Kiwifruit growers eye $450m after win
Kiwifruit growers affected by the damaging Psa disease are claiming victory following a High Court ruling that the Crown was negligent and breached its duty of care.
Growers who joined the class action are claiming $450 million compensation, higher than the figure ($376.4m) the 212 growers were earlier claiming.
‘‘This is a landmark decision and we hope it draws a line in the sand for what has been a very long and difficult eight years for growers,’’ Kiwifruit Claim committee member Grant Eynon said.
The claim followed an outbreak of the Psa disease in November 2010. The disease quickly spread and caused widespread damage to the kiwifruit industry.
A compensation package put together by the industry and Government came to an end when the strategy of aggressive containment was unsuccessful.
The Crown has 20 days to appeal the decision. In a statement the Ministry for Primary Industries (MPI) said the decision to appeal would be made by the solicitorgeneral, not MPI.
So far the case had cost ‘‘many millions’’ for the claimants, and the Crown has spent about $3m to date.
Justice Jillian Mallon ruled the then Ministry of Agriculture and Forestry (MAF, now MPI) owed a duty of care to kiwifruit growers because it had responsibility for controlling what goods could be imported into New Zealand.
She found MAF had breached its duty of care when deciding whether to grant import permits for kiwifruit pollen.
Justice Mallon also found that the claimants had proven on the balance of probabilities that the consignment of anthers containing pollen was the cause of the outbreak.
The Crown argued the claimants did not have a case because the way in which the disease entered New Zealand was unknown.
The court ruled MAF did not owe a duty of care to Seeka Kiwifruit Industries, a grower and packer.
‘‘Post-harvest operators were one step removed from the direct harm suffered by growers. They suffered financial losses because of contractual arrangements with those who suffered direct harm,’’ the ruling said.
However, Seeka is also the largest kiwifruit grower in the country and from that point of view benefits from the decision.
‘‘While Seeka is disappointed by the decision in relation to the postharvest losses, it confirms that it is a claimant alongside the growers and set to benefit in any final determination of damages,’’ chief executive Michael Franks said.
Seeka earlier told the court it was forced to make 64 staff members redundant at a cost of $2.1 million, saw its share price plummet, and lost $1.8m on sales that fell through following the arrival of the devastating Psa disease in 2010.
The claimants said MAF officials had allowed Te Puke company Kiwi Pollen to import kiwifruit pollen for the first time in April 2007, through to 2010.
They argued the officials should have undertaken a formal risk analysis for the imports, given that kiwifruit pollen had not been brought into New Zealand before then. Officials had also failed to inform the kiwifruit industry about the imports.
According to the claim plaintiffs, MAF officials owed them a ‘‘duty to exercise reasonable skill and care when undertaking their responsibilities in relation to biosecurity’’, but they had failed to exercise this skill and care.
The 212 growers represent 32 per cent of the total 2009-10 gold kiwifruit crop and 13 per cent of the green crop. There are about 2500 commercial kiwifruit growers in the country.
The class action has been run by litigation funder LPF Group. As a funder of the class action, LPF Group will receive a percentage of the compensation granted.
Plaintiffs were represented by a committee consisting of John Cameron, Bob Burt and Grant Eynon. Representative plaintiffs are Strathboss Kiwifruit for growers and Seeka Kiwifruit for post-harvest operators.