The Crown had faced a $450 million negligence claim by kiwifruit grower group Strathboss Kiwifruit and Seeka for losses incurred from the 2010 Psa outbreak.
After the Court of Appeal agreed with an earlier High Court decision about MAF’s failings in keeping Psa out, the Government had sought a Supreme Court hearing, scheduled to begin this week.
The Court of Appeal had agreed with a High Court decision that MAF personnel had not acted with reasonable care, and their failures were the likely cause of Psa introduction to New Zealand.
But it had also held the Crown had immunity from claims and MAF did not owe the orchardists a duty of care. It had found the risk of liability meant such a duty of care would be unfair, unjust and unreasonable.
The kiwifruit group has accepted a settlement of $40 million and Seeka chief executive Michael Franks says it was some acknowledgement by the Government for the impact the incursion had on growers and industry.
However, he says, business pragmatism and the ability to return some funds to the participating growers was an overriding consideration.
“It is not an insignificant sum, but we do have mixed emotions about it,” he said.
The payment has been acknowledged by the Ministry for Primary Industries (MPI) director general Ray Smith as confirmation it is time to move on and close the long-running legal challenges that reach back to the first filing in 2014.
“This payment to settle is a sensible one on a per head basis, given the number of claimants in the class action, and their legal and litigation funder costs,” Smith said.
Smith noted in its April 2020 decision the Court of Appeal had found it would not be fair or reasonable to make the Crown legally responsible for losses of that kind, therefore no legal duty of care was owed by MAF staff to the plaintiffs.
“The staff were protected by statutory immunity, as was the Crown,” he said.
There are approximately 212 growers participating in the action along with Seeka, the largest orchard operator in the country.
After the outbreak Seeka had to lay off 62 staff and suffered a $7.1m loss in the season Psa was discovered. Overall, the outbreak cost the entire kiwifruit industry over $800m.
Strathboss group spokesperson and grower John Cameron acknowledged the group had settled for significantly less than had been sought.
“I think the Crown had set on a number pretty early on, and this was close to it,” Cameron said.
“It is an acknowledgement that they had some responsibility; I believe 110% the Government would not have paid out a cent had they thought they were not responsible.”
He says there was a mixture of happiness and disappointment among the plaintiff growers about the settlement.
“But our team was always aware that getting a court ruling would be hard in a Supreme Court. I firmly believe negligence as never going to be in doubt, it was really about whether liability and duty of care came back to the Crown,” he said.
Franks acknowledged the MPI of today that was settling the case is not the MAF of a decade ago.
“Their far more responsible approach to biosecurity is a contrast to the cavalier attitude to biosecurity taken by the last regime,” he said.
He says he believes the more controlled and responsible approach to biosecurity today is largely in part to the actions taken by growers in the wake of the Psa outbreak.
He says the payment by MPI is also an acknowledgement by the agency of the harm the issue had caused growers.
