LEGAL ISSUES AND INFORMATION ON NATURAL HAZARDS[1]

Mr Michael Eburn

Senior Lecturer, School of Law

University of New England

ARMIDALE NSW 2351

AUSTRALIA

Professor John Handmer

Director, Centre for Risk and Community Safety

Bushfire CRC

RMIT University

GPO Box 2476V

MELBOURNE VIC 3001

AUSTRALIA

Abstract

Information is fundamental to natural hazards management. Yet often councils and other authorities suggest that they are reluctant to provide specific information about risks such as flood or fire risk, to property owners or prospective purchasers. This reluctance arises from a fear of litigation that may arise if that information has adverse consequences, for example by reducing the market value of the affected property.

This paper will look at Australian law to identify:

1) whether such a fear is grounded in legal principle, in particular whether authorities would owe a duty of care to homeowners not to disclose risk information; and

2) whether, in contrast, the law would consider that relevant authorities would in fact owe a legal duty to disclose known risk information to persons likely to be affected by that risk.

It will be argued that modern law should encourage risk management authorities such as local authorities and fire and emergency services to be proactive in identifying and warning of risk, so that potentially affected persons can make informed decisions about how they will prepare for and deal with the risks that they face.

Introduction

Anecdotally, at least, local governments (Councils) have reported a fear of releasing risk information to affected land owners for fear of legal liability. [2] It is suggested that Councils fear that they could be liable if they release information that may impact upon property values either by reducing the market value of the property or by limiting the developments that might lawfully be made on the property. A second potential liability issue might arise if it turned out that the information was wrong.

This paper will consider the legal issues around disclosing risk or hazard information to land owners, prospective land owners and developers.[3] The paper is not concerned with the provision of advice at the time of a fire or flood (for example advice on whether to stay or to evacuate) rather it is concerned with the provision of information when people are seeking to buy or develop land. Councils may have an obligation to release reasonably accurate hazard information (for example that the land is bushfire prone) but they are not required to give advice, for example that buying the land is a good idea or that development consent for a particular project will be granted.[4]

It will be argued that there is no significant legal risk in providing reasonably accurate hazard information. It is consistent with the policy of the law that risk information should be made available to allow informed persons to make their own choices about what risks they will accept and how they will prepare for those risks.[5] A policy to openly disclose reasonably accurate known hazard information will expose a council to less legal risk than a policy of withholding information or worse, failing to consider at all whether information should be made available

Liability for withholding reasonably accurate, known risk information

The question of whether a Council will be liable in negligence if it fails to reveal information about the risks facing a particular property depends on whether or not there is a duty of care. This in turn depends upon the extent of Council’s knowledge of the risk,[6] the control Council has over the risk,[7] the vulnerability of the person at risk including their ability to observe or detect the hazard themselves, and the reason Council is vested with a relevant power, authority or obligation.[8]

When it comes to knowledge Council (as distinguished from particular Council employees) will have greater knowledge than a purchaser or developer. Council, as an institution, may have long term knowledge and records that will identify particular risk.[9] In NSW Councils are vested with the power to develop Local Environment Plans[10] and Development Control Plans[11] and are given the authority to approve developments and buildings to ensure many relevant considerations, including risk, are taken into account.[12] With that degree of knowledge and control of the relevant information along with vulnerability of people who seek information (that is who will be at risk if the information is not provided and who are unable to obtain detailed hazard information from other sources) it is easy to argue, and has been held, that a Council

… which follows the practice of supplying information upon which the recipient is likely to rely in circumstances in which it is reasonable for him to do so is under a duty to exercise reasonable care that the information given is correct.[13]

Information provided by a Council must be reasonably accurate. Under common law such conduct would be negligent if the way the information was collated or communicated was not ‘reasonable’. What is reasonable is hard to define in advance. The Bolam test said that a court could not find a professional (in that case a medical practitioner) negligent if his practice was in accord with the opinion of a reasonable body of fellow practitioners. In effect the medical profession was allowed to determine the legal question of whether the defendant’s conduct was reasonable. This test has been rejected by the High Court of Australia which has determined that the question of whether conduct is ‘reasonable’ is a legal question to be ultimately determined by the Courts.[14] The Courts will be influenced and guided, but not bound to accept, the opinions of the relevant profession.[15]

Civil liability legislation has sought to restore the ‘Bolam test’[16] for professionals.

A person practising a profession (a professional) does not incur a liability in negligence arising from the provision of a professional service if it is established that the professional acted in a manner that (at the time the service was provided) was widely accepted in Australia by peer professional opinion as competent professional practice.[17]

That provision does not, however, apply to a duty to give ‘… (or the failure to give) a warning, advice or other information in respect of the risk of death of or injury to a person associated with the provision by a professional of a professional service.’[18] That provision was designed to ensure that professionals such as medical practitioners could not avoid telling a patient information about the risk of treatment just because their peers would not tell the patient. The conclusion as to how these provisions would apply in our context are unclear.

