From: Neil Foster <>
Date: 10/11/2009 02:36:22 UTC
Subject: HCA on alcohol and torts

Dear Colleagues;
Harold Luntz has alerted me to the fact that the High Court of Australia has handed down two significant torts decisions today, both involving alcohol-related issues and both decided against the plaintiffs, but different in a number of important ways.
Duty owed by publican to stop drunken customers harming themselves?

In C.A.L. No 14 Pty Ltd v Motor Accidents Insurance Board; C.A.L. No 14 Pty Ltd v Scott [2009] HCA 47 (10 November 2009) Mr Scott's widow was suing the owners of a pub where he had been drinking not long before being killed in a road accident while riding his motorbike. He had initially handed over the keys of the bike to the publican and told him to call his wife to pick him up, but later changed his mind.
This 2-1 decision of the Tasmanian Full Court is comprehensively overturned, the High Court (French CJ, Gummow, Hayne, Heydon & Crennan J) holding that there was no duty of care, a majority of the court (except Hayne J who declined to join the others on these points) also finding that even if there had been a duty there was no breach, and even if there had been a breach causation was not established. Taking these in reverse order (which the plurality judgment of Gummow, Heydon & Crennan J does)- no causation because it was not shown that even if a phone call to the wife had been made, the deceased would have agreed to wait until his wife arrived- [14]ff; no breach because even if there was a duty to do something to prevent Mr Scott leaving after drinking, the publican had done all that he could be expected to do by offering to ring Mrs Scott (an offered refused with some force- see [10]); no duty because to find a duty of care (along the lines of "take the agreed action to prevent Mr Scott leaving") would have interfered unduly with Mr Scott's "personal autonomy" and introduced legal obligations which were "incoherent" by clashing with other obligations (such as the duty of a bailee at will to redeliver a chattel when requested)- see [38]-[40].
Interestingly, while the case could be (and was by the Full Court) distinguished from the previous decision in Cole, the plurality judgment went on to specifically hold that for the future it should be clear that there is no duty of care in publican cases- see [52]
outside exceptional cases, which this case is not, persons in the position of the Proprietor and the Licensee, while bound by important statutory duties in relation to the service of alcohol and the conduct of the premises in which it is served, owe no general duty of care at common law to customers which requires them to monitor and minimise the service of alcohol or to protect customers from the consequences of the alcohol they choose to consume.  
There was some critique at [48]-[51] of the decision of the Full Court not to follow (or else to be more explicit in criticising) the decision of the NSW Court of Appeal in Cole which was to the same effect. Reasons for not imposing a duty of care included that alcohol consumption was an acceptable part of Australian culture (quoting Holmes, "Wine has been thought good for man from the time of the Apostles until recent years"- for those who are interested the apostolic quote is presumably from Paul's letter to Timothy 1 Tim 5:23 "No longer drink only water, but use a little wine for the sake of your stomach and your frequent ailments." ).
Canadian decisions to the contrary (esp Jordan House v Menow) were distinguished but in any event said to be "unconvincing" at [56]. Their Honours did, however, decline to specifically rule on a possible duty of care owed to third parties in connection with harm caused by drunken patrons- [57]. But it must be doubtful whether such a duty would be recognised by the current High Court.
Duty owed by nightclub in relation to harm caused by violent patron?
In the second decision, Adeels Palace Pty Ltd v Moubarak, Adeels Palace Pty Ltd v Bou Najem [2009] HCA 48 (10 November 2009) two patrons who were shot by a gunman at a New Year's Eve party run by the defendant had sued for their negligence in not providing sufficient security guards. The HCA (same makeup of the bench as in CAL but in a single joint judgment this time) gave what I think is a sensible and nuanced judgment in finding against the plaintiffs and overturning the decision of the NSWCA.
The court did not do as they had been invited to, and rule that a nightclub owed no duty of care where they ran a party at which they could foresee possible drunken and violent behaviour by patrons. At [23] they say that this case was clearly distinguishable from the earlier decision in Modbury Plaza, where the duty unsuccessfully argued for there had been based on occupation of shopping centre premises. The nightclub here did owe a duty of care to patrons- see [25]-[26]: they controlled entry, they served liquor, and interestingly here their statutory obligations to customers included obligations to avoid harm arising from violence and anti-social behaviour, so there was quite a close coherence between statutory obligations and the asserted common law duty.
But there was strong doubt whether there had in fact been a breach of that duty. The claimed breach was provision of more security guards, but the HC expressed doubt whether a careful club owner would have done more than monitoring entrants in the way that it did on the night. There were no precise findings about a history of violence (see [35]) and so it was unclear whether the plaintiff had made out his case on breach.
More importantly, the final blow to the plaintiff's case was in the area of causation- see [41] ff. It seemed clear that it had not been shown that "but for" the failure to provide more guards, the incident would not have occurred. The court says that s 5D (1) of the NSW Civil Liability Act now clearly requires that the "but for" test be satisfied in ordinary cases. Here extra security guards on the door would probably not have deterred the assailant, who had come back to the club after a previous incident carrying a gun and clearly determined to shoot some people- see [48]-[49].
There was a faint attempt by the plaintiff to argue that causation could be established because the lack of guards meant an "increased risk" of harm. This attempt was given some slight leverage because s 5D(2) of the CLA allows for what it calls an "exceptional case" where "but for" proof is not needed. The court at [57] recognised that this provision was inserted to deal with cases like Fairchild, but explicitly said it was not deciding whether and how s 5D(2) would work in such cases. (As will be apparent from my previous post, I think the Fairchild issue will be resolved soon in the Ellis proceedings before the HC now.) But in any event the court said that there was no analogy with Fairchild here and that ordinary principles applied to exclude recovery where the harm could not be shown to have been caused by the defendant.
The other aspect of the decision of interest to Australian lawyers is the comment that the HC makes on the breach provisions of the CLA. It is clearly stated, finally, that the heading to Div 2 of Part 1A ("Duty of Care") is "apt to mislead" and that sections 5B and 5C are "directed to questions of breach", not to those of duty- see [13]. And the court stresses that a court in NSW dealing with a case covered by the CLA must refer in detail to s 5B, not merely to the common law "calculus", in dealing with breach- see [39].
Neil F

Neil Foster
Senior Lecturer, LLB Program Convenor
Newcastle Law School
Faculty of Business & Law
MC158, McMullin Building
University of Newcastle
Callaghan NSW 2308
ph 02 4921 7430
fax 02 4921 6931