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11 Feb 2009

Rising sea levels - a sea change for the courts and decision-makers

By Claire Smith

Developers are now on notice that a failure to consider climate change risks on (or arising from) their proposed coastal developments could mean rejected proposals or leave approvals open to future challenge. Obtaining development consents could become harder, as councils ponder the risks of future negligence claims if landowners suffer loss or property damage. Owners of coastal tourist resorts and facilities will also need to consider mitigation and adaptation strategies to ensure the preservation of their infrastructure and assets and balance restoration costs against new design or relocation costs.

The tourism industry in Australia is particularly vulnerable to the effects of climate change. A large number of resorts and facilities are located on coastal areas, islands and floodplains that stand to be impacted by rising sea levels, shoreline erosion and flooding. This article examines the recent case law and policy developments triggered by climate change concerns and potential implications for owners and developers of coastal property.

Recent cases

Although few planning schemes specifically require public authorities to consider climate change risk in planning decisions, there is an increasing trend by the courts towards the recognition of climate change impacts on and arising from proposed developments.

In Gippsland Coastal Board v South Gippsland Shire Council [2008] VCAT 1545, the Victorian Civil Administrative Tribunal (VCAT) overturned the Council's decision to grant development consent for six coastal dwellings, a decision based in part on climate change considerations including the threat of increasing storm severity and rising sea levels. While the relevant planning legislation did not specifically require consideration of coastal recession or sea level rise, it required the responsible authority to consider any significant effects which the environment may have on use or development. The VCAT found that the location of the development was not suitable for the proposed development given the unacceptable risk of sea level rise and flood inundation. Although the VCAT conceded that there was no scientific certainty as to the degree or magnitude of sea level rise, there was general consensus that some level of climate change would lead to extreme weather beyond the historical record of sea levels or inundation from coastal or inland storm events.

Similarly, the NSW Court of Appeal has left the door open for future challenges to planning and development approvals under the Environment Planning and Assessment Act 1979 (NSW) (EP&A Act) if decision makers fail to take into account long-term environmental risk factors, including climate change flood risk. In Walker v Minister for Planning [2006] NSWLEC 133, the Land and Environment Court held that a concept plan approval for a large scale coastal redevelopment was void because the Minister failed to consider the principles of ecologically sustainable development (ESD). To this end, the Minister failed to consider whether changed weather patterns would lead to an increased flood risk. While this decision was overturned by the Court of Appeal, development consents and planning approvals are still open to challenge if decision makers fail to consider ESD principles and take future climate change risks into account.

In Walker v Minister for Planning [2008] NSWCA 224, the Court of Appeal agreed with the views of Preston CJ in Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133 that although section 79C of the EP&A Act does not expressly refer to ESD principles as factors required to be taken into account by a consent authority, the "public interest" is broad enough to embrace ESD principles (including the precautionary principle). The Court of Appeal noted, however, that it is not mandatory for the Minister to have regard to any particular aspect of "public interest", including ESD principles. The Minister is required to consider the objects of the EP&A Act and take into account those considered relevant, but a failure would not of itself render a decision void. The Court of Appeal suggested that ESD principles are likely to be an element of public interest in relation to most decisions and the failure to consider same would provide strong evidence of the failure to consider public interest, capable of avoiding decisions.

In Charles & Howard v Redland Shire Council (2007) 159 LGERA 349, the Queensland Planning and Environment Court dismissed an appeal against a decision by Redland Shire Council. The Council had granted the applicant a preliminary approval for filling to be used for a building pad on which a house was to be constructed. The approval included a condition requiring the applicant to locate the building pad on the western side of the land, instead of the eastern side. In imposing the condition, the Council took into account the impact of climate change on the flood prone land. The applicant argued that the Council should have made a decision on whether the eastern part of the land was appropriate for a house, rather than imposing a condition requiring the house to be built on the western part of the land. The Court found that the condition to require the house to be located in an area less prone to tidal inundation was relevant and reasonable, as it better reflected the aims of the planning scheme provisions. This case demonstrates that the Court held it was proper for the Council to take climate risk such as higher frequency and more extensive storm tide flooding into account.

Northcape Properties v District Council of Yorke Peninsula [2008] SASC 57 concerned an application for subdivision of a large parcel of coastal land. The relevant Development Plan required the decision maker to consider climate change risk, and in particular, the risk of inundation by storm tides, coastal erosion and changes in sea level. At first instance, the Environment, Resources and Development Court considered expert evidence on whether the coastline was subject to erosion. The Court relied on the developer's expert evidence, which found that over the next 100 years, the coastline would shift inland by 35-40 metres. The Supreme Court upheld the refusal of the subdivision, finding that rising sea levels and changes in flood patterns caused by global warming would erode a buffer zone and prevent public access to the coast. The Court noted that the proposal was "an attempt to develop the land to the greatest extent possible without due regard to the ecological sensitivity of the area and the need to preserve natural features".

These decisions all demonstrate the courts' willingness to accept evidence of climate change risk and emphasise the need for proponents and decision makers to take climate change risks into account when planning their developments.

