Max Barber is a Senior Solicitor with Franks Ogilvie. He joined the firm in early 2023 as a Law Clerk and was admitted as a barrister and solicitor in March 2023. Max joined the firm from BNZ, where he worked in client relations and personal banking while completing his Bachelor of Laws at Victoria University.
Since joining Franks Ogilvie, Max has been involved in all aspects the firm’s work, including litigation matters ranging from a Commerce Act appeal through to appearing at a coronial inquest, a major commercial negotiation in the biosecurity sector, and law reform projects relating to water infrastructure, local government, and primary sector governance.
Summary
An iwi leader successfully appealed a decision striking out his climate-change based tort claims against several major greenhouse gas emitters.
Background
The appellant in the case was Michael Smith, an elder of Ngāpuhi and Ngāti Kahu, and a climate change spokesperson for the Iwi Chairs Forum, a national forum of tribal leaders.
In 2019, Mr Smith filed proceedings in the High Court against several companies that he alleged were major greenhouse gas (“GHG”) emitters, or suppliers of raw materials that, when burned, resulted in significant GHG emissions (“Respondents”).
Mr Smith alleged that the ongoing GHG emissions contributed to climate change, in breach of duties the Respondents owed under tort law, including public nuisance, negligence, and a common law duty to cease materially contributing to the climate change crisis. Mr Smith sought a declaration that the duties had been breached as well as an injunction requiring the Respondents to gradually phase out their net GHG emissions (or in the alternative, stop them immediately).
The Respondents applied to strike out the proceedings on the basis that they disclosed no reasonably arguable cause of action. The High Court struck out the nuisance and negligence claims but refused to strike out the climate duty. On appeal, the Court of Appeal struck out all three claims.
Mr Smith appealed to the Supreme Court.
The case
Strike out principles
The court affirmed existing principles of determining strikeout applications, namely:
· All pleaded facts were assumed to be proven unless wholly without foundation.
· A claim would only be struck out if it clearly could not succeed on the basis of those facts.
· A court would be cautious to strike out a claim in a novel or developing area of law.
The court placed significant emphasis on the third point on the basis that development of the law was best done with the discipline introduced by evidence and detailed argument.
The court emphasised that declining to strike out a claim did not suggest that the claim was likely to succeed at trial.
Climate change legislation
The court noted that the preliminary issue was whether the claims were excluded by the operation of legislation. In the case of climate change, the relevant legislation was the Climate Change Response Act 2002 (“CCRA”) and the Resource Management Act1991 (“RMA”).
The emissions trading scheme (“ETS”) under the CCRA is the primary mechanism in the government response to climate change. Under that scheme, businesses in certain industries are required to register as participants and surrender ‘emissions units’ to the Crown proportionate to their annual GHG emissions. The Crown only issues a certain number of units per year, which can be purchased directly at carbon auctions as well as on private markets. Businesses that fail to accurately report annual emissions or surrender sufficient units to cover their emissions liability may be liable for pecuniary penalties.
The Respondents argued that Parliament’s intent in enacting the ETS was that it act as the sole means of accountability for otherwise lawful GHG emissions. The court rejected this argument.
They noted that the CCRA said nothing about concurrent tort liability, contrasting with other legislation such as the Accident Compensation Act 2001 (which expressly ousted personal injury claims where cover was available under the Act). Additionally, the CCRA said nothing about the legality of GHG emissions themselves. While the ETS was designed to indirectly incentivise emissions reductions, direct legal accountability for emissions themselves (if any) existed only under the RMA. The latter Act specifically provided that tort claims remained available.
Accordingly, the court held that the Parliamentary intent behind the CCRA and the RMA (described as ‘companion legislation) did not oust liability for emissions under tort law.
The public nuisance claim
Mr Smith argued that various harms arose from climate change caused by GHG emissions (temperature and sea level rises, ocean acidification, geopolitical instability, and others). The Respondents’ contribution to these harms amounted to a substantial and unreasonable interference with the rights of the public,and accordingly the Respondents’ emissions amounted to a public nuisance.
The court accepted that the harm pleaded by Mr Smith was capable of amounting to a substantial and unreasonable interference, and that the issue of whether a nuisance was established should be assessed at trial. The court rejected the argument that GHG emissions had to be independently unlawful before they could amount to a nuisance. Additionally, they cast doubt on whether Mr Smith (as a private plaintiff) had to have suffered ‘special damage’ before he had standing to sue in public nuisance, although it left a final decision on this point for trial. In any event, they held that it was arguable that Mr Smith had suffered special damage by virtue of his dual legal and tikanga-based interests in the land.
The most important aspect of the court’s decision on the nuisance claim was on the issue of causation. The significant difficulties of attributing harm arising from climate change to the Respondents was ‘fatal’ to the claim in the Court of Appeal.
