Abalone farm that released virus settles before trial
Southern Ocean Mariculture, the abalone farm that unleashed a herpes-like virus in 2006, has reached an agreement in principle with 10 abalone licence holders.
Before the outbreak, the licence holders controlled about 32 per cent of Victoria's abalone exports, which generated about $70 million a year. Many have had their life savings eroded, the cost of commercial licences plunging from about $6 million in 2006 to less than $1 million.
Maurice Blackburn principal Jacob Varghese, who is acting on behalf of the licence holders, said the terms of the settlement were confidential and still being finalised.
Southern Ocean Mariculture was one of two defendants in the class action, the other being the Victorian government, which has been accused of failing to control the spread of the disease.
Mr Varghese welcomed the settlement and said the firm would pursue the state government.
"This settlement does not affect the outstanding issues in the class action still being run against the state government, which has always been the primary respondent," he said.
Southern Ocean Mariculture reported the outbreak to the Department of Primary Industries but the department failed to shut down the farm, allowing it to continue to pump contaminated water into the ocean, Mr Varghese said.
Infected wild abalone were found soon after on a reef near Port Fairy in Victoria, he said. It then spread from near the Victorian/South Australian border to Cape Otway.
Most of the abalone harvested in the affected area, known as the western zone, was exported to Asia.
Mr Varghese said it could take decades for the area to recover from the virus.
Victorian Premier Denis Napthine, whose electorate covers the bulk of the western zone, has previously declined to comment while the matter is before the courts.
But Dr Napthine has publicly accused the former Labor government several times of failing to control the outbreak.
The trial is set to begin in Victoria's Supreme Court on Monday.
Frequently Asked Questions about this Article…
One defendant, Southern Ocean Mariculture, reached an agreement in principle with 10 abalone licence holders and settled before the Supreme Court trial. The settlement terms are confidential and still being finalised. The class action itself was originally for around $82 million.
The plaintiffs were abalone licence holders (including a group of 10 who reached the agreement in principle). The defendants named in the action were Southern Ocean Mariculture and the Victorian government, with the government accused of failing to control the disease spread.
Before the outbreak, the licence holders involved controlled about 32% of Victoria’s abalone exports, which generated roughly $70 million a year. The outbreak heavily impacted that western zone of the fishery.
According to the article, commercial abalone licence values plunged from about $6 million in 2006 to less than $1 million after the outbreak, eroding many licence holders’ life savings—an important factor for investors who held or tracked those licences.
No. Maurice Blackburn principal Jacob Varghese said the settlement with Southern Ocean Mariculture does not affect outstanding issues in the class action still being pursued against the Victorian government, which remains the primary respondent.
The article reports that Southern Ocean Mariculture informed the Department of Primary Industries about the outbreak, but the department did not shut down the farm. The claim is that this allowed contaminated water to continue reaching the ocean, contributing to spread.
Infected wild abalone were first found near Port Fairy in Victoria, then the disease spread from the Victoria/South Australia border to Cape Otway. Most abalone harvested in the affected western zone were exported to Asia, so the outbreak hit export-focused producers.
Investors should monitor finalisation of the confidential settlement terms, the progress of the remaining case against the Victorian government, any regulatory or policy responses from authorities, and signs of biological recovery in the fishery—Jacob Varghese warned recovery could take decades. Court updates and official filings will be key sources of reliable information.
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