; (1868) LR 3 HL 330. As liability was strict, the scope of the rule dramatically narrowed over time until it became confined to dangerous, non-natural uses.

257 Although the rule in Rylands v Fletcher started out in England as a form of nuisance, in Australia it has been absorbed into the common law of negligence: Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520, 556. However, it would be wrong to treat the law relating to the escape of things from a defendant's land as circumscribed or narrowed by the scope of the rule in Rylands v Fletcher at the time of its absorption.

258 An irrelevant consideration is one which a decision-maker is prohibited from taking into account in an evaluative assessment. A relevant consideration is one that must be taken into account. The determination of whether or not a consideration is irrelevant or relevant depends upon the live issues at trial. The issue in nuisance is whether the interference with the appellants' use and enjoyment of Eagle Rest was substantial and unreasonable.

259 It was not the appellants' case in nuisance that the respondent's use of his farmland to produce GM canola crops was incompatible, or in conflict, with the appellants' use of their farmland to produce certified organic products. The appellants' case was as to the manner in which the respondent harvested his GM crop. The appellants' claim was (and is) to the effect that the respondent failed to harvest the GM crop in a manner that would have avoided the damage to the appellants' use of Eagle Rest as an organic farm without appreciably prejudicing the respondent's own interests. This formulation of the appellants' case also addressed the respondent's claim that the appellants' use of Eagle Rest was hypersensitive.

260 Against that background, I turn to the alleged irrelevant considerations. The type of damage suffered by a plaintiff is always a relevant consideration in assessing whether the interference with an occupier's use and enjoyment of land is unreasonable. As a general proposition, the infliction of physical damage is more likely to be adjudged unreasonable than other types of interference. The trial judge's reference to the absence of physical damage is to be understood in that context. Moreover, the trial judge expressly recognised (correctly) that physical damage is not a condition of the existence of liability in nuisance. The absence of physical damage is not an irrelevant consideration.

261 However, the gravamen of the first factor on which the trial judge relied is his strongly negative assessment of the unreasonableness of what he regarded as the factual cause of the appellants' financial loss, being their voluntary entry into the 'idiosyncratic', private contractual relationship with NCO/NASAA [373] - [380], [711]. There are two errors in this analysis. First, the NASAA Contract, which incorporates the NASAA Standard, is not a relevant factual cause of the appellants' financial loss. The NASAA Contract was in place long before the swath incursion. Decertification under the NASAA Standard occurred after and as a consequence of the relevant factual cause, which is the escape of GM canola swaths from the respondent's land to the appellants' land.

262 Second, it is wrong to characterise the relationship between the appellants and NCO/NASAA as idiosyncratic and as a purely private relationship. As previously noted, NCO/NASAA are authorised and approved by the Commonwealth to perform a public function, being the provision of certification of compliance with the NASAA Standard which enlivens the appellants' right to export products under s 7 of the Export Control Act. The purpose of certification is to provide a guarantee to potential consumers of the correctness of the description of the produce.

263 However, the appellants go further and claim that the fact that the incursion of swaths onto Eagle Rest had consequences for the contractual relationship between NCO/NASAA and the appellants is irrelevant to the evaluation of the unreasonableness of that interference. They also contend that their 'blamelessness' in the context of decertification is also irrelevant with which the respondent agrees.

264 I am not persuaded that the consequences under the NASAA Contract are irrelevant. The unreasonableness of the interference depends upon the effect the GM canola incursion had on the appellants' continuing use of their land to produce certified organic produce. That required the continuing certification of Eagle Rest (in whole or in part) under the NASAA Standard, which formed part of the NASAA Contract. A wrongful withdrawal of certification (that is, in breach of the NASAA Contract) would be relevant to the unreasonableness of the interference.

265 Moreover, even in the absence of breach, the scope of the NASAA Standard and of NCO's powers thereunder were relevant to the respondent's claims of decertification as a disqualifying intervening cause (novus actus interveniens) and of hypersensitivity.

266 There is no merit in the appellants' claim that the absence of deliberate conduct by the respondent to release the canola swaths and the economic irrationality of such a course (part of the fifth factor) are irrelevant considerations. The latter is supportive of the former. Although neither of those matters are a necessary condition of liability in nuisance, a deliberate release would weigh heavily in favour of a finding of unreasonable interference.

267 Further, the fact that the respondent's decision to swath was not unilateral or uninformed (the fourth factor) is not irrelevant. It supports the trial judge's finding as to the respondent's purpose or motive in swathing the GM canola crop.

268 The fact there was a certain measure of first time novelty in the swath incursion events (the sixth factor) is relevant, even though it is not a condition of liability. However, having regard to the government and trade warnings associated with the introduction of GM canola into the Western Australian farming community, it is of little weight. The same analysis applies to the trial judge's conclusion that the swathing was done professionally.

269 As the appellants correctly observe, the fact that the October notice was served after the canola crop had flowered (the seventh factor) is irrelevant as service was effected prior to swathing the crop. It was not suggested that the respondent would or may not have grown GM canola unless he could swath the crop.

270 In ground 11, the appellants challenge the correctness of the trial judge's finding that the respondent had legitimate agricultural reasons for swathing (the second factor). When considered in isolation (that is, divorced from any risk to the use and enjoyment of the appellants' land) the finding is established by the evidence. At the hearing of the appeal the appellants did not press their claim that there was insufficient evidence of the respondent having a problem with herbicide resistant weeds in Two Dams and Range or that the respondent had a reasonable weed management strategy.

271 However, the central issue not addressed by the trial judge is whether the harm to the appellants could have been avoided without appreciable prejudice to the respondent's interests (or, with the same intent and effect, proposed finding 5 that the respondent had no compelling reason to swath his GM canola). I return to that subject below.

272 The next challenge is to the trial judge's finding that the respondent did not, by electing to swath, engage in any conduct that was unique or aberrant (the third factor), in the context of '"ordinary usages" of broadacre farming in the Kojonup locale' [714]. That finding is by reference to canola generally, not GM canola in particular. The trial judge did not address the real issue, which is what was reasonable in the circumstances having regard to the fact that in 2010 GM canola was being grown in this State for the first time and was accompanied by public warnings from the Ag Department as to the care required to ensure the co-existence of organic, non-GM and GM farming. The correct finding is that in 2010 the harvesting of GM canola, by swathing or otherwise, was not among the ordinary usages of broadacre farming in Kojonup.

273 It is also the case that the trial judge's list of factors for his finding of no unreasonable interference did not include all matters relevant to the nature, extent and unreasonableness of the interference with the appellants' use and enjoyment of Eagle Rest. I infer that was in large measure a result of the trial judge's damning assessment of the unreasonableness of the NASAA Contract, in particular the NASAA Standard.

274 The interference in question was the physical incursion of GM canola swaths, cultivated by the respondent, from his farmland onto the appellants' farmland which, following NCO decertification, had the consequence of preventing the appellants from continuing their business of producing certified organic products from 70% of their farmland for three years.

275 The evidence establishes that around one-third of Eagle Rest was used to grow crops and two-thirds to grow pasture to feed livestock. The appellants rotated crops and pasture throughout the 13 paddocks. Crop rotation is fundamental to organic agriculture because it facilitates soil regeneration. When 70% of Eagle Rest was decertified by NCO, the appellants were obliged to alter their planned rotation of crop varieties, to quarantine their livestock into discrete paddocks to guard against the risk of the stock consuming GM plant material, and to modify the treatment of soil on paddocks affected by the incursion in order to encourage germination of volunteer canola plants. The disruption was very significant by any measure, even if it had been for less than three years.

276 The errors made by the trial judge undermine the correctness of his conclusion that there had been no unreasonable interference with the appellants' use and enjoyment of Eagle Rest. It remains for this court to determine whether there was an actionable nuisance. That assessment must include the respondent's claim (contention 6) that the risk of decertification by reason of the mere accidental presence of GM canola on Eagle Rest rendered the appellants hypersensitive to that harm.

277 In support of the hypersensitivity claim the respondent relies on the trial judge's findings that: GM canola is benign; organic farming was an isolated practice at best in the Kojonup farming district in 2010; and farmers growing only conventional canola have a tolerance to the adventitious presence of GM canola. The evidence establishes that AOF established a trading standard for non-GM canola which sets a limit of 0.9% adventitious presence of an approved GM canola in conventional canola seed (G3/1399).

278 The respondent also claims the appellants are abnormally sensitive because they were exposed to NCO misapplying, or unreasonably applying, the NASAA Standard. For the reasons discussed above, NCO's decisions relating to the fact and period of decertification were reasonably open. This aspect of the respondent's contention must fail.

279 The appellants deny hypersensitivity, relying on the following matters: the appropriate comparison for the purpose of assessing hypersensitivity is between organic and GM farmers, not organic and conventional farmers; the AOF standard relates to the presence of GM canola in conventional canola seed; in 2010 the cultivation of GM canola was wholly novel, strictly regulated according to Monsanto's standard form agreement and the subject of warnings and recommendations from the Ag Department and Farmanco; and the appellants' organic farming was in conformity with AQIS-audited standards required by the Commonwealth regulatory regime for the export of organic produce, thereby implicitly recognising that the NASAA Standard serves mainstream agricultural and economic values.

280 I turn now to my determination on hypersensitivity and reasonableness.

281 In 2010 the respondent created the risk of GM canola plants being carried by the wind onto Eagle Rest by swathing the crop which he cultivated in paddocks closest to Eagle Rest.

282 The cultivation of GM canola had been prohibited in Western Australia until 2010. The cultivation of other GM agricultural products (barring GM cotton) is still prohibited in this State.

283 In lifting the prohibition on the cultivation of GM canola, the State Government's intention, as evident in the second reading speech to the GM Free Act, the Ag Department information sheets and the terms of the Monsanto Agreement and Monsanto Management Plan, was that GM canola farming, conventional (non-GM) canola farming and organic farming coexist within the agricultural regions of this State. The sole reason for this policy was economic, namely to ensure the State could continue to maintain and service all demand particularly in its large export market.

284 In 2013 the Australian organic industry was worth more than $1.276 billion annually to the Australian economy (finding 22).

285 The evidence establishes that in 2012 approximately 1,000,000 ha of canola was under cultivation in the Western Australian grain belt, 8% of which was GM canola. I infer it would have been a smaller percentage in 2010.

286 Non-GM canola producers are sensitive to the presence of GM canola in their products. Organic producers are sensitive to GM canola in both their production systems and their products. The relevant comparison in this case is between organic and GM farmers.

287 The fact that organic farming was an isolated practice in the Kojonup farming district in 2010 (there being only the appellants and one other organic farming operation [708]) is of reduced significance in a situation where the appellants had been carrying on a certified organic farming operation at Eagle Rest from December 2004 and the longstanding prohibition of cultivation of GM canola has just been lifted.

288 The respondent contends that farming GM canola has social utility, although does not identify its nature. I infer it is a function of increasing the yields from arable land in order to contribute to feeding the world's ever increasing population.

289 It is significant that the appellants' organic farming was in conformity with AQIS audited standards under the Commonwealth regulatory regime for export of organic produce. That is, as the appellants contend, implicit recognition that the NASAA Standard serves mainstream agricultural and economic values. At the very least, there is an international market for such produce which the Commonwealth seeks to protect.

290 Against that background, it would be wrong to characterise the appellants' organic farming activity under the NASAA Standard as 'hypersensitive' for the purpose of the law of nuisance.

291 However, regardless of the correct characterisation of the appellants' activity, for the purpose of assessing whether the interference was unreasonable in this case, it is necessary to determine the nature and extent of any prejudice to the respondent from direct heading the GM canola crop in lieu of swathing.

292 With the sole exception of the 2010 GM canola crop, the respondent had harvested all his canola crops by direct heading. The respondent accepted that he had not had any real problems with pod shattering in his use of direct heading and was also able to get an evenly ripened crop using that harvesting technique. Further, the respondent had achieved a very good 'kill' of wimmera ryegrass plants in his GM canola with very few wimmera ryegrass plants surviving. The respondent would also have been saved the expense of hiring an outside contractor to swath the crop and of hiring a 'pick up front' to harvest the windrows. Further, the uncontradicted expert evidence is that direct heading is the better and more responsible practice when GM canola needs to be contained. I am persuaded that the respondent would not have suffered appreciable prejudice to his own interests if he had direct headed his GM canola crop in 2010. In any event, the nature and extent of the proven prejudice to the appellants' use and enjoyment of Eagle Rest well outweighs the prejudice to the respondent.

293 The evidence supports a finding, which I would make, that the respondent failed to harvest the GM canola crop in a manner which would have made it possible to avoid the damage caused to Eagle Rest without appreciable prejudice to his own interests.

294 Having regard to all relevant factors, the interference with the appellants' use and enjoyment of Eagle Rest flowing from the escape of GM canola swaths from Sevenoaks in 2010 was both substantial and unreasonable and constituted a private nuisance. I would uphold ground 11 and contention 5(a). However, I would dismiss contentions 5(b)(ii) and 6.

Legal principles - duty of care for pure economic loss

295 The history of the law of pure economic loss in negligence provides a context for understanding the present stage of its development. Until 1964 there was no common law duty of care for pure economic loss in any circumstances. That line was first breached in the negligent misstatement case of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] UKHL 4; [1964] AC 465 which was followed by the High Court in Mutual Life & Citizens' Assurance Co Ltd v Evatt [1968] HCA 74; (1968) 122 CLR 556.

296 From 1968 the absence of any duty of care for pure economic loss became a general rule to which there were limited exceptions falling into broad categories. One category is liability for negligent misstatements. In that context, a duty to take reasonable care to avoid economic loss may not arise if the plaintiff has failed to take reasonable steps to protect their own economic interests: Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59; (1981) 150 CLR 225 and Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424. In effect, contributory negligence prevents a duty of care arising in pure economic loss cases whereas in physical damage cases, contributory negligence was (at common law) a complete defence to a claim in negligence.

297 Another category is professional negligence claims for pure economic loss by an executor or beneficiary of a will against the solicitor(s) who drafted it: Hawkins v Clayton (1988) 164 CLR 539 and Hill v Van Erp (1997) 188 CLR 159.

298 A further category that may be a true exception is where the plaintiff is in a contractual relationship with the defendant: Barclay v Penberthy [2012] HCA 40; (2012) 246 CLR 258 as now explained in Brookfield Multiplex Ltd v Owners-Strata Plan No 61288 [2014] HCA 36; (2014) 88 ALJR 911 [143]. See Apache Energy Ltd v Alcoa of Australia Ltd [No 2] [2013] WASCA 213 [46] - [52].

299 Outside the established categories are fact scenarios where relief has sometimes been given for pure economic loss. An example is where a defendant negligently inflicts physical damage on a third party as a result of which a plaintiff suffers pure economic loss. This is sometimes described as 'relational loss'. Australian examples in this category are Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad' [1976] HCA 65; (1976) 136 CLR 529 and Perre (if the diseased potato crop grown by the third party from negligently infected seed potatoes supplied by the defendant constitutes physical damage).

300 As to claims by non-parties to a building contract for pure economic loss for latent damage to buildings, see Bryan v Maloney (1995) 182 CLR 609, Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515, and Brookfield Multiplex.

301 The appellants' negligence claim against the respondent does not neatly fit into any recognised category or case in which a duty of care to avoid pure economic loss has been upheld. To that extent it is novel.

302 Accordingly, I propose to start with what is known or uncontroversial. First, the elements of a claim in common law negligence include a duty of care, a breach of that duty and a causal connection between the damage sustained and the breach of duty.

303 Second, the CLA replaces the common law relating to breach and causation in negligence, but does not displace the common law relating to duty of care: Department of Housing and Works v Smith (No 2) [2010] WASCA 25; (2010) 265 ALR 490.

304 Third, reasonable foreseeability of harm of the kind suffered is a necessary, although insufficient, condition for the existence of a duty of care: Tame v New South Wales; Annetts v Australian Stations Pty Ltd [2002] HCA 35; (2002) 211 CLR 317 [12]. That is, there is no general duty to avoid injury to everyone who it is reasonably foreseeable may suffer that kind of injury if reasonable care is not taken: Tame [247] - [248].

305 Fourth, the test of reasonable foreseeability is objective, being what a reasonable person in the respondent's position ought reasonably to have foreseen.

306 Fifth, it is not necessary to foresee the precise character of the injury or the precise sequence of events leading to the injury, it being sufficient if the kind or type of injury was foreseeable even if its extent was greater than expected: Dovuro Pty Ltd v Wilkins [2003] HCA 51; (2003) 215 CLR 317 [60].

307 Sixth, the reasonable foreseeability requirement is satisfied if the risk of harm of the kind suffered is real, not far-fetched or fanciful: Dovuro [60].

308 Seventh, the scope of tort liability for negligently caused pure economic loss is narrower than the scope of tort liability for negligently caused physical damage (although how much narrower is unknown). There are at least two policy reasons for that difference. They are first, the spectre of indeterminate liability, whether in terms of time, amount or the class of potential plaintiffs. Second, the infliction of pure economic loss in some circumstances is an accepted and acceptable part of a competitive economy. Legitimate pursuit of market share is frequently at the expense of a competitor. However these two factors alone do not adequately explain the outcome in all cases. See, in particular, Woolcock Street Investments and Brookfield Multiplex.

309 Eighth, there is no test or general principle for determining whether or not a defendant owes to the plaintiff a duty of care to avoid causing pure economic loss. We are instructed that in novel cases, legal reasoning should proceed by way of analogy with decided cases: Brookfield Multiplex [25].