It would appear that how a Council goes about collecting and assessing a risk would be a matter of professional practice. That means the procedures used to assess whether a property is at risk from fire or flood would be judged as being reasonable against the standards adopted by the relevant professional bodies, for example the Australian Institution of Engineers, or the Australian Fire and Emergency Services Authorities Council. How the Council warns of that risk, where the risk is one of death or injury, would appear not to be covered. Where Council is aware of a hazard that poses a threat to life then the question of whether it was reasonable not to tell someone would depend on issues of Council’s knowledge, whether Council was directly asked about the risk, the vulnerability of the person exposed the risk, their ability to identify the risk themselves etc.[19] The mere fact that other Council engineers would not advise of the risk would not be a defence particularly if the defendant Council was specifically asked about the sort of risk in question.[20]

Failure by a council to give accurate, or any, information about known risks of slippage,[21] exposure to aircraft noise[22] and contamination,[23] has led to liability.

Liability for disclosing reasonably accurate, known risk information

There are no reported cases of authorities being sued for releasing reasonably accurate hazard information. This is despite fears that such an action may be possible.[24]

In deciding whether there has been negligence the High Court has said that the defendant needs to take reasonable care. In determining what reasonable care is, the courts must take into account any conflicting responsibilities Council may have.[25] It can be confidently asserted that in a serious situation, where the recipient of the information can be expected to rely on the information there is a duty to honestly provide that information, [26] but are there conflicting responsibilities that would warrant council not disclosing hazard information? Is there some conflicting duty to land owners that would mean Council should not release hazard information?

There are legislative requirements upon Councils to make risk information available.[27] Where legislation requires particular action, complying with that legislative obligation cannot be the basis of an action for compensation.[28] However, how a Council chooses to perform its obligations can be negligent. For example a statutory obligation upon an authority to obtain and disseminate natural hazard information cannot lead to compensation because the release of the information is detrimental to someone, but it can if the way in which that information is obtained or released is negligent. For example a statutory obligation upon an authority to obtain and disseminate natural hazard information cannot lead to compensation because the release of the information is detrimental to someone, but it can if the way in which that information is obtained or released is negligent, for example if the Council did not consider how the information may be used (or misused) and how it may impact upon others. That does not mean all adverse impacts lead to liability, but they are likely to do so if the Council cannot show that adverse impacts were considered and balanced against overall benefits.

Other amendments to Australian tort law have moved to further protect authorities from legal liability for the decisions they make when performing their statutory obligations.[29] A Council will not be liable for adverse consequences unless its action was ‘… so unreasonable that no authority … could properly consider the act or omission to be a reasonable exercise of its functions.’[30] Determining fire risk by having the Council engineer drive around and guess what properties may be at risk, and then releasing that information by placing a sticker on a ‘For Sale’ sign saying ‘Don’t buy this land, it’s going to burn’ may lead to a successful claim for compensation. Producing maps or other risk communication tools, using appropriate scientific methodology, and making that information publicly available will not.[31]

A Local Government is not liable for giving, in good faith, advice about whether or not land is flood prone, subject to coastal erosion,[32] or contaminated.[33] ‘Good Faith’ requires more than just an honest attempt. A Council acts in ‘good faith’ when providing information when it refers to its records, applies current practice and guidelines and genuinely considers how the information is relevant to the land in question. The concept of ‘good faith’ is discussed in more detail, below.

Even if it could be argued that Council owed a legal duty to current owners not to publicly disclose the hazards that may impact upon their property, that duty would be breached once by disclosing the known information. On the other hand a duty to disclose known, reasonably accurate risk information that is owed to prospective land purchasers is breached every time the land is the subject of a sale or creation of a legal interest (for example a mortgage). If there was some duty that could sound in damages (and it is argued that there is not), that could be crystallised by making information available. The damage to the current landowner could be assessed and people who acquired a future interest in the land would be informed of the risk. Failure to take that action, and so not disclose hazard information, would see Councils exposure to legal risk continue ad infinitum.

It follows that there is no conflicting duty owed to current landowners that would justify withholding reasonably accurate hazard information such as on risk maps or by reference to the risk on planning certificates.[34]

Liability for disclosing inaccurate information

The duty that any Council owes is the duty to act reasonably and to produce information that is accurate or at least reasonably accurate. Just because the eventual hazard does not perform as predicted does not, however, mean that the information was inaccurate. The fact that a flood is higher, or lower, than predicted, or a fire burns out land that was thought not to be bushfire prone and does not damage identified bushfire prone land, does not mean the hazard information was inaccurate. To be accurate the hazard predictions have to be based on current scientific knowledge and methodology, reasonable assumptions and, to rely on statutory protection, made in good faith.

This issue may have been at the forefront of the thinking of Brisbane City Council when they failed to release flood risk information that they commissioned and obtained between 1999 and 2003. The initial reports indicated that the expected level of a 1 in 100 year flood would be between 1 and 3 metres higher than that used in Brisbane City planning documents. The process of commissioning, and withholding the various reports, was the subject of an investigation by the Queensland Crime and Corruption Commission.[35] In evidence before the Commission and in the press, fear of liability was raised as one reason why material was not disclosed but the exact basis for that fear is not set out.