The Supreme Court of Victoria has recently ordered that the operators of Bald Hills Wind Farm (Bald Hills) be restrained from generating excessive noise in the operation of the wind farm and required them to take steps to reduce that noise. The operators were also required to pay the successful plaintiffs, Mr. Uren and Mr. Zakula, over $250,000 in damages including for the loss of amenity of their land, primarily due to the impact of the wind farm on their ability to get a good night’s sleep (Uren v Bald Hills Wind Farm Pty Ltd [2022] VSC 145).

The decision confirms that operators of clean energy infrastructure do not have an immunity from common law actions in nuisance just because they may meet the standards imposed in applicable planning and environmental approvals. This will require an important shift in the mindset of operators – and a review of the adequacy of systems and measures they have in place to deal with complaints – and any broader statutory general environmental duties.

In addition, Justice Richards observed that while wind farming contributed to the reduction of Australia’s reliance on fossil fuels and that it was a socially valuable activity, which is in the public interest, he also stated that, in effect, those social benefits should not be prioritised over existing social norms – such as allowing neighbours to have “a good night’s sleep”.

Whilst the decision was predicated on the Victorian planning regime under the Planning and Environment Act 1987 (Vic) (PEA) and the associated regulations and permit conditions, the central and broader issues of compliance with noise standards, the relevance of statutory regimes to private legal action, and relationship management, provide lessons for all Australian jurisdictions and the renewable energy proponents which operate therein.

Uren and Zakula v Bald Hills Wind Farm Pty Ltd: The decision

In February 2020, Mr. Uren and Mr. Zakula, each of whom lived on properties neighbouring Bald Hills, commenced proceedings against the operators of Bald Hills in the Supreme Court of Victoria, alleging it had committed the tort of nuisance by emitting excessive noise, disturbing their sleep and reducing the value of their properties. The plaintiffs sought an injunction to prevent the continued emission of the noise and an order for damages.

Richards J found that the noise emissions constituted nuisance, as they were a substantial and unreasonable interference with the plaintiffs’ right to use and enjoy their land.  

As part of its consideration in relation to whether the noise is causing an unreasonable interference, the Court found that Bald Hills was not operating in compliance with the noise emission conditions in its planning permit (largely because the operator hadn’t adequately proven that it had complied).  But the Court noted that even if Bald Hills had complied with those conditions, that would not necessarily have resulted in a finding that the noise emissions were reasonable because (among other matters) the applicable noise standard imposed by the conditions was ‘not directed to intermittent loud noise from wind turbines, and does not provide a way of assessing whether a wind farm produces unreasonably annoying noise in certain weather conditions, or on a particular night’.

Importantly, Richards J confirmed that it was ultimately for the Court to determine whether a particular party had complied with the conditions of a relevant planning permit, and not the the acoustics industry, or indeed, the Minister who may have previously confirmed compliance in writing.

Other matters considered by the Court in determining whether the noise was unreasonable include:

• the nature and extent of the interference;
• the social and public interest value in operating the turbines to generate renewable energy;
• whether the plaintiffs were hypersensitive to noise from the turbines;
• the character of and the nature of established uses in the locality of plaintiffs’ land;
• precautions that the operator has taken to avoid or minimise the interference; and
• whether the operator could reasonably have taken any other precautions.

Notably, the injunction ordered by the Court was deferred for three months to avoid requiring a complete shutdown of Bald Hills’ operations and to provide it with an opportunity to reduce noise emissions in another manner. 

Lessons to be learned by renewable energy sector

The decision shows the importance for wind farm operators and those in the renewable energy sector more broadly to be proactive rather than reactive in respect of the following:

1. Implementing and maintaining a comprehensive system of compliance monitoring: A distinct issue for Bald Hills was the manner and methods by which its compliance with noise requirements were measured. The Court found that the relevant monitoring was being conducted intermittently and only at certain parts of the wind farm, such that the results did not accurately reflect the farm’s actual noise emissions.
   
