Government activates Coronavirus plan — with possibly disruptive consequences for some businesses and property owners

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By Aaron Gadiel, Partner

Business and property owners in NSW are now at risk of disruptive government legal directives, following the Australian Government’s activation of the Australian Health Sector Emergency Response Plan for Novel Coronavirus (Covid-19) last week (on the 27 February 2020).

In announcing the plan’s activation, the Prime Minister, Scott Morrison, said that the Australian Government’s National Security Committee had decided to initiate the Emergency Response Plan. The plan itself had only been finalised just 10 days earlier (by top health bureaucrats). Things are moving quickly.

Mr Morrison said that the decision to activate the plan was based on expert medical advice.

‘There is every indication that the world will soon enter a pandemic phase of the coronavirus,’ Mr Morrison said.

‘We believe that the risk of a global pandemic is very much upon us and as a result, as a government, we need to take the steps necessary to prepare for such a pandemic,’ he said.

‘We’re effectively operating now on the basis that there is … a pandemic,’ Mr Morrison said.

The federal Health Minister, Greg Hunt, said that ‘the high likelihood is that somewhere, sometime, there is a further round of cases that may make it to Australia’.

‘Today we are activating something which we had anticipated for which we planned and that ultimately is about saying to Australians we’ll get through this, we will keep you safe, we’ll do all that we can and as a country, we are well prepared,’ Mr Hunt said.

The Emergency Response Plan and the NSW plans

The Emergency Response Plan says that ‘[t]he novel coronavirus outbreak represents a significant risk to Australia’.

(The novel coronavirus causes the disease that is now known as COVID-19. The virus itself is officially called ‘severe acute respiratory syndrome coronavirus 2’, or ‘SARS-CoV-2’.)

The plan says that the virus ‘has the potential to cause high levels of morbidity and mortality and to disrupt our community socially and economically’.

Relevant to businesses and property owners is the plan’s promise that the Australian and state/territory governments will:

  • ‘respond promptly and effectively to ‘minimise the novel coronavirus outbreak impact’; and
  • ‘undertake strategies to minimise the risk of further disease transmission’.

The newly-activated Emergency Response Plan says that ‘there will be high vulnerability in the population to the virus’.

The Emergency Response Plan warns that, in comparison with influenza (ie ‘the flu’), there are greater gaps between successive cases in the chain of virus transmission.  This means that any government response will need to be sustained for longer (than would be the case for influenza).

The plan explains that the primary responsibility for managing the impact of the novel coronavirus lies with the state and territory governments and that the majority of operational detail will be found in their plans.

The relevant NSW Government plans are two pre-existing documents: the NSW Human Influenza Pandemic Plan. This plan has formal legal status in NSW under the State Emergency and Rescue Management Act 1989 (the SERM Act). This plan is supplemented by the NSW Health Influenza Pandemic Plan.

While the novel coronavirus is not a form of influenza, the state plans expressly apply to ‘health emergencies which are similar to an influenza pandemic (eg: outbreaks of other respiratory pathogens with pandemic potential)’. This includes the novel coronavirus.

(The federal government listed ‘human coronavirus with pandemic potential’ under the Biosecurity Act 2015 on 21 January 2020. On the same day the NSW Government listed ‘Novel Coronavirus 2019’ as a ‘category 4’ medical condition under the Public Health Act 2010, joining the already-listed Middle East respiratory syndrome (MERS) and severe acute respiratory syndrome (SARS). Category 4 medical conditions are generally those that provoke the most serious concerns.)

Triggers for escalated action

The Emergency Response Plan nominates two examples of triggers that might warrant escalated governmental action (above current efforts). These examples were as follows:

  • The declaration of a ‘pandemic’ by the World Health Organisation (WHO). This has not yet happened.  On 28 February 2020 WHO Director General Dr Tedros Adhanom Ghebreyesus, announced an upgrade to its global risk assessment from ‘high’ to ‘very ‘high’. However, Dr Adhanom Ghebreyesus did not label the virus a pandemic, saying that ‘we do not see evidence yet that the virus is spreading freely in communities’.
  • ‘Advice from a credible source that sustained community transmission of a novel virus with pandemic potential has occurred’. It is not clear whether this a reference to community transmission in Australia or elsewhere. The United States Government’s leading public health agency, the Centres for Disease Control and Prevention, says (as at 28 February 2020) that there is ‘widespread community transmission’ in mainland China, Iran, Italy and South Korea, with ‘sustained community transmission’ in Japan.
    The Emergency Response Plan observes that ‘[t]here is no evidence of sustained human-to-human transmission in Australia’, but that ‘this is being carefully monitored and could change’. The plan says that [t]he window of opportunity for measures aimed at controlling transmission are proving successful but may become more limited’.

