Superimposing private duties on the exercise of public powers: Sharma v Minister for the Environment

Ellen Rock

11.08.2021

In May of this year, Bromberg J in the Federal Court handed down a key decision in climate change litigation which has made waves both within Australia and internationally. Sharma v Minister for the Environment [2021] FCA 560 was a negligence claim commenced in connection with an application to expand a coal mine in regional NSW. Vickery Coal Pty Ltd wanted to expand the scope of an existing mining approval, which would see permitted coal extraction increase by approximately 33 million tonnes at the site. The environmental implications of the proposal meant that it was a ‘controlled action’ under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the Act), meaning it could not proceed without the approval of the Minister for the Environment.

Before the Minister could make a final decision, a group of children brought a representative action in the Federal Court seeking an injunction to restrain the Minister from breaching an alleged common law duty of care. The Minister was said to owe each of the children a duty to exercise her powers under the Act with reasonable care so as to avoid causing them harm. The particular harm complained of included mental and physical injury, economic harm, and property damage which was likely to arise in the future as a consequence of climate change. In essence, the children alleged a chain of causation from the mine approval to increased coal extraction, increased CO2 emissions, increased global surface temperatures, increased climatic hazards and extreme weather events, and consequent exposure to harm (at [195]-[197]). This post focusses on the personal injury component of the claimants’ case, which received the most attention in the judgment.

The Sharma case raises a number of novel legal issues around the duty of care in negligence. Negligence cases against public authorities and officials are generally less complex where the government sits in a relationship analogous to that between private parties (eg occupier and entrant as in Romeo v Northern Territory Conservation Commission [1998] HCA 5). But in cases like Sharma, where the duty of care is overlaid on a statutory power, things become much murkier.

Justice Bromberg’s initial duty of care analysis rested on familiar ground. Just as in non-government cases, the overarching enquiry is concerned with the foreseeability of harm, asking whether the Minister should reasonably foresee the likelihood that the mine approval would cause future harm to the children. The other factors which were said to weigh in favour of recognising a duty in this case will also be familiar to most lawyers. The Minister was found to have knowledge of the risk of climate-induced harm (at [286]) and the Act placed her in a position of control in respect of that harm (at [284]). The children were vulnerable due to their powerlessness to avoid their prospective harm (at [296]) and were reliant on the Minister to protect them (at [299]). Critically, this case did not suffer from one of the key difficulties that often presents in government liability cases—the distinction between positive acts and omissions (ie failure to exercise a capacity to avoid harm, see for example, Pyrenees Shire Council v Day [1998] HCA 3). In Sharma, it was the Minister’s positive act of approving the mine which could be said to expose the children to future harm (at [269]).

The case did raise some difficult issues around causation and indeterminacy, which I will leave others to consider. While these private law factors are of interest, this post focusses on the public law implications of the judgment, being the superimposition of private (common law) duties on public (statutory) powers. This is the point at which the law struggles to always articulate neat answers, and the Sharma case offers a good example of this difficulty.

Justice Bromberg’s duty of care inquiry was anchored in close analysis of the purpose of the statutory approval power. The stated objects of the Act included the protection of the environment and the ecologically sustainable use of natural resources. Importantly for this case, the Act specifically contemplated the position of future generations, defining ‘ecologically sustainable use’ as ensuring that ‘the benefit of the use to the present generation does not diminish the potential to meet the needs and aspirations of future generations’ (s 528 of the Act) and adopting ‘inter-generational equity’ as a principle of ecologically sustainable development (s 3A of the Act). While the Act did not expressly protect against harm to people and property, it did contemplate the protection of the environment for the benefit of ongoing human use and enjoyment (at [157]-[159]). This allowed Bromberg J to later read protection of human safety as an implied ‘relevant mandatory consideration’ for the purpose of the Minister’s decision-making (at [404]). This interpretation of the Act was subsequently called on to perform some heavy lifting in Bromberg J’s analysis of the private law duty of care, which is the focus of this post.

From a public lawyer’s perspective, perhaps the most interesting points in the Sharma case were framed as points about legal ‘coherence’. The Minister had argued against the imposition of a duty of care on the basis that it was inconsistent with the Act or public law more generally. As put by Bromberg J:

coherence-based reasoning is driven by a need to avoid joint occupation of the field that would undermine, contradict or substantially interfere with the purpose, policy and operation of the statutory law already in place (at [322]).

His Honour tackled these incoherence arguments from a number of different directions.

The first source of incoherence his Honour rejected was between the common law duty of care and the Act itself. In other negligence cases the courts have been quick to dismiss the imposition of a duty of care in the exercise of statutory power where there is inconsistency between their purposes. For example, in Sullivan v Moody [2001] HCA 59 the High Court denied that investigators owed a duty to the subjects of investigations into allegations of child abuse because the legislation placed the interests of children as paramount. In X v South Australia (No 3) [2007] SASC 125 there could be no duty owed by a Parole Board to protect the public from paroled prisoners because this was likely to distort the performance of the Board’s functions under statute. And in the UK context, Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council [1995] UKHL 9 denied a duty in exercising powers to take at-risk children into care because the purpose of the statute was internally conflicted; the statutory purpose was directed both at the protection of children and at promoting the upbringing of children by their families. The imposition of a common law duty would interfere with the statutory balance struck between those inconsistent purposes (at 24).

In Sharma, Bromberg J distinguished these cases in which inconsistency was found. His Honour stated that the protection of human safety would ‘almost always cut across the exercise or performance of a statutory power including a broad discretionary power’ (at [398]). Based on a review of the subject matter, scope and purpose of the Act, his Honour reached the conclusion that there was an implied legislative intention to treat human safety as a mandatory consideration: ‘the lives and safety of the Children are not optional considerations but have to be taken into account by the Minister when determining whether to approve or not approve the controlled action’ (at [404], emphasis added). Accordingly, there was no inconsistency and the duty of care and statutory power could co-exist.

