Saturday, 13 February 2021 11:48

Govt forks out $40m to settle Psa compo case

Written by  Sudesh Kissun
The Government has spent $40 million settling a case relating to Psa. The Government has spent $40 million settling a case relating to Psa.

A $40 million out-of-court settlement has been reached between the Government and some kiwifruit industry players over the long-running compensation case relating to the vine disease Psa.

The agreement was announced two days before a Supreme Court hearing on an appeal by the plaintiffs including Strathboss Kiwifruit Limited, representing a group of kiwifruit growers, and Seeka Limited, a post-harvest operator.

They have agreed to accept a Crown offer of $40 million, which includes a contribution from the Crown’s insurers of $15m. The plaintiffs had brought a claim for $450 million plus interest.

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

 Ministry for Primary Industries Director General Ray Smith says all parties agree 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 for what they alleged was actionable negligence in allowing Psa into the country.

 “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.

 “But the settlement acknowledges the grievance felt by the kiwifruit sector plaintiffs.”

 Smith says settling now confirms the earlier judgment of the Court of Appeal.

 In its decision of April 2020, the Court of Appeal found it would not be fair, just or reasonable to make the Crown legally responsible for losses of this kind, and that therefore, no legal duty of care was owed by the relevant MAF staff to the plaintiffs. 

The staff were protected by a statutory immunity, as was the Crown, says Smth.

The claimants had appealed this ruling in the Supreme Court with a hearing set down for five days, beginning on Monday.

The agreement means this hearing will now be vacated, says Smith. 

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

 “It is good that all parties can now move on from this event which goes back 11 years.”

 “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. 
“New Zealanders can have confidence in our current biosecurity system,” Smith says.

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