West Australian farmers begin legal action against Emerald Grain for 2011/2012 pool performance

29.08.2016

A group of 47 Western Australian farmers has filed a writ in the Supreme Court of WA against Emerald Grain over the performance of its 2011/2012 grain pool, claiming losses of $7.4 million.

The growers in the case delivered over 100,000 tones of wheat to Emerald's 2011/2012 grain pool.

Granich Partners, which has been representing the farmers since 2013, said its analysis of seven other grain pools in the same season show returns distributed by Emerald were below competitors by between $64 and $84 per tonne.

Perth-based law firm Granich Partners is acting for the group of growers.

Solicitor Nathan Draper said the basis of the case was founded in breach of trust.

He said, in effect, grain pools held growers' grain and the proceeds from the sale of that grain in trust for participants in the pool and distributed those proceeds in accordance with the terms of individual contracts.

"In the case of the 2011/12 pool managed by Emerald, we allege there has been a breach of that trust given the returns to participants were well below the expectations marketed to growers and below the average returns calculated on the lowest prevailing wheat price experienced in the contract period of the pool," Mr Draper said.

"The contractual arrangement entered into between the growers and Emerald created a trust, and Emerald as trustee failed in its duty.

"The total loss is estimated to be in the region of 7.5 million dollars.

"The biggest losses suffered by an individual is in the region of $700,000 and on average we estimate that 47 farmers have suffered $150,000."

Three years ago 70 growers expressed an interest to Granich Partners in pursuing action against Emerald for alleged losses.

Mr Draper said the firm had advised these growers that for any claim less than $30,000 it was not worth them pursuing legal action.

"We advised them to pull out. We believe that any claim less than $30,000, while it's a substantial amount of money, given the possible cost and the time coupled with the frustration and stress of litigating, that it would be in their interest not to continue with the matter," he said.

Mr Draper said there had been no response from Emerald since the writ was lodged in the Supreme Court.

"They have 21 days to file what we call an appearance to defend, and no doubt they will file that in time," he said.

He said a mediation may be ordered by the court, and after which the matter may progress to trial.

"We are possibly a year to 18 months before we have a trial," Mr Draper said.

ABC Rural has contacted Emerald Grain for comment.


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