Introduction

In  December  2012,  Carter  Newell  published  a bulletin  about  the  decision  of  the  Supreme  Court  of New South Wales in Orcher v Bowcliff Pty Ltd.1 , which concerned an assault on a hotel patron by an employee of the hotel. That case subsequently went on appeal.

On 23 December 2013, the New South Wales Court of Appeal handed down its decision in QBE v Orcher.2 The Court of Appeal overturned the primary judge’s decision (who found in favour of the plaintiff), finding that neither of the defendants, being the hotel and the security company, had breached their respective duties of care to the plaintiff.

There are two key features of this case. First, the employee who assaulted the plaintiff was not a security guard as is typically the case, he was a glass collector. Secondly, the assault occurred outside the hotel’s boundary.

 The facts

The assault

At around 5.00am on 25 November 2007, the plaintiff was assaulted by Mr Paseka, who was a glass collector employed by the Bridge Hotel at Rozelle (the hotel).3 As a result of the assault, the plaintiff sustained serious injuries.

The assault took place across the street from the hotel, around 15 metres from its entrance.

Shortly before the assault, the plaintiff and his partner, Ms Williams, had been asked to leave the hotel following an argument between them. The plaintiff had come to pick up his partner from the hotel and had only been there for around 10 minutes before being asked to leave. He had not been drinking.

The plaintiff and Ms Williams left through the hotel entrance and crossed to the opposite side of the 

street. At the time, Mr Paseka was standing on the footpath outside the hotel talking to other patrons.

Ms Williams then went alone to a nearby service station to withdraw money from an ATM. While the plaintiff was waiting for Ms Williams to return, another hotel patron, Izzy, crossed the street and became involved in a ‘verbal altercation’ with the plaintiff. Around a minute later, Mr Paseka crossed the road and also became involved in the altercation. Around two and a half minutes after that, Mr Paseka punched the plaintiff causing him to fall to the ground.

A secondary incident which adopted some signifi cance during the hearing was that, prior to Izzy crossing the road, Mr Paseka relieved Izzy of a bottle of alcohol and deposited it in to a rubbish bin. This took place in front of the hotel’s senior security guard, Mr Lokotui, who had temporarily exited the hotel out onto the street, but who had re-entered the hotel prior to Izzy and Mr Paseka crossing the road.

Security arrangements

The hotel was responsible for designing and implementing the security system.

One of the special conditions attaching to the hotel licence was that the licensee was required to take all reasonable steps to ensure ‘that the patrons depart[ed] the hotel and the neighbourhood in a quiet and orderly manner’ and that ‘patrons [did] not congregate on the footpaths of the street surrounding the hotel, to the disturbance of the neighbourhood.’

There were four security guards on duty on  the night in question. Two were employed by the hotel, including Mr Lokotui, and two were supplied by the security company,4 including Mr Paea.

The evidence

The main evidence concerning these events came from the plaintiff’s partner, Ms Williams, the police record of interview with the assailant, Mr Paseka (who, whilst being one of the defendants, took no part in the proceedings) and the CCTV footage outside the hotel.

The evidence of Ms Williams was found to be unreliable. In particular, her evidence that Mr Paseka had been yelling at the plaintiff from across the road, calling him a ‘woman basher’ was not accepted. Limited weight was also given to Mr Paseka’s evidence.5

The Plaintiff/Respondent’s Case

The plaintiff’s case was essentially that the defendants’ negligence arose out of Mr Paea (in the case of the security company) and the hotel’s security guard Mr Lokotui (in the case of the hotel) permitting

Mr Paseka, an untrained, unqualifi ed and unlicensed employee of the hotel, to cross the street for the purpose of quelling an apparent dispute between the plaintiff and Izzy, in circumstances where there was a foreseeable risk that Mr Paseka would overreact, as he allegedly did, and assault the plaintiff.6

It was submitted that by observing Mr Paseka removing the bottle from Izzy, Mr Paea must thereby have become aware that Mr Paseka was an employee of the hotel carrying out his duties as such.

In the case of the hotel, it was also asserted that its duty of care was breached by Mr Paea, as he was under the direction and control of Mr Lokotui (and other hotel management) in that he had been subsumed into the hotel security system.7

Decision at first instance

The first issue for consideration was whether or not the hotel (and the licensee of the hotel) was vicariously liable for Mr Paseka’s actions. After considering the leading cases in this area, including the High Court decision in New South Wales v Lepore,8 the primary judge considered that the hotel was not vicariously liable for Mr Paseka’s actions as the assault was a ‘gratuitous and unprovoked attack’ which did not appear to have been done ‘in furtherance of [the hotel’s] interests.’9

The primary judge then considered the scope and content of the duty of care owed by the hotel and the security company respectively. The primary judge considered that the hotel owed a duty to the plaintiff to take reasonable care to prevent injury to  him from the violent, quarrelsome or disorderly conduct of other persons on the premises of the hotel,10 and that the duty was not necessarily confi ned to the boundary of the hotel.11 That duty was said to arise from the hotel’s capacity and statutory obligation to control conduct upon licensed premises pursuant to the Liquor Act 2007 (NSW).12 

In relation to the security company, the primary judge also considered that it owed a duty to patrons such as the plaintiff to take reasonable measures to protect them from foreseeable harm.13

The primary judge ultimately found that both the hotel and the security company breached their respective duties to the plaintiff by failing to take any or any reasonable steps to prevent Mr Paseka assaulting him. The primary judge considered that it was ‘entirely foreseeable that Mr Paseka’s ‘interest’ in the altercation between Mr Orcher and Izzy was likely to lead to an escalation of the disturbance rather than to its reduction’ and that ‘an alert or vigilant security guard should have reacted to prevent Mr Paseka from ever becoming involved.’14

As to apportionment of liability between the hotel and the security company, the primary judge considered that a just and equitable apportionment of damages was 70% to the hotel and 30% to the security company. The liability of the hotel was held to be greater on the basis that it designed and implemented the security system.

