Sharma appeal decision: end of the road for novel duty of care? - Climate Change

The Full Federal Court of Australia has ruled on appeal in Minister for the Environment v Sharma [2022] FCAFC 35 that the Commonwealth Minister for the Environment does not owe a duty of care to Australian children to protect them from the physical harms of climate change which may arise in granting environmental approvals for fossil fuel projects.

In a previous Corrs Insight, we analysed the developing body of case law both in Australia and internationally that indicated a willingness of courts to hold governments and corporations accountable for their decisions, actions and omissions in respect of greenhouse gas emissions management and abatement.

The effect of the first instance decision in Sharma v Minister for the Environment [2021] FCA 560 was that the Commonwealth Minister needed to take into account the Court's findings on the human health impacts of climate change and the duty of care owed to young people.

At the time, this decision was seen as novel, to have wide-ranging implications for decision-makers and proponents of fossil fuel projects and was susceptible to being overturned on appeal. This is what has transpired, and the decision of the Full Federal Court has put at least a momentary stop to the development of this area of jurisprudence in Australia.

Reasons of the Full Federal Court

The Court's rejection of the novel duty of care was comprehensive and emphatic. At more than 270 pages in length, the Court's judgment engaged in very detailed consideration with the arguments for and against the duty.

Ultimately, though, the Court was clear in its reasons why a duty of this kind does not exist under current Australian law. The key reasons for this are that the duty:

is unsuitable for judicial determination given the 'core government policy considerations';
is inconsistent and incoherent with the purpose and duties in the Environment Protection and Biodiversity Conservation Act 1999 (Cth), under which the Minister was required to make a decision;
was not appropriate given the Minister's lack of control over the harm caused by climate change and the absence of 'special vulnerability' among young Australians;
does not arise in the conventional sense of the law of negligence, given matters of 'breach, causation and damage' were yet to arise and the indeterminacy of the class of individuals that would be affected by a hypothetical breach of the purported duty; and
when applied, would overlap with NSW planning determinations (which is inconsistent with the objectives of Commonwealth environmental law), slide into political considerations and require the making of value judgments, the assessment of which is not appropriate for resolution by judicial determination.

While accepting the threat of climate change to humankind, the reasoning of the Full Federal Court makes it clear that there are limitations to the way in which the Australian courts and the common law can respond to that threat.

Relevantly, Justice Beach stated that the legal concepts that he himself had applied to find against the existence of a duty "may have reached their shelf life". Ultimately, however, his Honour was of the view that it was for the High Court, and not the Federal Court, to "engineer new. sustainable duties of care".

Key takeaways - where to next?

Despite the emphatic judgment, there are three key points to consider including how climate change litigation may develop further in the Australian context.

Appeal to the High Court

In the decision at first instance, Justice Bromberg emphasised that "the recognition of a novel duty of care represents a development in the law.the law is being asked to respond to altering social conditions brought about by human interference to the natural environment".

The Full Federal Court did not agree and found that the common law of negligence was not 'fit-for-purpose' and did not respond in these circumstances.

However, given Justice Beach's obiter on the limited role of the Federal Court and that it was for the High Court to engineer more sustainable duties of care, there is a high chance that the plaintiffs will seek special leave to appeal to the High Court of Australia.

Limitations on role of the Australian judiciary

The Court recognised that inherent in the climate change debate were multiple layers of scientific, social and economic considerations linked to national and State policy making in the context of international commitments.

Rather pointedly, Chief Justice Allsop stated that the Commonwealth Parliament has at no point attempted to "translate those international agreements concerning climate change, in particular the Kyoto Protocol to the United Nations Framework Convention on Climate Change.or the United Nations Framework Convention on Climate Change (UNFCCC) Paris Agreement 2015 (Paris Agreement) into Commonwealth law".

As a result, the Court found that it would be inappropriate for the judiciary to engage in any consideration of whether the duty of care had been breached by the Minister given the magnitude of the policy matters involved, described as "public policy of the highest importance".

This is distinct from the approach taken by the Supreme Court of Netherlands in the 2019 decision in Urgenda where the Court found that the State had a duty of care to protect the human rights of its citizens by taking appropriate action to mitigate the existential threat of climate change.

While the Dutch Court found that decision-making on greenhouse gas emissions belongs to government and parliament, it is the Court's domain to ensure that government and parliament remain within the limits of the law by which they are bound, having regard to their international and human rights obligations.

Pabai duty of care case

It is not yet clear how the findings in the Sharma appeal will impact on the progression of the Pabai Pabai and Guy Paul Kabai v Commonwealth of Australia case filed in the Federal Court in late 2021. The claim is a class action brought by Torres Strait Islanders who allege that the Commonwealth owes a duty of care to the plaintiffs given that they will suffer loss and damage as a result of the failures of the Commonwealth Government in respect of climate change mitigation.

In considering the elements of the duty of care, Justice Beach in the Sharma appeal held that it had not been established that there was any 'special relationship' between the Minister and the children, for example, no temporal or geographic closeness.

In Pabai, which has not yet been heard by the Federal Court, there is a limited class of litigants, being Torres Strait Islanders whose traditional lands will be made uninhabitable as a result of rising seas. This is arguably a more direct and demonstrable impact of climate change compared with the hypothetical, future damage alleged in Sharma, which may provide a point of distinction and lead to a more favourable outcome for the plaintiffs.

If successful, the Australian Courts may make orders similar to the Dutch Courts in Urgenda (2019) and Milieudefensie et al. v Royal Dutch Shell plc (2021) requiring the defendants to take positive climate change action through the implementation of tangible, adequate and binding greenhouse gas emission reduction targets and plans.

Conclusion

The focus will now turn to whether special leave will be sought and granted by the High Court to hear an appeal from the Full Federal Court's decision. It therefore remains to be seen whether the common law in Australia will in fact evolve to address the climate change threat and, in particular, the acts and omissions of a person that may have, as stated by Justice Beach, "wide-scale consequences that transcend confined temporal boundaries and geographic ranges".

There is no doubt, given the pending Pabai case, that the law will be put to the test again in the near future. Further legal challenges are also likely to test the applicability of similar duty of care-type arguments under different legislation and in different Australian jurisdictions, seeking to hold decision-makers accountable for their actions and omissions in respect of climate change, including in a human rights context.

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