The High Court in Auckland last week issued a judgment striking out two of three causes of action in a novel claim brought against corporate defendants in relation to climate change issues: Smith v Fonterra Co-operative Group Ltd [2020] NZHC 419. The Court was, however, unwilling to strike out a third cause of action, which raised the prospect of a novel tortious duty of care. While noting that matters of public policy meant that such a claim faced "significant hurdles", Wylie J was ultimately "reluctant to conclude" that it was untenable.[1]
While the decision not to strike out the third/novel cause of action displays an openness to the evolution of the common law in this area, which may alarm some, for the most part, the decision indicates that the New Zealand courts are likely to be cautious about intervening in climate change matters between private parties. This is particularly given New Zealand's detailed regulatory scheme. In that regard, the judgment is consistent with the extra-judicial musings of Winkelmann CJ, and Glazebrook and France JJ that private litigation in the climate change space "remains a complex area fraught with doctrinal difficulties".[2]
The judgment does illustrate, nevertheless, the potential for claims in this area to gain traction in the courts or as strategic litigation by claimants. As with other matters climate change-related, therefore, potential defendants are advised to expect the unexpected. We expand on this potential further in the "observations" section below.
The claim
The claim was brought by Michael Smith, of Ngāpuhi and Ngāti Kahu descent, against seven corporate defendants across a range of industries. Mr Smith raised three tortious causes of action: public nuisance, negligence and breach of a new (or "inchoate") duty of care.
Mr Smith claimed that the defendants' activities release greenhouse gases that have contributed to (and will continue to contribute to) "dangerous anthropogenic interference with the climate system and to the adverse effects of climate change".[3] This, in turn, would cause damage (eg, as a result of sea level rise) to land and other resources in or around Mahinepua, Northland, in relation to which Mr Smith claimed an interest according to Māori custom and tikanga.
The claimant sought:
- declarations that each defendant had unlawfully caused or contributed to public nuisance, or had breached the relevant duties of care to Mr Smith; and
- injunctions requiring each defendant to achieve net zero emissions by 2030.
The defendants sought to strike out all three causes of action, arguing that the claim raised issues that could not properly be determined by the law of tort in the courts.
Decision
As noted in the introductory paragraph to this update, the matter involved a strike out application (rather than a substantive hearing). Wylie J struck out the claimant's causes of action in public nuisance and negligence, but refused to strike out a claim based on an alleged new tortious duty of care. Further details of the decision in relation to each cause of action are set out below.
Public Nuisance
A public nuisance arises where a person does an act not warranted by law or omits to discharge a legal duty, if the effect of the act or omission is to endanger the life, health, property, morals or comfort of the public or to obstruct the public in the exercise or enjoyment of common rights. An individual, as opposed to the Attorney-General, can only bring such an action if he or she suffers "special damage" over that suffered by the general public. "Special damage" is damage that is "particular" and "direct".[4]
Wylie J struck out Mr Smith's claim in public nuisance, finding that:
- The damage sought by Mr Smith was not particular or direct, and accordingly did not amount to special damage. Specifically, the damage sought by Mr Smith was no different to the "all-pervasive" impact of climate change that many other members of the public would suffer.[5 Further, the relevant damage was consequential rather than a direct result of the defendants' activities.[6]
- Mr Smith could not establish that a public right had been interfered with, because he could not establish that the defendants' interference with such rights had caused or would cause the pleaded damage.[7]
The right protected by the tort was "the right not to be adversely affected by an unlawful act or omission", and in the present case the defendants' activities were not unlawful (indeed, they had complied with all relevant statutory and regulatory requirements).[8]
Negligence
Wylie J also struck out Mr Smith's negligence claim. Specifically:
- Mr Smith's loss was not a reasonably foreseeable consequence of the defendants' activities. The damage claimed by Mr Smith would likely occur irrespective of the defendants' activities, and the defendants' collective emissions were "miniscule in the context of the global greenhouse gas emissions" which were said to cause the pleaded damage.[9]
- The relationship between the defendants and Mr Smith was not sufficiently proximate to give rise to liability in negligence. The defendants were not the most appropriately placed entities to take care in avoiding damage to Mr Smith – the most appropriate entity in the present case was the New Zealand Government.[10] A finding of liability in the present case would be disproportionate and could lead to the defendants' having "indeterminate liability".[11]
- Policy factors did not support the finding of a duty of care in the present case.[12] These policy factors were too numerous to set out here, but included, for example, that the courts were "poorly equipped to deal with the issues which Mr Smith seeks to raise". New Zealand's climate change response involved "policy formation, value judgments, risk analysis, trade-offs and distributional outcomes" that were "well outside the normal realms of civil litigation".[13]
Novel duty of care
Despite identifying a number of difficulties with the claim, Wylie J declined to strike out Mr Smith's claim that a new tortious duty of care arose which "makes corporates responsible to the public for their emissions". The difficulties identified included that:
- Mr Smith had "made no attempt" to refer to recognised legal obligations, nor to incrementally identify a new obligation by analogy to existing principles.