Social distancing measures

The Emergency Response Plan says that state and territory governments will ‘implement social distancing measures as per national recommendations and local risk assessment’.

‘Social distancing’ is defined as ‘a community-level intervention to reduce normal physical and social population mixing in order to slow the spread of a pandemic throughout society’.

The NSW Health Influenza Pandemic Plan acknowledges that ‘[d]epending on the extent to which social distancing measures are applied, the effect on workforce absenteeism and the disruption to daily life may be considerable’.

The NSW plans say that compliance with — and benefits of — social distancing measures are ‘likely to be highest when the disease is clinically severe’.

The NSW Health Influenza Pandemic Plan (when read in conjunction with an associated Commonwealth plan Australian Health Management Plan for Pandemic Influenza, which is partially adopted by the NSW plan) explains some available ‘social distancing’ measures and their relative desirability.  This is summarised below.

School closures

Schools may be closed either proactively or reactively. However, the plans say that closures are ‘not generally recommended’.  Nonetheless, such measures could still be considered when there is evidence of high transmissibility, specifically in children. Apparently, modelling and studies suggest that:

  • proactive school closures reduce transmission by 1–50 per cent; and
  • school closure delays the epidemic peak by a week or two and flattens the wave of the epidemic.

Nonetheless, the plans admit that the measure may cause workplace and economic disruption — saying that a large proportion (about 40 per cent) of Australian parents would need to take unplanned leave from work.

In the last few days:

  • Japan’s government recommended the closure of schools for a month;
  • the Lebanese government has announced the closure of schools across the country for at least one week;
  • Armenia closed schools across the country for one week; and
  • the (European) country of Georgia has closed schools for a further week.

Similar announcements had already been made in some other affected countries.

Workplace closure

The plans say that this measure is ‘not generally recommended’.

The plans say that some specific workplaces may be able to accommodate closure, but they also say that it is unlikely that sufficient workplaces could participate to significantly affect the pandemic’s impact.  Apparently, modelling suggests that at least one-third of workplaces would need to be closed to bring an epidemic ‘under control’.  Nonetheless, the plans say that the measure may be relevant ‘if clinical severity is moderate to high’.

The plans acknowledge that this measure may cause disruption to businesses, threats to income and job security and economic strain on families (if closures are prolonged).  The plans concede that the measure is not plausible for workplaces involved in the provision of essential services and supplies (such as medical goods).

The plans also say that modelling has estimated the macroeconomic impacts of school and workplace closure are likely to exceed costs caused by the pandemic itself.  (Such closures have been implemented in parts of mainland China, with some controversy about the economic cost.)

The Public Health Act 2010 gives the NSW Health Minster, Brad Hazzard, the power to issue an order directing that workplaces close (or operate in a limited way) to deal with risks to public health.

If such a direction is made (and there has been no declaration of state of emergency) the direction may be independently reviewed on its merits by proceedings in the Civil and Administrative Tribunal. If a state of emergency has been declared, any legal proceedings would be restricted to more limited ‘judicial review’.

There are no statutory compensation rights if the operations of a business are stopped or limited in this manner.

For completeness, the Australian Government also has similar powers under the Biosecurity Act 2015, by either establishing ‘human health response zones’ or by declaring that a ‘human biosecurity emergency’ exists. However, the Emergency Response Plan implies that it is more likely that such measures will be taken under state law (in accordance with national recommendations and local risk assessment), rather than under federal law.

Cancellation of mass gatherings

The plans say that the cancellation of mass gatherings (such as sporting events, conferences and religious events) is ‘not generally recommended’.  Nonetheless, such cancellations may still be considered if ‘the disease has a high clinical severity rate and moderate to high transmissibility’.

There is apparently some evidence to suggest that mass gatherings can amplify the risk of (influenza) transmission. One modelling study that examined the impact of mass gatherings apparently found large increases (around 10 per cent) in the simulated peak prevalence as a result of the occurrence of mass gatherings within 10 days before the epidemic peak.

Again, the same provisions of the Public Health Act 2010 and the Biosecurity Act 2015 give the NSW and Australian government respectively the powers to do this, if they wish to do so.   There is no statutory right of compensation if the decision is made under NSW law.

