Late last year, the High Court examined the liability of licensees in two important cases alleging claims of negligence. These High Court decisions provide comfort to licensees who have been concerned about an unprecedented expansion of the common law duty of care owed by licensees to patrons. In these cases, the High Court has not only been careful to develop the common law in such a way that is consistent with liquor legislation but also taken a common sense approach to the duty of care owed by a licensee to its patrons.
C.A.L. No 14 Pty Ltd t/as Tandara Motor Inn & Anor v
Motor Accidents Insurance Board
C.A.L. No 14 Pty Ltd t/as Tandara Motor Inn & Anor v Sandra Scott
 HCA 47
10 November 2009
On 24 January 2002, Shane Scott went to the bar at the Tandara Motor Inn (Inn) with a mate after work. That afternoon, there was a rumour at the Inn that there was a police breathalyser or speed camera near where Mr Scott lived. An arrangement was made with the licensee of the Inn (Licensee) for Mr Scott's wife's motorcycle, which Mr Scott rode to the Inn, to be placed in the plant room. It was the Licensee's understanding that Mrs Scott would pick up Mr Scott later that night and that the motorcycle would be collected the next day. The Licensee placed the keys to the motorcycle in the petty cash tin.
After Mr Scott's mate left the Inn, the Licensee told Mr Scott that he had had enough and it was time to go home. The Licensee asked for Mrs Scott's telephone number so that she could be contacted to come and get Mr Scott. According to a witness, Mr Scott responded in a verbally aggressive manner, "fired up all of a sudden", became agitated, angry and stroppy.
Soon after, Mr Scott asked the Licensee to return the motorcycle and its keys. The Licensee asked three times whether Mr Scott was "right to ride" and each time Mr Scott answered: "Yes, I'm fine". The Licensee then handed over the keys and Mr Scott drove off at approximately 8.30pm. Mr Scott ran off the road about 700 metres from home and suffered fatal injuries. It was common ground that the accident resulted from his ingestion of alcohol. His blood alcohol reading was 0.253g per 100mL of blood. He had drunk seven or eight cans of Jack Daniels and cola at the lnn from 5.15pm onwards.
Both Mrs Scott and the Motor Accidents Insurance Board of Tasmania commenced proceedings against the proprietor of the Inn (Proprietor) and the Licensee. At first instance, Blow J of the Supreme Court of Tasmania held that the Proprietor and the Licensee did not owe any relevant duty of care to Mr Scott, but that if they did, they were in breach of it, and that their breaches caused the injuries which brought about his death. The majority of the Full Court of the Supreme Court of Tasmania (Crawford CJ dissenting) overturned this decision on appeal concluding that the Proprietor and the Licensee did each owe a duty of care, but agreed with the trial judge that there was a breach of duty causing damage.
The issue for the High Court to determine was whether the Licensee and the Proprietor owed Mr Scott a duty of care. The duty of care was formulated narrowly before the High Court as the duty to take the reasonable care chosen by Mr Scott and the Licensee as the way to protect Mr Scott from facing the risks of driving the motorcycle while intoxicated. The relevant means of taking care was to ring Mrs Scott so that she could collect Mr Scott.
The majority (Gummow, Heydon and Crennan JJ) stated that no duty could arise in the circumstances of this case. The High Court considered that the arrangement for the Licensee to store the motorcycle in the plant room was just an informal arrangement instigated by Mr Scott's mate in order to avoid Mr Scott being breathalysed. In particular, the majority found that the arrangement:
- gave the Licensee no authority over the motorcycle
- did not deprive Mr Scott of his right of immediate possession of the motorcycle
- imposed no duty on the Licensee to ring Mrs Scott
- was left open to Mr Scott to terminate if he wished, and
- was both gratuitous and at will.
The majority also considered that finding a duty of care in the circumstances would lack of legal coherence with:
- other torts (such as assault and battery)
- the law of bailment, and
- legislative regimes in relation to alcohol.
Referring to the words of Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ in Sullivan v Moody (2001) 207 CLR 562 at 576 , the majority decided that to conclude that the law of negligence created a duty in the circumstances of this case, "would subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms.
