The Sharma case – a false start for climate change negligence litigation in Australia

Mike Hales
Minter Ellison, Perth

Edward Fearis 
Minter Ellison, Perth

Introduction

Australia is recognised as one of the most plaintiff-friendly jurisdictions for climate change litigation. This has kept Australia at the forefront of developments in climate change law.

In May 2021, the Federal Court of Australia recognised, for the first time in Australia, that a government decision-maker owes a duty of care in negligence to Australian children with respect to the harm caused by the climate change impacts of decisions made under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act): Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment [2021] FCA 560. However, in March 2022 this decision was overturned on appeal by the Full Court of the Federal Court of Australia: Minister for the Environment v Sharma [2022] FCAFC 35.

This article explores the reasoning of the Full Court, the implications of its decision and possible ways forward for similar climate change litigation in Australia.

The claim in the Federal Court

The claim arose from a proposal by Vickery Coal Pty Ltd to expand a coal mine in New South Wales. The Federal Minister for the Environment was responsible under the EPBC Act for deciding whether to approve the application to expand.

Eight children, acting through a litigation representative, commenced a class action against the Minister and Vickery Coal on behalf of all children under the age of 18 who were ordinarily resident in Australia at the time of the commencement of the proceedings.

The children sought relief in two parts: first, a declaration that the Minister owed a duty of care to the children to not cause them physical harm in the form of personal injury from climate change; second, an injunction to restrain a breach of that duty (in this case the approval of the expansion of the coal mine).

At trial, the children led evidence about climate change and the consequences of the expansion of the coal mine. This evidence was unchallenged and the Minister did not call her own evidence. The evidence included that:

•    the Paris climate commitments are unlikely to be achieved;
•    the realistic future stabilised global surface average temperature will be two degrees above pre-industrial levels, but there is a risk rising from small (at two degrees) to substantial (at three degrees) that global temperatures will be propelled to an ‘irreversible’ four-degree trajectory to be reached by about 2100;
•    at three degrees average global surface temperature above pre-industrial levels, the potential harms may fairly be described as ‘catastrophic’; and
•    the 100 million tonnes of CO2 attributable to burning the coal from the expansion of the coal mine was likely to cause a tiny but measurable increase in global average surface temperatures. In doing so, it would increase the risk of global average surface temperatures increasing beyond two degrees and thus the risk of temperatures being propelled towards four degrees. This risk was ‘real’ and not far-fetched or fanciful, and thus the harm was reasonably foreseeable.

The primary judge held that there were features of the relationship between the Minister and the children which favoured the recognition of a common law duty of care. These included the Minister’s control over the potential harm (namely, the ability to approve or refuse the expansion of the coal mine), the vulnerability of the children to the harm and the extent to which they relied on the Minster to prevent this harm.

Accordingly, the primary judge held that the Minister had a duty of care when deciding to approve or not approve the expansion and, importantly, other comparable decisions.

However, the primary judge declined to order an injunction. He was not satisfied that a reasonable apprehension of breach of the duty of care by the Minister had been established, nor that the extent of the restraint sought by the applicants was justified.

The appeal to the Full Court

The Minister appealed to the Full Court. There was no cross-appeal by the children. Interestingly, the Minister had granted approval to the expansion of the coal mine between the date of the primary judge’s decision and before the hearing of the appeal.

The Full Court unanimously upheld the appeal.

The judges of the Full Court disagreed with the primary judge for slightly different reasons. As well as overturning the first instance decision, the Full Court ordered that the proceedings not continue as representative proceedings. The significance of this is that the claimant class (ie all Australian children under the age of 18) are not bound by an issue estoppel in relation to all questions of fact and law necessary to the Full Court’s conclusion that the Minister did not owe a duty of care. That is, they are not barred from commencing similar proceedings in the future.

Chief Justice Allsop

Chief Justice Allsop rejected the primary judge’s finding that the Minister owed a duty of care for three reasons. First, the content and scope of the duty would require the court to assess ‘high public policy’ questions which were matters for government and unsuited to judicial determination. Second, the Federal EPBC Act was part of a legislative scheme which co-ordinated federal and state legislation on environmental issues. Climate change fell under the state legislation rather the EPBC Act. Third, in conjunction with the first two reasons, because of the lack of control by the Minister over the harm arising from climate change, the lack of ‘special vulnerability’ of the children (as compared to other classes of persons), the indeterminacy of liability, and a lack of proportionality between the ‘tiny’ increase in risk and the liability.

Justice Beach

Justice Beach rejected the primary judge’s finding for two reasons. First, there was insufficient closeness and directness between the Minister’s exercise of power under the EPBC Act and the risk of harm to the children (as the claimant class in the proceedings). Second, to impose a duty would result in indeterminate liability as the members of the claimant class at risk from particular effects of climate change (eg bushfires and heatwaves) were not ascertainable.

