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Cregan Hotel Management Pty Ltd & Anor v Hadaway [2011] NSWCA 338 Alexzandra Harvey | December 2011 | General Insurance

On 8 November 2011 the Court of Appeal considered the liability of a hotel operator and licensee for injuries suffered by a hotel patron in an assault on a public street, in circumstances where there had been earlier altercations between the victim and assailant within the hotel premises.

Who does this impact?

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Hurly burly at the Hoey Moey – Liability of hoteliers for patron’s assault on another patron

Occupiers and licensees of licensed premises, security service providers and their insurers.

The facts At 9:30pm on 17 September 2004 Graham Hadaway was assaulted by a fellow patron of the Hoey Moey Hotel in Coffs Harbour, shortly after leaving the hotel premises. The attack took place some 200 metres from the hotel. Hadaway and the assailant, Heath Robinson, had been drinking at the hotel for more than four hours prior to the assault. Throughout the course of the evening there were at least two altercations between the men. At 5:00pm Robinson slapped and verbally abused Hadaway, inviting him to fight outside the hotel. Bar staff intervened and the men proceeded to separate areas of the hotel. A second confrontation occurred at 5:30pm. On that occasion Robinson approached Hadaway, threatening violence and inviting security staff to throw them both out so that Robinson could assault Hadaway. Bar and security staff separated the men again and instructed Hadaway to return to the bistro area. Robinson was told to remain in the main bar. Hadaway left the hotel at 9:30pm. A security guard observed Hadaway walk a distance of 10 metres down the road before he resumed his security duties. Hadaway brought a claim for damages against Robinson, the operator of the hotel, Cregan Hotel Management Pty Limited, the licensee and the company which provided security services to the hotel. The claim against the security company was subsequently discontinued. Cregan and the licensee (‘the hoteliers’) issued a crossclaim against Robinson.

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The case against the hoteliers at first instance It was argued on behalf of Hadaway that the hoteliers had breached their duty of care by failing to eject Robinson from the premises after the second altercation at 5:30pm. Alternatively, it was submitted that both men should have been ejected at that time in a controlled manner, to ensure they did not leave in close proximity. Hadaway relied on the expert evidence of a security consultant to the effect that it would be contrary to acceptable industry practice to have permitted Robinson to remain on the premises after the second confrontation.

The decision at first instance Levy DCJ found the hoteliers liable in negligence and assessed damages at $922,394. Robinson was also held to be liable for assault and battery and his Honour assessed the damages for that wrong at common law at $1,161,368. There was no finding of contributory negligence. On the cross-claim his Honour found that the hoteliers were entitled to a 70% contribution from Robinson. His Honour held that the duty of care owed to Hadaway required, amongst other things, that the hoteliers take reasonable care to ensure that Hadaway was well clear of the premises and ‘out of foreseeable harm’ before Robinson left. His Honour did not consider that the actions of the security guard in watching the respondent walk 10 metres from the hotel premises were sufficient to discharge this duty. Material to his Honour’s reasoning was his finding that Hadaway had been forcibly ejected from the hotel at 9:30pm.

The appeal The hoteliers appealed the decision of Levy DJC in relation to liability, contributory negligence, damages and contribution. The appeal was heard on the issue of liability only. The Court of Appeal allowed the appeal and ordered that the judgment of Levy DCJ be set aside and verdicts be entered in favour of the hoteliers and Robinson on the cross-claim.

Whilst the Court of Appeal acknowledged that the hoteliers had a duty to take reasonable care to prevent injuries arising from the ‘violent, quarrelsome or disorderly conduct of other patrons’1, it was held that there had been no breach of such duty in this instance. Giles JA, with whom Allsop P and Basten JA agreed, held that the evidence adduced at trial did not establish that Hadaway had been ejected from the hotel at 9:30pm; rather he had left voluntarily. Having accepted that the risk of injury to Hadaway at the hands of Robinson after the second altercation was foreseeable and not insignificant, the primary issue to be considered by the Court of Appeal was whether reasonable care required the ejection of Robinson, or of both parties in a controlled manner, at that time.

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Hurly Burly at the Hoey Moey – Liability of hoteliers for patron’s assault on another patron Cregan Hotel Management Pty Ltd & Anor v Hadaway [2011] NSWCA 338 Alexzandra Harvey | December 2011

The Court of Appeal ultimately found that the continued separation of the men within the hotel after the second incident was not an unreasonable response in the circumstances. In reaching this conclusion the Court noted the following: >> The second separation at 5:30pm was effective. There was no further confrontation between Robinson and Hadaway in the intervening four hours2. >> Industry standards and practice are not the determinant of reasonable care for the safety of hotel patrons; they are a guide only. Reasonableness depended on ‘circumstances of appropriate control of human responses of two men known to the hotel staff and security guards3. >> The fact that there was an alternative course available to the hoteliers, namely the ejection of Robinson, did not establish that the separation was an unreasonable response4. Basten JA found that there was no continuing duty to monitor the behaviour of Hadaway and Robinson after the second incident to ensure Hadaway’s protection whilst at the hotel and at the time of his departure.

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Relying on the principles accepted by the Court of Appeal in Rooty Hill RSL Club Ltd v Karimi5 and Portelli v Tabriska Pty Ltd6, Basten JA considered that in order to succeed, Hadaway needed to prove the time of his departure and that: >> hotel staff knew, or ought to have known, that at the time of Hadaway’s departure there was a real risk of him being pursued and attacked by Robinson; and >> Robinson knew, or was in a position to know, when Hadaway left the premises. Basten JA concluded that the necessary degree of risk had not been established such that no duty of care arose in respect of Hadaway’s safety once he had left the hotel. His Honour noted, in relation to the level of risk, that there was no further outbreak of aggressive behaviour from Robinson after the 5:30pm separation. Basten JA observed that the effort to establish negligence on the basis of a failure to remove Robinson at 5:30pm was the only avenue of appeal pursued and that it had failed at the breach of duty level. In the absence of a continuing duty of care, Basten JA did not consider that Hadaway could establish that the earlier failure to eject Robinson was relevantly a cause of the assault some four hours later, after Hadaway had left the hotel premises.

The decision of the Court of Appeal also recognises that the issue of causation presents a further difficulty in these types of cases. In this instance, Basten JA suggested that even if breach had been proven the plaintiff would not have been able to establish the requisite causal link.

End notes 1. 2. 3. 4. 5. 6.

Adeels Palace Pty Ltd v Moubarak [2009] HCA 48 Giles JA at 73 Giles JA at 70 Basten JA at 89 [2009] NSWCA 2 [2009] NSWCA 17

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Hurly Burly at the Hoey Moey – Liability of hoteliers for patron’s assault on another patron Cregan Hotel Management Pty Ltd & Anor v Hadaway [2011] NSWCA 338 Alexzandra Harvey | December 2011

For more information, please contact: Alexzandra Harvey Lawyer T: 02 8257 5719 M: 0418 266 201 alex.harvey@turkslegal.com.au

Implications Whilst this case turned on its own particular facts, it does demonstrate the hurdles faced by plaintiffs in pursuing claims against hoteliers in respect of assaults by fellow hotel patrons. Hoteliers may successfully argue that their management of an altercation is a reasonable response in the circumstances, notwithstanding that it does not strictly accord with security industry practice requiring the ejection of the patrons involved. The court will have regard to industry standards, but as a guide only.

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Hurly burly at the Hoey Moey– Liability of hoteliers forpatron’s assault on another patron