Psa settled 10 years on

Seeka CEO Michael Franks.

The Crown and kiwifruit sector plaintiffs have reached an out-of-court settlement to bring the lengthy Psa saga to an end.

The plaintiffs, Strathboss Kiwifruit Limited, representing a group of kiwifruit growers, and post-harvest operators including Seeka have agreed to accept a Crown offer of $40 million, which includes a significant contribution from the Crown’s insurers of $15 million.

Ministry for Primary Industries director general Ray Smith says all parties agree it's time to move on and bring to a close 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,” says Smith.

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

Mixed feelings

“We have mixed emotions about the settlement,” says Seeka CEO Michael Franks.

“We are happy that it’s behind us and we’re also comforted because generally MPI has developed a new approach to biosecurity over the ten years and the previous cavalier attitude they had to it has gone.”

Franks says the $40 million settlement is an acknowledgement by MPI that their actions or inactions caused a lot of pain and suffering to New Zealanders and kiwifruit growers.

“But $40 million compared to what was lost is a very small settlement, if you take into account that the Crown paid more than $800 million to the dairy industry for Mycoplasma bovis.”

“Mycoplasma bovis wasn’t a breach by MPI, whereas it was the actions and inactions MPI made around Psa that was a breach.

“But at the end of the day, the claims committee decided that they should settle it, and we support them and thank them for their significant efforts made on our behalf.”

Moving forward

Smith says settling confirms the earlier judgement 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.”

The claimants had appealed this ruling in the Supreme Court with a hearing set down for five days, beginning on Monday, February 15 2020.

Smith says the settlement gives immediate financial certainty for the Crown and avoids a complex Supreme Court hearing and the wait for the court’s decision.

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

“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.”

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