Attorney-General v Strathboss Kiwifruit Ltd

• Jurisdiction: New Zealand
• Court: Court of Appeal
• Judge: Kós P,Brown,Courtney JJ
• Judgment Date: 09 April 2020
• Neutral Citation: [2020] NZCA 98
• Docket Number: CA420/2018

[2020] NZCA 98

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Court:

Kós P, Brown and Courtney JJ

CA420/2018

Between

Attorney-General

Appellant

and

Strathboss Kiwifruit Limited

First Respondent

Seeka Limited

Second Respondent

Counsel:

J E Hodder QC, P H Higbee and N Fong for Appellant

A R Galbraith QC, D M Salmon, M Heard and J P Cundy for Respondents

Agriculture, Tort — whether the Crown was liable to kiwifruit growers and post-harvest operators in negligence for granting an import permit for a consignment of kiwifruit pollen and failing to inspect that consignment from China which introduced a bacteria that destroyed kiwifruit plants — Crown liability — Biosecurity Act 1993 — Crown Proceedings Act 1950

The issue was whether Crown was liable in negligence for granting the import permit of kiwifruit and failure to inspect that consignment.

The Court held that the Crown had a statutory immunity precluding liability for the alleged negligent acts or omissions. The Crown could not be directly liable in tort by reason of the Crown Proceedings Act 1950 (“CPA”). Its liability, if any, must be vicarious. That meant the respondents must first identify direct liability on the part of individual Crown servants or agents before the Crown could be vicariously liable in tort.

Section 163 Biosecurity Act 1993 (“BA”) (protection of inspectors and others) provided an immunity in respect of the acts or omissions of the relevant personnel (the individuals said to have been in breach of a duty of care to the respondents have an immunity against civil and criminal liability). The Crown took the benefit of that immunity pursuant to s6(1) CPA (liability of the Crown in tort). Inasmuch as no cause of action could lie against the individual personnel responsible, nor could one lie against the Crown. If liability of that magnitude was to be contemplated for biosecurity hazards, it would be better it be introduced by legislation.

In case the proceeding should be considered further in another jurisdiction, The Court analysed duty and breach as if the immunity issue had been answered in favour of the respondents. In relation to the granting of the import permits, the Court would have found that no duty of care was owed. Although there was sufficient proximity, policy factors, in particular the risk of indeterminate liability, mean it would not be fair, just and reasonable to impose a duty of care in the circumstances. Had a duty of care been owed, the Court have found that the relevant personnel acted in breach of the alleged duty by granting the import permits without undertaking an effective risk assessment. In relation to the failure to inspect at the border, the Court would have found no duty of care existed for the same reasons. Had a duty of care been owed, the Court would have found that the failure to inspect the June 2009 consignment of kiwifruit pollen fell below the standard of care expected of skilled and informed personnel in the circumstances. However, that failure had no causative effect because the permit made provision for unmilled pollen because the June 2009 consignment was, more likely than not, the source of the Psa3 incursion.

The analysis of the nature of the connection between MAF personnel and the respondents, which derived from the environment of the BA, pointed to a prima facie duty of care in relation to the assessment of the risk associated with the importation of risk goods, being pollen intended to be utilised in a new manner. The Court would have concluded that the imposition of the asserted pre-border duty of care would not be fair, just or reasonable.

The appeal was allowed. The cross-appeals were dismissed.

• A The appeal is allowed.

• B The cross-appeals are dismissed.

• C The respondents must pay the appellant costs for a complex appeal on a band B basis together with usual disbursements. We certify for second counsel.

• D Costs in the High Court are to be determined by that Court.

