Planning and environmental law today: The growing impact of global issues of human rights and climate change on planning and environmental law and practice

This is a summary of the 2017 VPELA Barber Lecture delivered by The Hon Michael Kirby AC CMG, former Justice of the High Court of Australia

Introduction

On 28 November 2017, at the second annual Barber Lecture sponsored by URBIS, guests were welcomed by Tamara Brezzi (President, VPELA) and The Hon Michael Kirby was introduced by Adrian Finanzio SC (2006-2017 VPELA board member).  The Hon Michael Kirby paid respect to the first President of VPELA, Peter Barber.

Planning and environmental law

From 1903 to 1976, planning cases were heard by the High Court from time to time prior to amendments to the Judiciary Act 1903 (Cth).  This changed in 1976.  The High Court took command of the decision as to who should come into the High Court by way of special leave application.  As a result, there was a substantial concentration on federal legislation.   This was a pity because town planning is an area of ‘people law’ which affects people as dwellers on this planet.

During his time as President of the Court of Appeal of New South Wales, The Hon Michael Kirby heard and determined a large number of cases.  In those days, he was never in dissent.  Some cases related to the application of environmental law.  In 1996, the Hon Michael Kirby was appointed to the High Court.  During 1997 – 98, IW v City of Perth (1997) 191 CLR 1 was heard by the High Court.  This case concerned a challenge by IW to a decision of the City of Perth to refuse a permit application.  The permit application was made by a group who were trying to set up a drop in centre for a community in Perth who were living with HIV/AIDS.  The Council debate recorded that Councillors did not think these people were appropriate for this city or country and accordingly drop in centres should not be permitted.  The reasoning went that these strange people might infect others and might be using needles. The claim was brought under anti-discrimination law.  The question before the Court was whether Council had refused to deliver a service under a forbidden ground?

The Judges below said yes.  At this time, Denning J had an opinion on the question what does a Council produce?  A Council produces services and those services deliver products which can be judged by law.  The High Court said that Council was not delivering a service, rather they were performing a statutory function which cannot be delivery of a service and therefore the appeal failed.   There were two dissenting judges including Kirby and Toohey JJ.  The dissenters considered that the Council was offering a service consistent with the view of Denning J.

On 25 March 2003, then Chief Justice French gave an address while still in office.  He recounted how as a student at University of Western Australia he gave a lecture against a person who later became the Minister of Town Planning.  In this speech, French CJ said that the impact on town planning included development of the common law and administrative law.   French CJ quoted his colleague who summed up administrative law in 3 words:  lawful, rational and fair.  French CJ added upholding property rights and indigenous land rights to this list.  Converting respect into action and rectification of denial of historical indigenous people’s land rights was important to allow them access to economic means which might have assisted them to avoid socio-economic disadvantage.

International Human Rights Law

On 10 December 1948, the Universal Declaration of Human Rights was adopted.  Mr Evett was then President of the Assembly of the United Nations.  Article 17 as adopted declares that everyone has the right to own property and no one will be arbitrarily deprived of property.  However, that article did not find its way into the international covenants on socio- and economic rights.  Property rights will be respected but in accordance with the general interests – a recognition that these rules would have to bend to conform to the general interest.

Turning to the United Kingdom, in 1998, Blair piloted through the House of Commons and House of Lords the Human Rights Act 1998 (UK) which made the Human Rights Convention of the European Union apply in the UK.  Lawyers had to consider whether there were provisions relevant to town planning.  Article 1 provided a guarantee of peaceful enjoyment of the possessions of a person.  Article 14 made discrimination unlawful.  Article 16 had the effect that for every dispute at law you were entitled to have access to a court and have dispute decided by a court or tribunal that was independent.

After 1998, there were a whole range of cases where assertions were made in the UK that the Human Rights Act 1998 (UK) was relevant to planning cases.  It was then necessary to look at the European Court of Human Rights which also became relevant to Australia especially when we enacted a Charter of Human Rights and Responsibilities Act 2006 (Vic).  The Hon Michael Kirby noted the potential application of planning law to gypsies, also known as the roamer people, who do not wish to settle down in a nice neat council house but to move constantly.  These were the Gypsies Roamer. The Human Rights Act 1998 (UK) stated that the test of proportionality applied in the UK.  This was marginally different to the test of Wednesbury unreasonableness.  The policy may have been to keep judges in their place and avoid interference with jurisdiction.  Wednesbury unreasonableness was effectively a ‘non-irrationality’ principle and a very high hurdle.  This made it almost impossible to challenge on the basis of non-irrationality.  However under the Human Rights Act1998 (UK), the principle of proportionality was applied on the basis that it was ‘substantially the same test’ .

