Don’t Shoot the Occupier! Adeels Palace Pty Ltd v Moubarak by TurksLegal

Don’t Shoot the Occupier! Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem (2009) HCA 48 By Paul Angus | November 2009 Area of Expertise | General Insurance

Summary On 10 November 2009, the High Court delivered a joint judgment in Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem (2009) HCA 48 and considered the issue of whether an occupier of licensed premises owed a duty of care to patrons at a New Years Eve function, to prevent injury from the criminal conduct of another person. In the process, the Court also clariﬁed that under the Civil Liability Act 2002 (NSW) (the CLA) the main test of causation relevant to determining liability of an occupier is the ‘but for’ test.

Who Does This Impact? Liability insurers and owners of licensed premises including hotels, pubs, restaurants and function centres. Liability insurers and occupiers generally.

What Action Should Be Taken? Just because the injury or loss was caused by the criminal act of a third party, does not mean that an occupier won’t be liable. Careful consideration needs to be given to whether the harm alleged by a claimant was actually caused by the failure or act alleged against the occupier.

Facts Adeels Palace Pty Limited was the operator and occupier of a reception and restaurant business in Punchbowl, New South Wales. On New Years Eve 2002, Adeels Palace held a New Years Eve party, to which people paid a fee for entry and food, but purchased their alcoholic drinks. At 2.30am, a dispute erupted between two groups on the dance floor, which resulted in a fight. A male participant in the fight left the restaurant and returned sometime later with a gun. He gained entry to the premises and proceeded to shoot and injure Mr. Bou Najem (who had not been involved in the fight on the dance floor) and the second plaintiff, Mr. Moubarak (who had punched the gunman in the initial fight). The two men who were shot brought proceedings in the District Court against Adeels Palace, claiming damages for personal injury and alleging that their injuries occurred as a result of Adeels Palace’s negligence, in not providing any, or any sufficient security during the New Years Eve function.

At First Instance and on Appeal The two plaintiffs were successful in obtaining judgments for damages against Adeels Palace in the District Court. Adeels Palace appealed both judgments to the Court of Appeal and the appeals were dismissed. Adeels Palace sought special leave to appeal to the High Court.

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Don’t Shoot the Occupier! by Paul Angus

High Court In upholding the appeal of Adeels Palace, in the both cases, the High Court ﬁrst considered the issue of whether Adeels Palace owed a duty of care to prevent harm to patrons of the premises, as a result of the criminal actions of the gunman and then addressed the issue of whether, if there had been a breach, such a breach was a cause of the injuries suffered.

DID THE OCCUPIER OF THE LICENSED PREMISES OWE A DUTY OF CARE TO PATRONS? Adeels Palace submitted that it owed no duty of care to prevent the criminal conduct of third parties and relied upon the High Court’s well known decision in Modbury Triangle v Anzil,1 which was the basis for the position that an occupier, in the absence of some other special relationship, will not be liable for the criminal acts of a third party. In framing the duty of care in the terms of Sections 5B and 5C of the CLA and considering the obligations of an occupier who served alcohol pursuant to the Liquor Act 1982 (NSW), the High Court rejected the occupier’s submission that the principles in Modbury Triangle meant that the occupier owed no relevant duty of care to the plaintiffs, in the circumstances of the injuries suffered. The High Court differentiated the circumstances in Modbury (in which the plaintiff had been attacked in a shopping centre car park at night, when the lights at the car park were off ) on the basis that the occupier of a licensed premises had control over access to the land by third parties, who may cause injury to patrons. The High Court found: ‘Adeels Palace owed each plaintiff a duty to take reasonable care to prevent injury to patrons from violent, quarrelsome, or disorderly conduct of other persons’.

However, the Court found the duty was not absolute and was merely a duty to take reasonable care and was not a duty incapable of performance. In addressing whether the duty of care owed by the operator of licensed premises had been breached in the circumstances, the Court considered Section 5B of the CLA. In particular, the Court found that it was to be expected that there was a risk of violent, quarrelsome or disorderly conduct in the restaurant and that such a risk was not unforeseeable, nor was the risk of such behaviour occurring insigniﬁcant.