JUDGMENT OF THE COURT

Table of Contents

	Para No
SUMMARY OF JUDGMENT	[6]
GENERAL MATTERS
Background	[9]
The kiwifruit industry	[11]
Biosecurity in New Zealand	[16]
The Psa disease	[24]
Kiwi Pollen's permit applications	[32]
Importation of the pollen	[41]
The Psa3 outbreak in New Zealand	[44]
Biosecurity and its statutory framework	[49]
Issues on appeal	[68]
ISSUE 1: DIRECT LIABILITY
Issue 1(a): Can the Crown be directly liable (as opposed to vicariously liable) in tort?	[70]
Judgment appealed	[77]
Submissions	[81]
Analysis	[83]
Conclusion	[109]
Issue 1(b): What is the impact of any such direct liability on the Crown's liability?	[110]
ISSUE 2: IMMUNITY
Issue 2(a): Did the High Court err in holding that s 163 of the Biosecurity Act 1993 did not apply to the acts or omissions of MAF personnel at the pre-border stage?	[112]
Judgment appealed	[113]
Submissions	[121]
Analysis	[124]
Conclusion	[141]
Issue 2(b): Did the High Court err in holding that s 163 of the Biosecurity Act 1993 applied to the acts or omissions of MAF personnel at the border clearance stage?	[142]
Issue 2(c): Did the High Court err in holding that the Crown cannot take the benefit of the immunity under s 163 (to the extent it applied to the acts or omissions of any MAF personnel) pursuant to s 6 of the Crown Proceedings Act 1950?	[143]
Conclusion	[147]
INTERMISSION	[148]
ISSUE 3: FIRST CAUSE OF ACTION — PRE-BORDER NEGLIGENCE
Overview	[150]
Statutory context	[154]
The evolution of s 22 of the Biosecurity Act 1993	[155]
The alleged duty in the statutory context	[160]
Justiciability	[167]
Law making cannot be subject to a duty of care	[170]
Border control cannot be subject to a duty of care	[175]
Conclusion on justiciability	[191]
Issue 3(a): Did the High Court err in finding that MAF personnel owed a duty of care to Strathboss and some members of the Strathboss class to take reasonable skill and care in their actions or omissions prior to the New Zealand Psa3 incursion to avoid physical damage to property, and to take care to avoid loss consequential on that damage to property?	[192]
Relevant principles	[192]
Proximity	[201]
Is the Biosecurity Act 1993 inconsistent with the imposition of a duty of care?	[204]
An absence of a close and direct legal relationship	[218]
MAF personnel neither direct cause nor primary source of harm	[224]
Couch (No 1)	[231]
Conclusion on proximity of relationship	[240]
Policy	[242]
Indeterminate and disproportionate liability	[243]
Conflicting interests and regulatory decisions	[264]
Incompatibility with public law framework	[270]
Conclusion on duty	[273]
Additional aspects	[276]
Duty to consult	[276]
The PHEL Review	[283]
Issue 3(b): Did the High Court err in holding that MAF personnel breached their duty of care by acts or omissions at the pre-border stage?	[298]
The issues	[299]
Advising Plant Imports Team	[302]
Failure to undertake risk assessment	[317]
The risk assessment process	[317]
The issue on appeal	[319]
RAG's involvement in the decision	[325]
Conclusion on breach	[349]
Issue 3(c): Did the High Court err in holding that the acts or omissions at the pre-border stage caused the clearance and release of the June 2009 consignment?	[352]
Issue 3(d): Did the High Court err in holding that MAF personnel did not breach their duty of care in (1) failing to impose a condition requiring microscopic inspection; (2) permitting pollen to be “milled prior to import”; and (3) failing to consider the risk posed by kiwifruit pollen imports following the Italian outbreak of Psa3 and/or finding that such breaches did not cause the clearance and release of the June 2009 consignment?	[358]
Microscopic inspection condition	[359]
The revised wording of the import permit	[364]
Response to the Italian outbreak	[377]
ISSUE 4: SECOND CAUSE OF ACTION — NEGLIGENCE AT THE BORDER Overview	[389]
The relevant statutory provisions	[395]
Inspection during the clearance process	[400]
The June 2009 consignment	[406]
Issue 4(a): Did the High Court err in holding that MAF personnel owed a duty of care to Strathboss and members of the Strathboss class in respect of the clearance of the June 2009 consignment?	[411]
Issue 4(b): Did the High Court err in holding that MAF personnel did not breach their duty of care by acts or omissions at the border clearance stage and/or that any breaches did not cause the clearance and release of the June 2009 consignment?	[418]
Did the Judge err in finding that the Nursery Stock IHS was ambiguous?	[418]
Error in determining the standard of care: reliance on Ms Willmot's and Mr McLaggan's evidence	[428]
Negligence by the inspector	[440]
Conclusion on breach	[445]
Causative effect of failing to inspect and failing to issue an NCR	[446]
Conclusion	[454]
ISSUE 5: CAUSATION
Issue 5(a): Did the High Court err in holding that Psa3 entered New Zealand through the June 2009 consignment?	[455]
Did the Judge wrongly require the Crown to prove a counter-factual?	[458]
Did the Judge apply the correct legal principles in assessing the circumstantial evidence?	[465]
Admissibility of the genetic evidence	[479]
Evidence about PacICE1	[485]
Reliance on MLVA evidence	[500]
Conclusion on the genetic evidence	[502]
Orchard 1 as the source of the June 2009 consignment	[503]
The...