26/10/2021

New Zealand Court of Appeal strikes out climate change claim

Smith v Fonterra [2021] NZCA 552

 

The New Zealand Court of Appeal on 21 October 2021 issued its decision in Smith v Fonterra [2021] NZCA 552. This is a significant climate change case, and the first appellate Commonwealth decision concerning whether tort law can be used to seek wide-ranging private law remedies with respect to climate change.

As the judgment records, the appellant Mr Smith is an elder of two Maori iwi and the climate change spokesperson for the Iwi Chairs Forum. He contended that too little is being done in the New Zealand political sphere and that the climate crisis calls for a bold response from the common law. To that end, he 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 burned. Mr Smith’s claim alleged that the release of greenhouse gases by the respondents is a human activity that has and will continue to contribute to dangerous anthropogenic interference with the climate system and to the adverse effects of climate change.

The claim pleaded 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 were: (a) 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; and (b) injunctions requiring each respondent to produce or cause net zero emissions from their respective activities by 2030.

The court acknowledged the importance of responding appropriately to climate change, which “is commonly described as the biggest challenge facing humanity in modern times”. Mr Smith’s argument was a “bold” invitation, invoking Donoghue v Stevenson, for “courageous Judges…to extend the existing law to address a significant problem”.

The court accepted, however, the respondents’ arguments that the claims were fatally flawed and could not succeed. They were “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”. No other tort claim recognised by the courts involves a scenario where everyone is “both responsible for causing the relevant harm, and the victim of that harm”. Mr Smith was unable to “identify any principled basis for singling out” the respondents, none of which themselves materially contribute to climate change. Such an approach “is an inherently inefficient and ad hoc way of addressing climate change”, which “calls for a sophisticated regulatory response at a national level, supported by international coordination”: “[i]n effect Mr Smith is seeking a court-designed and court-supervised regulatory regime [but] [c]ourts do not have the expertise to address the social, economic and distributional implications or different regulatory design choices…[c]limate change provides a striking example of a polycentric issue that is not amenable to judicial resolution”.

The court therefore struck out all three causes of action, including proposed new tort, which the High Court had cautiously permitted to proceed. The court emphasised that the “bare assertion of the existence of a new tort without any attempt to delineate its scope cannot of itself be sufficient to withstand strike out”.

Daniel Kalderimis, instructed by Chapman Tripp, acted for the first respondent and led the oral argument for the respondents.

Read the full judgment