Farmers encouraged to sign up to Fonterra class action over 2016 clawback

Fonterra is being “unnecessarily intimidatory” towards farmers in a class action over the 2016 clawback, as it plays hardball over mental health claims.

Fonterra is being “unnecessarily intimidatory” towards farmers in a class action over the 2016 clawback, as it plays hardball over mental health claims.

Financial compensation for dairy farmers who supplied Fonterra in May and June 2016 is being sought by legal firm Adley Burstyner over Fonterra’s retrospective pricing move, known as a farmgate price “clawback”.

The case was filed in Victoria’s Supreme Court in June 2020 with a mediation session scheduled for next month.

Adley Burstyner director David Burstyner said a four-week trial was scheduled to start on November 15.

Mr Burstyner said: “Fonterra insisted on the right to dispute our expert evidence about the mental health impact of the May 2016 step down.

“The class action’s evidence already filed with the court, from a psychological expert familiar with rural mental health, included that the step down ‘undoubtedly caused unexpected high levels of farmer distress and challenged farmers mental health and wellbeing’.”

Mr Burstyner said the psychological expert also said the farmgate clawback “caused significant personal distress and mental harm to farmers”.

“Although we expect a fair dispute with Fonterra about many of the factual and legal issues in the case, we were disappointed that they wanted to dispute this seemingly obvious mental health position,” he said.

“(It’s also disappointing) especially that they pressed for the 60-plus year old plaintiffs to have to travel to Melbourne to undergo an examination by Fonterra’s psychiatrist simply because we are making what we think is the very obvious point that the step down caused mental distress.

“It is my view that this is unnecessarily intimidatory.”

Fonterra Australia amended its defence in recent months, two years since the case kicked off in mid-2020.

“Two years into the case, Fonterra changed its defence to say that a payment of 40c/kgMS it announced in May 2017 is part of the 2015-16 milk price,” Mr Burstyner said.

“Even though it was applied in a different season, to different milk volumes, not paid to farmers no longer supplying Fonterra, and paid to farmers who weren’t supplying Fonterra at the time of the May 2016 step down.

“The class action disputes that the 40c is relevant to the case. If the May 2017 announced 40c was part of the 2015-16 milk price, it seems strange that for the first two years of this very significant class action Fonterra didn’t say so?

“Did they simply forget that they thought they paid part of the claim already, or as trial approaches and the reality sets in about the exposure to losing the case, are they clutching at straws?”

Mr Burstyner said the plaintiffs were feeling optimistic about winning financial recovery for dairy farmers.

He said his firm had a team of nine lawyers on the case, including a KC and four barristers.

“The expert evidence filed by Adley Burstyner for the class action includes that it was known that farmers’ mental health was particularly at risk at the time of the step down,” Mr Burstyner said.

“But Fonterra appears set to challenge even that basic proposition and is addressing this sensitive issue in a way which challenges what should perhaps be obvious, in a combative way which adds more personal distress to the plaintiffs.

“As the 12 October 2022 mediation approaches it is important to know which farmers wish to claim any recovery achieved.

“Any farmer who hasn’t registered at www.fonterraclassaction.com.au should do so straight away, to avoid the issues which could lead to them missing out, or even Fonterra not being held to account at all to any farmers. Registration is important both for the individual farmer’s recovery, and to ensure there is a group recovery.”

A class action by farmers against Fonterra was launched shortly after the 2016 price “clawback”. Picture: Zoe Phillips

Fonterra Australia senior corporate counsel Jorja Cleeland said the amendment of a defence in legal proceedings was not unusual.

“We haven’t changed our position – we’ve put more detail around it in response to the plaintiff’s statement of claim,” she said.

“There is a lengthy process of discovery and investigation, and often changes are made in

response to the other party’s submitted documents and witness statements, what is uncovered

during the discovery process and as the case evolves.

“In this instance, the amendment to our defence was in part as a response to the plaintiffs amending their claim to state that MG’s forgiveness of debt should be counted as part of the price which we should have matched.”

Ms Cleeland said Fonterra “denied the forgiveness of debt should go to price”.

“However, we believe we should be able to count the 40 cents we paid to farmers who were affected by the step-down who continued to supply us as well as suppliers who retired at that time,” she said.

“A party’s alleged loss must always be considered in the light of the entire circumstances, including any payments received by it.”