Thinking | 11 August 2014
Update and overview on the Duty of Care of Occupiers of Licensed Premises
Indigo Mist v Palmer  NSWCA 239
Plaintiff’s age at date of loss:
|Soft tissue injuries to right arm and shoulder|
At first instance:
Liability apportioned equally between occupier and architect.
Award of damages of $113,321.90.
Appeal by occupier and architect dismissed. Trial judge’s decision upheld.
On 30 May 2008, the first respondent (Ms Palmer) fell down some stairs at the Oxford Hotel on Oxford Street, Darlinghurst (Hotel). The respondent alleged that she fell after slipping on an a4 sized puddle of liquid on the stairs. She suffered injuries as a result of the fall.
The stairs in which the first respondent fell were made of glass blocks and were lit from below with some dim lighting from the ceiling. They provided access between the first and second floor of the Hotel. It should also be noted that there are toilets on the second floor which served patrons using both the second and first floor. Furthermore patrons would carry drinks between the floors.
The Hotel was refurbished in 2006 with the second respondent Paul Kelly Design Ply Ltd (PKD) in charge of the refurbishment. Included in the refurbishment was the design and installation of the glass stairs and hence why PKD was also sued.
Findings at First Instance
The plaintiff had commenced proceedings in negligence against three defendants: the owner of the Hotel, the occupier/manager of the Hotel (Indigo Mist) and the architect (PKD).
The plaintiff called two experts (Dr Emerson a chartered professional engineer and Dr Cooke a consultant architect) and the defendant occupier called one expert (Mr Beckett a consulting engineer) who gave evidence about the co-efficient of friction of the stairs and the suitability of smooth glass (in particular wet smooth glass) as a surface for stairs. They found that the stairs failed the safety requirements and that even when the stairs were dry only just complied with the standards.
The trial judge concluded that the design of the stairs ought to have taken into account the probable use of the stairs which would have included the fact that patrons were likely to take drinks up and down the stairs and that there would be some spillages due to the nature of the premises.
The plaintiff was awarded $113,321.90 at first instance. The trial judge apportioned liability equally between the occupier and PKD and found in favour of the owner on the basis that it had completely delegated its duties to the occupier and PKD.
The trial judge rejected submissions that the plaintiff was intoxicated when she fell.
Findings on Appeal
The Court of Appeal dismissed the appeal and upheld the trial judge’s decision. The Court held that PKD had been negligent in recommending and designing the staircase, and that the occupier had been negligent by failing to respond to the risks posed by the staircase.
Appeal by Occupier
The occupier submitted that the trial judge had failed to properly carry out the requirements of s 58 of the Civil Liability Act 2002 (NSW) (CLA). They submitted that the risk of harm which eventuated, i.e. slipping on the liquid on the stairs, was not foreseeable.
To determine whether the risk was foreseeable, Hoeben JA (who provided the leading judgement) stated that:
“the question to be asked was whether it was reasonably foreseeable by such occupiers that patrons would move between those two floors and that if they did, they might carry drinks and those drinks might be spilt, particularly when one of the primary activities being conducted on the premises was the sale and consumption of alcohol.“
His Honour found that the risk of drinks being spilt on the stairs was clearly foreseeable. Not only was it foreseeable but there was a high likelihood of such an event occurring and that it must be regarded as not insignificant.
Hoeben JA then considered the precautions the occupier should have taken as ‘the danger presented by liquid on the stairs was one that should have been obvious to a reasonable occupier of the Hotel.’ There was no evidence of any response by the occupier to this not insignificant risk of harm. Hoeben JA noted that ‘there were no signs, no warnings and no prohibition by staff on the taking of drinks between floors. There was no system of regularly inspecting or cleaning the stairs.’
The occupier (in reliance upon Bevillesta Pty Ltd v Liberty International Insurance Co  NSWCA 16) submitted that it was not obliged to respond to the foreseeable risk of harm because its obligations had been delegated to PKD and subsequently that liability should only be found against PKD. Hoeben JA noted that this reliance was misconceived. In Bevillesta there was a delegation of responsibility by an occupier to a cleaning contractor. It was appropriate in that instance because there was clear overlap in their responsibilities for the cleaning of the shopping centre. In the present case the circumstances are quite different. Hence Hoeben JA distinguished Bevillesta.
In the present case, PKD had responsibility for the implementation of the refurbishment of the Hotel. It had no responsibility for the management or day to day running of the hotel. Once the occupier had accepted the design of the stairs, they had to consider for themselves what potential hazards arose there from. Given the nature of the premises, the occupier had to determine for itself whether a foreseeable risk of injury existed in relation to the stairs, and if so what response it ought to take on a day-to-day basis.
Therefore breach of duty was established by the first respondent against the occupier.