This led into a second incoherency issue, being the ‘skewing’ of administrative discretion to accommodate the newly defined common law duty. Would fulfilling the duty impact the Minister’s exercise of her powers in a way that brought public and private law into conflict? The Minister contended that recognition of the duty of care (and consequent obligation to prioritise the children’s future safety) would have the result of skewing the administrative decision-making process under the Act. In substance, the argument was that unless the Minister refused the application there would be an automatic breach of the common law duty, thereby narrowing the Minister’s discretion to a single option—to disapprove the application. The Minister argued that performing the duty would foreclose on the discretion which had been conferred by Parliament.

Justice Bromberg rejected the argument that imposing a duty of care would inevitably require the Minister to disapprove the proposal.  To determine breach, the court would apply a standard of reasonableness which would leave some scope for the Minister to weigh other factors alongside those protected by the duty (at [413]). However, even if the result was inevitable, his Honour concluded that this was nonetheless consistent with the purpose of the statute as he had interpreted it (ie with protection of human safety as a mandatory consideration), leaving no inconsistency in the outcome (at [414]).

Nested within this conclusion is a difficult public law point, which is most evident in the following passage:

Faced with a controlled action which poses a real risk to the safety of members of the Australian community, the Minister may be expected to give at least elevated weight to the need to take reasonable care to avoid that risk of harm. To do so would be consonant with the policy of the EPBC Act. In such circumstances, the imposition of a duty of care which may, as a practical matter, impose a requirement upon the Minister to consider and give elevated weight to the need for reasonable care to be taken to avoid death or personal injury will not distort the Minister’s discretion or skew the intended statutory balance (at [407], emphasis added).

From the public lawyer’s perspective, the reference to ‘weighting’ here is of particular interest. Unless rising to the level of ‘serious irrationality’ (Minister for Immigration and Citizenship v Li [2013] HCA 18), in public law ‘it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power’ (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 per Mason J). Again, then, implied legislative intention is doing some heavy lifting here.

Underlying these arguments and Bromberg J’s reasoning is yet a further coherency issue connected to the separation of powers. This concern has long troubled academics and judges when it comes to the negligent exercise of statutory powers, and the development of an administrative compensation remedy more generally. In NSW v Paige [2002] NSWCA 235, Spigelman CJ framed this as a ‘tension aris[ing] because the specific negligence alleged intrudes into matters within the heartland of judicial review of administrative conduct’ (at [158]). In essence, the concern is that judicial review limits the courts to review of the legality of administrative action, and that:

if standards of administration are to be regulated and enforced by recourse to the recovery of damages at common law, the courts must necessarily become involved, not just in the constitutional role of ensuring legality, but also in laying down standards of administrative conduct by reference to a standard of reasonable care (Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278, [119]).

Justice Bromberg conceded that this form of incoherence would arise where the content of the duty is ‘directed to the making of a valid decision’ (at [424]). In such a case, the government decision-maker would have a duty to exercise reasonable care to not make a decision in breach of administrative law norms, which would invite the courts to supplant existing public law remedies with those of private law.

However, his Honour maintained that the Minister’s duty could be distinguished from these cases:

The posited duty, whether assessed at the level of duty or at the level of breach, is not that the Minister must exercise reasonable care not to make a flawed decision either generally or by reference to any particular instance of flawed decision-making. The subject of the posited duty is not, in either form or substance, legally invalid decision-making (at [426]).

Instead of requiring a valid decision, the substance of the duty recognised by Bromberg J required the Minister to ‘take reasonable care to avoid causing the Children personal injury’ in making her decision. In this formulation (and in light of his Honour’s reading of the purpose of the Act), Bromberg J could see no inconsistency between public and private law.

The final incoherence point raised in this case was in connection with the award of relief. Given the nature of the harm of which the children complained, this was not a claim for damages but a claim for injunctive relief to restrain the Minister’s apprehended breach of duty. Justice Bromberg refused to grant the injunction as, in light of the way the duty was framed, it was not clear that the Minister would be in breach by approving the mine—that could only be assessed in the context of a breach analysis after the fact. To award the requested injunction would impose a restraint on statutory discretion which Bromberg J had taken steps to avoid in framing the duty of care:

The fine balance which needs to be struck by coherence-based reasoning demands that insofar as the imposition of liability in negligence impedes the exercise of statutory discretion, it only does so to the extent justified by the imposition of that liability (at [502]).

Accordingly, Bromberg J was willing to allow the Minister to proceed in her decision-making with the benefit of the additional knowledge gained as a result of the proceedings (as well as his Honour’s subsequent declaration as to the content of the duty):

Subject to exercising her rights of appeal and succeeding on any appeal, a well-advised and responsible Minister would take notice of those matters. If the Minister does, as I expect she will, due consideration will be given by her to avoiding conduct in breach of the duty of care.

Rather than taking Bromberg J up on that offer the Minister has announced the government’s intention to appeal the decision. When the matter comes before the Full Federal Court it is likely that, as in Bromberg J’s judgment, statutory construction will again feature as critical in reconciling public and private duties.

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Ellen Rock is a Senior Lecturer in the Faculty of Law at the University of Technology Sydney.

Suggested citation: Ellen Rock, ‘Superimposing private duties on the exercise of public power: Sharma v Minister for the Environment‘ on AUSPUBLAW (11 August 2021) <https://auspublaw.org/blog/2021/08/superimposing-private-duties-on-the-exercise-of-public-powers-sharma-v-minister-for-the-environment/>.