Supreme Court opens door for private action to be brought to restrain greenhouse gas emissions
The Supreme Court has given the green light to allow a case brought against seven businesses responsible for greenhouse gas (GHG) emissions to proceed to trial.
The Supreme Court in Smith v Fonterra[1] reversed the Court of Appeal’s 2021 decision to strike out the case, meaning that questions of whether and how the common law should evolve to respond to the climate change crisis can be fully evaluated at a trial.
The claim
Mr Smith, an elder of Ngāpuhi and Ngāti Kahu and a climate change spokesperson for the Iwi Chairs Forum, filed proceedings in 2019 against Fonterra, Genesis Energy, Dairy Holdings, New Zealand Steel, Z Energy, Channel Infrastructure, and BT Mining. He claims that the defendants jointly contributed to a third of Aotearoa New Zealand’s total reported GHG emissions in 2020-2021.
He has alleged that he and his whānau, who have proprietary and customary interests in coastal land in Northland, are suffering effects of climate change and that the defendants, who are responsible for GHG emissions contributing to climate change, should be held accountable for damage to his whenua and moana.
Mr Smith’s claim is founded on three tort-based causes of action: public nuisance, negligence, and a proposed novel “climate system damage” tort.
Mr Smith seeks declarations that the defendants have unlawfully breached a duty to him, or have contributed to a public nuisance, and have caused him loss. He also seeks injunctions requiring the defendants to either cease or reduce their contributions to net carbon emissions.
Strike out
Where it is “seriously arguable” that non-trivial harm is being caused, and there is no other remedy for that harm, the court will only strike out the claim if it is “bound to fail” at trial. Where, as here, a novel concept of the law is being relied on, the Supreme Court has said the courts will lean on the side of allowing the evidence and argument to be fully evaluated at trial, rather than pre-emptively eliminated.
The Supreme Court held that Mr Smith’s first cause of action based on public nuisance is not “bound to fail” and therefore reinstated his claim. The Court did not analyse the other two causes of action. It said that as they would be the subject of the same evidence as public nuisance, arguing them would not add undue cost or judicial resources to a trial.
Those hoping for guidance from the Supreme Court about the novel tort that Mr Smith is relying on will have to wait for the inevitable later instalment. There seems to be little doubt that regardless of who wins at trial, there will be further appeals.
Whether Parliament has precluded a judicial response to climate change
The Court of Appeal held that none of the causes of action could succeed and struck out Mr Smith’s claim. In doing so, the Court of Appeal held that the magnitude of the climate crisis cannot be appropriately or adequately addressed by common law tort claims. Instead a regulatory response is required.
The Supreme Court disagreed and has held that legislation passed by Parliament to address climate change (the Climate Change Response Act and the Resource Management Act) has not precluded the evolution and development of the common law in response to climate change.
The Supreme Court on the tort of public nuisance
The Supreme Court’s refusal to strike out Mr Smith’s claim is not an indication of whether he will ultimately succeed. However, its comments on the tort of public nuisance shed some light on the possible evolution of the common law.
The Supreme Court confirmed that there is no need for the actions or omissions said to amount to public nuisance to be independently illegal activities. Compliance with all applicable GHG legislation therefore does not mean that the defendants cannot be liable in common law for their GHG emissions.
Historically, public nuisance has required the plaintiff to show that they have suffered “special damage” of a kind different to that suffered by the public generally. The Supreme Court has left open whether the “special damage” rule should be retained in our law. However, the Court also noted that regardless of whether the tort requires proof of special damage, Mr Smith has a tenable case that he and those he represents are suffering effects of climate change beyond those experienced by the general public. Mr Smith claimed proprietary legal interests and distinct tikanga interests in a block of coastal land which is suffering particular effects from climate change, being inundation of coastal land and impacts on fishing and cultural interests.
It was argued by the defendants that the inability of Mr Smith to link each defendant’s GHG emissions to the particular harm suffered to Mr Smith’s whenua and moana means that Mr Smith cannot establish the requisite causation or connectivity between the activity and the harm. They argued that the inability to identify all those who had caused Mr Smith harm (given everyone contributes to GHG emissions) meant that they could not be held liable to him.
The Supreme Court left open the development of this part of the law for full evidence and argument at trial. However, it did comment that a different approach to causation and the connection between the activity and the harm may be available when the relief sought is not pecuniary damages, but an injunction restraining the activity contributing to the harm.
The Supreme Court commented that a “distinctive aspect” of the case is that Mr Smith is relying on tikanga, not as a cause of action (it is not alleged that the defendants owed or violated tikanga obligations), but in the development of the common law and in establishing loss. The Supreme Court confirmed that tikanga is part of and will influence the development of the common law, but noted that its application here would need to be the subject of expert evidence and analysis at trial.
While Mr Smith still has many hurdles to overcome to succeed at trial, this decision paves the way for the common law to evolve to respond to the climate crisis. Although any trial will be months, if not years, away, this case indicates emitters may have civil liability, even if they are not in breach of any statute or regulation.
[1] Smith v Fonterra Co-Operative Group Limited & Ors [2024] NZSC 5.
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