The majority noted that judges who have generally opposed the creation of duties of care on the part of publicans to their customers in relation to the consequences of serving alcohol have left open the possibility that the duties may exist in "exceptional cases". The majority suggested that an exceptional case may include where "a person is so intoxicated as to be completely incapable of any rational judgment or of looking after himself or herself, and the intoxication results from alcohol knowingly supplied by an innkeeper to that person for consumption on the premises" (South Tweed Heads Rugby League Football Club v Cole (2002) 55 NSWLR 113 at 146  per Ipp AJA). At first instance, Blow J thought that it would be reasonable to also make exceptions for intellectually impaired drinkers, drinkers known to be mentally ill, and drinks who become unconscious (Scott v CAL No 14 Pty Ltd (2007) 17 Tas R 72 at 84 ). The majority said that the circumstances of this case bore no resemblance to the exceptional cases and was not an exceptional case in any sense.
At paragraph 52, the majority was careful to explicitly point out that the reason the Court of Appeal decision was wrong on duty of case was that:
The majority, at paragraph 53, also noted that:
Furthermore, the majority held that even if there was a duty of care:
- it was not breached, and
- it had not been shown that the accident would have been prevented if the Licensee had complied with the alleged duty.
French CJ, agreeing with the majority, noted that the resolution of the question of duty of care in the future will likely require consideration of the liquor licensing laws and closer consideration of the civil liability statutes of the relevant State or Territory.
Adeels Palace Pty Ltd v Moubarak
Adeels Palace Pty Ltd v Bou Najem
 HCA 48
10 November 2009
The appellant, Adeels Palace Pty Ltd (Adeels Palace) carried on a reception and restaurant business at premises in Punchbowl, New South Wales. On 31 December 2002, Adeels Palace was open for business and many people attended to celebrate New Year's Eve. At about 2.30am on 1 January 2003, a dispute on the dance floor escalated, and came to involve a fight between one of the respondents Mr Anthony Moubarak and a Mr Danny Abbas. Mr Abbas left the premises and returned with a gun. Mr Moubarak was shot in the stomach and the respondent Mr Antoin Bou Najem was shot in the leg.
Mr Moubarak and Mr Najem each brought proceedings in the District Court of New South Wales against Adeels Palace claiming damages for personal injury. Each alleged that they had suffered injury as a result of Adeels Palace's negligence in not providing any or any sufficient security during the function on New Year's Eve 2002/2003. In the District Court, each plaintiff obtained judgment for damages. Adeels Palace appealed to the Court of Appeal of New South Wales and that Court dismissed the appeal. By special leave, Adeels Palace appealed to the High Court.
The live issues in the case of each, at trial, on appeal to the Court of Appeal and the High Court were whether:
- Adeels Palace owed each a duty of care to prevent harm of the kind suffered
- whether that duty had been breached, and
- whether the breach was a cause of the damage suffered.
In this case the High Court considered provisions of the Civil Liability Act 2002 (NSW) (Civil Liability Act) and the Liquor Act 1982 (NSW) and stated at paragraph 22:
According to the High Court, in the circumstances reasonably contemplated before Adeels Palace opened for business on 31 December 2002 as likely to prevail on that night, Adeels Palace owed each respondent a duty to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons. The High Court noted that this duty was consistent with the duty imposed by statute upon the licensee and which was a duty enforceable criminal processes.
In relation to whether the duty was breached, the High Court observed that the absence of consideration at trial of the matters prescribed by the Civil Liability Act may have been reason enough to conclude that the question of breach of duty was not determined properly by the trial judge. However, the High Court decided that it was not profitable to examine that issue further because resolution of the issue of breach would necessarily depend only upon the evidence that was led at trial.
Instead, the High Court thought it desirable to consider the question of causation and found that the negligence found against Adeels Palace was not shown to have been a cause of the injuries suffered by the plaintiffs. In considering the issue of causation, the High Court observed that the evidence at trial did not show that:
- the presence of security would have deterred the re-entry of Mr Abbas, or
- security personnel could or would have prevented re-entry by Mr Abbas.
The High Court noted at paragraph 47 that:
Accordingly, the High Court found that the absence of security personnel at Adeels Palace on the night the plaintiffs were shot was not a necessary condition of their being shot, in other words the "but for" test of factual causation was not established. The High Court, at paragraph 57, stated that:
The High Court allowed the appeals, set aside the orders of the Court of Appeal and Supreme Court of New South Wales and entered orders that the appeal to the Supreme Court be allowed with costs, the judgment of the District Court be set aside and its place there be judgment for Adeels Palace with costs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.