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New Act has changed the liability landscape for rural fires

04 August 2017 - By Veronica Cress

Section 43 of the Forest and Rural Fires Act 1977 (1977 Act) was a useful provision for recovering fire losses from the person responsible for causing a rural fire. Compensatory damages could be sought for firefighting costs, property damage and any other losses that were not too remote. It was not necessary to prove intention, negligence, or lack of care. The person responsible was strictly liable once the cause of a fire had been agreed or established by civil action.

On 1 July 2017 the Fire and Emergency New Zealand Act 2017 (FENZ Act) repealed the 1977 Act and effectively replaced s 43 with a new offence and penalty regime that includes serious criminal offences punishable by up to two years imprisonment. The stated purpose of the new regime in s 3(d) is “to improve fire safety.” As stated in the Department of Internal Affairs Report to Government Administration Committee on Fire and Emergency New Zealand Bill 2016 (October 2016 at [9.79]), the rationale is that serious criminal penalties ought to deter risky fire behaviour.

It remains to be seen whether this public policy shift away from civil cost recovery and towards criminalising risky fire behaviour will achieve the stated objectives. In the meantime, the liability landscape has changed significantly for those who cause rural fires that get out of control and those who suffer loss as a result of them.

The new offence and penalty regime

The FENZ Act has introduced a comprehensive offence and penalty regime. The offences in the Act broadly fall within three categories:

  • serious criminal offences (for intentionally risky behaviour with fire that increases the likelihood of fire spread and harm to others);
  • infringement offences (for contravening the FENZ Act or regulations); and
  • other offences (for intentional conduct more serious than infringement offences but not falling within the most serious category).

Serious criminal offences

The maximum penalties for the most serious criminal offences in the FENZ Act are:

  • imprisonment for up to two years, and/or
  • fines of up to $300,000 for an individual and $600,000 in any other case.

Sections 60 and 61 contain offences that fall within the serious category and most closely resemble the repealed s 43 of the 1977 Act. These offences are “knowingly or recklessly”:

  • causing or allowing a fire to get out of control and spread (s 60); and
  • leaving a burning or smouldering substance in open air without taking the prescribed precautions (s 61).

Sections 53 to 58 (inclusive) also create criminal offences falling within the most serious category. These are all offences for “knowingly or recklessly” lighting fires in the open air in breach of the various fire prohibitions and restrictions that Fire and Emergency New Zealand is authorised to impose under the FENZ Act. These can relate to fire seasons, geographical areas, and activities.

Infringement offences

Infringement offences will be created for breaches of the FENZ Act or regulations. The detail is yet to be provided by regulation, with just one offence (failure to provide information or evidence (s 154(4)) under the “Infringement Offence” heading in the Act. However, the penalties for infringement offences will be payment of either: (a) an infringement fee, or (b) a fine if proceedings are commenced in the District Court under section 14 of the Criminal Procedure Act 2011.

Other offences

The offences contained in sections 156 to 159 are positioned in the FENZ Act under the heading “other offences”. These offences are more serious than infringement offences but less serious than offences involving risky behaviour with fire. All offences in this category are punishable by imprisonment and/or fines. Other offences at similar levels of criminality and with comparable penalties are also scattered through the Act.

New offence of causing a fire to get out of control or spread

Section 60 of the FENZ Act introduces a new criminal offence for “knowingly or recklessly” causing or allowing a fire to get out of control and spread to vegetation or property.

This section will apply to some of the same fire incidents that would previously have been caught by s 43 of the 1977 Act but with some major differences:

  • Section 60 does not apply if FENZ is notified “…as soon as practicable after discovering the fire”.
  • The fire must now spread to vegetation or property. Previously, s 43 had applied if property was “safeguarded from a threat of outbreak of fire”.
  • Proof is now required of the mental element of “knowingly or recklessly” causing or allowing a fire to get out of control and spread.
  • The maximum penalty for the offence is a period of imprisonment and/or fine. There is now no statutory provision for seeking an award of compensatory damages.
  • As with all criminal offences, every element of the offence must be proved to the criminal standard of beyond reasonable doubt.

Expanded offence of leaving a burning or smouldering substance

It is also an offence under s 61 of the FENZ Act to leave a burning or smouldering substance in the open air without taking precautions.

Leaving a burning or smouldering substance “in a way that increases the likelihood of harm or damage from the start or spread of fire” is an offence if the accused ”knowingly or recklessly” fails to:

  • take reasonable steps to reduce the likelihood of harm or damage as soon as practicable; and
  • notify FENZ as soon as practicable after taking those steps.

This offence is an expanded version of the offence previously contained in s 26 of the 1977 Act. The key changes are:

  • The mental element of the offence has changed from “wilfully or negligently” leaving a substance to “knowingly or recklessly” failing to take precautions.
  • The danger at which the offence is directed has expanded from “creating a fire hazard in vegetation” to “increasing the likelihood of harm or damage from fire”. The words “harm or damage” indicating that danger to both people and property (including vegetation) is covered.
  • The maximum penalties for the offence have increased significantly. For periods of imprisonment the increase is from 2 months to 2 years, and for fines the increase is from $7,500 to $600,000.

Common law causes of action remain

Now that s 43 of the 1977 Act has been repealed, those who suffer loss as a result of rural fires will only be able to recover compensatory damages if they can establish a cause of action under the common law. Section 43 had expressly stated that other rights of recovery were not affected by the section. The FENZ Act is silent on the point. Without an express provision to the contrary, common law causes of action will continue to be available alongside the FENZ Act.

The three causes of action that are often pleaded in this context were recently discussed by Thomas J in Double J Smallwoods Ltd v Gisborne District Council [2017] NZHC 1284 from [96]. In very simple terms, they are:

  • Negligence (requiring knowledge of a hazard that could cause foreseeable harm and a failure to take reasonable precautions against it).
  • Nuisance (requiring an act or event that foreseeably causes or threatens, continuing or recurring, unreasonable interference with the use or enjoyment of other land).
  • Possibly, the rule in Rylands v Fletcher (1868) LR 3 HL 330 (requiring a foreseeable escape of a potentially harmful substance). Although there is debate about whether this is technically a separate cause of action, it is frequently pleaded as one in this context.

In every case, proof of reasonable foreseeability is required in addition to the other necessary elements of the cause of action. As a result, successful recovery of rural fire losses under the common law will require more of a plaintiff than simply proving the cause of a fire, as was previously the case under the now repealed s 43 of the 1977 Act.

Conclusion

The FENZ Act has significantly changed the liability landscape for those that cause uncontrolled rural fires and those who suffer loss as a result of them. In summary:

  • Those who cause rural fires are no longer strictly liable to pay compensatory damages for the losses they inflict on others but now face the threat of criminal liability, possible imprisonment and hefty fines that are payable directly to the Crown.
  • Those who suffer loss as a result of rural fire will need to establish a common law cause of action to recover compensatory damages and much more will be required for successful recovery than simply proving the cause of a fire .

Veronica Cress veronica@veronicacress.com is an Auckland barrister. A former insurance litigation partner in the New Zealand operation of DLA Piper, Veronica specialises in civil litigation, insurance law, civil liability, and professional risks.

Last updated on the 4th August 2017