WHAT WOULD A REASONABLE RESPONSE OF THE OCCUPIER HAVE BEEN? The Court then turned to the question of whether a reasonable person in a position of Adeels Palace would have taken precautions that the plaintiffs alleged they should have taken; that being, to provide additional licensed security personnel who would act as crowd control, or as bouncers. The plaintiff did not allege how many security personnel would have been required to ensure that the duty of care had not been breached but alleged that it was more than had been provided. The Court considered Section 5B(2) of the CLA which reﬂects the ‘Shirt calculus’2 in that an occupier must consider the probability that harm would occur, the likely seriousness of the harm and the burden of taking precautions to avoid the risk and balance those considerations to judge what an appropriate response would have been to the foreseeable risk.

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Don’t Shoot the Occupier! by Paul Angus

Both at the trial and in the Court of Appeal, the Court concluded that the failure of Adeels Palace 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 by Adeels Palace to its patrons. However, the High Court found that such a conclusion could only be reached if the probability of unruly or troublesome patrons leaving the premises and returning to inﬂict violence to other patrons at some later time, was such that a reasonable person in the position of Adeels Palace would have foreseen the need to employ security personnel to control access to the restaurant. While not concluding its judgment on this point, the High Court found that the Courts below had failed to properly consider whether the type of situation that arose with a gunman returning to the premises was a foreseeable event that would have called for, as a matter of reasonable precaution, bouncers or crowd controllers to have been employed. The Court however, did not consider in its judgment whether in fact a breach of duty had been proven and instead turned to the issue of causation as the determinative issue.

THE ‘BUT FOR’ TEST - DID THE FAILURE TO HAVE SECURITY GUARDS CAUSE THE LOSS? The Court then considered the issue of causation as governed by the CLA. Section 5D(1) of the CLA required that the issue of causation be considered in two elements: factual causation and scope of liability. The first element is essentially equivalent to the long standing ‘but for’ test and required consideration of whether ‘but for’ the negligent act or omission would the harm have occurred. The Court concluded that the presence of security personnel might have been able to deter or prevent re-entry by a drunken patron willing to throw a punch, but there was no evidence that the presence of security personnel would have deterred the re-entry of a determined gunman acting irrationally. The evidence at trial and on appeal did not show that the presence of security guards would have prevented the injuries that occurred. Evidence merely that the shootings ‘might’ not have occurred, or that security guards might have delayed the gunman’s entry or resulted in someone else having being shot, was not sufficient to satisfy the ‘but for’ causation test, as the absence of security personnel was not a necessary condition of the occurrence of harm to either plaintiff. Section 5D(1) of the CLA was found not to have been satisfied and the first element of causation was not established. The Court then considered Section 5D(2) which makes provision for ‘an exceptional case,’ where a Court is entitled to consider whether or not and why a responsibility for harm should be imposed on a negligent party, when the ‘but for’ test had not been satisfied. The Court found that the requirement to prevent the criminal act of a third party causing injury to patrons of a licensed premises, was not sufficient circumstances to impose an exceptional circumstances case for causation under Section 5D(2) and found that the failure of Adeels Palace to take steps that might have made the occurrence of the injuries less likely was not sufficient.

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Don’t Shoot the Occupier! by Paul Angus

Summary In upholding the appeal of the occupier of the licensed premises, the Court confirmed that the occupiers of licensed premises owe a significant duty of care to patrons, but this duty was to be considered in New South Wales in terms of the CLA as to the scope of the duty of care, breach of duty of care and the issue of causation. The Court confirmed that in certain circumstances the occupier of a licensed premises owes a duty of care to its patrons, to protect them from attack by a third party where the threat was foreseeable or forewarned in some way and the occupier had the means to control access or behaviour to prevent such attack. This duty of care is not insignificant, given the service of alcohol and the ability of the occupier to control access to the premises, but the question of the breach of that duty is one dependant upon the factual circumstances. The Court noted that evidence suggesting that certain actions might have prevented a difficult to foresee factual scenario, was not sufficient to satisfy the ‘but for’ causation test imposed by the CLA. (The High Court did note that the causation test under the common law was somewhat different, but did not consider whether their decision would have been different if considered under the common law). Simply bringing evidence of steps that might have deterred or prevented the third party criminal activity are not sufficient in themselves for a plaintiff to establish liability of the occupier or to bring such cases within the ‘exceptional circumstances’ extension of the causation consideration required under the CLA.

Endnotes 1

Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254

So named from the formulation set out by the High Court in Wyong Shire Council v Shirt (1980) 146 CLR 40

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Donâ&#x20AC;&#x2122;t Shoot the Occupier! by Paul Angus

For more information, please contact: Paul Angus Partner T: 02 8257 5780 paul.angus@turkslegal.com.au

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