For example, on 28 February 2020, Switzerland banned all events with more than 1,000 people to prevent the spread of the novel coronavirus.  Since then the French Government has also announced that all gatherings with more than 5,000 people in a confined space are banned.


The NSW Health Influenza Pandemic Plan says that during a severe pandemic, symptomatic individuals may be asked to remain in home or hospital isolation (and this may be extended to exposed contacts).

The plan says that voluntary measures are preferred ‘as compliance is generally high when the community is provided with the rationale behind the measures’.

Nonetheless, the plan notes that public health powers are an option to enforce compulsory quarantine or isolation. The use of such powers ‘may be considered in the context of a pandemic virus associated with severe clinical outcomes’.

The NSW Government amended the Public Health Act 2010 on 21 January 2020 to give itself the power to do this in relation to the novel coronavirus (by listing the virus as a ‘category 4’ medical condition).

As a result, authorised medical practitioners now have the legal power to issue a ‘public health order’ in relation to a person if, among other things:

  • the person has the novel coronavirus (or has been exposed to it and is at risk of developing it); and
  • because of the way the person behaves, the person may (as a consequence of that condition) be a risk to public health.

A public health order may compel medical treatment and/or require the detention of the person.

The law requires that the medical practitioner should not make the order without first considering the principle that any restriction on the liberty of a person should be imposed only if it is the most effective way to prevent any risk to public health.  That is, such an order should not be made lightly.

If a public health order is made, the person covered by the order is entitled to pursue a merit review of that decision in the Civil and Administrative Tribunal.

Overflow facilities

The plans say that in ‘extreme circumstances’ alternative quarantine/isolation accommodation (ie other than homes or hospitals) for large numbers of people may need to be provided.

More generally, the plans also say that ‘overflow facilities’ may be used to accommodate patients when it is impractical to manage them at home or in a hospital.  The NSW Health Influenza Pandemic Plan says that healthcare facilities, including private hospitals, would be used preferentially. However, the plan also nominates schools, warehouses, convention centres, hotels or sports arenas as alternative sites.

The plan says that overflow facilities may be needed during a long-lasting and/or large-scale health emergency.  During a pandemic they may serve as facilities to care for the large additional number of patients requiring treatment and management.  The care to be provided in overflow facilities is generally ‘supportive’ rather than ‘interventional’.

Depending on the infrastructure, staff and capacity, the care provided in overflow facilities could include:

  • acute care for ‘cohorted’ patients (that is patients with the same infection housed in a dormitory-like situation);
  • expanded ambulatory care (low-level care for non-pandemic patients); and
  • palliative care (acute and low-level care).

For example, in Wuhan, China, a local sports stadium, exhibition centre and cultural complex have been temporarily re-purposed as medical facilities with as many as 3,400 beds.

In the absence of a declared state of emergency, the NSW Government would be obliged to pay ‘just terms’ compensation for any temporary seizure of private property (assuming no commercial agreement).

However, if a state of emergency has been declared (because of an epidemic) the government may (while the state of emergency is in force) take possession and make use of any private property for such purposes. If this happens, there is no right to compensation (only a very weak provision allowing for the payment of compensation if the government chooses to make such a payment).

State of emergency

As outlined above, the legal rights of businesses and property owners will vary, depending on whether a ‘state of emergency’ is declared.

A ‘state of emergency’ may be declared by the NSW Premier under the SERM Act.

States of emergency have recently been declared in NSW for bushfires (earlier this year and in 2013 and 2019) and floods (2012).

An ‘emergency’ exists if, among other things, there is an actual (or imminent) epidemic which endangers (or threatens to endanger) public health.

The Premier, Gladys Berejiklian, may declare a state of emergency if she is satisfied that an emergency constitutes a significant and widespread danger to life or property in NSW.   It may apply to the whole state or only part of the state.

In the last few days states of emergency have been declared (due the novel coronavirus) in:

  • Hokkaido (a region of Japan);
  • Washington state (in the United States); and
  • San Francisco (in the United States).

The bottom line

The situation is rapidly evolving and there is uncertainty as to what will happen next.

The decision by the Australian government to activate the Emergency Response Plan raises the spectre of the imposition of disruptive legally-binding directions that may affect:

  • the operations of some Australian businesses; and
  • the rights of some property owners.
For further information, please do not hesitate to contact us.

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