Kiwifruit growers class action against government claiming losses of $400 million after PSA bacteria ravaged orchards resulted in a payout of 6.3 cents in the dollar following a government out of court settlement at $40 million and payment to litigation funders of $14.7 million for their costs and fees.
In late 2010, PSA spread from Te Puke orchards resulting in many orchards having to rip out vines and replant. Growers sued government, alleging the bacteria was introduced through pollen imported from China and negligently cleared for domestic use by Primary Industries. A total of 214 growers banded together in a class action, seeking compensation.
The High Court held government liable; a ruling reversed in the Court of Appeal. With a further appeal to the Supreme Court in the offing, government settled out of court at $40 million. Government now sits in the box seat. It has a Court of Appeal ruling in its favour to wave at future litigants seeking compensation for failures at the border, having paid a price of $40 million to avoid the possibility of this ruling being reversed in the Supreme Court.
Terms of the PSA class action required High Court approval before distribution of any successful damages claim to growers. Individual grower’s positions varied depending upon severity of the PSA outbreak, type of kiwifruit grown, remedial action taken and any insurance recoveries received.
The High Court approved a distribution schedule that first saw initial claimants getting back $1.32 for each dollar paid for their initial class action registration fee (first growers to join paid registration back in 2015) with the balance divided on a ‘broad brush’ approach based on number of hectares temporarily lost to production with claimants separated into two ‘loss groups’ dependent upon the kiwifruit variety grown by each particular grower. The average payment made to claimant growers amounts to about $10,000 per hectare.
Strathboss Kiwifruit Ltd v. Seeka Ltd – High Court (30.11.21)
22.100