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In brief

The Federal Court of Appeal has today (15 March 2022) overturned a ground-breaking decision in the environment and climate sector. The original decision held that the Commonwealth Minister for Environment owed a common law duty of care to the under 18 Australian population to take reasonable care to avoid causing personal injury or death resulting from Australian carbon dioxide emissions. Today, the Full Federal Court in Minister for the Environment v Sharma [2022] FCAFC 35 overturned that decision and unanimously denied that such a duty of care should be imposed on the Minister. This judgement will have consequences on negligence and liability claims in environment and climate law as well as intergenerational equity obligations.


Key takeaways for corporates

Given that in some jurisdictions tortious claims in relation to climate change have also been brought against companies, the Court’s decision not to accept this duty of care may reduce the risks faced by corporates in relation to such claims. Whilst some of the reasons for rejecting the duty of care were specific to the Minister’s position, some of the reasons, such as lack of control, lack of proportionality and reasonable foreseeability, could be equally relevant in claims against corporates. However, companies should be aware that interested parties also may have other legal options to pursue climate change actions, particularly using the statutory misleading and deceptive conduct provisions where companies make representations in relation to their environmental credentials and forecasts.   

Background

  • This case was originally commenced as a class action on 8 September 2020. The plaintiffs are eight young people aged between 13-17 who claim to represent all Australians under the age of 18. These plaintiffs sought an injunction to prevent the Minister from approving the extension of the Vickery Coal Project in Northern NSW by arguing the Minister had a common law duty of care to young Australians under the the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (“EPBC Act“).
  • On 27 May 2021, the Federal Court of Australia established a new duty of care to avoid causing personal harm to children but declined to issue an injunction to force the Minister to block the coal mine extension.
  • On 8 July 2021, the primary judge, Justice Bromberg found in favour of the plaintiffs and issued a groundbreaking declaration that “The [Minister] has a duty to take reasonable care…to avoid causing personal injury or death to persons who were under 18 years of age and ordinarily resident in Australia at the time of the commencement of this proceeding arising from emissions of carbon dioxide into the Earth’s atmosphere.” In issuing the declaration, the Court declared the duty applied to all Australian young people because both the applicants and Australian young people had the “same interest” and ordered the Minister to pay costs.
  • Despite this finding, the Minister granted approval for the expansion of the Vickery Coal Project on 15 September 2021.
  • The appeal by the Minister against the decision of the primary judge was heard by Chief Justice Allsop, Justice Beach and Justice Wheelahan on 18 to 20 October 2021.

Analysis

While the decision of the Federal Court was unanimous, each judge put forward different reasoning as to why the duty of care under the EPBC Act should not be imposed.  

  • Chief Justice Allsop found that the Court could not find a common law obligation based on the following legal issues:  
    1. The imposition of a duty of care on a Commonwealth Minister involves core public policy-making considerations, “the assessment of which is unsuited to decision by the judicial branch in private litigation.”
    2. Finding such a duty of care would have been “incoherent and inconsistent” with the Minister’s decision making powers and the EPBC Act’s application and operation within the intergovernmental arrangements of Commonwealth and State governments over the management and protection of the environment.
    3. The Minister’s “lack of control over the harm (as distinct from over the tiny contribution to the overall risk of damage from climate change), a lack of special vulnerability in the legal sense, the indeterminacy of liability and the lack of proportionality between the tiny increase in risk and lack of control and liability for all damage by heatwaves, bushfires and rising sea levels to all Australians under the age of 18, ongoing into the future, mean that the duty in tort should not be imposed.”
  • Justice Beach found that the duty should not be imposed based on two factors:
    1. His Honour believed there was not “sufficient closeness and directness” between the Minister’s exercise of statutory power and the likely risk of harm to the claimant class (all Australians under 18).
    2. Additionally, for the Court to impose such a duty would result in “indeterminate liability”. Due to the geographic range, timing and contingency issues, it would be impossible to establish a casual pathway between the Minister’s breach of duty and any personal injury experienced in the claimant class.
  • Justice Wheelahan found the duty of care was non-existent for the following reasons:
    1. The EPBC Act does not erect or facilitate a relationship between the Minister, the respondents and those whom they represent that supports the recognition of a duty of care. Specifically, “control over carbon dioxide emissions, and the protection of the public from personal injury caused by the effects of climate change, were not roles that the Commonwealth Parliament conferred on the Minister under the EPBC Act.”
    2. To establish a duty of care to all Australians under 18 would “radically alter the scope and subject matter” of the Minister’s decision-making functions under the EPBC Act.
    3. Justice Wheelahan was not persuaded that the risks of personal injury resulting from the approval of the coal project were sufficient to establish reasonable foreseeability, as the concept of causation is understood for the purposes of the common law tort of negligence.

What happens next?

The child-plaintiffs now have 28 days from today (15 March 2022) to apply for special leave to the High Court to appeal this decision. The number of cases that are accepted for special leave is very low. In saying this, the test under s 35A of the Judiciary Act 1903 (Cth) to determine whether a case is eligible to be granted special leave includes cases that present a question of law that is of public importance.

Thank you to Tara Hartmann for her assistance in preparing this alert.

Author

Ruth Dawes is a partner in the national Environmental and Climate Change Group in Sydney. With over 20 years of experience and substantial expertise in all aspects of environment and planning law, Ruth has particular experience advising on major projects, sustainability and renewables. Ruth is passionate about helping businesses find new opportunities in transitioning to a net zero emissions future, while also being deeply involved in the required energy transition to renewables. Ruth is an experienced solicitor advocate who has represented clients in the Land and Environment Court, Supreme Court, Court of Appeal, Federal Court and High Court of Australia. Ruth also worked in London at the Foundation for International Environmental Law and Development and the Carbon Capture and Storage Legal Programme within University College London.

Author

Georgie Farrant is a partner in Baker McKenzie's Dispute Resolution Practice Group in Sydney and head of the Firm's Compliance & Investigations team in Australia. She has over 20 years of experience in disputes and compliance matters, including working for a regulator and an in-house compliance team.

Author

Odette Adams is a Senior Associate in Baker McKenzie Sydney office.

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