The Montara oil spill class action: crossing borders and extending time

The Montara oil field lies in the offshore area of the Territory of Ashmore and Cartier Islands, in which the laws of the Northern Territory apply.  On 21 August 2009, a serious wellhead blowout occurred at the Montara Platform.  Oil and gas flowed into the Timor Sea for over 10 weeks, in what became the worst oil spill in Australia’s offshore petroleum industry history.  In 2010, a Commonwealth commission of inquiry concluded that the blowout resulted from widespread shortcomings in the well control practices of the production licensee, PTTEP Australasia (Ashmore Cartier) Pty Ltd (PTTEP).

Nearly 7 years later, on 3 August 2016, a class action was commenced in the Federal Court of Australia by Daniel Sanda, an Indonesian seaweed farmer who lived on the island of Rote (about 250 km north of Montara), and farmed in the coastal waters of the Timor Sea.  Sanda sued as a representative applicant, on behalf of a closed class of approximately 15,000 Indonesian seaweed farmers, claiming damages for the destruction of seaweed, and the decline in seaweed production, caused by oil pollution from the Montara blowout.

The proceeding lies at the outer bounds of the Australian class action regime, both geographically and temporally.  Offshore claimants have figured occasionally in Australian class actions – most notably, in the Ok Tedi proceedings in the 1990s and early 2000s, and in the recently-settled claim on behalf of asylum seekers detained on Manus Island.  The Montara class action appears to be the first Australian class action claiming for cross-border environmental damage.

PTTEP is an Australian company, which is alleged to have breached its obligations under Commonwealth offshore petroleum legislation.  So the Federal Court has jurisdiction, and PTTEP’s common law liability falls to be decided under the laws of the Northern Territory.

Under Northern Territory law, the basic limitation period for claims in negligence is 3 years.  So the viability of the class action would stand or fall depending on whether the limitation period applicable to both the lead applicant and the group members could be extended.  Section 44 of the Limitation Act 1981 (NT) allows the court to extend a limitation period as far as it thinks fit, provided that:

(i)         the plaintiff did not ascertain facts material to his case until after 12 months prior to the expiry of the basic limitation period;

(ii)         the plaintiff commenced the proceeding within 12 months after ascertaining those facts; and

(iii)        it is otherwise just, in all the circumstances of the case, to grant the extension of time.

The lead applicant applied, under s 44, to extend the limitation period.  Two questions arose.  First, when a plaintiff commences a group proceeding as a representative of all of the group members, has each of the group members “commenced a proceeding” on the same day, for the purposes of s 44 of the Limitation Act?  PTTEP contended that the lead applicant could only extend the limitation period applicable to his own individual claim; and further that the group members were not taken to have commenced a proceeding on their own individual claims, with the result that each group member would need to commence a separate proceeding for their individual claim and apply in those other proceedings to extend the limitation period for their individual claim.

Griffiths J considered that procedural issue as a separate question.  Having regard to the beneficial purpose, both of s 44 of the Limitation Act and of Part IVA of the Federal Court of Australia Act 1976 (Cth), he concluded that each of the group members was properly understood to have “commenced a proceeding” upon the lead applicant’s commencement of the representative proceeding.  However, if the proceeding runs to the stage of considering each of the group member’s individual claims, then each group member will need to prove that they did not ascertain the material facts until a date within 12 months before the proceeding was commenced:  Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd [2017] FCA 14.

In order to determine whether the lead applicant’s individual claim was time-barred, the second question was whether the lead applicant “ascertained the facts material to his case” prior to 3 August 2015.  That question was subsequently heard by Yates J.  The lead applicant had been aware since 2010 that an oil spill from Australia had destroyed the seaweed, and had heard, on several occasions prior to 2015, that the oil was from “Montara”, but he did not know what Montara was.  The lead applicant met with visiting Australian lawyers in October 2014 and October 2015, but it was not until the second meeting in October 2015 that he first learned that Montara was an oil well in Australian waters and owned by PTTEP.

Taking account of the lead applicant’s limited education and limited access to news media, Yates J was satisfied that he did not know the material facts prior to his October 2015 meeting with the Australian lawyers.  Further, Yates J held that the passage of time was not so great that PTTEP would be deprived of a right to a fair trial, and that it would therefore be just in all the circumstances to grant the extension of time in respect of the lead applicant’s individual claim:  Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 3) [2017] FCA 1272.

The beneficial approach taken by the court to those threshold time limitation questions broadly accords with the underlying policy of the class action regime.  In due course, it may see civil redress under Australian law for breach of Australian offshore petroleum laws wash up on Indonesian shores.