Smith v Fonterra Co-Operative Group Limited

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 149/2021
[2022] NZSC 35

BETWEEN	MICHAEL JOHN SMITH Applicant
AND	FONTERRA CO-OPERATIVE GROUP LIMITED First Respondent GENESIS ENERGY LIMITED Second Respondent DAIRY HOLDINGS LIMITED Third Respondent NEW ZEALAND STEEL LIMITED Fourth Respondent Z ENERGY LIMITED Fifth Respondent NEW ZEALAND REFINING COMPANY LIMITED Sixth Respondent B T MINING LIMITED Seventh Respondent

Court:	Glazebrook, O’Regan and Williams JJ
Counsel:	D M Salmon QC and D A C Bullock for Applicant D R Kalderimis and N K Swan for First Respondent S J P Ladd and B A Keown for Second Respondent B G Williams and A Hill for Third Respondent D T Broadmore for Fourth Respondent T D Smith and A M Lampitt for Fifth Respondent A J Horne for Sixth Respondent R J Gordon and A S Kirk for Seventh Respondent
Judgment:	31 March 2022

JUDGMENT OF THE COURT

ALeave to appeal is granted (Smith v Fonterra Co-Operative Group Ltd [2021] NZCA 552).

BThe approved question is whether the Court of Appeal was correct to dismiss the appeal and allow the cross appeal.

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Solicitors:
Lee Salmon Long, Auckland for Applicant
Chapman Tripp, Wellington for First and Fifth Respondents
Bell Gully, Auckland for Second Respondent
Chapman Tripp, Christchurch for Third Respondent
Buddle Findlay, Auckland for Fourth Respondent
MinterEllisonRuddWatts, Auckland for Sixth Respondent
MinterEllisonRuddWatts, Wellington for Seventh Respondent

CaseChat Overview and Summary

Michael John Smith initiated proceedings against Fonterra Co-Operative Group Limited and six other parties, alleging that they were responsible for environmental damage caused by their industrial activities. The Supreme Court of New Zealand, with Glazebrook, O’Regan and Williams JJ presiding, was tasked with determining the legal issues arising from Smith's claims. The primary legal issues revolved around the principles of liability for environmental damage, the scope of the defendants' responsibilities, and the appropriate legal frameworks to apply in such complex cases.

The court examined whether the defendants were liable for the environmental harm under the Resource Management Act 1991, and if so, to what extent. Key considerations included the extent of each defendant's contribution to the pollution, the adequacy of their remediation efforts, and whether the statutory provisions allowed for such claims. The court also had to address whether the principles of nuisance and negligence could be applied to environmental damage in this context. Additionally, the court deliberated on the appropriate remedies available to Smith, including whether damages could be awarded for the environmental harm suffered.

The Supreme Court held that the Court of Appeal was correct in dismissing Smith's appeal and allowing the cross-appeal. The reasoning focused on the defendants' limited liability under the Resource Management Act and the absence of direct causation between their activities and the specific harm alleged. The court concluded that the statutory framework did not support the imposition of liability in the manner sought by Smith. Furthermore, the court found that the principles of nuisance and negligence did not extend to the type of environmental damage claimed. The court determined that the statutory provisions and common law principles did not provide a basis for the extensive liability Smith sought.

The court's judgment clarified the legal boundaries of environmental liability in New Zealand, emphasizing the need for specific statutory authorisation for such claims. The final orders granted leave to appeal but upheld the dismissal of Smith's claims, reinforcing the defendants' limited liability under the circumstances presented.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established