Risks Involved in Serving Alcohol - August 2005
THE LEGISLATIVE FRAMEWORK
In New South Wales, the Liquor Act 1982 governs the sale and supply of alcohol.
Section 2A states that a primary objective of the Act is "liquor harm minimisation, that is, the minimisation of harm associated with misuse and abuse of liquor (such as harm arising from violence and other anti-social behaviour)".
Section 18 of the Liquor Act gives the Licensing Court of New South Wales the power to grant a license authorising the sale of liquor on premises.
The provision notes that the Court may grant an "on-license" authorising the licensee to sell liquor on the licensed premises, but only for consumption on those premises.
Section 18(4) then notes that the premises in relation to which an on-license may be granted include premises within a University that are occupied by a Union, Association or Club within the University.
Alternatively, an on-license may be granted to a non-proprietary association to sell liquor at a function, generally granted on a temporary basis. Where such a license is obtained, say by a University Club or Association, the duties and responsibilities of licensees as detailed in the Act must be noted.
Division 2 in Part 7A of the Liquor Act outlines offences relating to minors. Pursuant to Section 114, it is an offence to sell or supply liquor to a person under the age of 18 years. This may be relevant, for example, in circumstances where first year University Students are yet to attain the age of 18 years, and yet become a member of a University Club which hosts a function at which alcohol is supplied.
Part 8 of the Liquor Act then outlines other offences relevant to the sale or supply of alcohol.
Sections 125 and 125C in Part 8 concern the responsible service of alcohol.
Section 125 (1) states that a licensee shall not permit intoxication, or any indecent, violent or quarrelsome conduct on his or her licensed premises.
It is also an offence to sell or supply liquor to any person who is at the time in a state of intoxication: Section 125(3).
Where a person is intoxicated and on licensed premises, subsections 125(4) and (4A) note that a licensee is deemed to have permitted intoxication on the licensed premises unless they took the following steps:
- Asked the intoxicated person to leave the premises,
- Contacted, or attempted to contact, a police officer for assistance in removing the person from the premises,
- Refused to serve the person any alcohol after becoming aware that the person was intoxicated.
Section 125C notes that regulations may make provision in respect of prohibiting the conduct of promotions or other activities that could result in the misuse or abuse of alcohol, such as binge drinking.
As from 1 January 2004, any staff member of licensed premises who sells, supplies or serves alcohol must hold a recognised Responsible Service of Alcohol (RSA) certificate (Section 79C Liquor Regulation 1996).
Moreover, drinking water must, at all times while liquor is sold or supplied on the licensed premises, be made available free of charge to patrons at or near the point of service (Section 86F Liquor Regulation 1996).
Although a breach of the abovementioned provisions does not give rise to a liability for personal injury, the Courts generally give considerable weight to evidence of any such breaches. Moreover, harsh monetary penalties often result and the consequence of more serious breaches could be additional penalties such as the suspension or cancellation of a liquor licence.
CIVIL LIABILITY ACT
Claims brought by persons who suffer injury whilst intoxicated are not uncommon. In New South Wales, the ordinary principles of negligence apply, subject to the provisions of the Civil Liability Act , introduced in 2002.
Part 6 of the Civil Liability Act is concerned directly with intoxication.
Sections 49 and 50 are most relevant and state as follows:
Section 49 Effect of intoxication on duty and standard of care
(1) The following principles apply in connection with the effect that a person's intoxication has on the duty and standard of care that the person is owed:
(a) in determining whether a duty of care arises, it is not relevant to consider the possibility or likelihood that a person may be intoxicated or that a person who is intoxicated may be exposed to increased risk because the person's capacity to exercise reasonable care and skill is impaired as a result of being intoxicated,
(b) a person is not owed a duty of care merely because the person is intoxicated,
(c) the fact that a person is or may be intoxicated does not of itself increase or otherwise affect the standard of care owed to the person.
(2) This section applies in place of a provision of section 74 of the Motor Accidents Act 1988 or section 138 of the Motor Accidents Compensation Act 1999 to the extent of any inconsistency between this section and the provision.
Section 50 No recovery where person intoxicated
(1) This section applies when it is established that the person whose death, injury or damage is the subject of proceedings for the recovery of damages was at the time of the act or omission that caused the death, injury or damage intoxicated to the extent that the person's capacity to exercise reasonable care and skill was impaired.
(2) A court is not to award damages in respect of liability to which this Part applies unless satisfied that the death, injury or damage to property (or some other injury or damage to property) is likely to have occurred even if the person had not been intoxicated.
