Bay of Island oyster farmers, barred from harvesting for almost six years, are battling to avoid bankruptcy in the face of an $806,000 claim for legal costs against them.
Eleven Waikare Inlet sites were closed in 2001 due to pollution from effluent.
Last year they sued the FarNorth District Council for $12 million, blaming the Kawakawa sewerage plant. But a High Court judge threw out their claim, saying the pollution could have come from boats or septic tanks.
The matter was back in court last week when Riskpool, the council's insurer, claimed costs of $806,031.60 for fighting the case.
Farmers of New Zealand operations director Bill Guest said the oyster farmers were already unofficially bankrupt due to the closures. Paying that level of costs would "push them over the edge".
Last week Justice Helen Winkelmann sent the parties away to sort out costs, but if they could not agree she would determine the level. She said in her ruling that she was not persuaded any of the matters raised by the council justified an increased award of costs.
"Although the plaintiffs were ultimately unsuccessful, it cannot be said that their claims lacked merit," she said.
Mr Guest said last week the oyster farmers received letters from the Northland Regional Council threatening abatement notices if they did not clean up the farms.
But Mr Guest said the clean-up could cost $3.5 million, on top of about $830,000 in lost earnings per farmer.
"Their property rights have been destroyed through no fault of their own."
He said options were to ask the Government to buy the farms or go bankrupt.
Mr Guest will seek regional council backing to approach the Government, an idea supported by regional council chairman Mark Farnsworth, who said he would strongly recommend that council staff take no further action against the farmers.