The decision in Lopez Ostra v Spain (European Court of Human Rights, Strasburg, 9 December 1994)  related to a State grant of a subsidy to build a tannery near the applicant’s home.  The Court held that this was a breach of human rights.  Environmental pollution resulting from a tannery may prevent residents from enjoying their homes.  The Court awarded Mrs López Ostra ESP 4,000,000 in pecuniary and non-pecuniary loss.

Climate change

Turning to climate change risks, recent work done by the Centre for Policy Development has looked at whether a company director (or town planner) should or must consider modelling for possible impacts of climate change on issues relevant to the decision of that company director (developer or planning regulator).

A joint legal opinion of Noel Hutley and Sebastian Hartford-Davis considers the question of whether there is a breach of s 180(1) of the Corporations Act 2001 (Cth) if a company director fails to take into account any relevant developments affecting climate change.

The argument runs that climate change risks are capable of representing risks of harm to Australian companies which would be regarded as forseeable, to the extent they intersect with the interests of the company.  Certainly directors are not legally prohibited from considering climate change. To the contrary, it is considered that company directors can and in some circumstances should take into account climate change risks.  Company directors need to form their own assessment as to what if any action is to be taken.  In that scenario, they may attract the protection of the business judgment rule.  In Australia there are stronger reasons for this than other countries because Australia is more exposed to the risks of climate change which if not taken into account may amount to a failure of director’s duties.

The CSIRO and Bureau of Meteorology have observed an increase in average surface temp of 0.9C since 1910.  This is linked to increasingly frequent and intense heatwaves and rainfall events.  Modelling that was undertaken as part of Garnaut Climate Change Review 2011 considered the possible impacts of temperature rise beyond 2°C including:

1) agricultural production in Murray Darling Basin will cease;

2) destruction of the Great Barrier Reef;

3) significant increase in cost of supplying urban water;

4) increase in health-related deaths;

5) sea-level rise beginning to cause major dislocation in coastal megacities of south Asia, south-east Asia and China and displacement of people in islands adjacent to Australia.

If it is the duty of a company director to consider climate change risks in decision-making, then is there also a duty on those who are advising on planning and advising decision makers?  It is unsafe for entities or regulators to ignore risks.  It is better if risks are explicitly considered rather than ignored or neglected.  Modelling the potential impact of climate risks under different scenarios has been conducted.  The impacts of a rise of 2°C is the most important model and will guide the development of much government policy around the world.

In March 2015, The Hon Michael Kirby joined a group of experts which met in Oslo and formulated the Oslo Principles on Global Obligations to Reduce Climate Change (Oslo Principles).  The Oslo Principles were designed to uphold the objects of the Paris Agreement of the Parties to the UN Framework Convention on Climate Change (2015).

On 13 November 2017, a decision was made in a case which concerned a claim brought by a litigant and civil society in Peru in the case of Huaraz, Saul v RWE.  Mr Saul, a farmer in Peru, brought a claim against RWE which is a large corporation in Germany and reported to be the largest emitter of CO2 in Europe.  GermanWatch reports that RWE is responsible for ½ of 1% of global CO2 emissions.  Mr Saul asked RWE to bear the costs of protection measures against a glacial outburst in the Peruvian mountains, part of the South American Andes. He filed the claim in 2015 in the District Court of Essen, Germany under German Civil Code.  The Court held that the house of the claimant would be flooded and therefore held he had standing.  The Court also held that climate change could well be responsible for any such flood but rejected the claim on legal grounds.

An appeal was brought to the Higher Regional Court, Hamm against the negative ruling of the Regional Court, Essen. On 13 November 2017, that Court decided that the appeal at the Higher District Court, Hamm would go to trial and is now scheduled as an oral hearing.

The Hon Michael Kirby noted the similarities between this case and litigation regarding asbestosis and cancers arising from cigarette and tobacco use.  He noted the indication that judges and others making decisions regarding environmental questions in Europe might be more willing to render accountable those who are responsible for wrongs.  The Court will determine whether RWE is liable proportionate to the level of impairment to cover the expenses for appropriate safety precautions to protect claimants property such as Mr Saul from a glacial outbreak.  That is, RWE may be required to share costs for protection measures against climate change.  The purpose of this litigation is to render those accountable for inflicting wrongs against others.  The Hon Michael Kirby noted that the fact this litigation is unfolding in Germany is significant, being a ‘serious rule of law country’.

The evening concluded with a question and answer forum hosted by Adrian Finanzio SC.

(c) Eliza M Bergin 2017

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Polluter pays – Availability of reasonable costs of clean up

What is the issue?