310 Ninth, consistent with the absence of any test or general principle, the determination of pure economic loss cases outside accepted categories requires consideration of the 'salient features' of the relationship between the plaintiff and the defendant, the relevance and weight of which may vary according to the nature of the case: Perre [198]; Brookfield Multiplex [30]. Salient factors may include physical, temporal, relational and causal closeness, assumption of responsibility, general reliance, control, inconsistent duties or rights, vulnerability and actual or constructive knowledge of relevant matters.

311 Finally, vulnerability, in the sense of a plaintiff's inability to protect itself from the defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant, is an important if not essential factor in pure economic loss cases: Brookfield Multiplex. However, vulnerability has no fixed or certain scope. The nature and degree of vulnerability sufficient to support a duty will vary from case to case, category to category: Perre [129]. In the words of Hayne and Kiefel JJ in Brookfield Multiplex, it is neither necessary nor profitable to attempt to define what would or would not constitute vulnerability [58].

312 An aspect of vulnerability in pure economic loss cases is that there may be no duty of care owed to a person who could reasonably be expected to have protected themselves. However, plaintiffs are only required to take reasonable steps of self-protection: Perre [149], [216]. Further, the self-protection principle in connection with the existence of a duty of care must be satisfied before the accrual of the cause of action; that is, before damage is suffered. After that, the self-protection principle underpins a plaintiff's duty to mitigate and a plaintiff-sourced disqualifying intervening cause.

313 The most closely analogous High Court case on the existence of a duty of care for pure economic loss is Perre. In that case the defendant negligently supplied infected seed potatoes to Sparnon from which Sparnon grew a diseased crop. As a result, potato growers and processors who carried on business within a 20 km radius of Sparnon's farm suffered economic loss. The disease did not spread from Sparnon's land. However, neighbouring growers were prevented from selling their produce into the Western Australian potato market, processors were not called upon to provide services to growers selling into that market and landowners claimed the value of their land had been reduced because it could not be used for growing potatoes for the Western Australian market. The grower, processor and land owner plaintiffs had suffered pure economic loss. A majority of the High Court held that the defendant owed a duty of care to all the plaintiffs.

314 Another factually similar case is Dovuro where the defendant imported into Australia, and sold to distributors, canola seed produced in New Zealand. The seed had been tested by New Zealand authorities which, to the defendant's knowledge, revealed the presence of weed seeds. The canola seed was not sold as being free of weeds. At the time of the importation, no Australian government had declared any of the weeds in the canola seed to be prohibited. The plaintiff conducted a farming business in Western Australian and bought from a local distributor (not the defendant) canola seed imported by the defendant. After the plaintiff had planted the canola seed, the Ag Department became concerned about the presence of the weed seeds in the canola seed which resulted in declarations being made by the State Agriculture Protection Board prohibiting the introduction into Western Australia or movement within the State of those weeds and to require their eradication. As a result of the declarations, the plaintiff suffered pure economic loss which he sought to recover. Towards the end of the trial, the defendant conceded it owed the plaintiff a duty to take reasonable care but denied any breach. The defendant applied to withdraw the duty concession in the High Court. A majority said it was unnecessary to determine the application: Gummow J [58]; Hayne and Callinan JJ [154]; Heydon [177]. The other members of the High Court would have refused leave: Gleeson CJ [3]; McHugh J [29]; Kirby J [94]. However, a majority appeared to accept that the defendant owed a duty to exercise reasonable care not to expose the plaintiff and other farmers who planted the canola seed to a risk of injury of which the defendant knew or ought to have known: McHugh J [29]; Kirby J [96]; Hayne and Callinan JJ [159]. The High Court held there was no breach of duty because at the time the defendant imported and sold the canola seed in Western Australia it was not reasonably foreseeable that buyers of the seed would suffer damage by reason of the weeds subsequently being declared prohibited. In that context it was relevant that the weeds were not known to be 'dangerous' in a way that would justify prohibition.

Reasonable foreseeability - duty (grounds 2[3(a)] and 3)

315 The issue of reasonable foreseeability was not squarely or directly addressed in the trial judge's reasons. However, in the context of the nuisance claim the trial judge found that:

[A]n airborne GM canola swathe incursion emanating from the windrows of Sevenoaks was not, I conclude, reasonably anticipated or expected by [the respondent] in November 2010 [717].

316 I infer from the trial judge's reasons as a whole that he concluded, in effect, that the respondent did not know, and ought not reasonably to have known, of the risk of GM canola swaths being carried by the wind from Sevenoaks to Eagle Rest and thus the risk of that occurrence was not reasonably foreseeable. The finding in [717] is challenged by the appellants (ground 3[6(c)]). I have upheld the challenge (finding 3B). They also challenge the trial judge's findings that:

(a) there was insufficient similarity between the vectors of seed movement in 2008 and 2010 so as to make the risk of harm to the appellants reasonably foreseeable [683] - [684], [718]; and

(b) Mr Marsh's reference in November 2008 to the escape of GM canola onto Eagle Rest was insufficient for the purpose of knowledge or reasonable foreseeability [742].

317 In addition to the factual challenges, the appellants claim the trial judge misconceived or misapplied the test of reasonable foreseeability by focusing on the precise manner in which the loss occurred. They contend the trial judge ought to have concluded that the respondent had actual knowledge of the risk to the appellants that GM canola may be carried onto the appellants' farm, with the result that his organic certification may be affected or lost.

318 I have found (finding 2) that the respondent had actual knowledge that the movement of GM canola from Sevenoaks onto Eagle Rest may result in the appellants' organic certification being lost or jeopardised.

319 However, the respondent contends that: (1) foreseeability requires the appellants to prove the respondent had actual knowledge of the extent and magnitude of the risk of the appellants losing their organic certification by reason of the presence of GM canola swaths on Eagle Rest; (2) the information in the respondent's possession was insufficient to give him any idea of the quantity of GM canola required to give rise to a risk of decertification or precisely what that risk of decertification related to (be it land and if so how much, crop or livestock) or how long the decertification would last; (3) the respondent could not have appreciated any real risk of decertification on the basis of a reasonable expectation that the NASAA Standard would be properly and reasonably applied.

320 Reasonable foreseeability does not require the respondent to have actual or constructive knowledge or appreciation of the detail in (1) and (2). The most that can be said is that actual knowledge of the magnitude of the risk of an outcome may (not must) impact on whether there is a duty of care in relation to pure economic loss and whether there has been a breach. As to proposition (3), I have concluded that the NASAA Standard was properly and reasonably applied.

321 The trial judge did not determine whether the respondent had actual knowledge of the general risk that GM canola may be carried onto the appellants' farm, directing his attention instead to the precise means of the carriage of GM canola from Sevenoaks to Eagle Rest. The respondent's actual knowledge of the general risk is established by the November 2008 discussion between Mr Marsh and the respondent.

322 What has to be foreseeable for the purpose of the existence of a duty of care is informed by the formulation of the relevant duty which should be at a higher level of generality than the breach. A higher level of generality is necessary to avoid the duty question being determined by the answer to the breach question. If there is a duty owed by the respondent it may be in terms of a duty to neighbouring occupiers of land to exercise reasonable care to avoid or minimise the risk of pure economic loss from the escape by natural causes of GM canola from Sevenoaks. On that formulation, the trial judge's foreseeability test is too prescriptive. Foreseeability of the risk of a windborne incursion would on the appellants' pleading be necessary at the breach stage.

323 However, because of the absence of a general principle or test for liability in negligence for pure economic loss outside the recognised categories, another approved approach is to avoid the formulation of the duty and pose the question whether the pure economic loss suffered by the appellants from the windborne escape of swaths of GM canola from Sevenoaks to Eagle Rest resulted from a breach of a duty which the respondent owed to the appellants. See Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61; (2000) 205 CLR 254 [105] and Dovuro [158]. Approached in that way, the test of foreseeability descends to the particular means of escape. A misapplication of the test of foreseeability has not been established.

324 In any event, I have concluded the evidence establishes that a reasonable person in the position of the respondent ought to have known of the risk of strong winds moving swaths from Sevenoaks onto Eagle Rest (finding 3B).

325 The trial judge erred in his conclusion on reasonable foreseeability. In the context of a duty of care, the trial judge ought to have found that in 2010 the respondent had actual knowledge of the risk to the appellants that GM canola may be carried onto Eagle Rest with the result that its organic certification may be lost or jeopardised and that the respondent ought to have known of the real risk that GM canola swaths may be carried by strong winds from Sevenoaks onto Eagle Rest. I would uphold grounds 2[3(a)] and 3 (save for [7]) of the grounds of appeal.

Characterisation of pleaded duty (grounds 1 and 5)

326 The appellants contend the trial judge made errors in, and resulting from, a mis-characterisation of the appellants' pleaded duty of care.

327 The appellants pleaded in [35] of the amended statement of claim that the respondent owed to the appellants a duty to take reasonable care:

(i) to ensure that GM canola was not blown or carried from Sevenoaks onto Eagle Rest; and

(ii) to ensure that they did not suffer loss, including economic loss as a result of GM canola being blown or carried from Sevenoaks onto Eagle Rest.

[A]n absolute level for the duty is set far too high, especially in circumstances involving a large scale, broad acre crop-farming scenario which is necessarily exposed to the uncontrollable seasonal weather events.

... Pitching the duty of care at a level of absoluteness (as is connoted by the word 'ensure'), even if then moderated ... by a ... use of the phrase 'reasonable care' ... is simply not justified, either by case precedent or in principle ... Bearing in mind that the weather and the elements are all ultimately uncontrollable, at best, the scope of any duty of reasonable care should have been pitched at a less absolute level. For example, a duty to take reasonable steps to 'reduce' or 'minimise' the risk(s) of something happening [333] - [334].

329 The pleaded duty is not absolute in the sense of requiring a guaranteed outcome. The phrase 'reasonable care' renders the formulation aspirational. In any event, in the context of the trial judge's finding that in 2010 there would have been no wind-blown incursion of GM canola from Sevenoaks to Eagle Rest if the respondent had direct headed instead of swathed, the criticism of the pleading is of no practical significance.

330 Moreover, as a result of the recognised challenges associated with the formulation of any duty of care, it is unusual to hold a plaintiff to the precise terms of its pleaded duty. The proper course was to consider whether the respondent owed to the appellants a duty to exercise reasonable care to avoid or minimise the relevant risk.

331 The appellants also contend the trial judge's erroneous characterisation of the pleaded duty led him to take into account an irrelevant consideration, being that the evidence at trial did not show that GM canola is, per se, physically dangerous or injurious to persons, animals or property.

332 That is not my understanding of the trial judge's reasoning. It is clear that if GM canola itself was physically dangerous or injurious to persons or property, there would be a well-recognised duty of care based on the former rule in Rylands v Fletcher now incorporated into the general law of negligence in Burnie Port Authority. It being outside that category, the trial judge said that the pleaded duty:

[M]ust be viewed as novel. A duty formulated in such terms cannot be accepted as generally arising out of a relationship between two neighbouring farms or farmers. No such earlier case precedent was cited to me. There is no well-known, well-established or well-accepted duty of reasonable care at common law, for the presenting circumstances of this litigation [328].

333 The appellants claim the trial judge's characterisation of this case as novel and as travelling into 'legally unchartered territory' [307] is also an error (ground 1). On the current state of the law relating to negligently caused pure economic loss, it is fair to describe this case as novel. Even if it is not, the mis-characterisation is not an error capable of altering the result. I would dismiss grounds 1 and 5.

Vulnerability - duty (grounds 2[3(e)], 4 and contention 3(b))

334 The appellants claim the trial judge erred in his approach to the question of the appellants' vulnerability to the respondent.

335 On the subject of the appellants' vulnerability to economic loss the trial judge said:

I am not at all comfortable that the vulnerability concept extends to catch what is a different and essentially self-inflicted contractual vulnerability to NCO of [the appellants], generating their claimed economic losses. That is especially so when the conduct of contracting party A, which generates the economic harm to party B vis-à-vis their contract might be assessed (objectively) to have been unreasonable conduct, or even conduct in breach of their contractual terms [321].

Nor do I find any degree of vulnerability as arising from the contract the [appellants] entered into with NCO/NASAA and under which they appear to have been wrongly denied their contractual right by NCO to use the label 'NASAA Certified Organic' on their Eagle Rest produce. If there was contractual vulnerability in the [appellants] to NCO, then from a Perre v Apand duty analysis perspective, I assess that as an ineligible vulnerability from a duty of care analysis perspective. This is because the exposure of the [appellants] to NCO was wholly self-initiated by entering into the terms of such a contract [741].

337 The appellants contend the trial judge ought to have held that the appellants' vulnerability to contractual sanction by NCO pursuant to the NASAA Standard fell within a legally recognised concept of vulnerability and that they were relevantly vulnerable to the respondent. In support of that proposition, the appellants rely on the fact that the NASAA Standard was part of a national regulatory framework with which the appellants were required (legally or practically) to comply in order to sell their product as certified organic in the export market and in parts of the domestic market.

338 The respondent claims that, correctly construed and applied, there was no risk of NCO decertifying Eagle Rest on the basis of the mere presence of GM canola and therefore the appellants were not relevantly vulnerable. In the event there was a risk of decertification by NCO acting unreasonably, it was within the appellants' power (not the respondent's) to protect themselves.

339 Otherwise, the respondent supports the trial judge's conclusion that even if it was open to NCO to decertify, the appellants' exposure to the exercise of private contractual rights does not amount to a relevant vulnerability. He also relies on the absence of evidence that the appellants had no choice but to enter into the NASAA Contract to sell 'certified organic' produce. In contention 3 the respondent goes further and says the appellants could and should have obtained licences from other approved certifying organisations whose Standards would not have permitted decertification in the circumstances of this case.

340 To the extent that the trial judge's conclusions and the respondent's contentions on vulnerability depend on acceptance of the propositions that decertification was in breach of the NASAA Contract, alternatively, was unreasonable, they must fail. I have concluded that there was no breach of the NASAA Contract and that there were reasonable grounds for decertification. The existence of a duty of care is not conditioned on the period of decertification being three years. A significant period would suffice. One or more growing season would meet that yardstick.

341 Having regard to the fact of, and basis for, the lawfulness and reasonableness of the decertification and the appellants' longstanding connection with NCO/NASAA, reasonableness did not require the appellants to seek an alternative or additional licence to label their produce organic. Accordingly, the fact that the appellants did not seek a licence from another approved certifying authority does not negative their vulnerability for the purpose of the existence of a duty of care.

342 The appellants were relevantly vulnerable to the risk of the harm they suffered for a number of reasons. First, the physical proximity of Eagle Rest to the site of the cultivation of GM canola on Sevenoaks. Second, a number of significant matters directly affecting the nature and extent of the risk of GM canola escaping from Sevenoaks to Eagle Rest were in the direct and sole control of the respondent, including the site of cultivation and the manner of harvesting the crop. Third, prior to swathing the appellants had taken all reasonable steps to appraise the respondent of the risk of and consequences for them of an escape of GM canola onto Eagle Rest. Fourth, the appellants had taken all reasonable steps to reduce the risk of contamination of their organic crop by altering their intended crop rotation programme in 2010.

343 I would uphold grounds 2[3(e)] and 4. I would dismiss contention 3(b).

Other matters - duty (ground 2[3(b), (c), (d), (f), (g)])

344 In addition to the challenges to the trial judge's approach and conclusions relating to foreseeability, vulnerability and the scope of the pleading of duty, the appellants claim the trial judge:

(a) failed to take into account the physical propinquity of the farms;

(b) failed to take into account or give sufficient weight to what the respondent knew of the risk of harm to the appellants;

(c) ought to have held that no question of indeterminant liability arose on the facts;

(d) ought to have found that the respondent had no right to grow RR canola except in compliance with the Monsanto agreement, an objective of which was to manage risks to the integrity of agricultural supply chains and to enable different agricultural systems to concurrently operate;

(e) as a result of the Monsanto agreement, no question of interference with the respondent's existing rights or freedoms arose on the facts.

345 The matters in (a) and (b) are clearly relevant factors. However, I am not persuaded the trial judge failed to take them into account. A weighting error of a single relevant consideration leads nowhere.

346 It is clear that no issue of indeterminate liability in terms of time, amount or potential plaintiffs arises in this case.

347 In addition, the trial judge should have found that the respondent's right to grow GM canola was conditioned upon compliance with the terms and conditions of the Monsanto agreement, which included the Monsanto Management Plan. Like the NASAA Contract, the Monsanto agreement is not just a private agreement voluntarily entered into by private citizens. As noted earlier, the Monsanto agreement is a standard form agreement which was developed in conjunction with the development of, and decision-making under, the Commonwealth and State statutory/regulatory regimes for the release into the environment of GMOs and is the mechanism for achieving grower compliance with the regulatory requirements of the Regulator and APVMA.

348 Of particular significance is that the respondent was required to have regard to the objective of the Monsanto Management Plan of enabling different production and market systems to concurrently operate in a profitable and sustainable way. However, I would not go so far as to conclude that the Monsanto agreement prevented him from swathing his GM crop. I would uphold ground 2[3(c) and (f)] but not 2[3(b), (d) or (g)].

349 For the reasons that follow, I am satisfied the respondent owed a duty, the scope of which required him to exercise reasonable care to avoid or minimise the risk to the appellants of pure economic loss from the windborne escape of GM canola from Sevenoaks to Eagle Rest.

350 First, the relevant risks were reasonably foreseeable. In 2010 the respondent had actual knowledge of the risk to the appellants that GM canola may be carried onto Eagle Rest with the result that its organic certification may be lost or jeopardised. Further, the respondent ought to have known of the risk that GM canola swaths may be carried by strong winds from Sevenoaks onto Eagle Rest.

