Smith v Fonterra Co-Operative Group Ltd

• Jurisdiction: New Zealand
• Judge: French J
• Judgment Date: 21 October 2021
• Neutral Citation: [2021] NZCA 552
• Docket Number: CA128/2020
• Court: Court of Appeal

Between

Michael John Smith

Appellant

and

Fonterra Co-Operative Group Limited

First Respondent

Genesis Energy Limited

Second Respondent

Dairy Holdings Limited

Third Respondent

New Zealand Steel Limited

Fourth Respondent

Z Energy Limited

Fifth Respondent

New Zealand Refining Company Limited

Sixth Respondent

B T Mining Limited

Seventh Respondent

[2021] NZCA 552

Court:

French, Cooper and Goddard JJ

CA128/2020

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Environment, Tort — appeal against a High Court decision which struck out the appellant's claim of public nuisance against the companies — the appellant felt not enough was being done on the issue of climate change — special damage rule — illegality — lack of a sufficient connection between the pleaded harm and the respondents' activities

Counsel:

D M Salmon and D A C Bullock for Appellant

D R Kalderimis and N K Swan for First Respondent

S J P Ladd and B A Keown for Second Respondent

A Hill for Third Respondent

D T Broadmore for Fourth Respondent

T D Smith and A M Lampitt for Fifth Respondent

A J Horne and O K Brown for Sixth Respondent

R J Gordon and A M B Leggat for Seventh Respondent

• A The appeal is dismissed.

• B The cross-appeal against the High Court's refusal to strike out the third cause of action pleaded as “breach of duty” is allowed. That cause of action is struck out.

• C There is no award of costs.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by French J)

Table of Contents

	Para No
Introduction	[1]
Analysis	[12]
Are common law tort proceedings an appropriate response?	[12]
Claims in public nuisance	[39]
The tort of public nuisance	[39]
Mr Smith's claim in public nuisance	[55]
The High Court decision	[56]
Public nuisance: our analysis	[58]
(i) No actionable public right pleaded?	[60]
(ii) No independent illegality?	[69]
(iii) Inability to satisfy the special damage rule?	[75]
(iv) The lack of a sufficient connection between the pleaded harm and the respondents' activities	[88]
Negligence cause of action	[94]
Reasonable foreseeability and proximity	[99]
The proposed new tort — breach of duty	[118]
Costs	[127]
Outcome	[129]

Introduction

1 What should be the response of tort law to climate change? That starkly put is the key issue raised by this appeal.

2 Climate change is commonly described as the biggest challenge facing humanity in modern times. Its causes and its effects are now widely recognised, with scientists predicting that if greenhouse gas emissions keep increasing, the planet will eventually reach a point of no return.

3 The appellant Mr Smith is an elder of Ngapuhi and Ngati Kahu and the climate change spokesperson for the Iwi Chairs Forum. He contends that too little is being done in the political sphere and that the crisis calls for a bold response from the common law. To that end, he has issued proceedings in the High Court against seven New Zealand companies, the respondents. Each of them is either involved in an industry which releases greenhouse gases into the atmosphere or manufactures and supplies products which release greenhouse gases when they are burned.

4 Mr Smith alleges in the statement of claim that the release of greenhouse gases by the respondents 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. These are particularised as increased temperatures, loss of biodiversity and biomass, loss of land, risks to food and water security, increasing extreme weather events, ocean acidification, geopolitical instability, population displacement, adverse health consequences, economic losses and an unacceptable risk of social and economic loss and mass loss of human life. It is also alleged that poor and minority communities will be disproportionately burdened by the adverse effects of climate change.

5 In a proposed amendment to the statement of claim, Mr Smith further alleges that each of the respondents knows or ought reasonably to know about the harmful impact of their continued emissions or their enabling of emissions on people in the same or similar position to him.

6 The statement of claim pleads three causes of action in tort: public nuisance, negligence and a proposed new tort described as breach of duty. The remedies sought in respect of each cause of action are declarations that each of the respondents has unlawfully caused or contributed to the effects of climate change or breached duties said to be owed to Mr Smith. Mr Smith also seeks injunctions requiring each respondent to produce or cause zero net emissions from their respective activities by 2030.