(3) If the court is satisfied that the death, injury or damage to property (or some other injury or damage to property) is likely to have occurred even if the person had not been intoxicated, it is to be presumed that the person was contributorily negligent unless the court is satisfied that the person's intoxication did not contribute in any way to the cause of the death, injury or damage.
(4) When there is a presumption of contributory negligence, the court must assess damages on the basis that the damages to which the person would be entitled in the absence of contributory negligence are to be reduced on account of contributory negligence by 25% or a greater percentage determined by the court to be appropriate in the circumstances of the case.
(5) This section does not apply in a case where the court is satisfied that the intoxication was not self-induced.
The intent of Section 49 is to alter the law as it was applied in those cases where persons are injured at a time when intoxicated. The importance of Section 49 is to negate the impact of a Plaintiff's intoxication on the nature and extent of the duty of care owed by another.
Section 50 has to some extent removed the discretion of the Courts in such matters. Pursuant to Section 50, the Court may not award damages unless it is satisfied that the injury is likely to have occurred even if the person had not been intoxicated.
These provisions were considered recently by Her Honour Judge Sidis in the District Court at Newcastle in a matter in which I acted for the Defendants.
In Russell v Edwards (unreported, 23 November 2004) Her Honour considered a case in which the Plaintiff suffered serious injuries when he struck his head on the floor of the pool at the Defendants' premises. The Plaintiff was 16 years old at the time of the incident on 25 January 2000. The Plaintiff was a guest at the Defendants' premises where the Defendants had arranged a 16 th birthday party for their son.
The Defendants had allowed the guests to use the pool during the course of the party while they also allowed the guests, the majority of whom were under the age of 18, to consume alcohol.
Her Honour found that the Plaintiff was affected by alcohol at the time of the accident, a concession essentially made by the Plaintiff. However, Her Honour noted that no allegations of illegality were raised by the Plaintiff in respect of Section 114 of the Liquor Act (supply of alcohol to a minor), the Plaintiff's evidence being that he had been drinking Bourbon and Coke which he and friend brought to the party.
Her Honour concluded that the risk to the Plaintiff in circumstances where alcohol and a swimming pool were involved was foreseeable and in those circumstances, on the ordinary common law basis the Defendants would be responsible to the plaintiff in negligence.
However, she then found the Plaintiff's claim was defeated by reason of the provisions in Part 6 of the Civil Liability Act .
Her Honour made a finding that the Plaintiff's level of intoxication led directly to him misjudging the depth of the pool when he dived into it. She therefore concluded that Section 50 applied denying recovery to the plaintiff.
Her Honour noted that there are two exceptions set out in Section 50. Firstly, where it is established that the injury was likely to have occurred even if the person had not been intoxicated. Secondly, where the Court is satisfied that the intoxication was not self-induced. Her Honour did not consider that either had been established in the case.
Despite finding as she did, Her Honour did go on to say that in her view the terms of Part 6 of the Civil Liability Act are "extremely harsh". Her Honour then added:
"In this case I am faced with a situation where I have no hesitation in finding neglect on the part of the Defendants. This neglect led to significant injury to the Plaintiff in circumstances where his right of recovery is denied by him by reason of Part 6 of the Civil Liability Act 2002. In my view these consequences were not those that were considered by those who drafted the legislation and I would seriously recommend that those responsible for the legislation re-visit the provisions of Part 6 of the Act in order to assess the harshness of its consequences".
The Plaintiff has lodged an appeal in this matter, likely to be heard early next year. It will be the first opportunity to my knowledge for the New South Wales Court of Appeal to consider the intoxication provisions in the Civil Liability Act .
DUTY OF CARE TO INTOXICATED PATRONS
Since 2001 the law has developed to the position where it is now well established that the duty of care of occupiers is to persons who take reasonable care for their own safety. Although this was noted in earlier Appellate decisions (see, for example, the High Court decision in Romeo v Northern Territory Conservation Commission (1998) 72 ALJR 208 it has definitely become more pronounced since 2001. The introduction of the Civil Liability Act in 2002 in many respects only reinforced the modern approach of the Appellate Courts. It is now the position that a person injured as a result of an accident attributable to some extent to self-induced intoxication faces significant difficulties when bringing a claim for compensation.
Perhaps the case which received the most publicity is the High Court decision delivered on 15 June 2004 in Cole v South Tweed Heads Rugby League Football Club Ltd  HCA 29.
Ms Cole was a 45 year old lady who on Sunday, 26 June 1994 attended the Club from 9.00 am for a champagne breakfast. Free Spumante was provided at the breakfast. 100-120 people attended the breakfast and the plaintiff consumed eight free glasses of Spumante. She then took turns with her friends to buy more bottles of Spumante.