351 Second, the appellants were vulnerable for the reasons detailed above. In particular, by reason of the physical proximity of the GM canola on Sevenoaks, Eagle Rest was uniquely vulnerable to an incursion of GM swaths. The appellants were also uniquely vulnerable to the consequence of that incursion, being loss of the certification of the land as organic. The respondent had actual knowledge of these vulnerabilities.

352 Third, the respondent created the relevant risk of economic loss which was direct, not indirect.

353 Fourth, the canola swath incursion interfered with the appellants' existing legally recognised interest to use Eagle Rest as a certified organic farm under terms and conditions approved by the Commonwealth.

354 Fifth, the respondent did not have an unfettered legally recognised interest in the way he used Sevenoaks in relation to the production of GM canola. He was restricted by the terms of the Monsanto agreement and Monsanto Management Plan in the ways indicated above.

355 The respondent claims he did not owe a duty of care because he was engaged in a legitimate commercial activity. Reliance is placed on McHugh J's statement in Perre that:

As long as a person is legitimately protecting or pursuing his or her social or business interests, the common law will not require that person to be concerned with the effect of his or her conduct on the economic interests of other persons [115].

356 The intended scope of that statement is to be discerned from the example provided, which was that a consumer owes no duty to a trader not to cause loss by withdrawing custom. Another example would be the conduct of competitors in the course of competition. However, the respondent was not competing in any relevant way with the appellants. Indeed they had no relevant commercial dealings between them at all.

357 It is commonplace in the law of negligence that defendants are required to modify their otherwise lawful conduct in response to the foreseeable risk of harm to another person. The principle of commercial or business autonomy is not absolute, even in cases of pure economic loss: Perre [117], [211]. However, in my judgment, the respondent's autonomy would trump the appellants' interests if the respondent's interference with the use of Eagle Rest had been reasonable. This has the incidental effect of achieving coherent outcomes.

359 The trial judge considered the question of breach in the context of a lesser duty than that pleaded. He said:

Moreover, if I had found some lesser level of duty of care in [the respondent], say, to take reasonable measures to inhibit the movement by wind of GM canola from a boundary paddock of Sevenoaks, I still would not have found that more truncated duty to have been breached by [the respondent]. The December 2010 incident was, as I assess it, an unexpected first-time event and that an escape of GM canola to Eagle Rest was, in a non-specific and very general fashion, spoken of by Mr Marsh in November 2008, is not enough. For reasons canvassed under my private nuisance evaluation, I am not satisfied that in 2010 [the respondent] breached any (lesser) duty of reasonable care as regards his swathing activities given the following:

(i) the state of (ie, lack of) knowledge about prior escape events;

(ii) the considerable thought given by [the respondent] to the protective work of the 5 m buffer to his eastern boundary fences (in Range and Two Dams), the 20.9 m road reserve and the buffer work of the trees on either side of the road reserve;

(iii) I do not have any or any sufficient evidence about whether the wind events of November 2010 were unusual in the Kojonup district at that time of the year; and

(iv) s 5B of the Civil Liability Act applies to deliver this negative outcome as regards a breach analysis [742].

360 In ground 6, the appellants claim the trial judge erred by purporting to apply the proposition that 'common law negligence action[s] ... in Western Australia have been rendered more difficult for plaintiffs by the introduction of the [CLA]' [297]. No reasons were given for the proposition. However, unless the appellants can show it produced an erroneous approach to the question of breach, the correctness of the proposition is academic. I would dismiss ground 6.

361 The trial judge's passing reference to s 5B of the CLA falls short of a reasoned analysis on the issue of breach.

362 Section 5B of the CLA provides:

(1) A person is not liable for harm caused by that person's fault in failing to take precautions against a risk of harm unless -

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and

(b) the risk was not insignificant; and

(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things) -

(a) the probability that the harm would occur if care were not taken;

(b) the likely seriousness of the harm;

(c) the burden of taking precautions to avoid the risk of harm;

(d) the social utility of the activity that creates the risk of harm.

363 The trial judge's formulation of the lesser duty of care does not identify the relevant risk of harm. The appellants contend the trial judge had earlier characterised the risk as that of genetic contamination by the possibility of outcrossing [685]. If that was intended, it is an error for the reasons previously discussed.

364 As to s 5B(1)(a), I have concluded that the respondent ought to have known of the risk that GM canola swaths could be blown by strong winds from Sevenoaks onto Eagle Rest and knew of the consequential risk to the organic certification of Eagle Rest.

365 Whether the risk was 'not insignificant' under s 5B(1)(b) is to be determined objectively. In light of the proximity of the GM swaths to Eagle Rest, the expert evidence relating to the windborne movement of swaths, the purpose and effect of swathing and the warnings in the Ag Department's Farmnote 409 and the Farmanco newsletter, it is clear the risk of swaths being blown from Sevenoaks onto Eagle Rest was not insignificant. Having regard to the likely extent of the incursion (one swath comprising multiple stalks, hundreds of pods and thousands of seeds), the risk that the appellants would lose their organic certification if GM material was present on Eagle Rest was also not insignificant.

366 The requirement in s 5B(1)(c) is to be informed by the mandatory considerations in s 5B(2) and any other relevant considerations. The question whether a reasonable person in the respondent's position would have taken precautions against the risk of harm is objective. There is nothing in the trial judge's reasons to indicate that he took into account the mandatory and other relevant considerations in s 5B(2) or that he understood that the issue had to be objectively determined. The consideration in [742(ii)] provides cause for doubt on that subject.

367 This court must make its own assessment of whether a reasonable person in the respondent's position would have taken the precaution of direct heading the GM canola crop to avoid the foreseeable risk of GM canola swaths being blown onto Eagle Rest with the consequence that it would cease to be certified organic in whole or in part.

368 The probability the harm would occur in the absence of the precaution was not insignificant. As noted above, the purpose of swathing the canola plants and placing them in windrows is to allow wind to circulate through the windrows which dries and reduces the weight of the swath. As a single swath contains multiple stalks, hundreds of pods and thousands of seeds, the manner of harvesting not only increased the risk of GM canola being blown onto Eagle Rest it increased the magnitude of the possible contamination and harm which in turn increased the risk of decertification. The assessment of the degree of the risk and the probability of harm is affected by the scope of the term 'contamination' in the NASAA Standard. I have held that it covers genetic contamination, mixing of organic product with non-organic material and the presence in and exposure of an organic farming system to non-organic inputs, product and produce.

369 It is also relevant that the Monsanto agreement and Monsanto Management Plan recognised that care was required by GM growers because of the probability of harm.

370 The matters relevant to the probability of the harm are linked with its likely seriousness. The likely seriousness of the harm was significant. The effect of the loss of certification of the land on the appellants' manner of farming is detailed above. The evidence establishes that certified organic produce attracts a premium price. It can be accepted that loss of certification of any significant portion of the appellants' farm would have had significant financial ramifications.

371 As to the burden of taking precautions to avoid the risk of harm, I have concluded that the respondent could have direct harvested the GM canola crop to avoid the damage caused to Eagle Rest without appreciable prejudice to his own interests.

372 The respondent relies on the social utility of cultivating GM canola. In the context of breach, the issue is the social utility of swathing as against direct heading his GM canola. The absence of any appreciable prejudice suggests there is none.

373 Whether or not swathing is common practice in harvesting canola is of little weight. The respondent had always direct headed his conventional canola crops, including in 2010. Further, the issue in this case is the appropriateness of swathing the newly introduced GM canola cultivation adjacent to an organic farm.

374 For these reasons, the respondent breached his duty of care to the appellants. I would uphold ground 7 and dismiss contention 5(b)(i).

375 On the subject of causation in negligence the trial judge said:

Finally, in the negligence context, I am not satisfied that the swathing harvest methodology used for Two Dams and Range paddocks in 2010 factually caused this economic loss under any tests of the common law, or by the second limb (legal causation) s 5C of the CLA. The legal cause of the economic loss was the work of NCO in unreasonably (erroneously, it presents) applying NAASA Standard 3.2.9 [743].

376 Section 5C relevantly provides:

(1) 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).

377 If the trial judge held that factual causation under s 5C(1)(a) was not established, that was clearly an error. The entirely factual inquiry required by s 5C(1)(a) involves no more and no less than the application of the 'but for' test of causation at common law: Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375 [14] - [16].

378 The trial judge had found that the respondent's swathing of the GM canola crop on Range and Two Dams in 2010 laid the necessary preconditions for the subsequent airborne incursions of 245 GM canola swaths onto Eagle Rest ([113], [670], [677]). Those findings compelled a further finding of factual causation under s 5C(1)(a). That is conceded by the respondent.

379 The distinct question of 'scope of ... liability' or legal causation under s 5C(1)(b) involves a normative inquiry requiring the application of precedent to determine whether it is appropriate for the scope of the respondent's liability to extend to the appellants' loss: Wallace v Kam [14].

380 Under s 5C(4), for the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether and why responsibility for the harm should, or should not, be imposed on the tortfeasor.

381 I have concluded that NCO's decision to decertify 70% of Eagle Rest was open under cl 3.2.9 of the NASAA Standard and further that the decision was based on reasonable grounds. The respondent had actual knowledge of the risk of decertification when he engaged in the conduct which caused the harm to the appellants. NCO decertification did not break the chain of causation between the respondent's negligence and the appellants' loss. The attribution of liability to the respondent is reasonable as between him and the appellants. In all the circumstances it is appropriate for the scope of the respondent's liability to extend to the appellants' pure economic loss caused by him. I would uphold ground 8.

382 There being a duty, breach and causation, I would uphold the appellants' claim in negligence in addition to the claim in nuisance.

383 For these reasons I would uphold grounds of appeal 2, 3, 4, 7, 8, 9, 10 and 11 and dismiss contentions 1, 2, 3, 4, 5 (except par (a)) and 6. I would order that the appeal be allowed, the judgment of Kenneth Martin J dated 28 May 2014 be set aside and in lieu thereof order the respondent to pay damages to the appellants in the sum of $85,000. I would hear from the parties on costs.

384 This is an appeal against a decision of Kenneth Martin J in which his Honour dismissed the appellants' claims against the respondent in negligence and nuisance with respect to the respondent's growth and harvesting, in late 2010, of a crop of genetically modified (GM) canola, some plant material of which was blown, after harvesting, across by wind onto the appellants' farm.

385 It is not in dispute that in the particular circumstances of this case, the GM plant material that landed on the appellants' farm posed no risk of any genetic trait transfer to any species of crop or produce on the appellants' land.

386 For the reasons which follow, we would dismiss the appeal.

Background[1]**** The appellants - partnership and land

387 Mr and Mrs Marsh carried on business, as a partnership, in farming certain land in Kojonup called 'Eagle Rest'. The land was owned by Mr Marsh.

388 In 2002, the partnership decided to conduct its business as a fully organic farming operation with a view to selling the produce under the label of 'organic' produce. The produce was to be cereal and sheep. The cereal was to be comprised of oats, spelt, rye and a small amount of wheat. The sheep were to be raised for the sale of organic meats (Dorper lambs).

389 In order to allow the partnership to label their produce 'organic', they were required to obtain the endorsement of a body which was itself accredited by the Commonwealth of Australia under Australia's export protection scheme. The National Association of Sustainable Agriculture Australia Ltd (NASAA) was one such body.

390 By 11 January 2006, the partnership obtained organic certification from NASAA for 476 ha of their 477 ha farm.

391 The Marshes' farm, at all material times, comprised paddocks 1 - 13. The farm was next door to the respondent's (Baxter's) farm. The two farms were separated by a road.

392 Paddocks 9, 10, 12 and 13 of the Marsh partnership's farm were adjacent to the road which separated it from the Baxter's farm. Lines of trees grew on either side of the road. The distance between the two farms across the road, from boundary fence to boundary fence, was 20.9 m.

393 Using a process of paddock rotation, the partnership used various paddocks to cultivate cereal. In other seasons, the paddocks were rotated through a pasture phase to carry sheep. The partnership did not grow canola.

394 On 14 September 2007, Mr and Mrs Marsh entered into a contract with NASAA entitled 'NASAA Contract'. NASAA's wholly owned subsidiary (NCO) was also a party to the contract.[2] The contract referred to a document by NASAA called 'NASAA Organic Standard' (NASAA Standard) which ran to 114 pages.

395 In or around November 2008, Mr Marsh discovered 12 'conventional' canola plants which had sprung up on his property (called 'volunteer' plants). He pulled them out. In November 2008 he went and saw Mr Baxter and told him he believed that the volunteer plants had come from the respondent's property. Mr Baxter did not dispute this. Mr Marsh also told Mr Baxter, in effect, that if the growing of GM canola were ever to become legal in Western Australia and GM canola was grown by Mr Baxter, and if the GM canola was blown or carried onto Eagle Rest, the partnership's organic certification could be imperilled. Mr Marsh told Mr Baxter that genetically modified organisms (GMOs) were not allowed in a certified organic system. Mr Baxter responded to the effect that he would nevertheless probably grow GM canola if it became legal to do so.

396 In 2009, Mr and Mrs Marsh used chemicals on their sheep in paddock 12, in consequence of which the produce from that paddock in 2010 was unable to be sold as 'organic'.[3]

397 In April 2009, NASAA wrote to Mr Marsh concerning the potential risks of decertification in connection with GMOs. NASAA advised Mr Marsh, in effect, that:

• the issue of contamination from GMOs was a risk to certification;
• under the Australian National Standard for Organic and Bio-Dynamic Produce, products 'known to be contaminated' by GMOs cannot be sold as organic;
• if levels of GM material 'above the limits of detection were found', then decertification of the relevant crop or product would follow.[4]

398 In January 2010 a ministerial order authorised the cultivation of GM canola in Western Australia. Monsanto manufactured a GM canola seed called Roundup Ready (RR) GM canola. In early 2010, Mr Baxter's agronomist, Mr Robinson, recommended to Mr Baxter that he plant GM canola in the three paddocks of Seven Oaks, aligned to the road reserve.

399 Mr Baxter entered into a 'Roundup Ready Canola Grower Licence and Stewardship Agreement' with Monsanto.[5] It was a term of the agreement that Mr Baxter comply with Monsanto's Canola Crop Management Plan.[6] The Monsanto Canola Crop Management Plan provided, inter alia, that where GM canola was to be grown near canola to which special standards applied, eg, organic canola, (which was not the case here because the appellants did not grow organic or indeed any canola), the management strategies applicable to that special standard should be incorporated 'as deemed and communicated by the supply chain for the specified product'. In other cases, where special standards did not apply, if GM canola and non-GM canola were to be grown in adjacent paddocks within 5 m of each other (again, which had no application here), a narrow band of at least 5 m should be slashed and cultivated prior to the onset of flowering;[7] alternatively, certain other specified steps were to be taken where the crops were grown within the same farming operation.[8] If GM canola were grown along a boundary fence line adjacent to a neighbouring canola crop, or within 400 m of a crop grown for canola seed production (again not the case here), the GM farmer should notify the neighbour and 'discuss any relevant matters'.[9]

400 The judge found that Mr Baxter attended a Monsanto seminar in March 2010 and was advised that any GM canola crop should only be planted up to a distance of 5 m from the paddock fence.[10]

401 Also, a Department of Agriculture and Food of Western Australia document headed 'Farmnote' dated January 2010, provided that GM and non-GM canola crops required separation of at least 5 m.[11] Mr Baxter complied with the Monsanto licence. Even though the Marshes did not grow canola, Mr Baxter not only left a 5 m gap, but there was also 20.9 m of road reserve separating his boundary from the Marshes' boundary.[12] In addition, there were protective trees growing on the edges of the properties which would assist in protecting against any airborne incursion, and no airborne incursion of canola plants had previously occurred.[13]

402 In 2010 (by which time the growing of GM canola was legal), Mr Baxter informed Mr Marsh that he proposed to plant GM canola in two boundary paddocks.

403 In May 2010, the respondent sowed canola in three paddocks on his property. Two paddocks - Two Dams and Range - were sown with RR GM canola. The third - Mailbox - was sown with conventional canola. The Mailbox and Range properties were on the boundary of the road, more or less opposite paddocks 9 and 10 of the Marshes' farm. The Two Dams paddock was also on the boundary of the road, but to the north of the area of the Marshes' farm.

404 Before receiving notification from the respondent that he would be growing some GM canola, Mr Marshes' crop rotation plan indicated that the partnership would:

(c) use paddocks 7 - 9 and 13 for sheep pasture; and

405 As a result of the communication with Mr Baxter in 2010, Mr Marsh decided to grow organic wheat in paddock 11, rather than paddock 10. Paddock 11 was not adjacent to the boundary and was to the north and east of paddock 10. Paddock 10 was then used for sheep pasture.[14]

406 Mr and Mrs Marsh also grew their wheat crop at the northern, upper, end of paddock 11. Paddock 11 sloped downwards at its southern end. Mr and Mrs Marsh grew their wheat in 2010 in paddock 11 so that the lower, southern, end would create a 'buffer zone'.

407 Mr and Mrs Marsh grew spelt and rye crops on paddock 12 in 2010. As noted earlier, these crops could not be certified as organic because of the chemical treatment of sheep in paddock 12 the previous year. Similarly, the sheep themselves had been decertified and the meat could not be sold as organic because of the chemical treatment.[15]

408 On 20 August 2010, Ms Goldfinch of NASAA informed Mr Marsh that for the purposes of certification, the definition of 'contamination' was 'genetic contamination', and that NASAA doubted that GM canola would contaminate wheat.[16]

409 In September 2010, Mr Marsh erected some new signs along the boundaries of his property which said that the property was a 'certified organic farm' and 'GM free'.

