Smith v Fonterra Co-operative Group Ltd

• Jurisdiction: New Zealand
• Judge: Wylie J
• Judgment Date: 06 March 2020
• Neutral Citation: [2020] NZHC 419
• Court: High Court
• Docket Number: CIV-2019-404-001730
• Date: 06 March 2020

Between

Michael John Smith

Plaintiff

and

Fonterra Co-operative Group Limited

First Defendant

Genesis Energy Limited

Second Defendant

Dairy Holdings Limited

Third Defendant

New Zealand Steel Limited

Fourth Defendant

Z Energy Limited

Fifth Defendant

The New Zealand Refining Company Limited

Sixth Defendant

BT Mining Limited

Seventh Defendant

[2020] NZHC 419

Wylie J

CIV-2019-404-001730

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA

TĀMAKI MAKAURAU ROHE

Civil Procedure, Environment — application to strike out applicant's cause of actionin in public nuisance and negligence and an inchoate duty — climate change — each of the defendants were involved in an industry which released greenhouse gases or supplied products which released greenhouse gases when they were burned — novel duty of care — Climate Change response Act 2008

Appearances:

D Salmon and D Bullock for Plaintiff

D Kalderimis and N Swan for First Defendant

S J P Ladd and B A Keown for Second Defendant

J M Appleyard and A Hill for Third Defendant

D T Broadmore and A N Birkinshaw for Fourth Defendant

T Smith and A Lampitt for Fifth Defendant

A J Horne and O K Brown for Sixth Defendant

R J Gordon and A M B Leggat for Seventh Defendant

RESERVED JUDGMENT OF Wylie J

Introduction

1 The plaintiff, Michael Smith, has filed a statement of claim against Fonterra Co-operative Group Limited (Fonterra), Genesis Energy Limited (Genesis), Dairy Holdings Limited (DHL), New Zealand Steel Limited (NZS), Z Energy Limited (Z Energy), The New Zealand Refining Company Limited (NZ Refining) and BT Mining Limited (BT Mining).

2 Each of the defendants is either involved in an industry which releases greenhouse gases into the atmosphere, or supplies products which release greenhouse gases when they are burned. The statement of claim raises three causes of action, all in tort — public nuisance, negligence, and breach of an inchoate duty. Declarations are sought that each of the defendants has unlawfully caused or contributed to the public nuisance alleged or breached duties said to be owed to Mr Smith. Injunctions are also sought requiring each defendant to produce, or cause, zero net emissions from its activities by 2030.

3 The statement of claim raises novel issues. Insofar as I am aware, they have not been raised in New Zealand before.

4 The defendants have each made application seeking to strike out the proceedings. Broadly, each defendant argues that Mr Smith's statement of claim raises issues which cannot properly be resolved through the Courts via the law of tort, and that it discloses no reasonably arguable causes of action. Mr Smith opposes the strike out applications.

The pleadings

(a) The statement of claim

5 Mr Smith asserts that he is of Ngapuhi and Ngati Kahu descent and that he is the climate change spokesman for the Iwi Chairs' Forum. He claims customary interests in lands and other resources situated in or around Mahinepua in Northland. In particular, he claims an interest according to custom and tikanga in land known as the Mahinepua C block, and he says he is a representative of the interests of his whanau in that land. He says that there are various sites of customary, cultural, historical, nutritional and spiritual significance to him on that land, and that many other such sites are situated in close proximity to the coast, waterways or low-lying land, or are in the sea.

6 It is alleged that:

It is alleged that each defendant can achieve net zero emissions by 2030 and that those who supply products that are burned can account for the emissions of the end users of the products supplied by 2030.

• (a) Fonterra owns and operates dairy factories in New Zealand that burn coal to generate energy. Fonterra will continue to burn coal in its factories for the foreseeable future. The combustion of coal releases greenhouse gases.

• (b) Genesis operates the Huntly power station. It is fuelled by the combustion of coal and natural gases. The combustion of coal and natural gases at the power station releases greenhouse gases.

• (c) DHL operates a large number of dairy farms in the South Island. Livestock on its farms release greenhouse gases as a result of enteric fermentation. Nitrogen dioxide is also released from nitrogen-based fertiliser use.