- The public policy reasons relevant to the analysis of Mr Smith's negligence claim (described above) also applied such that there were "significant hurdles" that Mr Smith's claim would face in trying to persuade the Court that a new legal duty should be recognised.[14]
His Honour said that he was reluctant to strike out the claim in the circumstances, stating:
"[i]t may, for example, be that the special damage rule in public nuisance could be modified; it may be that climate change science will lead to an increased ability to model the possible effects of emissions. These are issues which can only properly be explored at trial. I am not prepared to strike out the third cause of action and foreclose on the possibility of the law of tort recognising a new duty which might assist Mr Smith."
Relief
His Honour briefly commented on the relief sought by Mr Smith. We do not comment on that aspect of the decision further here, other than to flag that the Court observed that it would be "all but impossible" to grant injunctive relief in the present case, given doing so would require the Court to apply an emissions accounting methodology.[15]
Observations
It is safe to assume that we have not seen the end of litigation in New Zealand that seeks to drive climate change reform and action. The international trend is for increasing activity in this area, including a continuing testing of the law and judicial appetite through novel claims.
Despite the difficulties faced by the claimant in the present case, the decision does not represent a complete closing of the door, and there remains potential for the courts in this case and others to influence the direction of travel on climate change issues. In particular:
- Appeal: It remains to be seen whether the decision will be appealed by one or both parties. An appellate court could be willing to take a more radical or conservative approach and this strike out application may ultimately be one that ends up before the Supreme Court.
- Substantive hearing regarding novel duty of care: Assuming that post any appeal the claimant is still able and minded to pursue the novel claim, the matter could well proceed to a full trial where the matters at issue will be fully tested through factual and expert evidence in addition to legal argument. Even if the claimant is ultimately unsuccessful, the public interest in a full trial could well add to the political and commercial pressure surrounding climate change issues in New Zealand.
- Other more traditional civil claims: The strike out by his Honour of the claims based in private nuisance and negligence follows international trends. Tortious claims between private parties have typically faced issues globally because claimants "have had real difficulties in establishing that particular emitters have proximately caused them particular injuries or will cause them particular injuries".[16] Notably, outside of Mr Smith's proceedings, other potential avenues of climate change related litigation amongst private parties remain untested in the New Zealand courts (for example, claims raising alleged breaches of directors' duties).
- Other more novel claims: Internationally, the trend in climate change litigation is for claims that seek to explore or push the boundaries of the existing law and we expect to continue to see the rise of these types of claims in New Zealand. In this regard, Mr Smith himself has reportedly also filed proceedings against the Crown in respect of breaches of the Treaty of Waitangi and Bill of Rights Act 1990 in the New Zealand courts and against the Chief Executive Officer of OMV in the International Criminal Court.
[1] At [103].
[2] Helen Winkelmann, Susan Glazebrook and Ellen France "Climate Change and the Law" (paper prepared for Asia Pacific Judicial Colloquium, Singapore, May 2019) at [41].
[3] At [8].
[4] At [58] and [61].
[5] At [62].
[6] At [63].
[7] At [67].
[8] At [68]-[71].
[9] At [78].
[10] At [92].
[11] At [93]-[96].
[12] At [98].
[13] At [98(g)].
[14] At [102]-[103].
[15] At [107]-[108].
[16] Helen Winkelmann, Susan Glazebrook and Ellen France "Climate Change and the Law" (paper prepared for Asia Pacific Judicial Colloquium, Singapore, May 2019) at [101].
This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.