On 26 July 2017, the Supreme Court of Victoria (Court of Appeal) upheld a key finding of Justice Riordan at first instance in Yarra City Council v Metropolitan Fire and Emergency Services Board.[1] The City of Yarra appealed on several grounds[2] from the decision of Justice Riordan, only one of which is discussed in this note.  The issue discussed here is recovery from the polluter of the reasonable costs of clean up conducted by a person who has been served with a notice by the Environment Protection Authority (EPA) under s 62A of the Environment Protection Act 1970 (EP Act) (s 62A notice).

As noted in my recent book review here, at first instance, Justice Riordan in Metropolitan Fire and Emergency Services Board v Yarra City Council & Ors[3] found that statutory liability under the EP Act for the cost of remediation of contaminated land subject to a notice under the EP Act remains with the polluter.  That finding, upheld by the Court of Appeal,[4] is important in the development of contaminated land law and highlights the practical importance of prudent due diligence in the context of buying and selling contaminated land, and considering options for recovery of reasonable clean up costs.

Image credit Burnley and Richmond Historical Society

What was decided?

The EP Act makes provision for EPA to serve a notice directing a person to take clean up measures.  An owner of contaminated land may then recover reasonable clean up costs from the polluter in responding to the s 62A notice.[5]

One finding the Court of Appeal confirmed was that the Metropolitan Fire and Emergency Services Board’s (MFESB) reasonable clean up costs for legacy contamination at the corner of Burnley Street and Barkley Avenue Richmond (Burnley Site) could be recovered.  The analysis required a detailed consideration of changes in site ownership from City of Richmond in 1919, which became the City of Yarra. The Burnley Site was then purchased by the State of Victoria in 2005.  City of Yarra was held liable for pollution at the Burnley Site.  The pollution source was tar found in a bluestone storage pit, identified on the Burnley Site in 2005.

What does it mean for me?

I am a purchaser or vendor (including a public authority) of potentially contaminated land

On the one hand, this decision clarifies the extent of liability for clean up costs which at least in theory should give parties to sale of land transactions comfort.  With increasing pressures on development and land use change at inner city industrial sites, it is less true than ever that contaminated land ought be regarded as ‘land locked’.  The clarity provided by the Court of Appeal gives parties an assurance, including that liability for remediation under the EP Act remains with the polluter where the EPA has issued a s 62A notice regardless of whether:

  • the site has been vacated, relinquished or sold;
  • other contractual arrangements exist dealing with potential land contamination, including with State government;
  • the pollution occurred prior to the EP Act’s inception in 1970;
  • the polluter no longer retains an interest in the property (MFESB v Yarra City Council [2015] VSC 773).

On the other hand, for parties such as the City of Yarra, the Court of Appeal decision is ‘bitterly disappointing’.[6]  In the aftermath, City of Yarra reported that it was considering all its options including appeal to the High Court.[7]  This report relates in particular to the underlying finding that City of Yarra caused or permitted the pollution to occur.  Recovery of reasonable costs of cleaning up land affected by a s 62A notice is only available from a person who ‘caused or permitted the pollution to occur’.

I am an owner of land with a contamination legacy

As an owner of contaminated land, if you propose a change in land use or development, it would be prudent to revisit any assumptions included in your real estate development matrix.[8]  In particular, consider:

  • Are any assumptions made at the time of acquisition of the land still correct?
  • Has a s 62A notice been served in relation to the land, and if not, whether there is a prospect of service of such a notice by EPA in the future in respect of clean up which you have not caused or permitted to occur?
  • Do you have accurate information about the contaminated land history of the land, and is it wise to make further inquiries?
  • Do any contracts allocate the cost of clean up pursuant to an existing s 62A notice and if so are they enforceable? Is the contract potentially inconsistent with any s 62A notice that has been served and therefore likely to be unenforceable in light of this decision?

Section 62A does not provide for any form of damages for consequential loss.  It provides only for actual costs incurred in meeting the requirements of a clean up notice.

Next steps

As noted above, adopting a prudent and on-the-front-foot approach to the management of any legal risk associated with cost of clean up of contaminated land may require consultation with existing commercial advisors.  This note is prepared in practical terms, and relies on assumptions about the particular ownership history at the Burnley Site.[9]  Your circumstances may differ from those discussed by the Court of Appeal, in important respects.

The Court of Appeal remitted the matter back to Justice Riordan for findings on the remaining issues, including the reasonable costs of clean up to be paid by City of Yarra to MFESB pursuant to s 62A.

POST SCRIPT:  City of Yarra recently applied for special leave to appeal to the High Court of Australia.  Special leave was refused on 16 November 2017.

Image Tar Pits Museum https://tarpits.com

© Eliza M Bergin

Liability limited by a scheme approved under professional standards legislation

[1] [2017] VSCA 194 (26 July 2017), [178] (‘Yarra v MFESB’)

[2] (1)  Was Yarra liable for the pollution caused by Richmond (Grounds 1, 2 and 3 – s 62A(1)(b)?

