Questions and Answers

1. What did it cost to join the claim?

Unless you are a post-harvest operator, each plaintiff is required to make a one-off total contribution to the claim based on the size of their orchard as at 1 October 2010. The contribution required is:

  • $500 if your orchard (whether owned or leased) is less than 5 hectares;
  • $1,000 if your orchard (whether owned or leased) is between 5 and 10 hectares; and
  • $1,500 if your orchard (whether owned or leased) is larger than 10 hectares.

All amounts are inclusive of GST, if any.

Each post-harvest operator is required to make a one-off total contribution of $10,000 to join this claim.

These contributions will be applied to the payment of the legal fees, expert costs and other costs relating to the legal proceedings ("project costs"). All project costs over and above the total amount of the one-off total contributions made by the plaintiffs will be advanced by LPF. You will only repay LPF for the balance of the project costs if the claim is successful, and then only from the amount recovered from the Crown ‐ so once you have paid your one-off total contribution, you cannot be asked to pay any more for the proceedings.

LPF will be entitled to reimbursement of the project costs that it advances and to a success fee to be paid out of the proceeds in the event that a successful settlement or judgment is obtained. LPF has agreed to a success fee structure that sees them fairly sharing in the success of the claim. The success fee is 20% of the award should the proceeds of the claim be under $500m and within 2 years and 25% if under $500m and later than 2 years will be paid to the funder. The percentage share falls to 10% and 12.5% respectively if the successful conclusion is beyond $500m. If there is not a successful conclusion LPF is not entitled to a fee.

Here is an example based on a settlement or award of damages of $800 million:

Project Costs funded by LPF $4m $4m
Resolution Amount $800m $800m
Net Resolution Amount $796m $796m
Time period 2 years 3 years
Growers receive $666.4m $638m
LPF receives
Repayment of funded Project Costs $4m $4m
Service Fee (0-$500m) 20% $100m $125m
Service Fee ($500m-$796m) 10% $29.6m $37m
Total Service Fee to LPF $129.6m $162m

2. Will I ever have to pay anything further if any legal proceedings are not successful?

No. LPF will pay any adverse costs awarded against the plaintiffs in the proceedings.

3. What is the Kiwifruit Claim about?

We are lodging a class action against the Crown in relation to losses resulting from the entry of the Psa disease into New Zealand. It is alleged that the Crown owed a duty of care to both kiwifruit growers and post-harvest operators, and that the Crown breached that duty of care in negligently clearing a shipment containing the Psa pathogen for entry into New Zealand.

The investigations to date, including that of the Sapere Research Group, show major shortcomings by the Ministry for Primary Industries ("MPI") in relation to the introduction of Psa into New Zealand, including with the relevant import requirements and border processes in place prior to the entry of Psa into New Zealand.

Legal advice is that there is a strong legal basis upon which a claim against the Crown may be lodged for its role in allowing Psa to be introduced into New Zealand. Legal professional privilege is not waived over any of the plaintiff's legal advice received.

We know the introduction of the Psa disease has had a devastating effect on kiwifruit growers and the industry. There are a significant number of instances where growers have lost their entire orchards (of both green and gold varieties) – and in some cases, growers were forced to undergo mortgagee sales, such was the extent of the devastation. It has taken over 4 years to assemble the evidence about what happened when Psa came into New Zealand, and this includes extensive DNA evidence analysis. It has also taken time to assess the legal position in light of this evidence, and to obtain funding for the growers.

The Crown, acting through MPI, is responsible for border security in New Zealand. This is an extremely important role for the public good of New Zealand, as approximately 70% of the New Zealand economy is dependent on primary industries. As MPI has now admitted publicly, it has had many failings in doing this job. However, MPI has not made any suggestions that it will compensate kiwifruit growers or post-harvest operators for their losses.

It is hoped that this action will not only result in the Crown making fair and proper financial compensation for the losses suffered by kiwifruit growers and post-harvest operators from the outbreak of Psa disease; but also put the onus on the Crown to take considerably more ownership of its role in relation to protecting New Zealand's borders, so that similar biosecurity catastrophes may be avoided in the future.

4. How does this claim affect Zespri or KGI?

This is neither a politically motivated action nor does it involve Zespri or KGI.

This action is proposed by growers (including orchard leaseholders) from across the kiwifruit industry, for growers. It is proposed to provide a pathway for growers (including orchard leaseholders) to seek commercial redress for the commercial losses that they have had to incur – which, if acting individually, would have been difficult to achieve.

This action will also be relevant for post-harvest operators. Post-harvest operators have suffered commercial loss through lower volumes with the reduced orchard production. They have lost margin through lower pricing as they competed to secure crop.

This is an action that you are invited to join in your own accord, alongside other growers and post-harvest operators.

5. Who is running the litigation?

A Psa Claim Committee has been established to represent the plaintiffs in all matters relating to the claim. The Committee will have the full authority to make all decisions relating to the claim, including investigating the bringing of the Psa Claim on behalf of kiwifruit growers and post-harvest operators. The members of the Psa Claims Committee are all involved in the kiwifruit industry and will represent the plaintiffs’ interests.