The appellants' notices - late September/October 2010

410 On or about 29 September 2010, Mr Marsh hand delivered to the respondent a document entitled 'Notice of Intention to Take Legal Action'. The notice stated, amongst other things:[17]

1. The use of genetically modified organisms in farming, including GM canola seed (GMOs) has the potential to cause catastrophic commercial losses to non-GM farmers and particularly to non-GM farmers that have been accredited as being organic (or sustainable) farms (Organic Farmers) if GMOs enter upon and contaminate a non-GM farm or non-GM farm production cycle;
2. The principal cause of the commercial losses to Organic Farmers as a consequence of GMOs contaminating a non-GM farm or non-GM farm production cycle is as a result of the forfeiture of the price premiums attached to the sale of the produce grown by Organic Farmers and/or the withdrawal of their accreditation as Organic Farmers. There may also be other costs and expenses incurred as a direct consequence of such contamination by GMOs;
3. Because of the well known risks and perhaps the inevitability of GMOs eventually contaminating non-GM farms, most policies of insurance, including most public risk policies of insurance for farmers, have a specific exclusion denying the policy holder from any insurance cover for any claim arising from the contamination of non-GM farms or non-GM farm production cycles by GMOs;
4. The farming property ... known as 'Eagle Rest' ... [has] been declared as a non-GM farm and we are accredited as Organic Farmers ...;
5. We have been informed or otherwise have an understanding that you have already or are presently contemplating growing GM canola on your land or that you will be directly or indirectly involved in the seeding, transportation, swathing, harvesting or storage of GMOs and/or GM canola;
6. Contrary to some perceptions and some commentary in the media there is a zero tolerance for non-GM farms in Australia which means that any level of contamination of a non-GM farm by GMOs or GM canola will render the affected land as GM contaminated;
7. The legal principle in Australia commonly referred to as 'strict liability' means that a person ... will be liable for the expenses, commercial losses caused by the escape of a dangerous thing from land even where there has been no fault or negligence giving rise to or causing the escape;
8. The liability of a person ... in Australia pursuant to the principle of 'strict liability' as a consequence of the escape of a dangerous thing or a risk from other or adjoining land, as applicable to the escape of GMOs or the contamination of a non-GM farm with GMOs irrespective of the means by which the GMOs escaped or the unexpected intervention of another person ... resulting in the contamination of a non-GM farm with GMOs or with GM canola;
9. If ... our land ... becomes contaminated with GMOs or GM canola, we intend to immediately commence one or more legal actions to recover all our expenses, reductions in income and any other economic losses arising from such contamination, against any person ... who was involved or connected in any way to the escape of the GMOs or the GM canola being brought on or near to the general vicinity of our land, including any contractors who were in any way connected with the seeding, ... swathing ... or storage of the GMOs and/or the GM canola, notwithstanding that any one or more of them may not be at fault or in any way negligent ...;
10. In pursuing any such court actions against you and/or others ... we will rely on this Notice in writing to you ... as demonstrating that we specifically alerted you to our concerns before the event and to the foreseeability of the losses and damages that we would incur if the GMOs and/or GM canola escaped onto our land and the contamination by GMOs of our farm production cycle generally;
11. We hereby urge you to immediately seek appropriate legal advice in response to this Notice and if you continue with or elevate your involvement with GMOs ... after being served with this Notice we urge you to seek and obtain comprehensive indemnity cover ... from the supplier(s) to you of the GMOs ... as you are unlikely to be insured for any liability (including any strict liability) arising from your conduct ...;
12. Please refer to the attached schedule A for a non-exhaustive list of the likely ... economic losses we may incur if our land becomes contaminated by GMOs and/or GM canola. (emphasis added)

We will be seeking legal recourse if GM crops result in any cost, damage or economic loss including, but not limited to;

• Testing costs or additional contractual requirements ...
• Segregation costs over and above what is currently required.
• Loss of market access or market premium ...
• Loss of organic certification.
• New control measures required to remove canola from grain sold ...
• Any payments due or deducted as end-point royalty or user fees from GM companies for unintentional GM use.
• Any fines associated with any adventitious presence of GM crops.
• Any costs associated with destroying unauthorised GM crops on our property.
• Spray drift from post-emergent glyphosate ...
• All associated and consequent costs and all legal costs.

We emphasise that this list is not closed ... We accordingly are putting you on notice so you are aware that these and other scenarios and losses are fully foreseeable and not remote from any action taken by you to plant GM seeds. (emphasis added)

412 Attached to the notice was a document headed 'NASAA Organic Standards' setting out a number of provisions under a clause described as '3.2 Genetically Modified Organisms'. This appears to be an extract of the NASAA Standard, which will be discussed in detail later.

413 Subsequently, on 25 October 2010, Mr Marsh caused notices to be published in local newspapers to the effect that Eagle Rest was a 'GMO Free Area'.

414 By this time, and even by the earlier time that Mr Marsh had delivered his notice of 29 September 2010, the respondent's canola crops were visible and flowering and were almost ready to harvest.[18]

415 On 8 - 10 November 2010, the respondent harvested the two GM canola paddocks by a technique known as 'swathing'. The plants were cut and put together into windrows and left standing in rows on the two paddocks. The conventional canola, in Mailbox paddock, was harvested with a technique known as 'direct heading'. The respondent completed the harvesting process on 2 - 4 December 2010 by harvesting the seed pods out of the stacked swathes in the windrows on the Two Dams and Range paddocks. (The topic of swathing is addressed in more detail later in these reasons.)

Canola swathes on the appellants' property and inspections including by NASAA - early December 2010

416 Meanwhile, on 30 November 2010, Mr Marsh first noticed canola swathes on Eagle Rest. He notified the Department of Farming and Agriculture of Western Australia (WA Department) of their presence by 1 December 2010. On 2 December 2010, he sent NASAA two facsimiles. The second stated that there were 'hundreds of swathed GM plants and thousands of seeds spread across our land'. He also said that the sheep were eating the swathes. The swathes had come from the respondent's property.

417 On 3 December 2010, officers of the WA Department inspected Eagle Rest. They issued a report on 17 February 2011. During the inspection, a swathe was observed to be stuck on a boundary gate. The officers recommended that it be removed to prevent seeds spreading and it moving further into the property. The WA Department report stated, 'Mr Marsh advised that he would rather the plants remain where they were for the time being'.

418 On 4 December 2010, NASAA inspected Eagle Rest. A report was prepared concerning the inspection. The report indicated that the appellants had been 'fully compliant' with the NASAA standards. However, through 'no fault' of theirs, there was assessed to be a 'major non-compliance' manifesting in 'GM canola ... scattered across a large area of [the] property'. This included paddocks 7, 8, 10 and 12. The sheep grazing in paddock 7, it was inferred, had eaten the heads of some of the swathes. The report indicated that a strong southerly wind was blowing at the time of the inspection. This gave rise to concerns that other areas further away into the property might have plant material blown onto them.

419 Mr Marsh held off harvesting paddocks 1 - 6 (oats), 11 (wheat) and 12 (spelt and rye) pending some outcome or advice from NASAA. He also held off gathering up and removing the canola swathes on the property pending some outcome or advice from NASAA.

10 December 2010 - NASAA suspends certification pending investigation and testing

420 On 10 December 2010, NASAA wrote to Mr and Mrs Marsh and informed them that NASAA was suspending organic certification in respect of paddocks 7 - 10 (sheep pastures), 12 (spelt and rye) and 13 (sheep pasture), pending further investigations.

421 On 21 December 2010, NASAA conducted a further inspection of Eagle Rest. It reported that three canola swathes were found on (in effect) the 'buffer zone' part of paddock 11 (ie, not within the wheat crop). It concluded that the wheat crop on paddock 11 was free of contamination. It also reported that some swathes had been found on the rye crop (paddock 12). However, unlike paddock 11, swathes had been found 'lodged within the ... crop'.

422 Mr and Mrs Marsh did not remove the swathes until April 2011.

423 Following testing by NASAA the swathes on Eagle Rest were found to contain RR canola, ie, GM canola.

424 On 29 December 2010, Ms Goldfinch on behalf of NASAA wrote to Mr and Mrs Marsh and advised them that paddocks 7 - 13, along with any crops grown on them, were 'decertified'. Paddocks 1 - 6 remained certified 'organic'.

425 On 25 November 2013, NASAA notified Mr Marsh of the recertification of paddocks 7 - 13 of Eagle Rest.[19] The recertification took effect as from October 2013.[20]

The extent of subsequent growth of volunteer plants on the appellants' farm

426 The judge found that after the incursion of the 245 swathes onto the appellants' land:[21]

(a) only eight volunteer GM canola plants were ever detected in the subsequent growing season;

(b) these volunteer plants were readily identifiable and pulled out by Mr Marsh, presumably before they had set seed; and

(c) no more volunteer GM canola plants were thereafter identified on Eagle Rest.

427 The fact that volunteers (eight) emerged in the subsequent growing season but not thereafter is consistent with the expert evidence to the effect that canola seed residing in the top few centimetres of soil will have its highest percentage germination in the year after entering the soil seed bank.[22]

The partnership's claims against the respondent

428 The appellants sued the respondent in negligence and nuisance.

429 The claims in negligence were to the effect that the respondent failed to take reasonable care:

(a) to ensure that GM canola was not blown or carried from Sevenoaks onto Eagle Rest; and

(b) to ensure that the appellants did not suffer loss, including economic loss, as a result of GM canola being blown or carried from Sevenoaks onto Eagle Rest.

430 In relation to the claim in nuisance, the appellants alleged that the presence of GM canola plants and seeds on Eagle Rest constituted an unlawful interference with the use and enjoyment by the appellants of their land.

431 In relation to their claim for loss and damage, the appellants particularised their loss in their amended statement of claim as follows:[23]

1. Land on Eagle Rest which is de-certified cannot be used to grow crops or raise livestock that can be sold as 'certified organic'.
2. Since Between December 2010 and November 2013 the Marshes were has not been 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'. Further particulars will be provided in due course. (emphasis added)

432 By the time of the trial, the parties, by a supplementary statement of agreed facts, agreed that:[24]

1. By reason of the absence of certification of Eagle Rest farm between 29 December 2010 and 25 November 2013, the partnership ... suffered a net loss of income [sic] of $85,000 as follows:

(a) For the 2010/2011 financial year: $20,000

(b) For the 2011/2012 financial year: $32,500

(c) For the 2012/2013 financial year: $32,500

433 In relation to the claimed, and agreed, loss, the primary judge observed:[25]

A financial loss bottom line as asserted by Mr and Mrs Marsh, is that the produce grown or raised from the decertified paddocks of Eagle Rest, between 2011 and 2013, was sold off at lower prices than the greater (premium) prices which could otherwise have been achieved, had their Eagle Rest produce been sold labelled as 'NASAA certified organic' produce.

That is the underlying basis for the financial losses claimed by the Marshes, both for negligence and for nuisance, and which the parties have agreed upon as a figure, just before the trial began, at $85,000: see exhibit 2, supplementary statement of agreed facts.

(a) whether the respondent owed the appellants a duty of care in relation to their claims for financial loss as a result of NASAA's decertification of 29 December 2010;

(b) if a duty of care were owed, whether the respondent breached that duty of care;

(c) whether the respondent committed an actionable nuisance; and

435 On the question of negligence, or breach of duty, the appeal was run on the basis that the only issue was whether the respondent was negligent in harvesting his GM canola crop by using the method known as swathing.

436 The allegation was that swathing constituted negligence in that it left the cut swathes in windrows in the fields, which were then susceptible to being carried across by wind to the appellants' farm. It was alleged that the exercise of reasonable care by the respondent required him to use the method of harvesting known as direct harvesting, rather than swathing his GM canola crops.

437 The next two sections of these reasons deal with the primary judge's findings in relation to swathing, and the location of swathes on the appellants' property.

438 Swathing is a well-recognised, and indeed preferred, agricultural harvesting technique used by canola growers.[26] It involves cutting not yet fully matured canola plants close to their base, and stacking them in windrows in the paddock. There, the plants with their attached seed pods stand to ripen in the paddock for about two to three weeks.[27] The last phase of swathing involves a header machine harvesting up the ripened canola seeds from each cut plant.[28]

439 There are multiple agricultural advantages associated with swathing a canola crop which make it the most commonly used and most efficient seed harvest method. The advantages include not only greater seed yields, but also swathing mitigates against potential crop losses from the elements by cutting the canola plants at an earlier point in time than would be done by direct harvesting (heading).[29]

440 Additionally, one of the factors that caused Mr Baxter to carry out swathing was that it provided a greater degree of weed control in comparison with direct harvesting.[30]

441 The judge also accepted Mr Baxter's evidence about why he direct harvested the Mailbox paddock, rather than swathed it. Mr Baxter was regarded as a reliable witness.[31]

442 The primary judge also accepted the evidence given by Mr Robinson, Mr Baxter's agronomist adviser. Mr Robinson said, amongst other things:[32]

• Canola is swathed by many growers to reduce pod shattering and canola seed loss to the ground. The canola pod is brittle and prone to cracking when ripening particularly if there is late rain and hot winds. These factors cause the pod to swell and shrink and crack allowing the seed to spill to the ground. Herbicide may be applied behind the swather to control late season germinating weeds, including wimmera ryegrass.
• The vast majority of his farmer clients had swathed their canola crops over the past 10 years.
• The swathing causes the canola to ripen evenly across the crop and to ripen earlier.
• If swathing is not done, the canola remains standing in the paddock and the ripening of the crop is generally uneven across the paddock and some of the pod becomes brittle as it dries out with further ripening. The pod is then prone to fracture following rain, hail and hot winds and is at risk of spilling seed to the paddock before harvest. Such spillages can be extensive to the tune of more than 50% of the seed within the pod.
• Swathing brings forward the harvest by about two weeks when compared to direct harvesting. This reduces the farmer's risk of crop loss by wind, hail, rain or fire because the canola is removed from the field and not at risk two or three weeks earlier than would be the case if the crop was direct harvested.

443 The primary judge also addressed a criticism of Mr Baxter that he was not in a position to accept his agronomist's advice because 'Mr Baxter had inadequately briefed Mr Robinson'.[33] The judge referred to Mr Robinson's cross-examination on this issue.[34] Mr Robinson said that he had been informed by Mr Baxter that the neighbour was an organic farmer.[35] His Honour said:[36]

It was then sought to undermine the advice Mr Robinson gave in 2010 to Mr Baxter, as to his advocating the swathing of the GM canola crops, in or around October 2010. This challenge was put on the basis that it was not reasonably open to Mr Baxter to accept or follow Mr Robinson's affirmative advice to swathe, as Mr Baxter had inadequately briefed Mr Robinson. This, it was suggested, was because Mr Robinson had not been told by Mr Baxter about the expressed concerns of Mr Marsh as a neighbouring organic farmer. These concerns were expressed in the November 2008 conversation at Sevenoaks and later in the notice of intention to take legal action that Mr Baxter had received from Mr Marsh around 1 October 2010. Mr Robinson was closely cross-examined over this issue (ts 835 - 841). He said he had not been told of Mr Marsh's notice of intent document or that had Mr Baxter been told by Mr Marsh that Mr Marsh could lose his organic certification, if RR canola ever reached Eagle Rest. Given that Mr Robinson accepted that he may have given different advice. He accepted as to swathing there is a 'small risk' of swathes moving onto a neighbouring property (ts 940 -941). But what this different advice about swathing from Mr Robinson to Mr Baxter would have been did not really ever emerge, either in cross-examination or re-examination.

...

On my overall assessment, neither Mr Robinson nor Mr Baxter were undermined as to the legitimacy or genuineness of Mr Baxter's decision, in around October 2010, in respect of their choice of a harvest by swathing process for the harvesting of the 2010 GM canola crops then growing on the Two Dams and Range paddocks of Sevenoaks.

444 The primary judge further found:[37]

Mr Baxter did not make any unilateral or uninformed decision to swathe his crops in 2010. Swathing was recommended by and supported by the opinion of a local Kojonup agronomist, Mr Chris Robinson. Mr Robinson knew that Mr Marsh ran an organic farming operation next-door at the Eagle Rest property. But on the evidence Mr Robinson was not aware of Mr Marsh's 1 October 2010 notice of intention to take legal action document that Mr Marsh delivered to Mr Baxter at the end of September 2010. During cross-examination Mr Robinson accepted that his advice to Mr Baxter about swathing might have been different had he been told. How it would have differed was not fully explored.

In the circumstances, one cannot say more than that different swathing advice from Mr Robinson would, in all probability, have been consistent with what was contained in his employer's (Farmanco) publication issued in March 2010: see Farmanco Facts, Vol 30, issue 2. This document was tendered as exhibit 31 (see pages 6 and 10, as regards suggested monitoring of paddocks for volunteers). It further refers to a need to discuss 'management options' for this scenario and the possibility of strong winds moving swathes into your own and your neighbour's paddocks. It continues on to say that this 'is unlikely to affect the status of any non-GM canola crops, but you should be aware of this happening and monitor access routes'. This is hardly to tell growers of GM canola they should not harvest by swathing, or even that they should not swathe in a border paddock adjoining a road.

