MPI ordered to release details of insurance arrangements for kiwifruit case

Friday 13th October 2017

The Ministry for Primary Industries has been ordered to release details of insurance arrangements it holds for a legal claim against it by a group of kiwifruit growers over the Psa outbreak which devastated the industry in 2009.

The trial, between MPI and a group of 212 growers led by Strathboss Kiwifruit and Seeka, is in its 10th week, having been set down for 12. The growers claim the Ministry of Agriculture and Forestry (MAF) - which became part of MPI when that ministry was formed in 2012 - was negligent under the Biosecurity Act. Pseudomonas syringae pv actinidiae - better known as Psa - infected 80 percent of kiwifruit orchards nationwide and is estimated to have cost the industry up to $930 million in lost exports.

MPI has argued in court that the statutory responsibility held by the ministry for managing biosecurity risks "does not give rise to private law claims for damages such as those advanced by the plaintiffs", and the claims made are "misconceived in law and unsupported on the evidence."

During the course of the trial, lawyers for the growers' group questioned MPI witness Murray Sherwin, who was director general of MAF at the time. Sherwin said he wasn't aware of MAF holding any insurance for liabilities. Stephen Butcher, who was MAF's plant imports and exports manager, said he didn't know whether the department held insurance.

The growers' lawyers asked for discovery about insurance arrangements MPI held, which the government agency opposed. MPI's lawyers said the Crown has "limited liability insurance cover relating to this claim" and the "maximum sum available is a modest fraction of the sum claimed by the plaintiffs. For the large balance the Crown is self-insured." The growers are seeking over $376 million in compensation.

MPI told BusinesDesk it wouldn't comment while the case is ongoing.

Wellington High Court Justice Jillian Mallon ruled that the court had had "incorrect evidence" about whether MPI had insurance, and now that has been corrected, the kiwifruit growers should have the opportunity to understand the extent and nature of the insurance held.

Once that has been done, each side will make submissions about whether the court should consider the availability of insurance in ruling on the case.

In a statement, the chair of the kiwifruit claim John Cameron said it was important that all New Zealand primary industries know what insurance arrangements the Crown has for acts of negligence and biosecurity breaches.

"We think it's reasonable to question why MPI is insured against acts of negligence if they believe they don’t owe a duty of care to the primary industries it is meant to protect," Cameron said. "Traditionally in litigation well-resourced defendants with liability insurance have not had to disclose details of their cover. This places plaintiffs at a serious disadvantage when seeking to access justice through the courts when up against well-resourced defendants who have the means to use the legal system to test the financial resolve of plaintiffs through delaying tactics."

(BusinessDesk)

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