In this decision handed down last month, the High Court held that the licensee of a restaurant was not liable for injuries to its patrons arising from the criminal conduct of a third party, in circumstances in which there was no action the licensee could have taken which would, on the balance of probabilities, have prevented that conduct.
Adeels Palace was a restaurant. On 31 December 2002 a New Years Eve function was held at the restaurant for which an admission fee was charged. There was a band and an area where patrons could dance. In the early hours of 1 January 2003 there was a dispute between two women on the dance floor – one accused the other of brushing her hand with a lit cigarette. Words were exchanged, relatives and friends intervened, fighting erupted and onlookers joined in. Punches, chairs, plates and bottles were thrown and Mr Abbas was hit in the face, drawing blood. Mr Abbas left the restaurant and returned with a gun. He shot Mr Bou Najem in the leg. He then found Mr Moubarak, who was the man who had earlier hit him in the face. Mr Abbas shot him in the stomach and then left the premises.
At first instance
Mr Moubarak and Mr Bou Najem sued the licensee of the restaurant, Adeels Palace Pty Limited claiming damages for negligence, breach of contract and breach of the Trade Practices Act 1974 (Cth). They succeeded at first instance because the licensee had not employed any security staff. The trial judge held that the security arrangements were inadequate and were causative of the injuries suffered. Mr Moubarak was awarded damages of $1,026,682.98. Mr Bou Najem was awarded damages of $170,000.00.
Court of Appeal
The NSW Court of Appeal agreed with the trial judge and held that the licensee's failure to provide licensed personnel to act as crowd controllers or bouncers at the door of the premises was a breach of the duty of care owed to its patrons which extended to taking reasonable care to guard against injury from intoxicated, unruly or violent, including criminal, behaviour. It was held that on the balance of probabilities, if security staff were present at the entrance of the restaurant they would have prevented Mr Abbas from re-entering the premises and shooting Mr Moubarak and Mr Bou Najem.
In a unanimous joint judgment the High Court overturned the Court of Appeal's decision and held that the licensee had not breached the duty of care owed to its patrons.
Consistent with obligations imposed upon it by the Liquor Act 1982 (NSW), it was held that the licensee had a duty to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons, but that this duty was not absolute.
Consideration was given to the principles set out in the Civil Liability Act 2003 (NSW). The question was whether the probability of other persons likely to do violence to patrons seeking to gain entry to the premises was such that a reasonable person in the licensee's position would have employed security personnel to control access to the restaurant.
There was nothing in the history of the restaurant which warranted the conclusion that there was the probability of violence erupting.
There was no finding that the risk of an altercation which, as a matter of reasonable precaution, called for bouncers or crowd controllers, was a risk that should have been foreseen. Such matters were to be required without the benefit of hindsight.
It was held that the negligence found against the licensee by the Court of Appeal was not a cause of the injuries suffered by the respondents. The 'but for' test was not established. The evidence did not show that the presence of security personnel would have deterred the re-entry of the gunman, nor did it show that the security personnel could or would have prevented the re-entry of the gunman, who was irrational and ready and willing to use the weapon on persons unconnected with his desire for revenge. Therefore, the absence of security personnel was not a necessary condition of the occurrence of the harm to Mr Moubarak and Mr Bou Najem.
Even though the presence of security personnel at the door might have deterred or prevented the gunman from entering, it was held that this was not reason enough to conclude that this was an 'exceptional case' where responsibility for the harm suffered by Mr Moubarak and Mr Bou Najem should be imposed on the licensee.
Pursuant to section 74 of the Trade Practices Act 1974 (Cth) there is an implied warranty that services will be rendered with due care and skill. It was held that damages could only be recovered for breach of such an implied warranty if Mr Moubarak and Mr Bou Najem established that the breach of the warranty materially contributed to their loss. For the same reasons that the 'but for' test had not been established, this contention was rejected.
Where an injury is caused by a third party's criminal act, then it will only be accepted that another, such as an occupier or licensee, has been negligent if the negligence was a necessary condition for the injury to have been able to be caused. The argument that the injuries were caused by the failure of the licensee to take steps that might have made their occurrence less likely was rejected.
In Modbury Triangle Shopping Centre Pty Limited v Anzil (2000) 205 CLR 254 the High Court held that the owner of a shopping centre did not owe a duty to take reasonable care to prevent injury caused by the criminal behaviour of a third party on the shopping centre's land. In that case an employee of the video store in the shopping centre was assaulted in the car park after the shopping centre was closed and the car park lights had been turned off.
This decision is in accordance with Modbury and further limits the potential liability of occupiers and licensees. It gives guidance as to when it is appropriate that security staff be present at licensed premises.
Whilst certain circumstances would warrant security staff being present, the lack of security staff does not necessarily constitute a breach of the duty of care owed where a third party commits a deliberate criminal act.
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.