445 As noted earlier, NASAA decertified paddocks 7 - 13 inclusive and all crops from those paddocks on 29 December 2010.

446 The judge found that a total of approximately 245 GM canola swathes were blown by the wind and landed on the Marshes' farm in late November/early December 2010.[38]

447 As to the bulk (or volume) of the swathes, when Mr Marsh eventually gathered up the swathes in April 2011, they filled two drums.[39]

448 In relation to the location of the swathes, Mr Marsh created a printout of the individual GPS locations where the swathes had been found and identified. He plotted these locations on an aerial photograph of Eagle Rest and this 'key document' became exhibit 10 at the trial.[40]

449 Mr Marsh was cross-examined extensively on the location of the swathes.[41]

450 Mr Marsh's document, exhibit 10, appears to have been created around March/April 2011.[42] It is to be recalled that the appellants left the swathes in situ and did not gather them up until April 2011. However, Mr Marsh resisted in cross-examination the proposition that swathes had been blown around the property in the period before he collected them.[43]

451 Exhibit 10 and Mr Marsh's oral evidence indicated the following in relation to the location of swathes on the appellants' farm:

• paddock 7 had 13 swathes on it;[44]
• paddocks 8 and 9 had no swathes on them;[45]
• paddock 10 and paddock 12 (which had already been decertified because of the chemical treatment of sheep) had the overwhelming majority of the swathes on them;[46]
• paddock 11 had three swathes, but not in the wheat crop in that paddock;[47] and
• paddock 13 had 7 swathes.[48]

452 According to Mr Marsh, approximately 200 ha of the land which became decertified had, in total, 23 swathes on it.[49]

453 The primary judge found expressly, or at least necessarily implicitly, that the swathes on the appellants' farm were located on paddocks 7, 10, 11, 12 and 13, but not on paddocks 8 and 9.[50]

454 Although there is no ground of appeal challenging the judge's finding as to the location of the swathes, in a schedule served subsequent to the hearing of the appeal, the appellants, in effect, seek to dispute the primary judge's findings of fact that paddocks 8 and 9 had no swathes on them.[51]

455 With respect to paddock 8, the appellants refer principally to a report dated 5 December 2010 in respect of a site inspection, by Ms Purvis, an officer of NASAA on 4 December 2010. Ms Purvis reported that she had driven through the appellants' farm, stopping to review paddocks 6, 7, 8 and 10, and had observed extensive incidents of canola swathe plants on paddocks 7, 8, 10 and 12.[52] The appellants contend that the judge erred in not accepting the evidence in the report that swathes were located on paddock 8. A possible explanation for the difference between Mr Marsh's document and the report of the NASAA inspector dated 5 December 2010, might be that any swathes on paddock 8 had blown onto paddocks 10 and 12 by the time that Mr Marsh created his document. However, as noted above, Mr Marsh had resisted the proposition that swathes had been blown around on the property before he collected them.

456 The contemporaneous report insofar as it records what Ms Purvis observed, is likely to be more reliable than Mr Marsh's evidence, particularly given that the judge evidently had some general reservations about Mr Marsh's evidence.[53] His Honour also referred to Ms Purvis' report in his recitation of the 'factual narrative' in relation to matters which 'were essentially uncontroversial' at trial.[54] Accordingly, it is more likely than not that swathes were located on paddock 8 of the property as at 4 December 2010, as noted in Ms Purvis' report.

457 In relation to paddock 9, Ms Purvis' report did not mention sighting swathes on paddock 9.[55] Insofar as there is a challenge in respect of the finding in relation to paddock 9, it is effectively on the basis that Mr Marsh gave evidence that he had observed a swathe caught on the boundary fence between paddocks 7 and 9.[56] That, to our mind, does not alter the substance of the finding that there were no swathes on paddock 9.

458 With respect to seeds being scattered on the ground from pods in the swathes which landed on the appellants' property, it may be inferred from his Honour's reasons[57] that his Honour accepted Ms Purvis' statement in her report that:

Some swath[ed] plant material was noted with seed pods cracked and numerous seeds scattered on the ground.[58]

459 At the relevant time, AQIS[59] published a 'National Standard for Organic and Bio-Dynamic Produce' (National Standard) in connection with its operation as an approved certifier under s 20 of the Export Control Act 1982 (Cth), in relation to its functions under the Export Control (Organic Produce Certification) Orders (Cth) made pursuant to the Export Control (Orders) Regulations 1982 (Cth). The National Standard (the relevant terms of which are set out in appendix 1 hereto) provides minimum requirements, for products placed on the market with labelling which states or implies that they have been produced under an organic system. The general principle of the National Standard in relation to genetic modification is that products derived from genetic modification are not compatible with the principles of organic agriculture, and there is an 'expectation of freedom of ... organic ... products from genetic engineering contamination'.[60] What each organic certifier requires of the organic farmers with whom it contracts depends upon the proper construction of the contract and any contractual standards adopted by that particular organic certifier.

The 2007 contract with NASAA Preliminary observations

460 We now turn to the contractual relationship between the appellants and NASAA.

461 At the outset, it should be observed that in response to the submissions of the parties, the primary judge made findings as to the proper construction and application of the contract between the appellants and NASAA. His Honour found, in effect, that properly construed and applied, NASAA had no power on 29 December 2010 to decertify the appellants' operation.[61]

463 Even though any such determination would not bind NASAA, ordinarily such rights would not be declared in the absence of NASAA as a party to the proceedings.[62] That precautionary observation is of particular significance in a case like this where the primary contractual document runs to 11 pages, and is said to incorporate another document comprising 114 pages; where the contractual materials address a topic and a range of subject matters in a very specialised area; and where any ambiguities might need to be resolved not only in light of the contractual instruments construed as a whole, but also in light of statutory instruments concerning the export of organic produce. Also, presumably NASAA has a number of contracts in the same or similar terms with a wide variety of organic producers. A formal, albeit non-binding, determination as to the proper construction and application of its standard contract might well give rise to commercial inconvenience and uncertainty.

464 The difficulty is not overcome by the fact that representatives of NASAA were called in support of the appellants' case against Mr Baxter. They were lay witnesses who could only give evidence of fact or (to the extent admissible) expert opinion.

465 Accordingly, all observations below and elsewhere in these reasons, as to the proper construction and application of the contract between the appellants and NASAA, are provisional only, and are not intended to represent any final or concluded views on those matters. This appeal may be decided without reaching final views as to the proper construction and application of the contractual arrangements between NASAA and the appellants.

466 The parties to the contract were NASAA[63] and 'Stephen and Sue Marsh, trading as Eagle Rest Farm'[64]. Mr and Mrs Marsh were described as the 'Licensee'.[65]

467 The contract recited that NASAA was accredited by, relevantly, AQIS, and IOAS[66] on behalf of IFOAM[67], to offer certification, and that the 'Relevant Standards' applicable to NASAA's accreditation included the 'NASAA Organic Standard'.[68]

468 It also recited that NASAA had certified the licensee's 'land and/or facilities' at Eagle Rest to the level of 'organic' under the AQIS/IFOAM program.[69] The 'facilities' were described as 476 ha of the 477 ha property known as Eagle Rest.

469 It provided that the purposes of the contract were to:[70]

(a) authorise the licensee to use logos, labels and names in association with the certification granted by NASAA of the licensee's land, facilities, products and processes; and

(b) to identify the licensee's obligations and entitlements in relation to that certification.

470 By cl 3, NASAA granted the licensee a non-exclusive licence to use, in effect, a label or logo styled 'NASAA Certified Organic' in relation to the licensee's 'products', which were specified as 'mixed grain, barley, oats, wheat (spelt), lupins, sheep (meat, wool).[71] The licence was 'subject to the Licensee's strict compliance with all the terms of this Contract'.[72]

471 Clause 3.2 provided that the licence would commence on 2 April 2007, and would 'continue in perpetuity unless terminated by either party in accordance with this contract'.

472 Clause 10, referred to below, dealt with termination.

473 By cl 5, the licensee warranted that it had provided all information requested, and had truthfully and fully answered all questions asked, by NASAA in connection with the certification.

474 Clause 6 was headed 'Licensee's obligations' and provided:

6.1 The Licensee must comply with the relevant Standard [NASAA Standard], all terms of this contract, including the Additional Conditions ... in Schedule 12 and any requirements laid out by NASAA in correspondence with the Licensee.

6.2 The Licensee must not use substances or methods prohibited under the relevant Standard.

...

6.4 The 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 relevant Standard.

...

6.6 The Licensee must grant to a NASAA inspector ... at any time, inclusive of routine annual inspections, ... access to inspect the Licensee's facilities ...

6.7 The Licensee must submit to NASAA annually ... a declaration describing the organic management of the Licensee's facility.

...

6.16 The Licensee must deliver up to NASAA the certificate of registration if this contract is terminated by either party.

6.17 The Licensee must recall from the market place all of the Licensee's products bearing any licensed items if required to do so by NASAA in accordance with this contract.

475 Clause 7 was headed 'NASAA's obligations'. It provided, relevantly:

7.4 Subject to suspension of certification under paragraph 9 of this contract, NASAA will from year to year issue the Licensee with:

(i) an annual certificate of registration; or

(ii) if the Licensee is in pre-certification, a confirmation of compliance. (emphasis added)

476 The term 'certificate of registration'[73] was defined to mean a 'document issued by NASAA to the licensee ... signifying current compliance with this contract'.[74]

Procedures in the event of possible non-compliance

477 Clause 8 was headed 'Procedures in the event of a possible non-compliance of the relevant Standard'.

478 Clause 8.1 provided that where NASAA 'has reason to believe that the Licensee's facilities or ... products have been affected by chemicals, processes, practices and/or treatments not specifically allowed under the relevant Standard', NASAA may suspend the licensee's certification and/or inspect the licensee's facilities and/or decide whether relevant testing is to be conducted.

479 Clause 8.2 provided that 'in the event of a possible non-compliance of the relevant Standard', NASAA could, without prior notice, inspect the licensee's facilities, the specified products or any materials etc used on the licensee's facilities, and any records relating to the same. It also provided, in effect, that the licensee would fully cooperate with such inspections and pay for the reasonable costs of such inspections.

480 Clause 8.3 provided that where in accordance with cl 8.2 NASAA decided to conduct laboratory testing, the licensee would be responsible for the payment of reasonable costs of the testing.

481 Clause 8.4 provided that if NASAA was satisfied that the licensee's facilities and products 'were not contaminated in the manner referred to in paragraph 8.1 of this contract', then any payment in respect of inspection and/or testing could, at NASAA's sole discretion, be refunded to the licensee.

482 As noted below, a failure by the licensee reasonably to cooperate with an inspection or investigation carried out under cl 8 could entitle NASAA to terminate the contract under cl 10.1.

483 Clause 9 of the contract, to which NASAA's obligations in cl 7.4 were subject, was headed 'Sanctions'.

484 Under cl 9, NASAA's 'sanctions' included both suspension of the licensee's use of licensed items, and/or suspension of 'certification'. As 'certification' applies to 'land and/or facilities' and 'the specified products or processes' in the schedule,[75] arguably suspension of certification would apply to any or all of the appellants' land and facilities and to any or all of the appellants' products.

485 Suspension of certification could be immediate,[76] or on 30 days' notice.[77]

486 Clause 9.1 provided in effect for immediate suspension of certification if the licensee failed to notify NASAA of any occurrence affecting the licensee's compliance with the relevant Standard or the contract;[78] or if NASAA 'reasonably believe[d] that there [had] been a breach of the compliance of the Licensee with the relevant Standard or [the] contract'.[79]

487 Under cl 9.2 NASAA could suspend certification on 30 days' written notice if fees remained outstanding for more than 30 days, or if the licensee failed to provide NASAA with appropriate declaration of sales, or information regarding the licensee's certification.

488 Clause 9.3 provided that where NASAA suspended the licensee's certification (under cls 9.1 and 9.2), NASAA would 'lay out its requirements' for the licensee to remedy the non-compliances, and the period within which they were to be remedied, not normally exceeding 14 days. (This appears to reflect the two week period referred to in cl 2.12 of the NASAA Standard in respect of 'Suspension'.)

489 By cl 9.4, where the licensee's certification was suspended, the licensee agreed to discontinue the use of the licensed items in connection with its products and promotion of its products; withdraw from distribution and sales any products reflecting the grant of the licence; recall from purchasers and retailers any examples of product that have not been produced in accordance with the relevant 'Standard'; and comply with the relevant 'Standard'.

490 Clause 9.5 provided that NASAA could lift the suspension at any time by notice in writing.

491 Clause 9.6 provided that where NASAA suspended the licensee's certification, NASAA reserved the right to inform relevant accreditors and trade operators.

492 Clause 10 was headed 'Breaches and termination'.

493 NASAA could terminate the contract with immediate effect in certain circumstances,[80] or upon notice.[81]

494 Clause 10.1 provided, in effect, that NASAA could terminate the contract forthwith:

• if NASAA suspended certification and the licensee had not remedied the 'non-compliances' within the terms specified by NASAA under cl 9.3[82] (the term 'non-compliance' was defined to mean 'a breach by the licensee of the relevant Standard to be rectified by the Licensee within a period of time set by NASAA');[83] or
• where the licensee did not reasonably cooperate with an inspection or investigation carried out by NASAA under cl 8;[84] or
• if in the opinion of NASAA the licensee's breach was of a kind which could not be remedied.[85]

495 Clause 10.2 provided for termination by NASAA with written notice. It provided, in effect, that NASAA could terminate the contract with notice of at least 30 days in writing if a licensee failed to confirm NASAA's variations to a term or terms of the contract, and failed to provide notice to NASAA setting out reasonable grounds for the failure to agree.

496 Clause 10.4 provided that either party may, without giving reasons, terminate the contract by giving one month's notice in writing to the other party. Insofar as cl 10.4 permits termination by NASAA without giving reasons, it may raise the question of whether the power need be exercised reasonably by NASAA.

497 Clause 10.7 provided that where NASAA terminates a 'Licensee's certification', NASAA reserved the right to inform relevant accreditors and trade operators, such as wholesalers, that the 'licensee's certification' had been terminated.

498 Clause 11 dealt with dispute resolution. Clause 11.2 provided, in effect, that if a licensee wished to dispute the NASAA contract, it must make a written submission to NASAA setting out the matters in dispute and the grounds for dispute, including any request for amendment to the contract or the 'Licensee's certification'. By cl 11.3, within 30 days, NASAA must consider the submission and may decide in favour of the licensee and amend the contract accordingly, or decide against the licensee. By cl 11.4, if NASAA decided against a licensee, the licensee may request NASAA to convene a specific Appeals Committee to make a binding decision upon the matter.

499 Schedule item 12 included cl 12.2 which provided that 'in cases of Parallel Production, the Licensee shall be subject to additional inspection at critical times and scrutiny of all records (including conventional produce) at the expense of the Licensee'. As discussed more fully later, 'parallel production' meant, in effect, the operator growing organic and non-organic crops and produce on the same farm at the same time. Thus, by sch item 12, NASAA appears to have allowed parallel production to the appellants on terms requiring additional inspections and record-keeping.

500 It would appear that following Mr Marsh's notification to NASAA on 2 December 2010 (presumably pursuant to cl 6.4 of the contract), NASAA carried out inspections on 4 and 21 December 2010, and testing of the swathes, arguably pursuant to cls 8.1 and/or 8.2 of the contract. Presumably NASAA's suspension of paddocks 7 - 10, 12 and 13 on 10 December 2010, pending further investigation, was also pursuant to cl 8.1.

501 Having investigated the matter under cl 9.1 NASAA could, it seems, have 'suspended' the appellants' certification under cl 9.1(ii) if there had been a breach of compliance with the NASAA Standard. Any suspension under cl 9.1(ii) would have required NASAA to lay out its requirements for the breach to be remedied, ordinarily within a 14-day period[86] or terminate the contract (under cl 10.1(iii)) if it were of the opinion that the appellants' 'breach' was of a kind which could not be 'remedied'.

502 It was accepted in this appeal that there was no suspension by NASAA under cl 9.1. It was also accepted that, in consequence, NASAA had not done anything to 'lay out its requirements' to remedy any 'breach' that could have been the subject of a cl 9.1(ii) suspension. Also, as the judge found,[87] NASAA did not purport to terminate the contract by its letter of 29 December 2010.

503 These matters raise questions about the existence and nature of any contractual power that NASAA purportedly exercised in its letter dated 29 December 2010.

504 The judge found, in effect, that any such power had to be found in the NASAA Standard, the terms of which, his Honour said, were 'incorporated by reference into the 2007 contract'.[88] The judge did not identify any particular term of the contract which expressly 'incorporated' the terms of the NASAA Standard into the contract.

505 Presumably, the NASAA Standard was 'incorporated' in the sense that:

• the licensees (appellants) were obliged to 'comply' with the terms of the NASAA Standard,[89] and not use substances or methods prohibited by them;[90]
• any failure by the licensees to notify NASAA of any occurrence 'affecting ... compliance with' the NASAA Standard could result in suspension;[91]
• any 'breach' of the NASAA Standard could lead to suspension;[92]
• any consequent suspension could then lead to termination of the contract where the non-compliance had not been remedied, or the breach was of a kind which could not be remedied.[93]

506 Mention may also be made of cl 10.2 which is another basis upon which it might be said that in some sense at least, the NASAA Standard was 'incorporated' into the contract.

507 Clause 10.2 appears to contemplate NASAA in effect compelling changes to the contractual terms in a manner consistent with the terms of the NASAA Standard, subject presumably to the operation of the dispute resolution provision where the licensee has given notice (under cl 10.2(ii)) that it had 'reasonable grounds' for not accepting the change.