Justice Wheelahan 

Justice Wheelahan rejected the primary judge’s finding for three reasons. First, there was no relationship between the Minister and the children under the EPBC Act that supported the recognition of a duty of care, as under the EPBC Act the Minister did not have a role to control CO2 emissions and protect the public from personal injury caused by the effects of climate change. Second, it was not feasible to establish an appropriate standard of care (eg of a ‘reasonable Minister’), due to the policy issues involved. Third, it was not reasonably foreseeable that the approval of the expansion of the coal mine would be a ‘cause’ of personal injury to the children for the purposes of the law of negligence.

Implications and possible future direction of climate change litigation

Somewhat surprisingly, the children did not seek special leave to appeal the Full Court’s decision to the High Court of Australia (Australia's highest court). The proceedings are therefore at an end.

As noted, before the primary judge the Minister chose not to call any expert evidence as to climate change or even to cross-examine the children’s experts, no doubt for political reasons. The Full Court implicitly criticised this approach and it resulted in obvious strategic disadvantages for the Minister. However, it is difficult to see the Minister taking a different approach in the future, particularly given the recent defeat of the conservative Coalition government and the election of the more liberal Labor government together with a record number of climate change-motivated independent and Greens candidates.

As such, the case may be viewed in the future as the beginning of a new chapter whereby the science in relation to climate change is no longer being challenged by governments (and possibly also corporations) in Australia. This would be consistent with the approach that governments and corporations are otherwise adopting in relation to climate change.

The case demonstrated, however, the difficulties in connecting a particular emission source to a particular harm. The science is developing in this area, though, and as it does an applicant's prospects in future, similar cases will improve.

Negligence law in Australia has traditionally struggled with the issue of multiple potential causative factors in relation to particular harm. For example, in mesothelioma cases courts historically struggled with (but seem to have resolved) how to address the issue of a plaintiff having had multiple exposures to asbestos from a range of defendants or other persons. As climate change negligence law develops, it could be expected that a similar resolution could be reached.

In the short term, the Full Court's reasons were narrow enough that subsequent applicants may seek to distinguish the decision. For example:

•    All judges placed reliance on the content of the EPBC Act and the Minister’s particular statutory function, so it is possible that in future decisions under different statutes could be challenged. In this regard, it is noted that various international agreements concerning climate change have not been translated into federal statute law and there is nothing in the EPBC Act which required the Minister to consider greenhouse gas emissions, global warming or climate change. A future case about a different statutory power or following legislative reform may therefore have a different outcome.
•    It is possible that a single or narrower class of applicants would be found to be more closely and directly affected by the Minister’s decision.
•    The tort of negligence relied on by the children in this case would only be ‘complete’ (in that all elements could be satisfied) many years into the future. A case of more immediate damage may be distinguishable.
•    Similarly, a case with evidence of more than a ‘tiny’ increase in particular harm (ie to particular persons) may be distinguishable.

Further, Beach J explicitly left it open for the High Court to pronounce new law on the issue (and arguably implicitly invited it to do so, perhaps anticipating the appeal that did not eventuate):

‘It is for the High Court not us to engineer new seed varieties for sustainable duties of care, modifying concepts such as “sufficient closeness and directness” and indeterminacy to address the accelerating complexity, multiple links and cross-links of causal relations. Such concepts in their present form may have reached their shelf life, particularly where one is dealing with acts or omissions that have wide-scale consequences that transcend confined temporal boundaries and geographic ranges, and where more than direct mechanistic causal pathways are involved.’

While, as noted, the children did not seek special leave to appeal the Full Court's decision, it seems almost inevitable that in the near future the High Court will be required to grapple with the relevant issues.

In this regard, there are already other, similar proceedings on foot. For example, Pabai & Anor v Commonwealth of Australia (VID 622 of 2021) is a class action brought in the Federal Court on behalf of Torres Strait Islanders (whose traditional lands and waters are in the far north of Australia). In the proceedings, the applicants seek:

•    a declaration that the Commonwealth owes a duty of care to Torres Strait Islanders to take reasonable steps to protect them, their way of life and the marine environment of the Torres Strait from the current and projected impacts of climate change;
•    a declaration that the Commonwealth is in breach of this duty of care;
•    an injunction requiring the Commonwealth to implement measures to protect the land and marine environment from greenhouse gas emissions, reduce greenhouse gas emissions, and otherwise avoid injury and harm to Torres Strait Islanders from greenhouse gas emissions; and
•    damages.

A four-week trial has been listed to commence in June 2023.