Federal Minister for the Environment does not owe duty of care

The Full Federal Court handed down its much-anticipated judgment in Sharma today. A summary of the judgment of the Full Federal Court allowing the appeal is set out below, with the full judgment available here. The Minister for the environment does not owe a novel duty of care at common law when exercising her power under ss 130 and 133 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) to consider and approve an extension of a coal mine in New South Wales.

Snapshot

• Each judge handed down a separate judgment, finding that the duty was not owed on different legal bases (see further detail below). The EPBC act formed a central part of each judge’s reasoning.
• The court was unanimous in finding that all of the findings of the primary judge were open to be made on the uncontested evidence led by the applicants about climate change and the dangers to the world and humanity from it. Beach J noted that he thought it was unsatisfactory that only one expert was called, who was not cross-examined “given that there was one aspect of the science that appeared to be contentious concerning the tipping point hypothesis and the non-linear effects of GHG emissions when temperature reached 2°C above the relevant base line” (at [369]). This suggests that in claims where expert evidence is led on climate change, defendants should consider engaging with the evidence and not assume they can defeat a claim by relying on the plaintiff’s expert.
• Although the parties approached the appeal on the basis that human safety could be taken into account, ultimately the court found that human safety is not an implied mandatory consideration for the Minister in deciding whether to approve an action under the EPBC Act.

Overview of appeal

On 15 March 2022, the Full Court of the Federal Court allowed the Commonwealth’s appeal of Bromberg J’s judgement finding that the Minister of the Environment did not owe a duty of care to young people to Australian children who may suffer potential “catastrophic harm” from the climate change implications of approving the extension to the Vickery coal mine.

If you would like a refresher of the original decision, our note be accessed here.

Reasons

While each judge came to the same conclusion that no duty of care was owed, each judge delivered a separate judgment and had had different bases for their decisions. These are set out below.

Chief Justice Allsop

• Assessment of breach not suitable for the Court: His Honour was of the view that assessing breach of the duty would give rise to core questions of policy which are “unsuitable in their nature and character for judicial determination”.

“At one level of abstraction we all rely on an elected government to develop and implement wise policy in the interests of all Australians, in one sense especially the children of the country who are its future.  That is not the foundation of the law of torts.  It is the foundation of responsible democratic government.” (at [344]).

                     And further that:

“[t]he role of the Judicial branch of government is to quell controversies between citizens or the state and citizens on the basis of evidence tendered by the parties, not on the basis of policy formulation by the court” (at [230]).

His Honour agreed with the Court of Appeal of New Zealand’s expression in Smith v Fonterra Co-operative Group Limited [2021] NZCA 552 (which upheld the striking out of a claim for public nuisance, negligence and a proposed new tort described as “breach of duty” brought against seven New Zealand companies in relation to their contribution to climate change) that courts are “ill-equipped” to address the issues in relation to the duty claim (see [255]).

• Duty is inconsistent and incoherent with the EPBC Act: Recognising a duty of care in negligence would be inconsistent with the statutory decision-making power of the Minister under the EPBC Act, and the context that it provides to state and federal responsibilities. To recognise a duty of care would therefore cause incoherence in the law.

His Honour was of the view that by Bromberg J did not utilise the salient features appropriately and that the proper starting point in determining a duty of care was the existing relationship of the parties which was to be determined by reference to the EPBC Act. In considering that Act, his Honour held there was no implied mandatory consideration of human safety and the imposition of the duty would create a form of mandatory consideration beyond the considerations provided for in the EPBC Act. His Honour explained this point at [268]:

“The creation of an overriding common law duty to a significant proportion of the population of Australia to consider all factors and information concerned with greenhouse gas emissions and the risks of global warming, and the proper policy response thereto is to impose upon the EPBC Act, or overlay the EPBC Act with, a responsibility and duty of the Minister personally not found within the statute and which, given its capacity for personal liability, would be to change the whole nature of the decision-making in question.”

• Other considerations: The lack of control over the harm as opposed to the minor increase in the overall risk of damage from climate change, lack of special vulnerability, lack of proportionality, indeterminacy of liability and risk of imposing on the Minister tortious liability for all climate events were all factors that went against a duty of care being recognised, especially given that the relationship was governed by the EPBC Act (as above).

• His Honour did note that there were situations where a decision under the EPBC Act could give rise to a duty of care in negligence, suggesting more specific circumstances when this could be so, such as “to exercise care in relation to the approval of a mine on land containing a large deposit of blue asbestos near a centre of population” (at [261])).

Justice Beach

• Insufficient closeness and directness: His Honour’s principal basis for concluding that no duty of care was owed is that there was not a sufficient closeness or directness between the Minister’s exercise of statutory power and the likely risk of harm to the respondents and the class that they represent.  His Honour stated that there was no temporal closeness, geographic closeness, causal closeness and directness and no otherwise relationship between the Minister and the claimant (see [696] – [700]).