508 The appellants' case in this appeal is that, relevantly, cl 3.2.9 of the NASAA Standard was incorporated into the appellants' contract with NASAA. As we would understand it, cl 3.2.9 of the NASAA Standard was in substance 'incorporated' through the application of cl 10.2 of the contract. For present purposes, it may be accepted that the effect of NASAA's letter dated 29 December 2010 was to impose a variation of the contract, on the terms specified in the letter, subject to any review process initiated by the appellants under cl 11. On the appellants' case, that contractual result was effected by NASAA applying cl 3.2.9 of the NASAA Standard, and in the absence of any dispute by the appellants under cl 11.

509 The terms of the NASAA Standard are referred to next in these reasons.

510 The introduction to the NASAA Standard provides that NASAA is an international organisation of organic operators and that the 'operators endeavour to use sustainable organic agricultural practices'. It also provides that the NASAA Standard 'outlines the practices and materials that are allowed ... or prohibited for use'. (emphasis added)

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

511 According to the introduction,[94] the NASAA Standard contains various classes of provision: - 'general principles'; 'recommendations'; 'standards'; and 'derogations'.

512 'General principles' reflect the underlying 'architecture' of organic agriculture; 'recommendations' are recommendations which 'should be put into place where appropriate'; and 'standards' are the minimum requirements which must be met. Unlike 'standards', neither 'general principles', nor 'recommendations', are subject to inspection and compliance.

513 'Derogations' represent possible exceptions to a 'standard' and the specific conditions under which they may be authorised.

514 Clause 1.3 provides that NASAA certification is a 'total quality management system developed for organic production'. It allows the operator 'to advertise and label their produce/products as meeting the NASAA Organic Standard'. (emphasis added)

515 Clause 1.4 provides, in effect, that the NASAA Standard reflects the aims of organic agriculture, which are said to include:

(a) 'maintain[ing] and encourage[ing] agricultural and natural biodiversity on the farm ... through sustainable production systems';[95]

(b) 'provid[ing] livestock with conditions which satisfy their behavioural and physiological needs';[96]

(c) 'maintain[ing] or increase[ing] as appropriate the genetic diversity of domesticated and native plants, animals and other organisms on the farm (this precludes the use of Genetic Engineering');[97] and

(d) 'progress[ing] towards an entire organic production chain, which is both socially just and ecologically responsible'.[98] (emphasis added)

516 Clause 2.8 deals with 'parallel production'. Parallel production is referred to in cl 2.8 to mean, in effect, the simultaneous production of exactly the same organic and non-organic crop, or the same organic or non-organic animal product, by the same operator on the same farm or by the same operator on different farms.[99] Clause 2.8 provides, in effect, that such parallel production substantially increases 'the risk of inadvertent mixing, or contamination' of the 'certified product' - which appears to be a reference to the final product. The general principle is that 'certified organic farms do not carry out parallel production'.

517 Parallel production may be permitted where there is perennial, or annual, produce from quarantine or 'buffer zones' which must be sold as conventional. A buffer zone is defined to mean 'a clearly defined and identifiable boundary area bordering an organic production site' where the area is 'established to limit application of, or contact with, prohibited substances from an adjacent area'.[100]

518 There are some other specified exceptions to the requirement that there be no parallel production, including 'where the operator is subjected to additional inspections at critical times and scrutiny of all records'.[101] Clause 2.8.4 also provides, in relation to the exceptions, that prohibited material shall be stored in a separate location from those where organic products are stored.

519 Clause 2.18, in the statement of general principles, provides that the NASAA label 'accurately indicates throughout the market chain, including the consumer, that the produce so labelled has been produced in accordance with this Standard'. (emphasis added)

520 By cl 2.20, the general principle is that labelling is employed to 'provide accurate and non-ambiguous information about products'. (emphasis added)

521 Clause 2.20.12 provides that organic products must not be labelled as 'GMO free' in the context of the NASAA Standard. Instead, any reference to genetic engineering on product labels 'shall be limited to the production and processing methods themselves having not used' (emphasis added) GMOs.

522 Section 3 is headed 'Precautions and General Requirements'. It deals with 10 topics, one of which is genetically modified organisms. The 10 topics are:

• residues and possible contamination;
• genetically modified organisms;
• windbreaks/buffer zones;
• spray equipment;
• landscape and environment;
• soil conservation, organic matter, humus and compost;
• green manure;
• diversity in crop production;
• water management;
• irrigation management.

523 Under the topic of 'residues and possible contamination', cl 3.1 provides that as a statement of general principle, all relevant 'measures' are to be taken to ensure that organic soil and product is protected from contamination. The 'recommendations' part of cl 3.1 provides that contamination that results from circumstances beyond the control of the operation does not necessarily alter the organic status of the operation.

524 Clause 3.1.12 provides that where prohibited substances have been 'applied directly and intentionally to certified products, or there is a demonstrable failure to take reasonable precautions against contamination, decertification will follow'. (emphasis added)

525 The topic of genetically modified organisms is dealt with in cl 3.2, which is discussed later in these reasons.

526 Section 4 deals with crop production generally, including fertilisers and input products. Section 5 deals with individual crop categories. Other sections include animal husbandry;[102] livestock standards;[103] post-production;[104] and health and beauty care products.[105]

527 Section 6 deals with 'general standards for animal husbandry'. The 'general principles' part of cl 6.4 provides that organic livestock production 'avoids contamination resulting from past and adjacent practices through identification and risks and the implementation of appropriate action to minimise or eliminate such risk'. The 'recommendations' in cl 6.4 are to the effect that each operator should develop a risk management plan that identifies all physical, biological and chemical hazards that may pose risks to animal health, welfare and integrity.

528 In the 'standards', cl 6.5.1 provides that the diet must comprise 100% organic feed, and cl 6.5.2 provides that for livestock products to be labelled as organic, the livestock diet must be sourced from organic feed (subject to certain specified derogations, none of which are presently relevant).

529 In s 1 of the NASAA Standard, cl 1.1 defines 'decertification' to mean 'the total withdrawal of certification by NASAA'. (emphasis added)

530 'Certification' is defined in cl 1.1 to mean 'the acceptance by NASAA of an operator's conformity to this Standard as verified through inspection and audit by NASAA'.

531 In s 2 of the NASAA Standard headed 'General certification requirements', cl 2.12 was headed 'Sanctions'. Clause 2.12 provided that:

Sanctions may be imposed by NASAA when there are non-compliances or non conformities to this Standard. An operator unable to demonstrate compliance with this Standard may be subject to the following:

• Suspension: A defined period, ordinarily not greater than two weeks, during which an operator must provide NASAA with verification of compliance with this Standard following non-compliance with any section of this Standard. During this period an operator must not sell produce with reference to NASAA certification.
• Decertification: Termination of certification as a result of ongoing non-compliance with the Standard, following a period of suspension. (emphasis added)

532 Clause 2.12 further provided that the following matters 'will result' in 'decertification':

• 'manifest non-compliance with this Standard such as mixing organic and conventional products';[106]
• 'ongoing failure to observe contract conditions'.[107]

533 Clause 2.12.5 provided that a failure to complete an annual return, complete a certification contract, pay levies and/or associated costs of certification would result in 'suspension and possible decertification'. (emphasis added)

534 Clause 3.1.12, under the topic of 'residues and possible contamination', provided:

Where prohibited substances have been applied directly and intentionally to certified products, or there is a demonstrable failure to take reasonable precautions against contamination, decertification will follow. (emphasis added)

Where successive inspections reveal that excessive tillage or other management factors have contributed to declining soil structure, a producer will be required to develop and implement a plan for soil restoration. Regular monitoring of soil organic matter will be part of any restoration plan. Where this is not implemented, decertification will follow. (emphasis added)

536 Section 4 was headed 'General standards for crop production'.

Operators of a certified production system that is managed contrary to this Standard must dispose of all products as 'conventional' prior to reinstating and implementing a cleaning program. Repeated violations resulting from failed or insufficient management may lead to decertification. (emphasis added)

• 'certification' involves an acceptance by NASAA of the operator's compliance with the NASAA Standard;
• generally, 'decertification' as that term is used in the NASAA Standard, will or may occur where there have been serious or repeated breaches by the operator of the NASAA Standard.

539 It should also be noted that cl 3.2.12 of the NASAA Standard uses the word 'decertify' but not 'decertification'. Clause 3.2.12 is discussed later in these reasons.

NASAA Standard - Genetically Modified Organisms Clause 3.2

540 Clause 3.2 is headed 'Genetically Modified Organisms' and deals specifically with that topic. It provides as follows:[108]

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

3.2.1 The 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

3.2.2 Operators 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.

3.2.3 The certification of organic crops will be withdrawn where genetically engineered crops are grown on the same farm.

3.2.4 Operators 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.

3.2.5 Operators must not knowingly permit exposure or fail to take action against the application of or exposure to GMOs.

3.2.6 Inputs, 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.

3.2.7 Operators 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

3.2.8 Planting 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.

3.2.9 Organic certification shall be withdrawn where NASAA considers there is an unacceptable risk of contamination from GMOs or their derivatives.

3.2.10 Any 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.

3.2.11 Contamination of organic product by GMOs that results from circumstances beyond the control of the operator may alter the organic status of the operation.

3.2.12 Under the National Standard, NASAA will decertify any products that are tested and reveal the presence of GMOs.

541 Clause 3.2 contains three classes of provision - 'general principles'; 'recommendations'; and 'standards'.

542 As noted earlier, 'general principles' reflect the underlying 'architecture' of organic agriculture; 'recommendations' are recommendations which 'should be put into place where appropriate'; and 'standards' are the minimum requirements which must be met. Unlike 'standards', 'neither general principles', nor 'recommendations', are subject to inspection and compliance.

543 In cl 3.2, the 'general principles' to be applied are, in effect, that:

(a) GMOs 'have no place' in 'organic production and processing systems'; and

(b) even where GMOs are not detected in the finished product of the organic operation, the deliberate or negligent exposure of the organic production system or finished product to GMOs is 'outside organic production principles'.

544 The 'recommendations' in cl 3.2 are to the effect that every potential source of GMOs 'in the supply and input chain' and 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. (emphasis added)

545 In this regard, an 'input' is a 'product' or 'material' which is 'applied' or 'used' 'in the course of production'.[109]

546 The 'standards' in cl 3.2 are contained in cls 3.2.1 - 3.2.12.

Clause 3.2 standards imposing obligations on the operator

547 The appellants argued in this appeal that the judge erred in finding that cl 3.2.1 was directed to the conduct of the organic operator, when he should have found that it was just as equally directed to third parties such as Mr Baxter. It was argued[110] that the aim of cl 3.2.1 'is not to deal with some kind of fault on the part of the operator ... it is directed to how to ensure that the organic farm remains organic'.[111] Senior counsel for the appellants nevertheless accepted that if that submission were correct, the words 'deliberate or negligent' would not have much work to do.[112]

548 The primary judge's finding on this issue was as follows:[113]

Standard 3.2.1 sees reference to the 'deliberate use' or 'negligent introduction' of GMOs to organic farming systems as being prohibited. Plainly, this would refer to conduct by an organic operator, in reference to the following as specified dot point items, including seed and feed. The chosen terminology of 'deliberate use' and 'negligent inhabitation' echoes the second paragraph of general principle 3.2 above. This is clearly a reference to intentional or negligent conduct on the part of the organic operator. Plainly, it does not address the scenario of an introduction of GMOs under unintended circumstances, assessed as either not deliberate, or not negligent, vis-à-vis the organic operator. (original emphasis)

549 The judge's reasoning and conclusion would appear to be at least open. Clause 3.2.1, by its terms and in its context, is at least arguably directed only to the conduct of the operator.

550 If that were correct, the 'standards' in cl 3.2 would appear to include the following obligations imposed on the operator:

(i) deliberately or negligently use GMOs in, or introduce GMOs into, their 'farming systems' or 'products', including via 'seed', 'feed' and 'farm inputs' such as compost;[114]

(ii) grow GMO crops on the same farm;[115]

(iii) use ingredients etc in certified products derived from GMOs;[116]

(iv) 'knowingly expose' or fail to take action against the 'application of' or 'exposure' to GMOs;[117] and

(v) plant or sow for organic production on land which has had GMO crops planted on it in the past, until five years have elapsed following removal of such GMO crops;[118]

(i) ensure that inputs etc are traced back one step in the biological chain to the direct source organism to verify that they are not derived from GMOs;[119]

(ii) in respect of 'input' materials at risk of containing GMOs, obtain verifications that they do not contain GMOs;[120]

(iii) notify NASAA of any site within 10 km of their farm on which GMOs are grown, as such sites are perceived to pose a risk of contamination;[121] and

(iv) assess any risks of contamination by GMOs and take appropriate action to guard against the risks, including implementing 'buffer zones' from potential contaminants.[122]

551 Again, for the purposes (relevantly) of cls 3.2.1, 3.2.2 and 3.3.6, an 'input' is a 'product' or 'material' which is 'applied' or 'used' 'in the course of production'.[123]

552 Reference should also be made at this point to the requirement for buffer zones, for which further specific provision is made in cl 3.3. Clause 3.3 imposes on the operator 'standards' (minimum requirements subject to inspection and compliance) that:

3.3.1 Buffer zones must be provided to protect certified areas from contamination from adjacent properties where appropriate.

3.3.2 Requirements for buffer zones shall be determined by NASAA ... and in each case will be no less than five metres.

3.3.3 Where outside rows of a crop are used as a buffer zone, produce from these rows ... may not be sold as certified.

553 Examples of buffer zones include not only 'acceptable distances from contamination', but also:

• multiple rows of trees or hedges; and
• physical barriers.[124]

554 The above provisions essentially relate to the fault (deliberate or negligent conduct) of the operator. They are readily capable of application insofar as their contravention may lead to NASAA applying the 'sanctions' of 'suspension' and/or 'decertification' provided for in cl 2.12 of the NASAA Standard.

555 The question of the extent to which the 'standards' in cl 3.2 permit NASAA to decertify in the absence of fault by the operator, is a more difficult one.

556 Clause 3.2.11 is the first (and only) provision in cl 3.2 which expressly refers to circumstances beyond the control of the operator. It provides:

Contamination of organic product by GMOs that results from circumstances beyond the control of the operator may alter the organic status of the operation.

557 Clause 3.2.11 also refers expressly to 'product' contamination.

558 Thus, under cl 3.2.11, the 'contamination' of organic 'product', in circumstances 'beyond the control of the operator', 'may alter' the organic status of the operation.

559 Clause 3.2.11 arguably has the sense of an 'even if' provision. In other words, 'even if' contamination of the operator's final product results from circumstances beyond the operator's control, NASAA may alter the organic status of the operation. Presumably, the exercise of any such power would be confined by the true scope and purpose of the provision read in the context of the NASAA Standard as a whole. It is perhaps designed to allow NASAA to work backwards, as it were, from the known result of contaminated product, for the purpose of determining whether any part or parts of the organic operation led to the contamination of product, and to 'alter', by the imposition of conditions or withdrawal of certification, the operator's organic status in whole or in part.

561 Clause 3.2.12 provides, in effect, that where the marketable product is tested and reveals the presence of GMOs within it, then NASAA 'will decertify' any such 'products'. Although cl 3.2.12 does not in terms use the word 'contaminate', it would appear to be addressing a situation where the final product is, in fact, contaminated. If the final product is tested and found to contain GMOs, it would ordinarily be said to be 'contaminated' by GMOs. The word 'contaminate' ordinarily means to render impure by contact or mixture.[125]

562 Presumably, a 'product' could reveal, upon testing, the presence of GMOs, either where there has been a GMO gene transfer into the organic product itself, or where, for example, in the case of a harvested crop, GMO plant material has been mixed into the 'organic' product and not been screened out.

563 Although cl 3.2.12 does not expressly refer to circumstances beyond the control of the operator, its presence in cl 3.2 as, in effect, the final word in that clause; its apparent connection with cl 3.2.11; and the direct and unambiguous language used; would arguably indicate that it also applies to product which, even without any fault on the part of the operator, is found to contain the presence of GMOs.

564 In other words, decertification of the 'product' (and not the whole, or any part, of the farming operation itself) is always mandatory if the product reveals the presence of GMOs. That would seem to be consistent with the evident purpose of certification. Where products are to be labelled and sold as 'organic', anything less might be said to be a misrepresentation of that label.

565 Another provision which might arguably operate in the absence of fault by the operator is cl 3.2.9. Unlike cl 3.2.11 and 3.2.12, cl 3.2.9 is prospective in its operation.

Clause 3.2.9 of the NASAA Standard Overview of the controversy

566 The combined effect of grounds 9 and 10 of the grounds of appeal, is to allege that the primary judge erred in his construction and application of the NASAA Standard in relation to cl 3.2.9.[126] Ground 10 alleges that the judge ought to have held that NASAA's decertification of Eagle Rest pursuant to cl 3.2.9 of the NASAA Standard was a 'sanction open' to NASAA. The appellants also allege that it was their vulnerability to decertification under, relevantly, cl 3.2.9 which was fundamental to the erection of a duty of care in their favour.[127]

567 As noted above, Clause 3.2.9 is prospective in its operation. It provides:

Organic certification shall be withdrawn where NASAA considers there is an unacceptable risk of contamination from GMOs or their derivatives.

568 The scope of the provision would, at least on its face, appear to be of extremely wide import. A number of essentially interrelated observations may be ventured about cl 3.2.9.

569 First, it deals with the withdrawal of 'organic certification'. It raises the question of precisely what 'organic certification' is intended to be the subject of withdrawal in this context. It is unlike cl 3.2.3 which says that certification of organic crops will be withdrawn. It is unlike cl 3.2.12 which provides that products will be decertified. It is also unlike cl 3.2.11 which provides that the organic status of the operation may alter.

