Australia: New Year´s Eve Celebrations With A BANG: The Liability Of The Licensee For The Criminal Acts Of Patrons

On 26 February 2009 the New South Wales Court of Appeal dismissed an appeal against a decision of the New South Wales District Court, where a hotel operator (the appellant) was found to have breached its duty of care to two patrons who were shot on its licensed premises.

The New South Wales District Court found the appellant owed a general and wide duty to take care to avoid injuries to its patrons caused by the unlawful actions of other patrons on its premises. The District Court found that the appellant was in breach of its duty because the security arrangements at the premises at the relevant time fell far short of what reasonable care and skill required in the circumstances. The court found that had the hotel operator provided proper security the patrons would not have suffered harm. This decision is a timely reminder to licensees in times where harm minimisation is at the forefront of government policy decision making, that inadequate security arrangements are not acceptable.

The Facts

The appellant hotel operator conducted a restaurant/nightclub premises known as Adeels Palace. In the early hours of 1 January 2003, at a New Years Eve function arranged by the appellant, a dispute on the dance floor erupted and came to involve a fight between one of the respondents, Mr Moubarak, and a Mr Abbas. Mr Abbas left the premises to retrieve a gun and was able to freely re-enter the premises due to there being no security staff at the entrance of the premises. The premises also had 10 CCTV cameras in place which were not monitored at the time of Mr Abbas returning. Preceding this was the fact that there had been eight police incidents, three involving firearms, in the vicinity of the premises in the previous four years. This was seen to shed some light on the nature of the establishment and its likely patrons. When Mr Abbas returned, he shot Mr Moubarak and Mr Bou Najem (the respondents).

The respondents brought proceedings against the appellant in the New South Wales District Court, claiming damages for negligence or in the alternative, for breach of contract. Sorby DCJ found on the evening of 31 December 2002 and the early hours of 1 January 2003 there was no security present at Adeels Palace. This finding was not challenged on appeal.

Sorby DCJ held that the appellant was liable in negligence to the respondents and that it owed the respondents:

"a general and wide duty ... to take care to avoid injuries caused by the unlawful actions of patrons (or invitees) on the premises during the course of the evening of 31 December 2002 and early hours of 1 January 2003".

Sorby DCJ held that the duty of care was breached because the appellant's security arrangements at the time of the function fell far short of what reasonable care and skill required in all the circumstances. It was held that this inadequacy in the security arrangements contributed to, and so caused, the injury suffered by the respondents.

On Appeal

On appeal, the appellant challenged the trial judge's findings in respect of duty of care, breach and causation.

The appellant relied on Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61 (Modbury) to argue that the occupier of premises does not owe a duty of care in relation to the criminal conduct of third parties. The appellant conceded that cases such as Wagstaff v Haslem [2007] NSWCA 28 recognise an exception to this principle in the case of licensed premises.

The respondents submitted that the present case fell within the recognised exception to Modbury. They further submitted that it is the general nature of the activities being conducted on the premises and the element of control exercised by the occupier which gives rise to the duty, and not actual or constructive knowledge of a patron's intoxication or propensity for violent behaviour.

Giles JA held that as occupier, the appellant was in a position to control who entered and remained on the premises through the presence of security guards. However, his Honour held that it is not the appellant's status of occupier that gives rise to the duty to protect patrons from the unruly behaviour of other patrons, but rather, the forseeability of injury from conduct on the premises, plus the capacity to control the conduct.

Campbell JA held that the history of previous incidents at the club, as well as the inherent probabilities of the type of activity being carried on in the club made it reasonably foreseeable that the patrons would include potentially violent and troublesome ones. As mentioned above, there had been eight police incidents, three involving firearms, in the vicinity of the premises in the preceding four years which was seen to shed some light on the nature of the establishment and its likely patrons. This dictated, in the Court's view, that a security officer should have been stationed at the front door to prevent re-entry of unruly patrons and the absence of a guard amounted to a breach of duty on the part of the licensee. In this case, Campbell JA pointed out that the appellant had even greater capacity for control than most hotel proprietors because entry to its premises was permitted only through one set of doors at street level.

Conclusion

This case confirms that the criminal conduct of a patron does not release a hotel operator from its duty to its patrons. The duty of care owed by clubs and hotels extends to taking reasonable care to safeguard against injury from intoxicated, unruly or violent behaviour of other patrons.

This case is another timely reminder that licensees must give extensive thought to their security arrangements and must use all endeavours to take care of patrons, as the courts are willing to extend the duty of licensees to cover criminal activity.

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