Adeels Palace Pty Limited (Adeels Palace)
operated a restaurant and reception business at Punchbowl in New
South Wales. The restaurant was open on New Year's Eve 2002 and
The restaurant was licensed to trade until 4.00am. At
approximately 2.30am on 1 January 2003 there was a dispute between
persons on the dance floor, resulting in an altercation in which
one man was hit in the face. That man left the restaurant and
returned with a gun and shot Mr Najem in the leg and Mr Moubarak
(the man who had struck the gunman) in the stomach.
Both Mr Najem and Mr Moubarak sought damages from Adeels Palace,
primarily on the basis of negligence for insufficient security
being provided at the function. Both Mr Najem and Mr Moubarak
succeeded at first instance in the NSW District Court and on appeal
in the NSW Court of Appeal.
The High Court allowed the appeals by Adeels Palace,
While the injuries were occasioned by a criminal act, Adeels
Palace nonetheless owed the plaintiffs a duty to take reasonable
care to prevent such injury. In relation to this, the High Court
distinguished the circumstances from the Modbury Triangle principle
that a defendant will not generally be held liable for the criminal
acts of third parties. The distinction lay principally in Adeels
Palace's control over the premises at the relevant time,
including its obligations under the relevant licensing law.
Whether security arrangements in place satisfied Adeels
Palace's duty depended on the considerations in s 5B of the
Civil Liability Act 2002 (NSW) (CLA), specifically the
probability that the harm would occur, the likely seriousness of
the harm, the burden of taking precautions to avoid the risk and
the social utility of the activity that created the risk. The High
Court did not need to decide whether the security was sufficient in
the circumstances, but did note that unless the risk to be foreseen
was a risk of a kind that called for the presence of security to
deal with it safely, failure to provide security of that kind would
not be a breach of the relevant duty of care.
The High Court decided the case on the issue of causation. It
held that the "but for" test of factual causation in s 5D
of the CLA was applicable. The test was not satisfied as it was not
shown to be more probable than not that, but for the absence of
security personnel, the shootings would not have taken place. It
was also held not to be an exceptional case within the meaning of
sub section 5D(2) (which allows courts to find in exceptional cases
that factual causation is established even if the "but
for" test is not satisfied).
The High Court's focus on the CLA provisions on causation
(and CLA provisions on principles of negligence in general) is of
significance. The NSW CLA provisions are mirrored in several other
Australian jurisdictions (including Part X of the Wrongs Act
1958 in Victoria and Chapter 2 of the Civil Liability Act
2003 in Queensland). Despite such provisions being part of the
landscape in most jurisdictions for seven years, the provisions
have often been ignored by lower courts which have continued to
have regard primarily to common law principles of negligence.
Illustrative of this is that the NSW CLA provisions were entirely
ignored by the trial judge in Adeels Palace.
While the CLA provisions to some extent reflect the common law,
the position is not identical. In particular, Adeels Palace
indicates that save for exceptional cases, in cases under the CLA
there should be a rigid application of the "but for"
causation test to establish that a negligent act or omission caused
the loss or damage in question. The decision should remind lower
courts that the common law position in March v. E & MH
Stramare Pty Limited that causation is "ultimately a
matter of common sense" must be viewed subject to the
requirements of the civil liability legislation of the jurisdiction
Adeels Palace Pty Limited v. Moubarak; Adeels Palace Pty
Limited v. Bou Najem (2009) 260 ALR 628
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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