570 If cl 3.2.9 is wide enough to cover not only withdrawal of certification of product, but also of crops and of the operation as a whole, upon the formation of an opinion by NASAA of an unacceptable 'risk' of contamination, it is a provision of considerable breadth. It also arguably appears, on its face, to be broad enough to apply not only to risks within the control of the operator, but also to risks which the operator cannot control. It could have the potential, unless somehow confined, to overreach every other aspect of the operation of cls 3.2.1 - 3.2.8 and 3.2.10 - 3.2.12, as well as other provisions of the NASAA Standard dealing with decertification for fault by the operator. On the other hand, unlike cl 3.2.11, it is not in terms addressing 'circumstances beyond the control of the operator'. It may perhaps form an integral part of the suite of 'standards' in cls 3.2.1- 3.2.8 and 3.2.10, which operate upon the conduct of the operator and not on the conduct of third parties.

571 Secondly, there is the question of the meaning of the word 'contamination'. The obligation in cl 3.2.5 that operators must not knowingly permit 'exposure to GMOs', and the risk assessments required under cl 3.2.7, may indicate that any contact of any nature or degree of a GMO with the operating system may constitute 'contamination'. Provisions in relation to other topics addressed by the NASAA Standard would suggest that contamination may occur by mere unauthorised contact with an organic product.[128] On the other hand, the 'general principles' in cl 3.2 are to the effect that GMOs have no 'place' in 'organic production systems', and the 'recommendation' is, in effect, to avoid contamination 'in the supply and input chain'. Those matters might suggest that contamination in cl 3.2.9 is concerned with GMOs being given a place in, or otherwise forming part of, the chain of production which produces the organic product.

572 Thirdly, the subject matter which is determined to be at risk of contamination (to the extent of requiring withdrawal of certification), is also not specified. Is it the product, the crop, the operation as a whole, or all three?

573 Fourthly, there is a question as to what 'unacceptable' means. By what criteria is a risk to be judged as 'unacceptable'?

574 Finally, like cls 3.2.12, 3.2.9 is expressed in mandatory terms. Once the relevant opinion has been formed 'organic certification shall be withdrawn'. If cl 3.2.9 were, properly construed, a discretionary power like cl 3.2.11, presumably the exercise of the discretion would be confined by the scope and purpose of the provision read in the context of the NASAA Standard as a whole. But that construction would raise many more questions than it would otherwise answer.

575 The primary judge sought to resolve some of these constructional questions by construing cl 3.2.9 as being confined to 'some sensible risk of a contamination to an organic product'.[129] He appears to have had in mind, specifically, genetic contamination of the product.[130] Indeed, that appears to have been the construction favoured by NASAA as late as August 2010 in responding to Mr Marsh's queries about the operation of the NASAA Standard.

576 The respondent contends, in effect, that the judge reached the correct result as to the proper construction of cl 3.2.9, but contends that there are other matters which the judge ought to have taken into account as a matter of construction in deciding that there was no power to decertify the appellants in the relevant circumstances.[131]

577 The appellants contended that the proper construction of cl 3.2.9 was as follows:[132]

Like Standard 3.2.1, Standard 3.2.9 does not depend for its operation on any conduct or default on the part of the organic operator such as the appellants. Rather, the standard operates where [NASAA] considers there to be 'an unacceptable risk of contamination'; it identifies the type and extent of risk (that it be unacceptable and constitute a risk of contamination), but is silent as to its causes. The standard of unacceptable risk imports a broad, evaluative judgment and confers discretion on [NASAA] to make that judgment.

578 Another construction might be that the condition enlivening the obligation in cl 3.2.9 is wholly subjective, and that the opinion does not have to be based on reasonable grounds, although it would, presumably, be subject to an obligation to act in good faith.[133]

579 Even if there were the further limitation that any opinion had to be held on reasonable grounds, the identification of reasonable grounds would, itself, depend upon answers to the constructional issues referred to in [568] - [574] above.

580 Another possible construction might be that cl 3.2.9 is intended to augment the operation of cl 3.2.7, and that where the operator has failed to comply with its obligations under cl 3.2.7 to avoid risks of contamination, NASAA may withdraw certification if it is of the opinion that the operator's conduct (its acts or omissions) will lead to an unacceptable risk of GMO contamination of the production system, the crops or the final product. In other words in context, it is augmenting the 'fault' standards imposed on the operator.

581 A further alternative possible construction might be that cl 3.2.9 is intended to apply where NASAA has formed the opinion that despite the organic operator having fully complied with cls 3.2.7 and 3.3, there remained an unacceptable risk, in the sense of an unacceptably high, or perhaps unavoidable, risk, that:

(a) the final product would itself come to the market contaminated (in the case of crops, genetically or by admixture with GM plant material); or

(b) a GMO would form part of the 'supply and input chain'[134] in the production of the final product (in the case of crops or livestock).

582 There may be other implied constraints on the operation of cl 3.2.9 which have not been examined in this case.

583 It is unnecessary to express any concluded views on appeal grounds 9 and 10. Nor, similarly, is it necessary to express a concluded view on the proper construction and application of the NASAA Standard contended for by the respondent in pars 1 and 2 of the respondent's notice of contention. For present purposes, it is sufficient to observe that the provisions of cl 3.2 in general, and cls 3.2.1 and 3.2.9 in particular, raise difficult questions of construction.

584 A reasonable person in the position of a third party to the NASAA contract, such as Mr Baxter, would neither know, nor ought to have known, the true construction of cl 3.2 and its provisions in general, or cl 3.2.9 in particular.

The question of contamination by the swathes Unchallenged findings as to health and genetic trait transfer

585 The primary judge made the following unchallenged findings of fact:

(a) the GM canola swathes were harmless to people, animals and property;[135]

(b) none of the appellants' crops or sheep could acquire any genetic traits of GM canola from the swathes, particularly because there were no compatible plant species present at Eagle Rest with which the pollen from a volunteer GM canola plant could cross-fertilise;[136] and

(c) accordingly, the swathes posed no risk of any genetic trait transfer to any species of crop or produce on the appellants' land.[137]

586 Whilst accepting that there was no risk of genetic contamination, senior counsel for the appellants submitted that the risks of contamination were as follows.[138]

587 The swathes had pods which contained GM canola seeds. Some seed pods were shattered and an indeterminate number of the seeds were scattered. The risk of contamination was:

(a) scattered seeds could subsequently germinate leading to the growth of volunteer GM plants;

(b) accordingly the swathes and the seeds could be eaten by the sheep and the consumption by the sheep of the GM plant material could render the meat unfit for organic status;

(c) if the sheep ate the plant material and, if the seeds were not digested and were subsequently excreted as seeds, then some excreted seeds might subsequently germinate into volunteer GM plants;

(i) be mixed into and caught up with the harvesting of the cereal crops grown on the appellants' land; and

588 It was not clear from their submissions whether the appellants were also alleging that contamination, for decertification purposes, would apply to lambs subsequently born to sheep who were on the property in 2010, and who had eaten GM plant material (even though those particular sheep had been decertified); and/or whether seeds left on the ground after the swathes had been removed in April 2011 would remain discernible to and edible by future generations of sheep brought onto, or born upon, the land after April 2011.

589 As we understood it, it was not contended that future generations of sheep born from the decertified sheep that had been treated with chemicals would on that account be decertifiable.

590 In relation to the prospect of volunteer canola plants growing on the appellants' property, the judge made the unchallenged finding that there was no prospect that GM canola seed could germinate and become a volunteer plant before the appellants' harvesting of wheat in early 2011.[139]

591 As to the prospect of GM volunteer plants growing in future years, the judge found, in effect, that even where canola had been grown under intensive harvest as a crop (not the case here), after harvest commercial fields decayed quickly and no 'viable' seed remained after 2 1/2 years, and no 'germinable' seed remained at 3 1/2 years.[140] As noted later in these reasons, the appellants to some extent challenge those findings.

592 The judge also, in effect, accepted evidence from the joint conference of two of the parties' experts, Professor Powles and Professor Van Acker.[141] Their joint memorandum included the following:[142]

Assuming seed has moved from paddock X to paddock Y we can assume that the seed would be viable and given suitable moisture and temperature conditions it will germinate. But the prospects of survival of the resulting volunteers is very much determined by the conditions in paddock Y.

...

If paddock Y is an organic farm, in a crop scenario the farmer ... would have to hand weed the volunteers.

593 The reference to 'hand weed' is a reference to pulling out the volunteer plants. The primary judge made the unchallenged finding that any volunteer plants were 'readily identifiable' and capable of being pulled out.[143]

594 As to the prospect of volunteer GM canola plants being caught up in the harvesting of cereal crops (on the assumption that they had not been pulled out before hand), the judge made the unchallenged finding that conventional seed enterprises can easily and economically screen the seed out of the harvested cereal grain, be it oats, wheat, spelt or rye.[144]

595 In relation to the sheep then on the farm eating the swathes, the judge made the unchallenged finding that the sheep were, in any event, unable to be sold as organic in 2010 because the appellants had treated them with chemicals.[145]

596 In relation to the prospect of sheep excreting seeds which could later germinate, Professor Rudelsheim[146] referred to a study which found that if sheep were being fed canola seed as part of their diet, they excreted approximately 1 to 1.5% of the canola seed, and a portion of that was able to germinate. The sheep continued to excrete viable seeds for six days after canola was removed from their diet, and the percentage of viable seed excreted daily was in the order of 0.1% of daily intake. That evidence was not the subject of challenge in cross-examination, but it is not clear whether the judge intended to make a specific finding to that effect.

597 The judge did not make any findings about whether future generations of sheep could be contaminated in either or both of the senses referred to in [588] above.

598 Professor Rudelsheim's evidence was that '[d]ispersed mature seeds can be consumed by animals'.[147] However, the evidence did not directly address the question of whether seeds remaining after April 2011 would have been detectable and edible by future generations of sheep. The appellants, in their schedule of proposed findings of fact which they allege the judge should have made and which they ask this court to make, do not include a contention that the seeds on the property were discernible and edible by sheep after April 2011.

599 Reference should now be made in detail to the further findings of fact sought by the parties in this appeal.

Further findings of fact sought by the parties

600 McLure P in her reasons has observed that after the conclusion of the hearing of the appeal, the parties filed schedules setting out proposed findings of fact which they would ask this court to make. Practice direction 7.4 had not been complied with.

601 Many of the matters raised by the appellants in their schedule were not raised in the appellants' case. Although it is unsatisfactory for this development to have arisen at such a late stage, the matters, broadly speaking, may be determined by reference to largely uncontroversial evidence, without prejudice to the respondent, and we would give leave to the appellants to rely upon the schedule. In what follows, we adopt McLure P's numbering in respect of the proposed findings of fact.

602 Proposition 1 alleges, in effect, that (1) GM material 'is not permitted in organic farming', and (2) that the respondent had actual knowledge and foresight of that fact. Part (1) of the proposition of fact is expressed too widely and too incompletely to be accepted as correct. As noted previously, what each organic certifier requires of the organic farmers with whom it contracts depends upon the proper construction of the contract and any contractual standards adopted by that particular organic certifier.

603 The National Standard published by AQIS does not contain provisions in terms of:

• clause 3.2.9 of the NASAA Standard - organic certification shall be withdrawn where NASAA considers there is an unacceptable risk of contamination from GMOs or their derivatives;
• clause 3.2.10 of the NASAA Standard - any certified production area within 10 km 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;
• clause 3.2.11 of the NASAA Standard - contamination of organic product by GMOs that results from circumstances beyond the control of the operator may alter the organic status of the operation.

604 As to the second part of proposition 1, if the first part of the proposition is not an accurate statement of the 'fact', it cannot be said that the respondent actually knew that 'fact'. Further, the position of foreseeability, as we would see it, is set out in [658] - [674] below.

605 Proposition 2 alleges that the trial judge ought to have found that Mr Baxter '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'. Proposition 2 does not distinguish between GM material getting onto Eagle Rest through the deliberate or negligent conduct of the appellants, and GM material getting onto Eagle Rest without fault by the appellants. Presumably proposition 2 is directed to the latter, rather than the former. A finding in terms of proposition 2 should not be made. For the reasons given in [658] - [674] below, the appellants have not established that the respondent had 'actual knowledge' that the appellants' organic certification might be affected or lost if any GM material got onto Eagle Rest irrespective of fault by the appellants.

606 By proposition 3, the appellants allege that the trial judge 'ought to have found that' the respondent 'had actual knowledge and foresight of the risk of GM canola plant material being blown from Sevenoaks onto Eagle Rest'. Proposition 4 is to the effect that the trial judge 'ought to have found that there was, in fact, a risk that, once swathed, GM canola would be blown by wind from Sevenoaks onto Eagle Rest'.

607 Proposition 4 is stated too widely and a finding in those terms should not be made. The burden of the evidence was that strong winds could carry canola swathes. If there were strong winds blowing toward Eagle Rest from Sevenoaks, there was a risk that swathes would be carried from the respondent's property to the appellants' property. Proposition 3 concerns actual knowledge and is expressed too widely to be accepted. The burden of the respondent's evidence was to the effect that he knew that there was a risk that swathes could be carried across to Eagle Rest by wind despite the buffer of the road, but he thought there was no real chance, or real prospect, that that would happen.[148] The judge's finding that the respondent could not reasonably have 'expected' that swathes would be picked up and carried across to the appellants' property by strong winds is not challenged.[149]

608 Proposition 5 alleges that the trial judge 'ought to have found' that the respondent 'had no compelling reason to harvest his GM canola in late 2010, by swathing'. Proposition 5 is not a proposition of fact which the judge 'ought to have' made. This matter is discussed in [741] - [745] below.

609 Propositions 6, 7 and 8 express similar themes. By proposition 6, the appellants allege that the trial judge ought to have found that:

(a) the respondent did not tell Mr Baxter's agronomist, Mr Robinson, that Mr Marsh had told him that if GM canola got onto the appellants' farm, his certification would be at risk;

(b) the respondent did not tell Mr Robinson that his organic neighbour, Mr Marsh, was worried about losing his organic certification; and

(c) the respondent did not show Mr Robinson the 'October 2010 letter', ie the 'Notice of Intention to Take Legal Action' that Mr Marsh had delivered to him.

610 Proposition 7 is to the effect that the judge ought to have found that:

(a) the risk that the GM canola grown by the respondent might be blown onto the appellants' property and jeopardise their organic status, was not, in fact, discussed between Mr Baxter and Mr Robinson in the course of Mr Robinson advising Mr Baxter, and Mr Baxter 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 their organic status, when deciding to harvest his GM canola by swathing.

611 Proposition 8 is to the effect that the judge erred in finding that the respondent gave considerable thought to the work of a protective buffer and trees.

612 As to propositions 6 and 7(a), it would properly be open to find, on Mr Robinson's evidence, that Mr Baxter did not tell, show or discuss with Mr Robinson the specific matters therein alleged. But we would not make the proposed findings as they would have no appreciable significance on the proper disposition of the appeal. The judge found[150] that even if Mr Robinson had been apprised of those specific matters, his advice would probably have been no different from that contained in the Farmanco publication of March 2010. The Farmanco publication[151] was to the effect that where there was a risk of pollen movement or movement of swathes from a GM canola crop to a non-GM canola crop, management options would need to be discussed. A 'Farmnote' publication issued by the WA Department in January 2010, dealing with the topic of segregation of GM canola from non-GM canola, also stated, in effect, that management plans should be discussed with neighbours when planning to grow GM canola in boundary paddocks.[152] However, the appellants did not have a non-GM canola crop at risk. Even if Mr Baxter had discussed management options with Mr Marsh, Mr Marsh's advice from his organic certifier was that the definition of 'contamination' was 'genetic contamination', and that NASAA doubted that GM canola would contaminate wheat.[153]

613 Moreover, Mr Robinson knew the fact that the appellants had an organic farm because Mr Baxter had sought Mr Robinson's advice in early 2010 as to whether that was a 'problem'.[154] The appellants' 'Notice of Intention to Take Legal Action' could have added nothing of substance to Mr Robinson's understanding of the technical, agricultural and commercial issues concerning swathing, other than an appreciation that his client was would likely end up in litigation for having grown GM canola.

614 Proposition 8, insofar as it concerns matters relevant to Mr Baxter's state of mind, is discussed in detail in [729] - [731] below. Moreover, with respect to proposition 8, insofar as the appellants' contract with NASAA incorporated the NASAA Standard, the legal obligation to provide an appropriate 'buffer', involving trees, hedges, or the erection of artificial barriers, was on the appellants under cl 3.2.7 of the NASAA Standard. It was a responsibility undertaken by the appellants in order to be certified as an organic farmer by NASAA. It was not a responsibility undertaken by the respondent.[155]

615 The appellants' expert evidence (from Professor Van Acker) was that:[156]

[B]uffers may be effective for helping to reduce the risk of movement of canola plants or plant parts. These buffers, however, would need to be substantive and dense so that even small pieces of canola plant would be captured. Some sort of fencing or permanent dense hedge could act as a barrier to an extent of the physical movement of canola plants or plant parts from one place to another. I am not aware of any peer-review studies on the use or effectiveness of physical barriers in fields to prevent the movement of GM material via seed and no barrier (as with no individual containment method) may be sufficient to absolutely prevent movement of GM canola from Sevenoaks to Eagle Rest.