The occupier submitted that the first respondent had failed to prove causation on the facts as it was necessary for the first respondent to adduce evidence that appropriate warning signs, the prohibition by staff of the movement of drinks between the two levels and the existence of a system of regular inspection and cleaning would have prevented her fall. Hoeben JA rejected this submission as it misstates the test for causation.
The first respondent was required to prove, on the balance of probabilities, that the occupiers’ negligence was a necessary condition of her harm. The occupiers’ negligence lay in their failure to have signs prohibiting the movement of drinks between floors, a failure to have staff enforcing such a prohibition and a failure to have a system of regular inspection and cleaning of the stairs. Proof of the causal link between such omissions and the occurrence of harm required consideration of the probable course of events had the omission not occurred.
It was therefore sufficient for the first respondent to prove that the taking of such action would have minimised the risk of her fall. Hoeben JA found that the presence of liquid on the stairs was a necessary condition of the harm. The Occupiers’ negligence lay in their failure to erect signs prohibiting the transportation of drinks between floors and to employ a system whereby staff would implement that prohibition by directing patrons accordingly.
Hoeben JA was satisfied that had the suggested system been in place, that it was more likely than not that liquid would not have been present on the stairs so as to cause the plaintiff’s fall.
The Court of Appeal upheld the trial judge’s finding of causation and negligence against the Occupiers.
Appeal by PKD
PKD appealed on the basis that the trial judge’s approach to liability was fundamentally flawed as it was a retrospective analysis. It submitted that it was not established that Ms Williams (employee of PKD) knew, or ought to have known, that the stairs would become dangerously slippery when wet. Furthermore it was never put to Ms Williams that she should have recommended an alternative type of step.
Hoeben JA noted that ‘while s 56 is not particularly useful in cases involving professional negligence, it still has a part to play.’ His Honour noted that ‘it was reasonably foreseeable that given the nature of the premises that drinks might be spilt by patrons using the stairs to move between floors where liquor was provided. Of course, that was only foreseeable if the architect turned her mind to the question.’ Ms Williams, in her evidence however, suggested that she had not turned her mind to safety considerations when recommending that the stairs be constructed of glass blocks. This was an inference that the trial judge was rightly allowed to make, and as Hoeben JA put it, it was an inference that was ‘unavoidable that what was foremost in her mind was the ‘look’ of the stairs, rather than safety aspects.’
Accordingly, Hoeben JA agreed with the findings of the trial judge in that the requirements of s 5B of the CLA had been met. ‘The appropriate response to the foreseeable risk of injury was to recommend a different product which would prevent or minimise the harm.’
In regards to causation Hoeben JA was:
“satisfied that in a purely factual sense, and applying the ‘but for’ test, had PKD not recommended the use of a step which became highly slippery when wet, the first respondent would not have fallen. Moreover, by failing to have the glass blocks tested and by failing to bring to the attention of the owners the test results which would have been forthcoming, there was a failure to take action which would have prevented or minimised the risk of the fall occurring.”
Therefore breach of duty of care and causation on the part of PKD had been established.
PKD also relied upon a defence under s 50 of the CLA. The section provides that (at (1)):
“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.”
The Court of Appeal upheld the trial judge’s decision that PKD was negligent in recommending and designing the glass stairs on the basis of the first respondent’s two experts. No evidence was called by PKD to indicate that there was a body of professional opinion amongst architects to the contrary effect. Therefore a defence under s 50 of the CLA was not made out.
Apportionment of Liability
The Court upheld the trial judge’s apportionment as no error was identified in his Honour’s approach.
This issue was only pursued by the Occupiers. At first instance they put to the first respondent that she was intoxicated, however this failed. The first respondent had stated that she had shared a bottle of wine with a friend over a two hour dinner, estimating she had two glasses as well as water. When she went to the Hotel she purchased a glass of red wine but only had two sips as it was not to her taste. The first respondent denied having any more alcohol after that.
On appeal the Occupiers only challenged the finding that the first respondent had been keeping a proper lookout. They argued that had she been keeping a proper lookout as she descended the stairs, then she would have observed the presence of the liquid since it was the size of an A4 piece of paper. She therefore was not keeping a proper lookout and was also not exercising reasonable care for her own safety.
The question that is required is whether a reasonable person in the position of the first respondent should have detected the liquid on the stairs before treading in it on this night.
His Honour relied upon the expert evidence of Dr Cooke who believed that the presence of liquid on the glass surface would have been practically impossible to detect at night. His Honour also relied upon the first respondent’s evidence where she stated that she had been watching where she was placing her feet, otherwise she would not have seen the A4 sized liquid just as her foot was about to be placed on the step.
