Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] Pty Ltd NSWCA 250

Background

Julia Day had been drinking ‘sparkling wine’ at The Ocean Beach Hotel Shellharbour’s premises (the Hotel). The Hotel’s duty manager decided she was intoxicated and instructed a security guard to “get rid of her.” CCTV footage then captured the security guard engage in a 39 second conversation with the claimant before pulling the stool, on which the claimant was seated, out from underneath her causing jury. The security guard was employed by a ompany called Checkmate Pty Ltd (the employer).  

The claimant on appeal attempted to fix liability on the Hotel for the actions of the bouncer as the employer of the security guard had become deregistered. The difficulty with this argument was that the following findings of fact had been made at trial:

  • Neither the duty manager nor the Hotel licensee, both employees of the Hotel, were there when the security guard confronted Ms Day; 
  • There was no suggestion that the security guard was expressly or impliedly directed to take the course of action he took; 
  • The security guard was employed by Checkmate, an independent contractor, pursuant to an oral contract; 
  • Uniforms were different to Hotel staff, to make it clear they were not Hotel employees; 
  • Two-way radios were provided to only security staff by Checkmate; 
  • Security guards could be sent to any location or Hotel at any time by Checkmate depending upon operational needs; 
  • The Hotelier and staff only had general control of security staff but no control over how they performed allocated tasks; 
  • Tasks assigned to security guards could be delegated to any other guard; and 
  • The security guards were able to turn out patrons without recourse to the Hotel management.

The Law

In light of these findings, the claimant argued:

  1. There was an overarching statutory duty under the Liquor Act 2007;
  2. Agency; and
  3. Dual vicarious liability.

It was submitted that under s91 of the Liquor Act 2007 the Hotel licensee is ‘responsible at all times for the personal supervision and management of the conduct of the business of the licensed premises under the license.’ However Leeming JA noted that it is necessary to examine all of the relevant

legislation and regulatory regime as a whole. This included the Liquor Act 2007, the conditions of the Hotel licence and the Security Industry Act 1997. Leeming JA noted that under s77 of the Liquor Act 2007 the appellant could be removed from the premises. In conjunction with this Act the Hotel complied with the Security Industry Act 1997 as Checkmate met the prerequisites within. The security personnel were contracted by the Hotel to ensure the licensee’s compliance with both the statutory obligations and specific obligations under their hotel license. This was seen to be to sufficient to comply with all their statutory obligations.

As to agency, the court held that while the security guard was the Hotels agent within the meaning of the Liquor Act 2007, he was not a true agent within the meaning of CML (1931) 46 CLR 41 because he was not a person with authority to bind his principal.

The NSWCA noted the ‘general rule’ had long been that an employer is not liable for a tort committed by an independent contractor and the High Court recognised that this concept was “too deeply rooted to be pulled out” (Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19.) As to ‘dual vicarious liability’ the NSWCA have formed the view that “once one person is vicariously liable, no other person could be.” The case against the Hotel therefore failed.

Implications

This case will offer some reassurance to insurers of Hotels that if the organisation has completely delegated its duties under the Liquor Act 2007 to a security company with appropriately trained employees and one of these security guards unlawfully assaults a patron unless there is some evidence of actual involvement or control over the assault the Hotel will not be held liable for the act of security staff merely because those actions have occurred on Hotel property.

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