Australia: Insurance: liability of the hotelier for the criminal conduct of its patrons

Last Updated: 11 December 2009
Article by Lisa Goward

Adeels Palace Pty Limited v Moubarak; Adeels Palace Pty Limited v Bou Najem [2009] HCA 48

Hoteliers can breathe a little more easily thanks to the High Court's recent rejection of two personal injury claims for damages totaling almost $1.2M. This comes on top of the Court's same day rejection of a third claim arising from the death of an intoxicated patron, the subject of last week's Legal Alert.

The present claims arose from random shootings on licenced premises during New Year's Eve celebrations in 2002. We reported on these claims earlier this year when the claimants were successful in the New South Wales Court of Appeal.

The shootings occurred following an earlier dance floor brawl involving the gunman. Following the brawl the gunman left the premises before returning with a gun which he then discharged. The gunman was able to freely re-enter the premises as there were no security staff at the entrance to the premises and no monitoring of CCTV surveillance.

The hotelier unsuccessfully argued before the NSW Court of Appeal that, even if security staff had been present at the door, they may not have been able to stop the gunman.

The Court of Appeal found that the security failures contributed to the occurrence of the claimants' injuries rendering the hotelier liable. The Court thought it significant that there had been eight police incidents, three involving firearms, in the vicinity of the premises in the preceding four years, despite none having occurred within the licenced premises.

The hotelier's argument was finally upheld in the High Court.

A unanimous judgment the High Court found as follows:

  • The hotelier owed both claimants a duty to take reasonable care to prevent injury to them from the violent, quarrelsome or disorderly conduct of other patrons. The hotelier had disputed this. The court referred to the NSW equivalent of sections 165 & 165A of the Liquor Act 1992 (Qld) as supporting (but not creating) that duty of care given the Act's approval of the use of reasonable force to evict unruly patrons.
  • The hotelier, in discharge of that duty, was required to consider before the particular function began (rather than with the benefit of hindsight), whether security was warranted taking into account such matters as:
  • the number of patrons expected to attend;
  • 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 establishment or elsewhere.
  • The fact that there is always a risk that there will be some altercation between patrons, especially those who consume alcohol, is not sufficient of itself to dictate the need for security. Each case must be judged on its own facts looking at the probability of a risk eventuating rather than its possibility. Here, due to the absence of evidence, the Court did not reach a conclusion as to whether security was necessary at all.
  • The result depended on causation. There was a possibility that security staff stationed at the entrance may have been able to prevent the would-be gunman re-entering but no evidence that security could or would have been able to do so. Security might have delayed re-entry but nothing more. It followed that the claimants failed to establish that, but for the absence of security, the injuries would not have occurred. They failed to prove factual causation in terms of the NSW equivalent of section 11 of the Civil Liability Act 2003 (Qld).

Hoteliers should applaud the High Court for its approach to these claims. One should keep in mind however the High Court's sobering advice that every case must be decided on its own facts.

Cooper Grace Ward was named Joint Best Australian Law Firm in the BRW Client Choice Awards 2009 - Revenue < $50m.

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.

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