Hoeben JA found that there was ample evidence to support the trial judge’s finding that the first respondent was exercising reasonable care for her own safety and that she was not guilty of contributory negligence.
The issue in this case was whether an occupier is liable for an injury that occurs after a refurbishment or whether they can escape liability on the basis that they have relied upon professionals who recommended the refurbishment.
The Court held that an occupier cannot escape liability for the risks that materialised as a consequence of the use of the stairs. It is vital that an occupier identifies all foreseeable risks that arise from the use of the premises and to take reasonable precautions to address those risks.
In regards to delegation: Only where there is a clear overlap of responsibilities will a court find that there has been a full delegation of responsibility from one party to another.
Defendants should always obtain expert evidence when seeking to rely on s 50 of the CLA in defence of a claim for professional negligence. This will assist to satisfy the requirement that it is ‘widely accepted’ practice amongst peers in that profession.
Evidence should also be led by way of lay or expert witnesses if a defendant wishes to challenge the particular precautions which the plaintiff alleges ought to have been carried out by the defendant in discharge of their duty of care. This may include evidence as to the practicality, effectiveness or cost of undertaking such precautions, as referred to in s 5B(2) of the CLA.
Professionals and, in particular, architects, are required to use reasonable care, skill and diligence in the performance of their work, including consideration of people who are strangers to the contracting parties.
Cregan Hotel Management Pty Ltd and Anor v Hadaway  NSWCA 338
|Appeal by occupier and architect dismissed. Trial judge’s decision upheld.|
Plaintiff’s age at date of loss:
At first instance:
|Occupier and assailant found negligent. Liability was apportioned 70/30 in favour of the occupier. Award of damages of $1,161,368.|
|Appeal by occupier was upheld. Trial judge’s finding regarding liability of occupier and apportionment overruled.|
On 17 September 2004, Mr Hadaway (plaintiff) attended the Park Beach Hoey Moey Hotel in Golfs Harbour (Hotel) drinking from the late afternoon into the evening. Mr Robinson was also at the Hotel. Both the plaintiff and Mr Robinson were locals known to Hotel staff and security. Prior to 2002, Mr Robinson had worked on occasion at the Hotel as a security guard. The plaintiff and Mr Robinson had known each other for some years. They had lived together but had a falling out which left ‘a considerable degree of deep seated ill will’ between them. As a result there were three altercations over the night. Two within the Hotel and then the final altercation when both men left the premises where the plaintiff was badly injured.
The first two verbal altercations (which occurred at approximately 5.00pm and then 5.30pm) were diffused by security and hotel staff. Neither man was ejected, rather the hotel staff opted to separate the men in two different areas of the Hotel to avoid further altercations.
After the second altercation, it was generally accepted that both the plaintiff and Mr Robinson continued drinking but were not involved in any further incidents. At approximately 9.30 pm, the plaintiff left the Hotel intending to walk to a nearby pizza shop. The plaintiff was approximately 200 m away from the Hotel when Mr Robinson and others ran towards him. Mr Robinson then assaulted the plaintiff resulting in significant injury, including a broken leg.
Findings on Appeal
The Hotel appealed the decision of Levy DCJ. Orders upholding the appeal were unanimously agreed. Giles and Basten JJA found that breach of duty of care was not established and the judgment of the primary judge should be set aside. Allsop P concurred with their decision.
Giles JA found the primary judge incorrectly concluded that the plaintiff was ejected from the hotel and this factual finding was central to the trial judge’s reasoning as to breach of duty of care. Giles JA found that the plaintiff had left the Hotel voluntarily some hours after the altercations had taken place.
This was particularly so given that the plaintiff’s case at trial had been that he had voluntarily left the Hotel, not that the Hotel had failed in its duty of care by ejecting him from the Hotel at 9.30pm. Instead, the plaintiff’s case had been that Mr Robinson should have been ejected from the Hotel at an earlier time, after the 5.30pm confrontation, or that alternatively, both the plaintiff and Mr Robinson should have been ejected at that time in a controlled manner. The Court of Appeal therefore found that it was not correct on any version of events that Hotel security ejected the plaintiff from the Hotel.
The Court of Appeal confirmed that the Hotel owed to the plaintiff as a patron of the Hotel a duty to take reasonable care to prevent injury from the violent, quarrelsome or disorderly conduct of other patrons: Adeets Palace Pty Limited v Moubarak. It was also necessary to consider the general principles set out in s 58 of the CLA, regarding whether there was a foreseeable risk of harm that was not insignificant and what a reasonable person in the position of the Hotel would have done in response to that risk.
Basten JA considered that to establish negligence against the Hotel, the plaintiff had to prove that:
- responsible staff in the Hotel knew, or ought to have known, at the time the plaintiff left that there was a real risk of harm of him being pursued and attacked by Mr Robinson.