The Supreme Court departed from the Court of Appeal on this point. While they acknowledged that the emissions of the respondents were miniscule in global terms (meaning that the claimed relief would not stop the harm from occurring), this was not an insurmountable barrier to success.
The court noted that earlier public nuisance cases involving the discharge of sewage into public waterways had resulted in liability for individual materially contributing to the pollution even where they had not independently caused it. It would be possible for a trial court to find that the climate change crisis differed only in magnitude, and not in principle, from this line of cases.
On this issue, the court also emphasised that the common law had not always developed slowly and incrementally – that in times of major social upheaval (such as the Industrial Revolution), legal development occurred quickly in relation to new social problems, citing the landmark Donoghue v Stevenson negligence case as an example. They noted that these developments were not always successful, but that it was open for Parliament to intervene in such cases by enacting corrective legislation.
Accordingly, the court was not prepared to halt development of the law in this area at a preliminary stage notwithstanding the significant difficulties involved in attributing blame. Until the matter was heard at trial, it was not possible to say that it was beyond the capability of tort law to respond to the complex issues raised by climate change.
The other claims
The negligence and climate duty claims were reinstated on the basis that they were based on overlapping facts to the nuisance claim and that inclusion of the claims would not materially add to cost and delay of proceedings.
Relevance of tikanga
The Supreme Court, contrary to the Court of Appeal, held that tikanga evidence was relevant to determining the development of the torts proposed in the claim. As Mr Smith was suing in the capacity of a kaitiaki of the whenua of his iwi, tikanga evidence was likely to be relevant to establishing the nature of the harm and meeting the special damage requirement (if one existed).
Result
Mr Smith’s appeal was allowed and all three causes of action were reinstated. The case now falls to be determined by the High Court with full evidence and argument, including evidence of tikanga.
The decision is a landmark tort law and climate change case. Depending on the outcome at trial, businesses in certain industry sectors could be subject to enormous legal risk in respect of their carbon emissions.
Whatever happens at trial, the court’s decision is likely to set an international precedent, emboldening further climate change litigation in countries beyond New Zealand.
For further information on this case or similar issues, please contact Director, Brigitte Morten.
Last year the government made changes to the Charities Act. The most important changes introduced by the Amendment Act that are already in force are:
· A requirement for charities to review their governance procedures at least once every three years
· An expanded definition of ‘officer’
From 5 July 2024, there are expanded objection and appeal rights for certain decisions of the Charities Registration Board (“Board”) and Charities Services.
Charities Services will have the power to exempt certain small charities from financial reporting requirements under the Act, however regulations need to be enacted before this power can be exercised.
Duty to review governance procedures
Registered charities are now required to review their governance procedures once every three years, with the first review due no later than 5 October 2026.‘ Governance procedure’ is not defined in the Act, but Charities Services guidelines suggest it is likely to include a charity’s primary governing document (usually a constitution or trust deed depending on the entity type) Any significant internal guidelines or policies should also be reviewed, particularly if they relate to financial management or conflicts of interest.
The review must consider whether the rules remain fit for purpose, and whether they continue to assist the charity to meet its charitable purpose and comply with the Act. Beyond this, the Act does not prescribe what must take place.
To ensure a bare minimum of compliance, charities should review at an appropriate meeting, which will vary depending on the type of entity. Incorporated societies should carry out the review at a members meeting, charitable companies at a shareholders meeting, and charitable trusts at a board meeting. This discussion must be minuted to demonstrate compliance with the Act.
Change in definition of ‘officer’
Officers are now defined to include “persons able to exercise significant influence over substantial decisions of the charity”. This is likely to include (among others) chief executives, treasurers, CFOs, and COOs. Such individuals are now subject to the minimum qualification requirements for charity officers, and can be disqualified for serious wrongdoing or significant breaches of the Act.
Entities wanting to register as charities must provide Charities Services with certifications of qualification from the expanded group of people included in the definition. Existing charities are required to notify Charities Services of appointments and resignations of key employees, compared to the prior position where this only applied to members of the charity’s governing body.
Exemption from financial reporting requirements
Charities Services will be able to exempt certain charities from the significant financial reporting requirements under the Act. Exempt entities will still be required to provide a minimum level of financial information, the specifics of which will be set in the same regulations. Drafting the regulations began in July 2023, but the date of any consultations (if they occur) or when the regulations are expected to be made is currently unknown.
This is a welcome change for small charities, which are the majority of registered charities. It was widely recognised prior to the amendments that the compliance difficulties for small charities were out of proportion to any transparency and accountability benefits that might arise from stringent reporting requirements.
Expanded objection procedure and appeal rights
From 5 July 2024, charities and some individuals can object to some decisions of Charities Services and all decisions of the Board by giving notice to the relevant decision-maker in accordance with the statutory procedure. Notice must be given within the timeframe stated in the preliminary notification of decision or within two months, whichever is earlier.