(2)  Is s 62A(2) impermissibly retrospective (Ground 4 – s 62A(2))?

(3)  Did Yarra appear to abandon the industrial waste in the bluestone pit when relinquishing possession of the Burnley Site to the State of Victoria in or about February 1996 (Grounds 5, 6, 7 and 8)?

(4)  Should an order or declaration under s 62A(2) have been made (Grounds 9 and 10 – s 62A(2))?

Yarra v MFESB [2017] VSCA 194, [87]

[3] [2015] VSC 773

[4] Yarra v MFESB [2017] VSCA 194 (26 July 2017)

[5] Section 62A(1)(b) provides that the EPA may issue a notice directing the person who has caused or permitted the pollution to occur to take the clean up and on-going management measures as specified in the notice.  On the application of the occupier of any premises which is the subject of a notice, a court of competent jurisdiction may order that the person compensate the occupier for any costs incurred by the occupier which the court is satisfied are reasonable and were incurred in good faith in complying with the notice.

[6] City of Yarra, Media Release: Supreme Court Appeal (27 July 2017).

[7] Ibid

[8] ‘The seven stages in the model are: land banking, land packaging, land development, building development, building operation, building renovation, and site redevelopment. Each stage in the process begins with the acquisition tasks and ends with the disposition tasks. Each stage must also address, to some extent, the following categories of tasks (many of which are done simultaneously): financing, market research, approvals, environmental, improvement construction, and transportation and accessibility concerns. As with all real world applications of conceptual models, the lines separating the stages and the categories can be fuzzy.’ Daniel Kohlhepp  ‘The Real Estate Development Matrix’ The American Real Estate Society Meetings St. Petersburg, Florida (2012)

[9] That is, the City of Richmond had controlled the land under a Crown grant since 1890 and by 1916 was operating:

  • an abattoir;
  • a quarry;
  • a stone crushing plant;
  • a ‘refuse destructor’; and, relevantly
  • a tar distilling plant with a 40,000 gallon blue stone lined storage pit for coal tar on the depot.

 

Water Overflow

What is the issue?

A recent decision of the Court of Appeal identifies seven factors to be considered and assessed in determining whether an overflow of water onto land is reasonable.[1]  These factors may have relevance to statutory agencies, Departments, Ministers and authorities responsible for public land or public infrastructure in particular, at times of heavy rainfall.

What was decided?

The Court of Appeal in Hazelwood Power Partnership v Latrobe City Council[2] held that the Morwell Main Drain was not a public drain for the purposes of the Water Act 1989.  Following that conclusion, the Court of Appeal considered whether the flow of water from the Morwell Industrial Estate and from the township of Morwell into the Morwell Main Drain was unreasonable.

Historically, the test of lawfulness for flow of water related to whether the landowner was uphill or downhill.  Called the ‘free flow principle’, it was considered that an owner of lower land was obliged to receive all flows of surface water onto his or her land that occurred naturally from the higher land.  The Water Act 1989 replaced the ‘free flow principle’ with a ‘reasonableness’ test.  That is, the question is no longer whether a flow of water is ‘natural’ but whether it is ‘reasonable’.

The Court of Appeal agreed with the trial Judge’s finding that the flow onto the Hazelwood land of waters generated in substantial part by the municipal drains on higher ground was reasonable.  The seven key factors considered in concluding that the water flow was ‘reasonable’ were:

  1. the contours of the land;
  2. the use of the lands concerned and the lands in the vicinity;
  3. the limited sense in which the water flow complained of from the Council drains could be said to be something other than a natural flow (ie, the ‘free flow’ principle);
  4. the purpose for which and degree of care with which the Morwell Main Drain was originally constructed by the SECV in 1949;
  5. no evidence of a lack of appropriate regard to cumulative impact of the subsequent drainage works which occurred over time;
  6. the fact that all drainage works were assumed to have appropriate statutory authority;
  7. the fact of prior consent or acquiescence to the flows of water for more than 60 years, since the Morwell Main Drain was first constructed by the SECV for the purpose of diverting flows of storm and rain water run-off from entering the open cut mine.

The Court of Appeal noted that the flow carries an ongoing risk of serious damage to the Hazelwood land and the northern batters in particular.  However in this case, the flow was considered to be reasonable.

What does it mean for me?

Advisers in government should consider these 7 factors when making an assessment of whether water flows from public land or infrastructure into private drains or onto privately held land are reasonable, particularly at times of high rainfall or floods.

[1] Hazelwood Power Partnership v Latrobe City Council [2016] VSCA 129 (Warren CJ, Osborn and Beach JJ).  See further, section 20 of the Water Act 1989

[2] [2016] VSCA 129

First published on the VGSO Blog.