- he had left the premises when he did.
- Mr Robinson knew or was in a position to know, when the plaintiff had left the premises.
If those elements were established there would then be a question as to what steps could reasonably have been taken to prevent Mr Robinson leaving the Hotel or otherwise to protect the plaintiff after the plaintiff had left the hotel. Basten JA noted that this would have faced formidable difficulties.
The case was run on the fact that Mr Robinson, or both men should have been ejected after the second altercation. The Court of Appeal held that the Hotel did have the discretion to allow them both to remain in the hotel when adequately separated.
Giles JA found that it was a reasonable response to separate Mr Robinson and the plaintiff within the hotel after the first altercation at 5pm. Giles JA remarked that the ineffective separation which occurred at 5pm cast doubt on the efficacy of a second separation after another altercation at 5.30pm, but it did not exclude the possibility that such a reinforced separation would be effective.
His Honour was not satisfied that the second separation and continued presence of Mr Robinson and the plaintiff in the hotel was unreasonable. Further, he noted that the second separation was in fact a success, as there were no further altercations until both individuals had left the premises. Giles JA concluded that it had not been established that Hotel was in breach of the duty of care owed to the plaintiff by not ejecting Mr Robinson, or both Mr Robinson and the plaintiff, from the hotel premises after the second altercation at 5.30pm.
Cases including Rooty Hill RSL Club Limited v Karimi and Portelli v Tabriska Pty Limited deal with the duty of care owed by a hotel when a patron is involuntarily ejected following confrontations within the hotel which then continue off site. Basten JA distinguished the current proceedings from Karimi and Portelli, first by remarking that the plaintiff had not been ejected from the premises and secondly, that his departure had not been supervised.
The decision demonstrates that hotels are not under a general duty to eject troublesome patrons from their premises but maintain the right to take alternative action.
Although the Court of Appeal has distinguished this case from Karimi and Portelli, they reaffirmed Adeels Palace whereby a hotel has a duty to take reasonable care to prevent injury to a patron from violent, quarrelsome or disorderly conduct of other patrons. The threshold questions remains what a reasonable person would do in response to the risk of injury.
Industry practice is a guide, not the determinant of reasonable care for the safety of hotel patrons. The court’s decision highlights that the circumstances of the patrons and the judgment of the staff involved in managing an altercation is critical to a determination on liability.
Day v Ocean Beach Hotel  NSWCA 250
|Soft tissue injury to lower back|
At first instance:
|Security contractor found vicariously liable for an assault committed by its employee. Occupier not found liable. Award of damages of $10,000 (General damages $2,500, aggravated damages $2,500, exemplary damages $5,000)|
|Appeal by plaintiff dismissed. Trial judge’s decision upheld.|
Julia Day, the appellant, was a patron at the Ocean Beach Hotel (hotel) on the night of 4 July 2008. The manager on duty that night was of the opinion that the appellant was intoxicated. After speaking with the licensee, the manager instructed a security guard (employed by Checkmate Security) to remove the appellant from the premises. The security guard did this by pulling the bar stool on which the appellant was seated out from underneath her. The appellant fell to the floor which caused her to suffer injury to her lower back.
Findings at First Instance
The trial judge found that the security guard had committed an assault and battery on the appellant and his employer (Checkmate) was held to be vicariously liable. Checkmate was ordered to pay 10,000 for general, aggravated and exemplary damages.
The appellant had also claimed against the Hotel (first defendant) and the licensee (second defendant) however both these claims were dismissed.
Findings on Appeal
The appellant appealed on the basis that the Hotel and licensee were also vicariously liable for the security guards conduct. She also challenged the assessment of damages ordered against Checkmate.
Checkmate had been deregistered shortly after the hearing at first instance.
The Court of Appeal was unanimous in upholding the primary judge’s decision and dismissed the appeal with costs.
The Court determined four issues in regards to whether the Hotel and licensee were vicariously liable for the actions of the security guard. These issues were:
- Whether the security guard was expressly authorised to commit the tortious act of assault and battery;
- Whether the security guard was an agent to either the Hotel or licensee;
- Whether the licensee was directly liable under s 91 of the Liquor Act 2007 (statutory vicarious liability); and
- Whether Australian law admits a theory of dual vicarious liability. Authorised to commit the assault and battery.
The Court held that the security guard was not expressly authorised to commit the assault and battery. This decision was reached on the basis that neither the licensee nor the manager of the Hotel was present when the security guard committed the assault and battery and that the security guard was not expressly or impliedly directed by either the Hotel or licensee to pull the chair from beneath the appellant, conduct which went beyond the reasonable degree of force necessary to remove her from the premises. Therefore, the Court agreed with the primary judge’s finding that the only action that was authorised was the removal of the appellant, not the manner of removal adopted by the security guard. Leeming JA commented:
“[C]heckmate was [the security guard’s] employer, and was vicariously liable for his tortious conduct because it was incidental to his employment. It is clear that that conduct was not expressly authorised by the Hotel or the licensee, a test which is much harder to satisfy than the approach based on ‘course of employment’ which applies to the tortious conduct of employees.”