The grounds for objections are that the reasons for making the decision are unsatisfied, or that it is otherwise not in the public interest that the decision be made. The decision-maker is then bound by certain process obligations when dealing with the objection.
Additionally, the same decisions that are subject to objections may now be appealed to the Taxation Review Authority (“Authority”). There is no requirement to lodge an objection in respect of a decision before it can be appealed.
The procedure and powers of the Authority in respect of appeals is similar to a specialist statutory court – the process is clearly formal and adversarial, but the Authority has wide powers to regulate its own procedure and can relax evidential rules. Additionally, the Authority is empowered to determine appeals without hearing from the parties in person, provided that it consults with the parties before doing so.
Parties dissatisfied with a decision of the Authority have a right of general appeal to the High Court.
To understand more about this issue, please contact Director Brigitte Morten
An advocate for Pike River families successfully sought access to privileged documents relating to the decision not to prosecute people involved in the mining disaster.
On 19 November 2010, an explosion occurred in the Pike River Mine near Greymouth, claiming the lives of 29 workers.
In 2013, Worksafe made the decision not to prosecute Peter Whittal, the managing director of the owners of the mine at the time of the disaster, conditional upon Mr Whittal making a ‘voluntary payment’ to families of the deceased miners Two family members of deceased miners challenged this decision as an unlawful agreement to stifle prosecution. In 2017, the Supreme Court found for the family members, and the decision was held to be unlawful.
The Supreme Court decision did not lead to prosecution of Mr Harder, so the family members sought to hold officials and lawyers involved accountable through other means. During this process, they were assisted by Mr Harder, a former lawyer who was the applicant in this case.
Harder made an Official Information Act request for the Solicitor General’s legal advice to Worksafe. The request was declined under on the ground that this information was privileged. This decision was upheld by the Ombudsman.
In the present proceeding, the Harder then sought access to communications between counsel who negotiated the ‘voluntary payment’ so they could further appeal to the Ombudsman to reconsider their decision. Worksafe provided some documents but withheld others on the basis that they were privileged under the Evidence Act 2006.
Privilege is the concept that individuals have an absolute right of confidentiality in certain communications. This usually covers communications made in defined circumstances where the public interest is conclusively presumed to favour confidentiality over disclosure of relevant information. The archetypal example is legal professional privilege, where the ability to speak freely and frankly when seeking legal counsel is deemed more important than the benefit of obtaining relevant evidence.
When documents are privileged, it means they cannot be used as evidence in court or released under the Official Information Act (unless that privilege is waived).
This case concerned materials that Worksafe alleged were covered by sentencing negotiation privilege. These documents are privileged in order to promote parties to reach an agreed sentence in confidence that any admissions or discussions will not be used as evidence against them later. Promoting confidence in this area is desirable to minimise court delays and costs when processing criminal cases, thereby improving the efficiency of the court system. It is also necessary to spare victims and other participants from lengthy and occasionally traumatic involvement in criminal proceedings.
Unlike other forms of privilege that are virtually absolute (such as legal professional privilege), sentencing negotiation privilege is subject to a public interest balancing exercise. Accordingly, the court is enabled to order documents covered by sentencing privilege to be disclosed if (among other things) it would be contrary to the interests of justice to withhold it. By contrast, documents covered by legal professional privilege can usually only be disclosed if the privilege is used to perpetrate or conceal a crime.
In this case, it was not seriously disputed that the privilege applied, as that the communications occurred pursuant to negotiating the voluntary payment, an integral part of the prosecution decision. The key issue in the case was whether upholding the privilege was contrary to the interests of justice.
The court noted the value of the privilege in the administration of justice, which arose from relieving victims from the burden of testifying, reducing court and prosecution time and costs, and providing a structured environment in which the defendant could admit responsibility for offending. However, given the length of time since the Prosecution decision, these factors were given significantly less weight than normal. Another crucial factor was that Mr Harder already had access to similar documents obtained through other channels. Worksafe were only withholding the documents at issue in the case out of general principle.
In this context, the court held that the interests of justice were better facilitated by releasing the documents. Refusing to do so could only have the effect of encouraging false speculation and misunderstanding.
The court ordered that Worksafe disclose the privileged communications to Mr Harder.
Strictly construed, this case only has value as a legal precedent in sentencing negotiations. However, construed more broadly, it acts as an important reminder that government officials do not have an unfettered power to determine that documents are privileged and thereby withhold them from the public. The High Court in this case sent a clear message when officials should not be too ready to resort to privilege as a means of withholding information they would otherwise be required to make available under the Official Information Act. Applicants for official information can be confident that the courts will effectively scrutinise claims of privilege that do not reflect statutory and public policy factors underlying the privilege.
For further information on this case or similar issues, please contact Director Brigitte Morten
