Government pays $40m to settle long-running kiwifruit Psa claim

Saturday, 13 February 2021

Kiwifruit growers and the Government have settled long-running court action over the vine disease Psa.

The Government has agreed to pay $40 million to settle a long-running legal dispute with kiwifruit growers over the incursion of the kiwifruit vine disease Psa.

The out-of-court settlement brings to an end years of legal disputes after 212 kiwifruit orchardists, and Te Puke-based post-harvest operator Seeka, brought a class action alleging the Government was liable for losses caused by the devastating plant disease.

Psa3 swept through kiwifruit orchards in the Bay of Plenty region from 2010. The disease could not be eradicated and it took several years for the industry to re-establish itself.

Psa3 was said to have been introduced by a consignment of kiwifruit pollen imported into New Zealand from China for the new use of commercial artificial pollination of kiwifruit orchards.

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The kiwifruit industry was devastated when the plant disease Psa swept through orchards.

In April last year, the Court of Appeal found the Government could not be held liable for the damage caused by Psa, despite the Ministry for Primary Industries (MPI) letting the disease into the country. An appeal against that ruling was due to start on Monday in the Supreme Court, but the settlement means the hearing has been vacated.

Kiwifruit Claim chairman, John Cameron, said the settlement concludes what has been a very long, hard, and stressful fight.

“This settlement provides some compensation to growers whose livelihoods were devastated by the biosecurity incursion, and very importantly we also achieved what we set out to do which was to hold the Government accountable for its negligent actions which caused the Psa outbreak,” he said.

Bringing it all back home - Zespri shares kiwifruit pointers with Chinese growers. This video was first published in 2018.

Cameron said it was a “tough decision” to agree to a settlement. While the case was meritorious and deserving, litigation was extremely risky and uncertain and growers had been advised to accept the settlement, he said.

“What happened to the kiwifruit industry in 2010 was entirely preventable – MPI knew Psa existed, they knew the damage it could cause if it was let into the country, and they breached their own protocols that were in place to keep it out,” he said. “It is critical our primary industries can rely on our government to perform their biosecurity role with reasonable care and skill; we don’t want to ever see this happen again.”

MPI director general Ray Smith said all parties agreed that it is time to move on and bring a close to the legal challenges that have been running since 2014, when the claimants filed against the Crown.

Smith says the settlement gives immediate financial certainty for the Crown and avoids a complex Supreme Court hearing and a wait for the Court’s decision which could take some time.

The Crown’s insurers would contribute $15m towards the settlement, he said.

The plaintiffs had brought a claim for $450m plus interest.

“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.

He said the settlement acknowledges the grievance felt by the kiwifruit sector plaintiffs, but also confirms the earlier judgment of the Court of Appeal that it wasn’t fair or reasonable to make the Crown legally responsible for losses of this kind.

Smith noted the claim related to actions taken by the then Ministry of Agriculture and Forestry and pre-dated the establishment of the Ministry for Primary Industries.

“Since that time, much work has been done to enhance and improve the way we manage pre-border risk, import processes at the border and incursions that inevitably occur,” he said. “New Zealanders can have confidence in our current biosecurity system.”