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

Between

Attorney-General

Appellant

and

Strathboss Kiwifruit Limited

First Respondent

Seeka Limited

Second Respondent

[2020] NZCA 98

Court:

Kós P, Brown and Courtney JJ

CA420/2018

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

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

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

• 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 epicentre of the Psa3 outbreak	[511]
Means of infection	[520]
Time to symptom evidence	[530]
Susceptibility of Hort16A variety	[536]
Survivability of Psa3	[541]
Conclusion on infection pathways	[544]
Conclusion on causation	[547]
ISSUE 6: RESPONDENTS' CROSS-APPEALS ON DUTY OF CARE
Issue 6(a): Did the High Court err in finding that those within the Strathboss class would have to show they had property rights in the vines and crops, or that their interest in the vines and crops was sufficiently direct or closely associated with those rights that they should be treated as though they have suffered loss to their property?	[548]
Issue 6(b): Did the High Court err in finding that MAF personnel did not owe a duty of care to Seeka, in its capacity as a PHO, to take reasonable skill and care in their actions or omissions prior to the New Zealand Psa3 incursion to avoid economic loss to Seeka?	[557]
RESULT	[559]

REASONS OF THE COURT

1 Is the Crown liable to kiwifruit growers and post-harvest operators in negligence for granting an import permit in 2007 for a consignment of kiwifruit pollen from China and renewing that permit in 2009, or for not inspecting those goods when they arrived in New Zealand? 1 That consignment of pollen is said to have introduced the Psa3 bacteria, a virulent strain of a plant disease that destroys kiwifruit plants — in particular, gold kiwifruit. From 2010 Psa3 swept through kiwifruit orchards in the Bay of Plenty region. The disease could not be eradicated. Vines were torn out. It took several years for the industry to re-establish itself.

2 Strathboss, the first respondent, is a grower plaintiff representing approximately 200 growers. Strathboss' own loss is said to be approximately $9.5 million. The group loss may be as much as $450 million. Seeka, the second respondent, is a PHO that packs and cools kiwifruit. Its losses are said to be $92.6 million.

3 Proceedings were commenced in 2014. A nine week trial ensued in the High Court in the second half of 2017. In June 2018 Mallon J issued a judgment of some 496 pages. 2 In it she held the Crown liable to Strathboss, the representative grower, in relation to the grant of the import permit. She cleared the Crown of liability

for failure to inspect the pollen, and of liability to Seeka, the PHO. Quantum was left for assessment at another trial

4 The Crown appeals the permit liability finding. Strathboss cross-appeals in relation to the failure to inspect conclusion. Seeka cross-appeals in relation to the dismissal of its claim.

5 Before moving to discuss matters of general application and the grounds of appeal and cross-appeal we summarise the conclusions reached in the course of the judgment.

SUMMARY OF JUDGMENT

6 In this judgment we allow the Crown's appeal, finding that it has a statutory immunity precluding liability for the alleged negligent acts...