   Importantly, Richards J noted that compliance (if proven) was not a complete defence to a nuisance claim (which needed to be determined on a case-by-case basis by the Court) but it would go some way to establishing that the noise emitted was reasonable.  Further, her Honour held that because the plaintiffs established the noise interference caused by the wind farm was substantial, it was up to Bald Hills to prove that the noise was reasonable because it complied with the conditions of the planning permit.
   
   Therefore, an operator that maintains rigorous compliance controls and can produce evidence of that compliance is better placed to defend any claims in nuisance for unreasonable interference. An approach conceptually akin to systems for managing occupational health and safety hazards is likely the best.
2. Shifting the compliance mindset: In addition it will be necessary for operators to shift their mindset from the established practice that compliance with planning permit conditions is in itself sufficient to deal with noise complaints (or complaints in relation to any other alleged adverse impacts). It may require a case-by-case analysis of the other factors relevant to an assessment of ‘reasonableness’ set out above.
3. Securing ‘breezements’ with private land holders: Properly drafted agreements between landholders and operators may prevent legal action. Such agreements were expressly contemplated by the conditions of the Bald Hills permit.  The permit provided that the operator did not have to comply with the applicable standard if it had already entered into an agreement with a landholder that set out alternative parameters.
   
   This concept has been implemented successfully in other jurisdictions with differing regimes. Such agreements tend to provide compensation to a landholder in return for both an easement over the property allowing the operator to generate noise and a covenant from the landholder that it will not commence proceedings in relation to such noise.
4. Ensuring third-party agreements are airtight: Where a third party is responsible for managing a project, a principal may be exposed to risk depending on the applicable suite of agreements.  Ensuring an effective, practical and enforceable indemnity clause in respect of compliance with any relevant permits or approvals can at least provide financial protection should an operator be subject to an adverse finding.
5. Location, location, location: The specific location of a wind farm can act as both a sword and shield in the event of litigation. The Bald Hills decision reveals that wind farm operators cannot ignore the pre-existing acoustic amenity of the relevant area, as the impact of any interference will be measured against that background. On this occasion, the impact of the noise emissions was measured against the acoustic amenity of a quiet rural area. Further, this decision suggests that courts are unlikely to accept existing permits as evidence that the permit-holder’s operations constitute an existing land use if its terms have not been complied with.
6. Maintaining social licence: Genuine engagement and undertaking reasonable remedial action to reduce noise levels (or other adverse environmental impacts) are not only useful for cultivating the social licence to operate, but will also be critical to the Court’s consideration of whether the noise interference is unreasonable and the amount of any damages to be awarded.  Richards J characterised the operator as adopting a ‘high-handed’ method of dealing with complaints that itself at least doubled the loss of amenity.  Had the operator engaged with the plaintiffs and taken reasonable steps to mitigate the noise impacts when the issue first arose, it may not have found itself on the unsuccessful side of Court proceedings, or at least may not have faced a damages award as high as was ordered by the Court.

Implications for renewable energy sector

In circumstances where compliance with existing regulations and permit conditions may be insufficient to ward off private legal action, operators of renewable energy projects may need to shift their mindset from the adopted position that ‘we comply with our conditions, and therefore the impacts are reasonable’.

Companies need to have systems and measures in place to mitigate the risks arising from this decision – and have the capability to take a deeper dive into complaints (particularly any systemic complaints) which involve a broader consideration of ‘reasonableness’ as set out by the Court. Those systems and measures will also need to deal with the changing landscape of broader statutory environmental duties – such as the new general environmental duty in Victoria which requires operators to minimise risks of harm to human health or the environment from noise so far as reasonably practicable.

While Bald Hills is an example of litigation risks faced by the sector – we don’t see the decision as fatal to the ability of large scale renewable projects to operate in compliance with applicable environmental laws (provided appropriate changes are made to mitigate the risks flowing from the decision) – or long-term investment in renewables.  

For advice on the adequacy of systems and measures to mitigate the risks arising from the decision and other statutory environmental duties (such as the general environmental duty in Victoria), implementing robust and effective compliance monitoring, interpretation of relevant standards, drafting of indemnity or liability causes or compensation agreements, contact our Clean Energy + Decarbonisation experts.