Agent of the Hotel or licensee
The Court held that the security guard was not acting as a true agent of either the Hotel or the licensee and therefore had no authority to bind either respondent. The security guard was employed by Checkmate and Checkmate was an independent contractor retained by the Hotel. It was clear that he was employed by Checkmate as he was wearing a Checkmate uniform, which displayed its mark and distinguished him from the Hotel employees (being a condition of the licence). Furthermore, the Hotel’s and licensee’s control of the security personnel was limited to directing security staff where in the premises they should work and on what task. It did not include how to carry out those tasks. Also security staff were permitted to turn out patrons without the authorisation of the Hotel’s management
Section 91 of the Liquor Act
The Court held that the licensee was not directly liable under s 91 of the Liquor Act 2007. Section 91 states that the licensee is responsible at all times for the personal supervision and management of the conduct of the business of the licensed premises under the licence. The Court followed the reasoning in Starks v RSM Security Ply Ltd  NSWCA 351 whereby in order for the Hotel to be liable for the acts committed by the security guard, it must be under the principles of general law. On the facts of the case, the Court found that there was no such liability. Furthermore, section 91 does not address the liability the Hotel may have had when the security guard, not directly employed by it, uses excessive force in carrying out a task otherwise authorised by section 103.
Dual vicarious liability
The final ground of appeal raised by the appellant was whether there could be dual vicarious liability. The law is based on the decision of Laugher v Pointer (1826) 5 B & C 547 at 558 which states:
“He is the servant of one or the other, but not the servant of one and the other; the law does not recognise a several liability in two principals who are unconnected.”
Furthermore, in Esso Petroleum v Half Russell  1 AC 643 at 686 Lord Jauncey of Tullichettle said:
“[T]here is no principle which permits a servant to be in the de jure employment of two separate masters at one and the same time.“
Leeming JA also relied on Oceanic Crest Shipping Company v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626. His Honour stated that the proposition of law is that once one person was vicariously liable, no other person could be.
The decision affirms the proposition that once there is a well established basis for vicarious liability (generally employer and employee) there is no sound basis for imputing vicarious liability to a third party. The decision states that if an employer has been found vicariously liable for the tortious conduct of its employed security guards, then the hotel/licensee will usually be precluded from a finding of vicarious liability unless it is found that the security officer was a ‘true agent’ of the hotelier/licensee.
Duty of care regarding service of alcohol
South Tweed Heads Rugby Club ats Cole HCA 29
This High Court case is the seminal case in regards to an occupier’s liability regarding the service of alcohol.
In providing a refresher, the case involved a 45 year old lady (Ms Cole) who attended the Club at 9am for a champagne breakfast. She allegedly drank copious amounts of alcohol, being considered drunk (by a witness friend) at 12pm and inebriated at around 2.20pm. She attempted to purchase another drink at 3pm but was refused on the basis that she was intoxicated. At 5.30pm the Club manager had returned to the premises. He saw the plaintiff was grabbing men she was with inappropriately, with one of them having to hold her up. He asked her to leave and offered her the use of the courtesy bus which she refused. He then offered her a cab which the Club would call, which she also declined. One of the men with whom the plaintiff was with stated that they would look after her. The group left shortly afterwards. The men appeared to be sober.
At 6.20pm the plaintiff was hit by a car up the road from the Club driven by the second defendant (Mrs Lawrence) who was driving her vehicle about 70km/h in an 80km/h zone. At hospital the plaintiff’s blood alcohol content was measured at.238 (16 standard drinks).
The trial judge stated that because the Club had continued to serve her when she was clearly intoxicated, it had breached its duty of care to the plaintiff. This breach was causative of her injuries despite the Club manager offering her the courtesy bus or taxi.
The NSW Court of Appeal overturned the trial judge’s decision. Of particular note are the following points:
- The principle that adults must assume responsibility for their own actions. The law did not recognise a duty to prevent persons from economic loss (gambling). Intoxication was no excuse to contractual obligations. Intoxication was not relevant to a criminal prosecution unless the accused was so intoxicated as to have no capacity. It followed that intoxication should not absolve one’s responsibility for one’s own safety.
- Save in extraordinary cases, there is no duty to protect persons who deliberately drink to excess.
- There should be no duty to assume responsibility for an intoxicated patron, except for extreme intoxication, where the capacity to form an intent was destroyed, e.g. the patron was so drunk as to be unconscious.
