Trucking group sues to recoup costs of equine flu outbreak
Sydney Morning Herald
Friday April 1, 2011
Graeme Weidenhofer lost $5 million when he was ordered to cease trading, writes Leonie Lamont. The news came in an early-morning call - a virus was spreading through the stables at Centennial Park and Randwick racecourse.Within a week Graeme Weidenhofer's livestock trucking business had been served with federal and state orders to cease trading in NSW and Queensland.Shut down, with no revenue and continuing expenses, Weidenhofer's family business lost more than $5 million as a result of the equine influenza outbreak in 2007.Three years on he finds himself in the unenviable position of being a test case, as the Commonwealth gears up to fight claims for damages. He is frustrated that bigger players with deeper pockets - such as the racing industry - have not taken the initiative.The federal independent MP Tony Windsor asked the government to settle the claims but the Minister for Agriculture, Fisheries and Forestry, Joe Ludwig, has told Windsor the Commonwealth is going to trial with Weidenhofer's Livestock Transport Group and over a proposed class action in Queensland, to determine its legal liability. For his part, Weidenhofer prefers the less expensive route of a mediated settlement.Livestock Transport Group has been operating since the 1920s, originally out of Kensington. Weidenhofer, an accountant, bought the business in 1996."I can't drive a truck, and I am scared of horses, but it seemed glamorous at the time. And I could see the business opportunities to take it out of the thongs and blue singlets to a professional operation." He has since acquired other horse transport businesses along the east coast.In Queensland, Wattle Brae Stud, claiming damages of $6 million, is the lead applicant in a class action that involves up to 600 claimants. Gavin Mills, a solicitor, says: "The people vary from the bloke emptying the wheelie bins at Doomben race course to farriers, horse studs - the whole spectrum."The ripples caused by the flu outbreak have not vanished. The Australian Racing Board has the figures in its yearly fact book. Nearly 1900 fewer foals were born in 2008-09 than in the previous year.For Weidenhofer's business, that is fewer horses being transported.For Andrew Harding, the chief executive of the racing board, that means fewer horses to run full fields. "There is a residual impact that is still being felt very keenly."At the time of the outbreak, losses to the industry were estimated at $1 billion. Harding says assistance funding negotiated with the government delivered $300 million. And following the findings of the inquiry into the outbreak by the former High Court judge Ian Callinan the government agreed to pick up the almost $100 million tab for controlling and eradicating the virus - an expense that normally would have fallen on the industry."Litigation is not a course we ever seriously considered because we secured from the Commonwealth assistance on a large scale."Tabcorp has reported losses directly attributable to the outbreak in 2007-08 of $17 million in earnings before interest and tax.Unlike the racing industry, it did not receive compensation, a spokesman said.Weidenhofer said the Commonwealth contributed $300,000 towards his wages bill but there was no support package for the business. "While trainers and stud farms could continue some business operations, the EI escape directly closed down Livestock trucking."Modelling by the Australian Bureau of Agricultural and Resource Economics during the initial response to the outbreak showed $560,000 a day was spent on disease control and $3.35 million a day in forgone business.Mr Callinan, who detailed the outbreak and its consequences, found the most likely explanation was that the virus was carried from the quarantine station at Eastern Creek on a farrier, groom or vet, or on their equipment.Cleaning and decontamination procedures were "not rigorously supervised or monitored" and the absence of fundamental biosecurity measures at Eastern Creek was a "serious failure" by the Agriculture Department and the Australian Quarantine and Inspection Service.The station was understaffed and unable to discharge properly its quarantine management functions because it was underfunded.In court proceedings in NSW, the Commonwealth has denied the virus escaped from Eastern Creek as Callinan outlined. It denies breaching any duty and has said its employees are protected by statute from being sued.Livestock Transport will be back in court next week, trying to head off an application by the Commonwealth to have the case transferred to Brisbane, to be heard with the Queensland action.
© 2011 Sydney Morning Herald