The Committee has engaged a legal team to conduct the case. The team consists of Alan Galbraith QC, Matthew Dunning QC and Davey Salmon of LeeSalmonLong, for more information about them, see the "About Us" page.

6. How much is my claim?

Your claim will be for the total estimated amount of losses that you have suffered as a result of the introduction of the Psa disease. If you are a kiwifruit grower, each legal entity that owned an orchard on 1 October 2010 will need to register as a plaintiff separately, and will have a separate legal claim. The losses that you will be able to claim will need to be assessed and will include:

  • Lost productions following the spread of Psa in your orchard;
  • Costs incurred by you in removing infected vines and materials;
  • Additional expenses incurred to try and combat Psa;
  • Costs of replanting and re-establishing your orchard; and
  • If you have sold your orchard since 1 October 2010, any capital loss that you suffered as a result of Psa.

7. What if I have sold my orchard since 1 October 2010?

This is not a problem. So long as you owned a kiwifruit orchard that was subsequently affected by Psa on 1 October 2010, or if you were a leaseholder of a kiwifruit orchard that was subsequently affected by Psa, you will be entitled to join in this class action.

8. What do I get if the claim is successful?

We expect any successful outcome of the claim to be delivered through a final judgment of the Court or through a settlement reached with the Crown. From the proceeds of the claim, the funding advanced by LPF in relation to the claim will first be deducted and repaid together with LPF's success fee – with the rest being available for distribution to each plaintiff.

Unless the Court issues directions as to the allocation of each plaintiff’s entitlement, the Claim Committee is responsible for working out each plaintiff’s entitlement from the proceeds. The Claim Committee will have regard to any factors that it may consider reasonably appropriate (including the best interests of the plaintiffs taken as a whole), and will appoint advisers to calculate any plaintiff’s share of the settlement sum or any damages awarded after deducting LPF’s entitlement. Then, the Committee will seek the Court’s endorsement of the allocation methodology adopted by the Committee and all allocations as being fair and reasonable. Once the Court’s endorsement has been obtained, the Committee will pay each plaintiff into its bank account.

9. How can you actually prove that Psa entered through the import of anthers and not some other means (e.g. orchardists travelling between China and NZ)?

The paper published on 27 February 2013 by Dr Russell Poulter and his team at the University of Otago points to Psa-V entering New Zealand through the import of anthers in 2009. This issue will be the subject of expert evidence in the case.

10. Can one also claim for the production losses/costs going forward until proposed settlement date or further. We just picked 2000 trays per ha instead of 6700 per ha as budgeted thus on 6.65 ha grafted 2010, 2011 & 2012 represents a one year loss of over $290000 and this will take a few years to get to average production with vines still dying daily.

Yes. This will be worked through between you and the forensic accountants. From what you’re saying, your losses may exceed $ 1million.

11. Has the Grower Committee obtained any separate legal advice on the documents we’re being asked to sign? If so, can we see it?

Yes, the Grower Committee has received independent legal advice on the documents. This is the Wynn Williams Memorandum that is attached in the information pack. It reviews the Deed for Provisions of Services and shows how it works.

12. How do I know I won’t need to pay any more money than my initial payment of $500 / $1000 / $1500?

Under the funding agreement with LPF, you pay ONLY the initial contribution of $500/$1,000 or $1,500 with LPF responsible for funding the balance of the project costs. It would only be if LPF was not continuing to fund the litigation and terminates the funding agreement, and the growers then decided to continue the litigation themselves that further costs may be incurred by growers. However, this is an unlikely scenario. It is not LPF’s intention to withdraw from the funding agreement.

13. What if growers haven’t followed KVH (Kiwifruit Vine Health) recommended hygiene protocols? Does that mean the Government has a clear out?

In a negligence claim, you need show you have acted reasonably to mitigate your losses where possible. Also, where a plaintiff’s own conduct has caused or contributed to their loss, the Court does have a discretion to reduce that plaintiff’s claim for contributory negligence. Experts will help us determine whether any failure to follow KVH’s recommended hygiene protocols would have made any difference to the losses suffered.

14. How can we sue when there was no contract? I’ve read that Spencer on Byron case, and it looks like there was only a duty of care because there was a contract? Doesn’t that ruin our case?

This claim against the Crown is in negligence rather than in contract. No contract is required to found a duty of care in negligence. The claim against the Council in Spencer on Byron was also in negligence rather than based on a contract and that case certainly does not ruin our case.

15. How long is this claim going to take? How many appeals can be heard, and can we call time on it if we want to?

Realistically, you should expect the case to take between 2 and 5 years to resolve. For obvious reasons, LPF and the plaintiffs will do everything reasonably possible to achieve resolution as soon as possible. A 3 year timeframe is probably reasonable. In most instances where there is a hearing or a decision made by the High Court, there will be the ability to appeal to the Court of Appeal, and, with leave, to the Supreme Court.

16. Over what period are our losses quantified? When Psa hit, we had to spend a lot of money on extra sprays, coverings etc which we’re still paying for now and we’ll be paying until this case is decided. Are the costs added up until the claim is filed, at a set date, or when the judge awards compensation (if any)?