• (d) NZS operates the Glenbrook steel mill which is primarily fuelled by the combustion of coal. The combustion of coal releases greenhouse gases.

• (e) Z Energy supplies retail and commercial customers with petroleum related fuel products. The fuel products supplied are burned by its customers resulting in the release of greenhouse gases. Z Energy knows that the fuel products it supplies are burned.

• (f) NZ Refining operates the Marsden Point oil refinery and the pipeline from the refinery to Auckland. It produces the majority of the fuel products consumed in this country. The fuel products supplied are burned by others to power combustion engines. The process of refining crude oil and the burning of the fuel products causes the release of greenhouse gases. NZ Refining is aware of this.

• (g) BT Mining owns and operates the Stockton mine north of Westport. The mine produces bituminous, coking and thermal coal. The majority of the coal is exported, much of it to China, where it is burned in the production of steel. The burning of the coal releases greenhouse gases and BT Mining is aware of this.

7 It is then alleged that:

• (a) the release of greenhouse gases into the atmosphere from human activities increases the natural greenhouse effect, and causes, amongst other things, the warming of the planet;

• (b) climate change from the release of greenhouse gases into the atmosphere from human activities will result in the additional warming of the earth's surface and atmosphere, and will adversely affect natural ecosystems and humankind;

• (c) the release of greenhouse gases is dangerous anthropogenic interference with the climate system;

• (d) the current scientific consensus as to the nature, effects and mitigation requirements of climate change is set out in recent reports of the Intergovernmental Panel on Climate Change (the IPCC), in particular in a report released in October 2014, and in a special report released in 2018;

• (e) it is necessary to further limit warming caused by climate change to 1.5 degrees Celsius to avoid dangerous anthropogenic interference with the climate system and to minimise long-term and irreversible adverse effects from climate change;

• (f) limiting the warming caused by climate change to 1.5 degrees Celsius requires a global net reduction in human-caused emissions of carbon dioxide by 45 per cent from 2010 levels by 2030, reaching net zero by around 2050, and substantial and fast reductions of other greenhouse gases.

8 It is then alleged that the release of greenhouse gases by the defendants is human activity that has contributed, and will continue to contribute, to dangerous anthropogenic interference with the climate system and to the adverse effects of climate change. Particulars are given — namely, that the release of greenhouse gases by the defendants results in increased temperatures, a loss of biodiversity and biomass, a loss of land (including as a result of sea level rise), risks to food and water security, increasing extreme weather events, ocean acidification, geopolitical instability and population displacement, adverse health consequences, economic losses and an unacceptable risk of social and economic collapse and mass loss of human life. It is also asserted that poor and minority communities will be disproportionately burdened by the adverse effects of climate change.

9 It is next claimed that it is necessary for the defendants to achieve greater emission reductions and at a faster rate than the minimum total global reductions recommended by the IPCC, because:

• (a) New Zealand is a developed country;

• (b) the defendants are among the major emitters in New Zealand;

• (c) the defendants have had the financial benefit of their greenhouse gas emissions over time; and

• (d) the dangers associated with climate change are so significant that a precautionary approach is required.

10 Against this background, the first cause of action raised is public nuisance. Mr Smith asserts that he will suffer harm from the effects of dangerous anthropogenic interference with the climate system. In particular, he says that climate change will result in increasing sea levels, irrevocably damaging his family's land at Mahinepua C. He says that there will be a physical loss of land, a loss of productive land, a loss of economic value, and the loss of sites of cultural and spiritual significance. He claims that climate change will irrevocably damage customary resources; he will lose traditional or customary fisheries and landing sites; burial caves and cemeteries will be lost as a result of erosion and inundation. He also asserts that climate change will result in ocean warming and acidification which will impact specific coastal and fresh water fisheries that he customarily uses and that climate change will result in the irrevocable and irreplaceable loss of land, resources and species that are economically, culturally and spiritually significant to him as tangata whenua. He asserts that there will be increasing adverse health impacts to which he and Maori communities are particularly vulnerable.

11 He next asserts that by releasing greenhouse gases into the atmosphere, or by producing products which result in the release of greenhouse gases, the defendants have interfered or contributed to inference with, and will in the future interfere or contribute to interference with, the rights of the public. Particulars given assert that there is and will...