7 In another proposed amendment to the statement of claim, Mr Smith seeks the addition of a clause referencing tikanga Maori. The proposed new clause reads:

Kaitiakitanga as a principle of tikanga Maori incorporates concepts of guardianship, protection and stewardship of the natural environment including recognising that a right in a resource carries with it a reciprocal obligation to care for its physical and spiritual welfare as part of an ongoing relationship.

8 As is apparent from the wording and confirmed by counsel, this proposed amendment is not intended to assert a separate cause of action but rather to plead a principle and value that should infuse the court's consideration of the issues in relation to all three causes of action.

9 The respondents filed applications to strike out the proceeding on the grounds that the statement of claim discloses no reasonably arguable cause of action. They contend the various matters raised by Mr Smith are non-justiciable and beyond the purview of the Court. In support of their strike out application, they filed undisputed affidavit evidence that each of them is operating within all relevant statutory and regulatory requirements.

10 The strike out application was heard by Wylie J. The Judge struck out the claims in nuisance and negligence but declined to strike out the claim based on a proposed new tort. 1

11 Mr Smith now appeals that decision in relation to the nuisance and negligence causes of action. The respondents cross-appeal the decision declining to strike out the novel tort claim.

12 For reasons we go on to explain, we have concluded that the appeal should be dismissed and the cross-appeal allowed.

Analysis

Are common law tort proceedings an appropriate response?

13 We begin our analysis by discussing at a general level whether common law tort claims are as a matter of principle and policy an appropriate vehicle for addressing the problem of climate change.

14 In support of the appeal, counsel Mr Salmon urged us to be bold. He submitted it was part of the tradition and strength of the common law that it is responsive to changing times. He likened the case to other watershed moments in the development of the law such as Donoghue v Stevenson 2 where courageous Judges were prepared to extend the existing law in order to address a significant problem.

15 Mr Salmon's plea was an eloquent one. However, we consider that to accede to it would in fact be contrary to the common law tradition which is one of incremental development and not one of radical change, especially when that change would involve such a major departure from fundamental principles as to subvert doctrinal coherence.

16 In our view, the magnitude of the crisis which is climate change simply cannot be appropriately or adequately addressed by common law tort claims pursued through the courts. It is quintessentially a matter that calls for a sophisticated regulatory response at a national level supported by international co-ordination.

17 We say that for the following reasons.

18 First, no other tort claim recognised by the courts has involved a scenario in which every person in New Zealand — indeed, in the world — is (to varying degrees) both responsible for causing the relevant harm, and the victim of that harm.

19 This claim is brought against a small subset of those responsible for the harm that is being suffered by Mr Smith and those he represents. Mr Salmon was not able to identify any principled basis for singling out the seven defendants in these

proceedings. If their contribution to climate change is an actionable wrong, the logic underpinning that finding would apply to every individual and every business that has not achieved net zero emissions. Mr Salmon said that the defendants had been selected as “major profit-seeking entities that emit or enable emissions”. But as he accepted, none of these defendants standing alone makes a material contribution to climate change. The scale of their businesses, and of their contribution to global warming, does not provide a principled distinction on which liability could turn. Nor does the fact that they are “profit-seeking” entities — the basis on which their activities are alleged to be wrongful does not turn on the reasons for which they engage in those activities. If the courts were to accept the argument that the emitting activities of the defendants amount to a tort, it would follow that every entity (and individual) in New Zealand that is responsible for net emissions is committing the same tort. That is, all of those individuals and entities would be acting unlawfully, and could presumably be restrained from continuing to do so. That would be a surprising conclusion to say the least, with sweeping social and economic consequences

20 A second fundamental conceptual problem with the claim is reflected in the way in which it relies on the concept of “net zero” emissions by a defendant. Mr Smith pleads that it is possible for each of the defendants to achieve net zero emissions of greenhouse gases by...