- Personal responsibility overrides foreseeability and vulnerability.
The decision was appealed to the High Court whereby the appeal was dismissed 4:2. Gleeson CJ and Callinan J believed that there was no duty of care to protect a person from risk of injury resulting from self induced intoxication. Gummow and Hayne JJ whilst appearing to sympathise with this view, believed that there could be a duty of care although the facts of the case did not go so far as to establish a duty of care in this instance. McHugh and Kirby JJ believed that there was a duty of care to monitor the behaviour and condition of patrons.
The effect of the High Court decision is not as clear cut as it first appears due to the split in the judgements. If a case can be distinguished from Cole whereby the facts show a greater knowledge of a particular patron’s activities, then the reasoning of Gummow and Hayne JJ may have established a duty of care. Examples may include smaller bars or areas where all patrons are visible by the staff. Nevertheless, the Club did not owe the plaintiff a duty of care as it discharged that duty at 5.30pm when offering the safe transport home.
This case is still cited with approval by the courts today.
C.A.L No 14 Pty Ltd tlas Tandara Motor Inn & Anor v Motor Accidents Insurance Board  HCA 47
This is a decision of the High Court which affirmed Cole. This was an appeal from the Full Court of the Supreme Court of Tasmania. In this case, Mr Scott crashed his motorcycle on the way home from a licensed premises. His injuries were fatal with the incident occurring only 700m from his home.
On 24 January 2002 Mr Scott went to the Tandara Motor Inn (Hotel) where he consumed cans of Jack Daniels and Cola with a friend. A rumour circulated in the Hotel that a police breathalyser was in operation near Mr Scott’s home. An arrangement was made with the licensee whereby Mr Scott could store his motorcycle in a lockable room and handed over his keys. It was the licensee’s understanding that Mr Scott would telephone his wife to pick him up and that they would collect the motorcycle the next day.
Mr Scott was refused service at around 8pm that night. The licensee asked for his wife’s telephone number so that he could call her to pick up Mr Scott. Mr Scott swore at the licensee and refused to provide the number.
Mr Scott then left the Hotel for a brief period of time before returning and asking for the keys and the motorcycle to be returned to him. The licensee on three occasions asked him whether he was okay to ride. Mr Scott responded on all three occasions that he was fine. Mr Scott rode his motorcycle from the Hotel around 8.30pm. Shortly after he had the fatal accident.
The High Court had overturned the decision of the Tasmanian Supreme Court and found for the proprietor and the licensee on the basis that the plaintiffs (being the wife of Mr Scott and the insurance board) had failed to establish the existence of a duty, secondly that even if there was a duty there was no breach of this duty, and finally that even if there was a breach of the duty which was owed, that the breach was not causative of Mr Scott’s injuries.
Not going into the reasoning in depth, the implications of this case is that it affirmed the decision of Cole in that for liability to attach to a licensee for the consequence of service of alcohol a plaintiff must establish the existence of exceptional circumstances (i.e. near unconscious).
A licensee owes no general duty of care at common law which requires them to monitor and minimise the service of alcohol or to protect customers from the consequences of the alcohol they choose to consume. A duty to safeguard an intoxicated person by not permitting the person to drive or traverse busy roads is inconsistent with the licensee’s statutory obligation to eject intoxicated patrons (if such a duty was imposed, a licensee would be placed in the paradoxical position of committing the tort of false imprisonment or committing the tort of negligence).
The individual freedom and personal responsibility are overriding factors in placing limits on the duty of care owed by licensees to their customers. In other words the amount of alcohol consumed is a matter for personal decision and individual responsibility.
Licensees should however remain aware that there is a duty to take reasonable care for patrons on their premises and this duty may give rise to a duty to refuse to serve intoxicated patrons incapable of independent judgement and to ensure the safeguarding of such persons.
Duty to protect patrons from the criminal conduct of third parties
Adeels Palace Pty Limited v Moubarak  HCA 48
One of the leading cases discussing the duty to protect patrons from the criminal conduct of third parties is Adeels Palace Pty Limited v Moubarak. In this case, the respondent plaintiff attended a New Year’s Eve function at Adeels Palace on 31 December 2002 held by the appellant. During the night a dispute arose on the dance floor which quickly escalated into a fight between the respondent Mr Moubarak and Mr Abbas as well as approximately 20 other males. Shortly after the altercation, Mr Abbas left the premises, only to return again later, producing a gun, and shooting Mr Moubarak and Mr Bou Najem.
At first instance in the District Court, the respondents were successful. The trial judge held that the appellant was liable in negligence to the respondents and rejected the contention that Mr Moubarak had been contributorily negligent. Damages were agreed at $170,000 for Mr Bou Najem and Mr Moubarak’s damages were assessed at $1,026,682.98.