Appeal decision

Vicarious liability

The primary judge’s fi nding that the hotel was not vicariously liable for Mr Paseka’s actions was not challenged on appeal. Accordingly, the appeal proceeded on the basis that it was necessary for the plaintiff to establish primary liability against the defendants.

Scope of the defendants’ duties of care

Tobias AJA, who gave the leading judgment, stated that the relevant scope of the duty of care of an occupier of licensed premises was to be derived from the following passage in the judgment of the High Court in Adeels Palace v Moubarak [2009] HCA 48; (2009) 239 CLR 420 at [26]:15

In the circumstances reasonably to be contemplated before the restaurant  opened for business on 31 December 2002 as likely to prevail on that night, Adeels Palace owed each plaintiff a duty to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons. The duty is consistent with the duty imposed by statute upon the licensee and which was a duty enforceable by criminal processes. No question arises of translating a statutory power given to a statutory body into the common law “ought”. The duty is not absolute; it is a duty to take reasonable care. It is not a duty incapable of performance. .... Although it is a duty directed to controlling the conduct of others (for the avoidance of injury to other patrons) it is a duty to take reasonable care in the conduct of activities on licensed premises, particularly with regard to allowing persons to enter or remain on those premises.’ (emphasis added)

His Honour subsequently stated that, in the context of the present case, the relevant duty imposed on the hotel and/or Mr Paea was to prevent injury to the respondent from the violent, quarrelsome or disorderly conduct of Mr Paseka.16

Factual  findings

A number  of  factual  fi ndings  were  challenged  on appeal. The key facts were resolved as follows:

  1. Mr Lokotui, the hotel’s senior security guard, was not outside the hotel when Mr Paseka crossed the street (overturning the primary judge’s fi nding in this regard);17
  2. There was no fi nding that Mr Paea saw Mr Paseka remove the bottle from Izzy,18 or that he was aware that Mr Paseka was an employee of the hotel;19
  3. In respect of the security company, there was no evidence as to what either Mr Paseka or Mr Paea heard or observed with respect to the altercation between the plaintiff and Izzy;20
  4. The altercation between the plaintiff and Izzy did not go beyond the trading of verbal insults, and was neither potentially violent nor did it constitute quarrelsome and disorderly conduct;21
  5. There was no evidence that any of the parties involved were heavily affected by alcohol at the time;22  and
  6. There was nothing to suggest to Mr Paea or anyone else that Mr Paseka had a propensity to become violent.23

Decision

In relation to the claim against the security company, Tobias AJA accepted that Mr Paea owed a duty of care to take reasonable steps to prevent harm to patrons of the hotel in his vicinity, and considered that any response by Mr Paea to a risk that a patron intervening in an altercation may himself overreact, must depend upon the circumstances.24

In fi nding that Mr Paea was not aware and could not have been aware of Mr Paseka’s intention when he commenced to cross the road, and having regard to the factual findings mentioned above, his Honour found that Mr Paea (and therefore the security company) was not in breach of his duty of care to the plaintiff by failing to intervene at an earlier stage.

In relation to the claim against the hotel, once it was found that Mr Lokotui was not outside the hotel at the material time, and therefore not able to control the actions of Mr Paseka, the main issue was whether, if Mr Paea was found to be negligent, the hotel was vicariously liable for his actions.

In this regard, the plaintiff relied on the decision in McDonald v The Commonwealth25 and argued that there had been a substantial transfer of control by the security company to the hotel over the services of Mr Paea to justify a fi nding that the hotel was vicariously liable for the acts or omissions of Mr Paea. However, Tobias AJA disagreed, fi nding that the evidence fell short of establishing the necessary degree of transfer of control.26 MacFarlane JA disagreed with Tobias AJA on this issue.27

Accordingly, both appeals were allowed.

Although ultimately not relevant, Tobias AJA  found that the primary judge did not err in his assessment of apportionment of liability between the defendants.

Conclusion

Previous decisions in which it has been found that the duty extended beyond the hotel’s boundaries have generally involved prior incidents between the parties within the hotel. This was not the case here.

Although this was a favourable decision for the defendants, had the circumstances been different, for example, had Mr Paea or the hotel’s employees been aware that Mr Paseka had a propensity to become violent, or that the altercation across the road was potentially violent and Mr Paea failed to intervene, the outcome on appeal may have been different.

The decision at fi rst instance, and on appeal, make it clear that a hotel’s duty of care can extend beyond its boundaries in circumstances where there have been no prior incidents between the parties.

Historically, cases involving assaults on patrons in hotels have not been happy hunting grounds for claimant litigants. Often such cases fall down at the causation stage. Causation was not a signifi cant issue in this case.

It is still probably the case that such claims are diffi cult to win. However, the number of cases involving assaults on hotel patrons seems to be on the increase. As in Orcher, the value of these cases can be quite high, often involving signifi cant brain injuries. Claimant litigants are more likely to run such cases in the hope (or expectation) that, despite the merits of the claim, some money will be paid.

Notwithstanding the unfavourable outcome for the plaintiff in this instance, this is likely to provide further encouragement to claimant litigants.