National Sea Change Taskforce

The National Sea Change Taskforce was established in 2004 as a national body to represent the interests of coastal councils and communities experiencing the effects of rapid population and tourism growth, and now has more than 68 member councils from around Australia. The Taskforce has identified climate change as being of particular concern for coastal Australia and as a result commissioned a report on the implications of climate change for Australian coastal communities.

The report released in July 2008, "Planning for Climate Change: Leading Practice Principles and Models for Sea Change Communities in Coastal Australia", outlines the implications of climate change for sea change communities and explains why new approaches to coastal planning and governance are needed.

It concludes that while climate change is increasingly recognised by the Government as a critical issue for coastal communities, few local planning schemes, apart from controls in Western Australia and South Australia, include specific provisions for considerations of climate change risk, in particular sea level rise. The report makes a number of recommendations, including:

  • all State and territorial planning authorities should enact high-level planning policy to ‘mainstream’ climate change mitigation and adaptation considerations in all coastal planning decisions
  • carbon impact on future land use or development forms must become an explicit consideration in all strategic land use planning and development assessment processes in coastal areas, including ways to avoid, negate or offset the impact of the development on greenhouse emissions and any existing or potential legal duty of care to consider direct or indirect carbon impacts of the development (both during construction and operation)
  • coastal councils should undertake an initial vulnerability assessment of the potential risks of climate change, the capacity of existing systems to adapt to these impacts, and the potential to introduce new adaptation strategies
  • a formal climate change vulnerability assessment be undertaken at regional or local levels to support strategic land use planning decisions and significant development assessment in coastal areas, including assessing the current and potential exposure of locations and infrastructure to climate change risks and the potential to reduce these risks through specific building standards, development controls or direct works; and
  • an intergovernmental agreement be established between all levels of government to clearly state the responsibilities of Federal, State and Local Government in planning for climate change.

At the time of writing this article, there is an ongoing House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts Inquiry into "The Climate Change and Environmental Impacts on Coastal Communities", with one of its terms of reference being to report on "the impact of climate change on coastal areas and strategies to deal with climate change adaptation, particularly in response to projected sea level rise". The Inquiry is midway through a series of public hearings in cities all over Australia. A report to will then be prepared by the Standing Committee. One possible recommendation may be to encourage State and Territory Governments to amend environmental planning instruments to make climate change considerations mandatory in all coastal planning decisions.

Implications

Climate change stands to have significant impacts on existing tourist developments and associated infrastructure. Recent case law and research papers indicate that there is likely to be a greater policy shift towards incorporating climate change considerations in future planning approvals for coastal developments.

Proponents of new tourism developments will need to assess the potential for climate change impacts (such as sea level rise, increased storm severity, flood risk etc) on their projects and incorporate appropriate adaption and mitigation measures in their design proposals. Adaption measures focus on minimising the physical effects and consequential costs of climate change. Tourist developers should, for example, ensure that developments are not located in low-lying areas that are subject to flood inundation or not located in waterfront positions vulnerable to predicted coastal retreat. Additionally, proponents of new tourist developments will need to consider and incorporate measures that will reduce the carbon impact of future land use, such as strong passive solar design principles and efficient water usage systems (such as grey water systems).

In relation to existing developments, property owners or tourism operators should start forward planning and develop adaptation strategies to ensure their assets are preserved over their lifespans. In addition, it is likely that new regulatory standards will see tourist operators having to implement mitigation measures to reduce their carbon footprint and promote ecologically sustainable development. These measures will no doubt come at a cost to the industry. However, planning now for climate change could significantly reduce costs that tourist operators would otherwise incur from infrastructure and asset damage. Further, mitigation measures can lead to considerable cost savings and can even be a marketable asset given consumers increasing appetite for green products and services.

In some States, consent authorities such as local councils are offered limited protection from liability under various statutes if they carry out their functions in good faith in relation to flood liable land or land in coastal zones which may be affected by coastal hazards (see for example the Local Government Act 1993 (NSW), section 733 or Part 5 of the Civil Liability Act 2002 (NSW)).

Where a consent authority acts in good faith in granting or refusing development consents, or preparing environmental planning instruments or development control plans, the statutory carve-outs provide councils with some protection from liability. Where a council is negligent, however, statutory protection does not prevent an individual claiming against that council in negligence. While it may be possible to seek contribution from councils to the extent that they are negligent in granting development consents, it would be prudent for developers to carry out and develop their own climate change vulnerability assessments and adaptation strategies. Additionally, as scientific modelling improves, it will be possible to predict local climate change impacts with more certainty and it is likely that councils will adopt an even more conservative approach when exercising their statutory powers in granting development approvals.

Lastly, and perhaps one of the more immediate threats of climate change for owners of coastal tourism resorts and facilities, is the recent surge in insurance premiums and availability. As sea levels rise, and coastal erosion continues, insurance may become prohibitively expensive and in some cases, simply unavailable.

Related Knowledge

Disclaimer

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.