The appellant appealed to the NSW Court of Appeal. The Court of Appeal held that the duty of care owed by a proprietor of licensed premises to protect its patrons from the tortious or criminal conduct of a fellow patron can extend to taking reasonable care to guard against injury from the behaviour of other patrons. Therefore the Court of Appeal upheld the trial judge’s findings and accordingly dismissed the appeal.
The appellant then obtained special leave and appealed to the High Court.
The High Court found in favour of the appellant. The Court focused on section 5 of the Civil Liability Act 2002 to determine whether the appellant owed a duty of care to the respondents, whether that duty was breached, and if so whether that breach was causative of the harm suffered.
Duty of care:
The Court distinguished the case from Madbury Triangle Shopping Centre Pty Ltd v Anzil  HCA 61 in that the appellant should have controlled, but did not control, access by assailants to the land that it occupied. The Court also relied heavily on the duties imposed by the Liquor Act upon licensees to take reasonable care to prevent injury from the violent, quarrelsome or disorderly conduct of other persons. The Court found that the duty was not one incapable of performance and therefore the appellant did owe a duty to take reasonable care to prevent injury to patrons.
Breach of duty:
The High Court stated that:
It may be accepted, for the purposes of argument, that there was a risk, of which Adeels Palace knew or ought to have known, that there would be violent, quarrelsome or disorderly conduct in the restaurant. It may also be accepted that this risk ‘was not insignificant’.
The question then becomes whether a reasonable person in the position of Adeels Palace would have taken the precautions that the plaintiffs alleged should have been taken. Those precautions were the provision of licensed security personnel who would act as crowd controllers or bouncers.
To determine whether a reasonable person would have taken those precautions, the Court stated that a number of factors needed to be considered which ‘included, but were not limited to, the number of patrons expected to attend the restaurant, the atmosphere that could reasonably be expected to exist during the function, and whether there had been any suggestion of violence at similar events held in comparable circumstances, either at this restaurant or elsewhere.’ These considerations needed to be assessed before the function began, not by reference to what occurred on the night.
The High Court ultimately held it was unnecessary to determine whether there had been a breach of the duty because the evidence led at trial did not establish that the provision of greater security would have deterred the gun man from re-entering the premises.
Factual causation is determined by the ‘but for’ test: but for the negligent act or omission, would the harm have occurred?
The Court held that the ‘but for’ test was not established in this case. It was not shown to be more probable than not that, but for the absence of security personnel (whether at the door or even on the floor of the restaurant), the shootings would not have taken place. That is, the absence of security personnel at Adeels Palace on the night the plaintiffs were shot was not a necessary condition of their being shot. Because the absence of security personnel was not a necessary condition of the occurrence of the harm to either plaintiff, s 50(1) was not satisfied. Furthermore there was no basis in the evidence for concluding that security staff at the entrance to the restaurant would have deterred or prevented the re-entry to the premises of a man armed with a gun irrationally bent on revenge.
The provision of security might have prevented the damage caused by the gunman but it did not show that more security would on the balance of probabilities have prevented their injuries. Furthermore the Court stated ‘recognising that changing any of the circumstances in which the shootings occurred might have made a difference does not prove factual causation.’
The court then considered s5D(2):
Even if the presence of security personnel at the door of the restaurant might have deterred or prevented the person who shot the plaintiffs from returning to the restaurant, and even if security personnel on the floor of the restaurant might have been able to intervene in the incident that broke into fighting in time to prevent injury to anyone, neither is reason enough to conclude that this is an ‘exceptional case’ where responsibility for the harm suffered by the plaintiffs should be imposed on Adeels Palace. To impose that responsibility would not accord with established principles.
The decision is the leading case on causation and demonstrates the duty of care imposed on licensed premises. It demonstrates that the party seeking damages must establish that the breach of the duty was the cause of the damage suffered and they must also establish any additional steps which could have been implemented by the licensee/occupier that would have prevented the injuries.
Dreher v Bowcliff Pty Ltd  NSWSC 1088
The most recent case to be discussed is that of Orcher v Bowcliff Pty Ltd  NSWSC 1088. The plaintiff in this case was seriously injured when he was assaulted outside the licensed premises by Mr Paseka, the second defendant, who was employed by the first defendant as a glass attendant. It was argued by the first defendant that Mr Paseka had ended his shift hours earlier, remaining on the premises in the capacity of a patron.
The Court found that the actions of Mr Paseka constituted a gratuitous and unprovoked attack. His actions had nothing to do with his duties as a glass collector and appear to have been borne out of an unexplained animosity towards the plaintiff.
Therefore the Court held that neither the occupier nor licensee were vicariously liable for the assailant’s actions.
