A GROUP of south-west abalone divers and processors is likely to have to pay $2.57 million in costs to the state government after a failed appeal regarding the outbreak of a devastating virus.
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Melbourne-based law firm Maurice Blackburn also stands to be out of pocket by millions of dollars for its expenses in running the case.
Regent Holdings Pty Ltd has withdrawn its Supreme Court appeal against a judge's decision to dismiss its application for $82m compensation against the state for negligence.
The class action had claimed that two senior state wildlife officers did not properly manage the viral ganglioneuritis outbreak which was alleged to have spread from a commercial abalone farm near Port Fairy and crippled the industry for several years.
Justice David Beach dismissed the claim and ordered Regent to pay the state's costs for the 2013 legal battle – a decision Regent appealed against.
However, records show Regent and the state agreed in December to settle the appeal subject to Supreme Court approval. The Standard was told this week all parties were awaiting a court date for a hearing on approval of the settlement terms.
Under the proposed agreement the state and Regent (on behalf of group members) would release each other from all liabilities owing to each other.
The agreement terms also say group members would receive no payment and would be barred from making further claims against the state regarding the virus.
They would also not have to pay their own money towards the state – the $2.57m would come from an earlier out-of-court settlement payment from commercial abalone farm operator Southern Ocean Mariculture.
Divers and processers were hit hard by the virus which triggered official bans on harvesting of abalone along sections of the Victorian coastline and brought the former multi-million-dollar industry to a standstill.
Western Victorian Abalone Divers Association executive officer Harry Peeters said some operators had gone bankrupt as a result.
"This region went from having 14 divers to only seven," he said.
"We are recovering very slowly and hopeful of getting back to a reasonable quota.
"The Sou'west Seafoods processing factory at Port Fairy was also forced to close with the loss of 25 part--time and five full-time staff.
"That was a big hit for Port Fairy."