The legal team and forensic accountant advisors will assess when the Psa-V outbreak first began to have an impact on growers and when that ended. In some cases the impact and losses will be ongoing, and that will be quantified and claimed. The claim can be amended and updated right through to setting down for hearing, or at a later stage before hearing.

17. Should I be getting my own legal advice? What if I don’t want to pay for it?

Yes, you should. All growers are strongly recommended to get independent legal advice before entering into the funding agreement – it’s important to know what you’re signing up to. You will have to pay for your own independent legal advice. The documents will be sent to you if you register your interest. You can take those documents to your lawyer, and if you’ve got any further questions please ask them through this forum, or via info@thekiwifruitclaim.org. Once you have joined the claim, the legal team running the litigation will be reporting to and advising the plaintiffs via the plaintiff committee throughout.

18. What are losses? Does it include higher costs? What if I have been paid more for my green fruit?

You can claim for all damages that are a foreseeable consequence of the alleged negligent acts and omissions that allowed Psa-V into New Zealand. This may include loss of income, higher costs involved with treating or preventing Psa-V, loss of capital value, general damages for stress and anxiety (general damages are only available for individuals or family trusts, not companies or corporate trusts), expert costs, other disbursements and a contribution to the legal costs.

19. You say I can withdraw from this litigation at any stage – but I don’t see that in the contract? Can you tell me what my rights are to withdraw?

No one can force you to be a plaintiff in the litigation. If you wish to withdraw from the litigation you can do so at any time. The downside of withdrawing is that your initial contribution will not be repaid to you and you will not be able to benefit from any settlement or award of damages. Before making the decision to withdraw, it is recommended plaintiffs should take independent legal advice and discuss the decision with the solicitors handling the claim so that all relevant matters can be properly considered including what, if any, costs implications arise.

20. If I do withdraw from The Kiwifruit Claim, can I get my money back?

No, you won’t. The one-off total contribution is non-refundable. You won’t be asked to pay any more than that, but you won’t get it back.

21. This New Zealand Pork Industry v MPI case – they lost. Isn’t that the same as ours, and doesn’t that mean we’ll lose too? Can you clarify this?

NZ Pork Industry v MPI was a judicial review claim, rather than a claim in negligence. While it's useful to the extent it sets out how the Supreme Court has previously approached interpretation of the Biosecurity Act and MPI/MAF’s obligations under that Act, it has limited relevance here and doesn't harm this case.

22. What are our chances of success?

The legal team consider that the claim has merit and that the evidence supports the claim and points to major shortcomings on the part of Biosecurity New Zealand/MAF (now MPI), which led to the entry of Psa-V into New Zealand. All litigation has uncertainties. The allegation of a duty of care owed by the Crown in respect of MPI/MAF’s biosecurity role in New Zealand has not previously been tested in the Courts but is based on conventional duty principles and is in line with relevant Supreme Court cases. There's no certainty of success, but there is certainly no chance of success without a claim.

23. What role does LPF play with the Grower Committee?

LPF can receive notices of and attend the Grower Committee meetings, but does not have any power to appoint anyone to the Committee. The Committee is representative of the plaintiffs, and is elected by them. LPF has the right to approve committee member appointments because it is important for LPF to be comfortable that they can work with the Committee.

24. So, the Grower Committee represents us as plaintiffs? Can we make sure there’s someone we know on the Committee? How do we do that?

The Grower Committee represents the plaintiffs in relation to the claim, and each member of the Committee is involved in the kiwifruit industry. Growers can appoint additional members or remove existing members from the Committee at a Committee meeting. You can call a meeting yourself if you have support of 30% of the claimants, but it is planned a meeting will be called shortly. The Committee is required to hold meetings at least once a year. Your suggestions are welcome if you feel there’s someone who should be appointed to the Committee, noting that the maximum number of members on the committee is 10.

25. Please can you tell me which clauses in the official documents we sign say individual plaintiffs can withdraw at any time, and to do so, the individual plaintiff would not be liable for any further cost?

As we’ve mentioned above in a previous answer, no one can force you to be a plaintiff in the litigation and if you wish to withdraw from the litigation you can do so at any time. However, there appears to be some concern around this, so we’re going through the Funding Agreement documents to see if this issue can be made clearer. The downside of withdrawing is that your initial contribution will not be repaid to you and you will not be able to benefit from any settlement or award of damages. Before making the decision to withdraw, it is recommended plaintiffs should take independent legal advice and discuss the decision with the solicitors handling the claim so that all relevant matters can be properly considered.

26. Our small block (.6ha) of 16A got PSA before we had a chance to graft to G3. We were not living onsite so in the absence of being able to monitor daily decided not to graft and sold th G3 license then removed everything inc rootstock. Do we have a viable claim for lose of income and how would it be calculated (roughly)?

Hi there. While it's entirely possible you have a viable claim, registrations for The Kiwifruit Claim closed in October last year. We are unable to add any further plaintiffs at the moment given the close-off date was set by the High Court. We'll let you know if this changes at all in the future.


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