The Court did however find that the occupier was liable for failing to take reasonable steps to prevent the attack on the plaintiff The security handbook required staff to maintain vigilance. The disturbance (inside the hotel earlier) ought to have alerted the security to be vigilant. Furthermore, one of the security guards who watched the incident was employed directly by the occupier. The Court held that the security guards should have prevented Mr Paseka from crossing the street, or should have followed him to prevent anything occurring. It was noted that they had a 2 minute window in which the assault could have been prevented. The court therefore held that the entire incident was entirely foreseeable.
The decision denotes that the duty of care owed to patrons of licensed premises does not end once they walk out the door. In circumstances such as this where surrounding streets are clearly visible and accessible by security staff, and security staff are on notice of the potential for violence to escalate, the occupiers and licensees must take reasonable steps to ensure patrons leave the area safely.
Portelli v Tabriska  NSWCA 17
The claim in this case was against the owners and occupiers of a hotel in Jindabyne. They were also the licensees and the providers of the security services.
The plaintiff and his companion were involved in an altercation with two of the later assailants in the hotel. The altercation was over a pool game near closing time. The assailants were told to leave the premises, in which they did so out the front door. The plaintiff and companion were allowed to finish their drinks and game of pool before being allowed to leave via the backdoor onto a laneway shortly after.
The plaintiff and companion walked up the laneway onto the intersection of another road where they were confronted by the assailants. A fight broke out which lead to the plaintiff being seriously injured by blows and kicks to the head.
The issue for the court to determine was whether a publican and security firm owe a duty of care with regards to later altercations between patrons occurring off the premises where there has been a previous altercation on the premises.
The court held that a duty may arise to persons who are injured outside the premises on a public street: ‘the fact that the aggressor has been put out of the hotel may not exhaust the obligation of the licensee or occupier to take reasonable steps to respond to a foreseeable risk of injury to the remaining patron.’
A licensee may anticipate that a fight, which has occurred in the hotel before being broken up, might reignite on the street. It might be foreseeable that if this occurred there would be danger to a patron who was involved in the fight previously in the hotel and has not left, but who intends to leave.
In this case, the owner/occupier was not liable as there was nothing to indicate that there was a need to protect Portelli from a further attack as it was noted that the group of men had disbursed and had not shown violent tendencies.
Rooty Hill RSL Club Ltd v Karimi  NSWCA 2
Another case with similar results was that of Rooty Hill RSL Club Ltd v Karimi. In that case the plaintiff was king hit by an intoxicated patron. The pair had been involved in an earlier altercation. Both were evicted from the club by security guards employed by a subcontracted security firm. The intoxicated patron (Mr Smith) left via the eastern entrance. He told security that he was going home and he got into his girlfriend’s car and they drove off. The security then radioed staff with the plaintiff at the western entrance and told them this information. These security guards then invited the plaintiff to leave by the western rear entrance. As the plaintiff and his friends were walking in the car park, Mr Smith’s girlfriend had driven into the car park. Mr Smith got out, ran up and king hit the plaintiff causing him to fall to the ground and suffer severe head injuries.
The court held that it was only the benefit of hindsight and by reasoning backwards that it could be held that the club and security firm were negligent in their failure to adopt the three measures identified by the primary judge, the three measures being:
Monitoring the entrances to the western car park to restrain Mr Smith from re-entering;
Staggering the interval between the plaintiff’s departure and Mr Smith’s departure by a longer period; and
Providing a security guard to escort the plaintiff to his car
The Court noted that Mr Smith appeared to have regained control and was planning to go home with his girlfriend. The plaintiff was not invited to leave until security confirmed that Mr Smith had left the club’s premises. Although the initial incident involved an unprovoked assault on the plaintiff, the Court held it did not call for preventative measures other than those which the club and the security firm took in order to reasonably protect the plaintiff from the risk of injury at the hands of Mr Smith.
Bell JA stated that the assessment made by Allied’s guards of Mr Smith’s condition is critical to its liability (in that they spent some time talking to Mr Smith and satisfying themselves that he had calmed down and that it was his intention to go home with his girlfriend). It was also very significant that no challenge was made to this assessment of Mr Smith as this would have gone to the issue of whether the duty had been discharged).
Therefore we can take from this case that the duty on the part of the occupiers of licensed premises to protect their patrons from the criminal or tortious conduct of third parties depends upon them having actual or constructive knowledge of the aggressive character of the person when intoxicated. The duty does not arise merely from the fact of intoxication.
You might be also interested in...
General Insurance | 21 Jul 2014
The Insurance Contracts Act’s latest makeover
Insurance | 9 Sep 2014
In a landmark decision handed down this morning, the High Court has taken an expansive approach to the scope of section 54 of the Insurance Contracts Act.