• Indeterminate liability: His Honour was concerned that imposing a duty of care in negligence would give rise to indeterminate liability, as the likely number of members of the claimant class are not readily ascertainable today:

“I agree with the Minister that the concern is with rolling events potentially causing damage where there is no meaningful limit on how many of the claimant class will suffer harm and how many times they will be so harmed, when that damage will occur over the next century or so, and the extent of that damage.” (at [745])

• In the conclusion of his judgement, His Honour noted that he “would entertain an application to remove the representative nature of the proceedings” as it “may be that one day, one or more members of the claimant class may suffer damage and so have an apparently complete cause of action”. His Honour noted that he would be prepared to receive further submissions from the parties on such questions before making formal orders to set aside the primary judge’s declaration (at [749]).

Justice Wheelahan

• EPBC Act does not facilitate a relationship between the Minister and respondents: The statutory context of the EPBC Act does not facilitate a relationship between the Minister and the respondents (or the class of persons who they represent). In particular, his Honour held that the control of carbon dioxide emissions and the effects of climate change were not responsibilities conferred on the Minister in that statutory context.
• Incoherence: His Honour could not envisage an appropriate standard of care in negligence, such that the recognition of a duty of care would be incoherent in light of the statutory duty the Minister had under the EPBC Act. His Honour noted that in public law, “jurisdictional error in the making of a decision under statute on the ground of legal unreasonableness has a high threshold that accommodates decisional freedom” and that avoids the court sliding into a merits review. However, subjecting a Ministerial decision to a tortious standard that requires reasonable care to be taken in making the decisions, exposes the decision to a merits review by the Court (at [853]). As such, the issue in dispute would be whether there was a departure from some standard of reasonable care that would have to be established by the respondents. This would require the Court to consider questions such as what matters might be taken into account by a Court standing in the shoes of the reasonable Minister, which would involve the consideration of political issues that are “uniquely suited to elected representatives and executive government responsible for law-making and policy-making” (at [868]).
• Damage not reasonably foreseeable: His Honour held it was not reasonably foreseeable that the extension of the coal mine would cause damage to the respondents, in the sense that tortious causation is understood:

“The “tiny” contribution to which the primary judge referred would at most amount to a contribution to an increased risk of harm, but not a risk of contribution to the harm itself, still less a material contribution that would attract the principles in Bonnington Castings. That is because the claimed foreseeable injuries would not be caused by any effect on the human body or mind by the accumulation of CO₂ itself, but by consequential events such as bushfires, heat, droughts, cyclones, floods, and other weather events.” (at [882])

• Like Beach J, his Honour provided that the parties should be afforded the opportunity to make submissions to the Court as to whether the proceeding should continue as a representative proceeding, by reason that the effect of allowing the appeal is to expose untold represented persons to an issue estoppel (disagreeing with Beach J, who said that no issue estoppel arises) (at [888]).

• Although the parties maintained that the declaration granted by the primary judge was a permissible, Beach J engaged in some analysis in relation to whether in the circumstances of this case, it was appropriate to entertain making a declaration as to the existence of a duty of care absent any allegation of a completed cause of action:

“The problems in entertaining an application for a declaration as to the existence of a common law duty of care in a novel case, in a representative proceeding, and where no cause of action has accrued, include that an array of issues relevant to the existence and scope of a duty of care owed to an individual may be overlooked, because the court is deprived of the insight that may be gained by a global examination of a claimed cause of action with the consequence, as Hayne and Callinan JJ identified in Dovuro, that the determination of questions of liability is distorted.” (see [782])

Going forward

This decision has been handed down in the context of a rapidly growing body of climate change claims invoking novel duties of care such as the Pabai Pabai claim against the Commonwealth Government. In terms of implications:

• We anticipate that this decision, and the reasoning of the Full Court, will make similar novel duty of care claims substantially more difficult. Unless the statutory context or the relationship between the defendant’s emissions-related conduct and harm to the claimant are more closely-connected and demonstrable than in Sharma, the Full Court’s decision is likely to discourage the trajectory of similar claims we’ve seen recently.
• Going forward, plaintiffs may seek to identify more suitable test cases where a close causal connection between emissions impact and harm can more easily be demonstrated.
• The decision is also likely to have implications for the treatment of climate change considerations in other environmental approval regimes, where regulators have been having regard to the primary judge’s reasoning.

We would be very happy to discuss recent developments in this space with you, including this judgment and any potential implications.

By Anna Sutherland, Partner, Peter Briggs, Partner, Heidi Asten, Partner, Melanie Debenham, Partner, Kathryn Pacey, Partner, Jacqueline Wootton, Partner, Juliana Warner, Partner, Mark Smyth, Partner and Timothy Stutt, Partner.