616 Although there was conjecture by Professor Van Acker that no barrier 'may' be sufficient to absolutely prevent movement of GM canola from Sevenoaks to Eagle Rest, there was no evidence that appropriate physical barriers would not have prevented the particular incursion of swathes which occurred in late 2010.

617 We would not make a finding in terms of proposition 8. Nor would we make a finding in terms of proposition 7(b) having regard to the observations we have made in relation to propositions 1 - 7(a) and 8.

618 Proposition 9 alleged that the trial judge 'ought to have found that once canola swathes were blown from Sevenoaks onto Eagle Rest in late November 2010, they continued to be blown about Eagle Rest in the wind and moved around by livestock'. As to proposition 9, it was a fact that the appellants did not collect and remove the swathes from their property from late November 2010 until about April 2011. We would accept, and find, based on Ms Purvis' report, that strong winds were blowing swathes around the property on 4 December 2010. The swathes themselves were not 'moved around' by livestock, although we would accept, and find, that some of the appellants' sheep were observed eating some of the swathes. We would also find, based on Ms Coleman's report, that the swathes were being blown around on the appellants' property on 21 December 2010. Other related facts are that the swathes were always readily identifiable and capable of being removed by the appellants. Also, on 3 December 2010, WA Department officers had recommended that a swathe stuck on a gate be removed, but the appellants declined to remove it.[157]

619 Proposition 10 is to the effect that the trial judge ought to have found that by 4 December 2010, canola swathes were present on paddocks 7, 8, 9, 10, 11, 12 and 13 of Eagle Rest. As we have previously observed, the primary judge found that swathes were present on paddocks 7, 10, 11, 12 and 13, there is no need to make a further finding in that regard. For reasons given earlier, we would accept that the judge should have found that swathes were on paddock 8, but we would not make the proposed finding with respect to paddock 9.

620 Proposition 11 is to the effect that the trial judge ought to have found that seed pods from the canola swathes blown onto and observed at Eagle Rest had shattered. Ms Purvis in her report referred to the appellants as having described 'thousands of seeds spread across the certified land'.[158] Mr Marsh's evidence at trial was to the effect that some pods in the swathes were open and some pods were closed, but there were 'certainly thousands of seeds contained in [the] swathes'.[159] As noted previously, in relation to her inspection on 4 December 2010, Ms Purvis said:[160]

Some swath[ed] plant material was noted with seed pods cracked and numerous seed[s] scattered on the ground.

621 The appropriate finding which we would make is that some seed pods in a number of swathes on Eagle Rest, had been shattered, leaving numerous seeds scattered on the ground. However, it could not be concluded on the evidence that the scattered seeds on the ground were sufficient in number, or were located in such a way, as to constitute a real risk that they would produce a crop of GM canola on the appellants' farm, or even a substantial stand of canola on the appellants' farm.[161] There was no evidence that the seeds scattered on the ground would likely result in, in effect, the parallel production of a GM canola crop on the appellants' farm. In this regard, reference should also be made to our observations with respect to propositions 16, 18 and 20 below.

622 Proposition 12 is to the effect that the trial judge ought to have found that although, in early December, Mr Marsh had attempted to contain swathes by fencing those he found, by 4 December 2010 the canola swathes were too numerous to enable Mr Marsh to continue to try to contain the swathes in this way. Proposition 12, dealing with 'fencing' the swathes, is not a finding that the judge 'ought to have made'. Insofar as there was an issue of containment, the more relevant findings of fact were that:

• the swathes were always readily identifiable and capable of being removed; and
• the appellants did not collect and remove them until about April 2011.

623 As to propositions 12A and 13, the proposition that each seed pod would hold between 20 and 80 canola seeds, and that the seed held within the pods was germinable, may be accepted, and found, on the expert evidence.

624 Proposition 14 is to the effect that the trial judge ought to have found that as a result of the movement of swathes from Sevenoaks onto Eagle Rest, a large, indeterminate volume of GM canola seed would have been scattered on paddocks 7, 8, 9, 10, 11, 12 and 13. Proposition 14 is too widely stated. It may be accepted, and found, based on the evidence referred to in [450] - [458] above, that numerous GM canola seeds would have been scattered on the ground on parts of the appellants' property in paddocks 7, 8, 10, 11, 12 and 13, with the overwhelming number of them in paddocks 10 and 12.

625 The fact alleged in proposition 15, namely that it is unlikely that the distribution of seeds shed from canola swathes carried onto Eagle Rest would have been uniform, may be accepted, and found, on Dr Preston's evidence.

626 Proposition 16 is to the effect that the trial judge ought to have found that an indeterminate amount of viable GM canola seed shed from the swathes blown onto Eagle Rest from Sevenoaks would enter the seed bank on Eagle Rest. Proposition 18 is to the effect that the trial judge ought to have found that canola seed would remain viable for at least two growing seasons. Proposition 20 is to the effect that the trial judge ought to have found that volunteer canola plants could have been expected to appear for around three years after the incursion of the canola swathes onto Eagle Rest.

627 Propositions 16, 18 and 20 depend upon a consideration of the expert evidence. Professor Rudelsheim was a bio-ethics and bio-safety expert who taught at the Universities of Antwerp and Ghent in Belgium.[162] The primary judge noted that there were minimal, if any, differences as between Professor Van Acker (the appellants' witness) and Professor Rudelsheim (the respondent's witness) at trial,[163] and his Honour accepted their evidence concerning the properties of GM canola and the public safety of GM canola.[164] Although their evidence was accepted in those respects by the primary judge, it may be inferred that their knowledge and experience of Australian conditions was limited. Also, some of their expert evidence relied on publications occurring well after the events in question in these proceedings.[165]

628 The 'local' experts were Winthrop Professor Powles from the University of Western Australia, and Dr Preston from the University of Adelaide. Each of Professor Powles and Dr Preston was eminently qualified.[166] Both of those experts were likely to have greater experience in relation to conditions in southern Australia.

629 Proposition 16 is too widely expressed. Based on Dr Preston's evidence, the appropriate findings, which we would make, are that:

(a) seeds from any shattered pods could enter into the seed bank; and

(b) the extent to which they were deposited into the seed bank on Eagle Rest could have been ascertained by testing, but that was not done.[167]

630 As to proposition 17, it may be accepted, and we would find, that any scattered seeds would have been difficult to detect on the soil. The evidence was that the seeds were tiny black seeds, about the size of poppy seeds.

631 Proposition 18 is too widely stated. The effect of Dr Preston's evidence, which should be accepted, was that:

(a) in fields where canola has previously been grown commercially, canola seed in the seed bank of those fields has been found viable up to 2 1/2 years;[168]

(b) seed banks of canola decline rapidly with time;[169]

(c) in Australia, most of the loss of canola seed from the seed bank occurs in the first six months after harvest;[170] and

(d) most canola seed that is shed in one year would expect to germinate in the next 12 months.[171]

632 The evidence of Professor Powles, with whom Professor Van Acker agreed on this point, was to the effect that canola seed residing in the top few centimetres of soil will have its highest percentage of germination in the year after entering the soil seed bank.[172] That evidence may also be accepted. We would make findings in accordance with the evidence of Dr Preston and Professor Powles referred to above.

633 Proposition 20 is too broadly stated. The extent to which any volunteer plants could be expected to appear on Eagle Rest would depend materially upon how the swathes on Eagle Rest were managed by the appellants, and the conditions and agricultural management of Eagle Rest generally.

634 As noted earlier, the judge, in effect, accepted the evidence of Professor Powles and Professor Van Acker in their joint memorandum, referred to at [592] above. Further, Dr Preston's evidence, which may be accepted, included:[173]

Based on my experience in weed management my recommendations for action to minimise the potential for GM canola volunteers on the farm would have been to take the following steps:

1. Remove as many of the cut canola plants as possible from the fields and ... dispose of them. This would greatly reduce the amount of spilt seed remaining in the fields.
2. After harvest, avoid cultivating the fields over summer. This will keep any spilt seed on the surface, where it may fatally germinate after summer rain, or if plants do establish they can be removed. In the Australian environment, most of the loss of canola from the seed bank occurs in the first six months after harvest.
3. Scout the fields during the next winter to detect any canola plants and control or remove them to stop seed set. Canola is easily identified ... Failure to stop volunteer canola plants setting seed at this time will replenish the seed bank and lead to a continuing problem.
4. Further monitoring subsequent years should be undertaken to ensure all the canola is removed.

635 The finding should be that most of the canola seed, if it were to germinate, would be expected to germinate in the first 12 months, but the possibility of germination in the two years after that could not be excluded.

636 Propositions 21 and 23 have been set out by McLure P in her reasons.

637 Proposition 21 cannot be accepted. The NASAA Standard is part of the AQIS - approved QM system for NCO. This is a necessary condition of NCO's status as an approved certifying organisation under the Export Control (Organic Produce Certification) Orders (Cth).

638 Proposition 23 may be accepted, based on the evidence of Ms Denham.

639 Proposition 22 is not strictly accurate in its terms or connotation. The evidence was that the total value of the 'organic industry in Australia' was $1.276 billion in 2012. This reflected two years of premium growth from 2010. Of that amount, the 'farm gate' value of organic products was $300 - 400 million.[174] Proposition 22 is, in any event, not a finding that the judge 'ought to have made'. Identifying the value of one particular industry within the economy as a whole, does not materially assist in determining negligence or nuisance - the latter being more concerned with a specific locality or district.

640 The above observations with respect to propositions of fact 16, 18 and 20, also address the substance of the allegations raised by the respondent in pars 4(a)(ii) and 4(a)(iii) of their notice of contention.

641 By par 6(b)(ii) of the notice of contention, the respondent contends that the Australian Oilseeds Federation established a trading standard for non-GM canola, which set a limit of 0.9% adventitious presence of approved GM canola in conventional canola seed. That was the unchallenged evidence[175] and that finding should be made.

The question of duty of care Specific observations on Perre v Apand

642 In this appeal, the appellants placed particular reliance on Perre v Apand Pty Ltd.[176] In Perre, the defendant, Apand Pty Ltd (Apand) commanded 60% of the potato crisp industry in Australia, and its operations included research and development into new varieties of potato which would enhance its commercial interests.[177] In the course of its experimentation with new varieties of potato, it caused a variety called 'Saturna' potatoes to be grown. There was a certification process for potatoes which, if successfully completed, led to a high expectation that the resulting potato seed would be disease free. Apand did not complete the certification programme for the Saturna variety. Instead, Saturna seeds were sold to a grower in Victoria for commercial production. The grower was in an area which was never part of a certified scheme and which was susceptible to diseases. Apand subsequently caused experimental crops of Saturna potatoes to be grown in South Australia, using the Victorian crop as seed. As it transpired, the seed from Victoria was infected with a disease called bacterial wilt. The seed infected with bacterial wilt was supplied to various growers in South Australia, including the Sparnons, who were part of a grower partnership. The Sparnons suffered an outbreak of bacterial wilt on their property and sued Apand, successfully, including in negligence and breach of implied warranty.

643 Bacterial wilt was described in the Federal Court decision of Perre v Apand Pty Ltd[178] in the following terms:

For many years before 1992, bacterial wilt was known to knowledgeable people in the potato industry. In South Australia, there had been earlier outbreaks in 1985, 1988 and 1991. It is a potentially serious and pernicious disease which can cause disastrous losses to growers. Infected paddocks cannot be used for potato growing for approximately five years and infected farms in potato growing regions are likely to be difficult to sell. Good husbandry requires that strict hygiene precautions should be rigorously pursued to prevent the spread of the disease from infected paddocks into other potato crops. The disease, which can exist in a number of host plants besides potatoes, is readily spread by seed, soil and debris from infected crops and continues to survive in damp environments for months, if not longer. Paddocks affected by an outbreak must be treated by eliminating regrowth potatoes and other host plants, and by preventing the movement of stock or vehicles from the land, unless, in the case of vehicles and agricultural equipment, they are thoroughly washed down with disinfectant.

644 Western Australia, which up to that time had been free of bacterial wilt, had a strict policy in place prohibiting the import of potatoes that had been grown or packed in an area where an outbreak of bacterial wilt had occurred. The Plant Diseases Regulations 1989 (WA) made under the Plant Diseases Act 1914 (WA) prohibited the import, into Western Australia, of potatoes grown within 20 km of a known bacterial wilt outbreak in the previous five years.[179] The Perres, who were also potato growers and producers in South Australia, were effectively neighbours of the Sparnons. They fell within the 20 km exclusion zone the subject of the Western Australian regulations. In the High Court, Gummow J (with whom Gleeson CJ generally agreed) observed:[180]

[A]t the time of the supply of the seed to the Sparnons, Apand knew or ought to have known that [Perre] grew commercial potato crops within the 20 km buffer zone, and knew of the special requirements of the Western Australian law with respect to importation of potatoes grown in adjoining areas to those where there was an outbreak of the disease. Apand was aware not only of the threat that bacterial wilt represented to growers, but of the presence of the disease in the ... area where [the Victorian grower]'s property was located.

...

The evidence was that, leaving aside the Saturna seed, the only potato seed which Apand sent into South Australia had been certified under the certification scheme. Apand appreciated that the major cause of the spread of bacterial wilt was through growers buying non-certified seed. As a practical matter, Apand was in control of the initiation and conduct of the experimental activities using the Sparnons' property. Apand both selected and supplied the seed and chose the location for the experiment.

The Perres had no way of appreciating the existence of the risk to which they were exposed by the conduct of the Apand experiment and no avenue to protect themselves against that risk. They thus stood in quite a different position from that of the financier in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords which had the power to deal from a position of strength in ordering its commercial relationship with the party to whom it provided financial accommodation. Here, the relevant risk to the commercial interests of the appellants was in the exclusive control of Apand. ... The effect of the Western Australian legislation upon the export market from South Australia was such that, within the buffer zone, the economic loss would flow directly and inevitably and the possibility of its occurrence would not be speculative.

The characteristics of the present case to which I have referred combined ... to bring the Perres and Apand into such close and direct relations as to give rise to a duty of care owed by Apand for breach of which purely economic loss may be recovered. (emphasis added) (footnotes omitted)

645 A number of the authorities in this area were reviewed recently in this court in Swick Nominees Pty Ltd v Leroi International Inc.[181]

646 In the Kojonup district in 2010, broadacre farming operations were the norm.[182] Most of these, it may be inferred, involve 'conventional' farming. 'Organic' farming was an 'isolated practice at best'[183]. In addition to the respondent, at least one other farmer had GM crops - approximately 3 km away.[184]

647 Ordinarily, in our view, the law would not require a farmer in Kojonup directing his or her mind at harvest time, to swathing or direct heading of the crop, to reasonably have in contemplation the effect of that decision on the economic interests of other farmers in the district,[185] whether on adjoining farms or up to 10 km away. That would still ordinarily be the position, in our view, even where the owners of a neighbouring organic farming enterprise had informed others in the district about their organic certification by taking out advertisements in local newspapers, or by putting up signs on their fences to that effect.

648 The farmer deciding how to harvest his or her crop at harvest time would appear to occupy a different position as a candidate for civil liability from other cases in which liability in negligence for pure economic loss has been found. The farmer at harvest would appear, at least prima facie, to be in a different position from the solicitor who negligently draws a will, in effect disinheriting his or her client's intended beneficiary;[186] or the builder who negligently builds a suburban home with defective foundations;[187] or the dredger who negligently, repeatedly dredges over an area where there is a pipeline carrying the plaintiff's product and fractures the pipeline;[188] and the dominant player in a food processing industry who, through links in its supply chain, effectively and negligently causes an outbreak of a highly infectious disease in an agricultural area where, by dint of statute, the mere presence of the disease precludes access to an important geographical market of all relevant primary producers within a 20 km radius of the outbreak.

649 Not only is the defendant's fault or blameworthiness, at least prima facie, more palpable in each of those cases, but it would be expected that the defendant in those cases well understood the deleterious financial consequences that would almost certainly be visited upon the plaintiff in the ordinary course if the defendant were careless.[189]

650 It was perhaps with those kinds of potential difficulties in mind, that the appellants sought to fix the respondent with actual notice of the precise nature, scope and basis of their economic interests, as a means of supporting their claimed entitlement to the protection the law affords to those to whom a duty of care is owed. Indeed, sch A to the 'Notice of Intention to Take Legal Action' stated that '[w]e ... are putting you on notice so you are aware that these and other scenarios and losses are fully foreseeable and not remote from any action taken by you to plant GM seeds'.[190]

651 Any duty of care is to be assessed prospectively, and with regard to the interests for which the plaintiff is seeking protection.[191] The appellants submitted that:[192]

[t]he relevant risk to which the appellants were vulnerable was the contractual sanction of decertification that was potentially applicable to Eagle Rest pursuant to the NASAA Standards.

652 The appellants' case, in substance, is that their contract with NASAA was varied by NASAA through a contractual mechanism, with the variation effectively decertifying a large part of their farm and crops. It is, in effect, alleged that the respondent had a duty, at law, to exercise reasonable care to avoid that contractual result for the appellants.

653 Accordingly, this case appears to raise the prospect of the tension referred to in Swick Nominees:[193]

In the case of liability for negligence causing pure economic loss there might sometimes also be a tension between (i) allowing liability for negligently caused pure economic loss in some circumstances arising from the reduction in the value of contractual rights and (ii) the rejection of liability for intentionally caused pure economic loss unless the plaintiff satisfies the strict requirements for proof of the tort of inducing a breach of contract. The action for inducing breach of contract requires intention; negligence is insufficient for liability. Inducing breach of contract also requires proof of a breach of contract upon which the action was parasitic; merely reducing the value of contractual rights is insufficient. (footnotes omitted)