The evidence established that by 12 noon the plaintiff was drunk. By the afternoon the numbers in the Club had increased to about 200. The plaintiff went to the bar to purchase another drink at 3.00 pm and was refused service on the basis that she was intoxicated.
At 5.30 pm the Club Manager saw the plaintiff grabbing some Maori men on their private parts at a table. He saw that she was being held up by one of the men. The manager therefore approached the group and asked Ms Cole to leave. He offered her the use of the Club's courtesy bus to which the response was "Get f-----". He then said that the Club would ring a taxi for her to which the response was the same. At this time one of the Maori gentlemen told the Club Manager to leave the plaintiff with them; "We will look after her". The Club Manager went about his business and within minutes the group left. The Maori men appeared to be sober.
At 6.20 pm Ms Cole was struck by a car after straying onto the roadway. The second defendant, Mrs Lawrence, was driving her vehicle at about 70 kph in a 80 kph zone.
The matter initially came before His Honour Mr Justice Hulme in the Supreme Court of New South Wales. Hulme J concluded that Ms Cole was obviously intoxicated at about 12.30 pm and the Club had breached its duty of care to the plaintiff in serving her Spumante at the time. He apportioned liability as follows:
The Club: 30%
The driver - Mrs Lawrence: 30%
The plaintiff - contributory negligence: 40%
The New South Wales Court of Appeal overturned the decision. The majority judgment was written by Ipp JA who focused on the principle that adults must assume responsibility for their own actions. He noted as follows:
"In my opinion, save in extraordinary cases, there is no duty to protect persons who deliberately drink to excess".
The Court of Appeal emphasised that the Club had no duty to assume responsibility for an intoxicated patron, except for extreme intoxication where the capacity to form an intent was destroyed, for example, if the patron was so drunk as to be unconscious.
This was reinforced by Justices Gleeson and Callinan in the High Court. The Chief Justice said that the Club had no duty to protect a person from a risk of injury resulting from self-induced intoxication. Unless the patron was intoxicated to a very high degree he or she was responsible for his or her own acts. Justice Callinan said that except in extraordinary cases the law should not recognise a duty of care to protect persons from harm caused by intoxication following a deliberate and voluntary decision on their part to drink to excess.
Justices Gummow and Hayne stated that there was not enough evidence to establish that the Club employees were aware of how much the plaintiff had consumed in the morning to establish a duty to act at that time.
Justices McHugh and Kirby were in dissent. Justice McHugh considered that a Club employee should have seen her in an intoxicated state well before 3.00 pm, while Justice Kirby focused on the proposition that it was the Club's activities which had led to the plaintiff being totally inebriated, i.e. making free Spumante available from 9.00 am.
Although at first glance the High Court decision in Cole seems to throw out cases brought by drunken patrons where they suffer injury, I am of the view that plaintiffs' counsel will seek to distinguish the case where facts show a greater knowledge of a particular patron's activities, which on the reasoning of Justices Gummow and Hayne could possibly establish a duty of care. The result may well be different if there was a bar where there were a small number of people drinking, all of whom were open to observation from hotel or club employees.
The other issue which remains unsettled is the degree of intoxication which would lead to a duty of care existing.
The type of facts which may establish a duty were discussed by Ipp J in the New South Wales Court of Appeal judgment in Cole when referring to a UK decision of Barrett v Ministry of Defence  1 WLR 1217.
In that case a Naval airman aged 30 was serving in a shore-based Royal Navy establishment in Norway. The Ministry operated bars in the establishment and one of the main recreational activities of personnel was drinking in the bars when off duty. Friday evenings were traditionally for heavy drinking and the airman concerned had recently learned that he was to be promoted. He commenced drinking at 9.15 pm and by 11.00 pm had consumed a minimum of 4 cans of cider and 9 double Bacardi's. He eventually became unconscious. He was placed in his bunk in the recovery position.
At 2.30 pm he was found dead. He had vomited and drowned or asphyxiated in his own vomit. While the House of Lords accepted that a responsible adult should assume responsibility for his own actions in consuming alcohol, once he collapsed the defendant's measures fell short of standards reasonably to be expected. It did not summon medical assistance and its supervision was inadequate.
Accordingly, despite the decision in Cole there remains the possibility that a duty of care will be found to be owed in particular circumstances, perhaps more likely the more intoxicated the plaintiff.
However in NSW Section 50 of the Civil Liability Act should mean that a plaintiff in the same position as Barrett (or his estate, if he died) would not recover damages, his capacity to exercise judgment being impaired by his consumption of alcohol.
CLAIMANT INJURED BY THE ACT OF AN INTOXICATED PATRON
The Courts are often asked to consider claims brought by individuals injured as a result of the actions of other persons who were intoxicated.
Violence fuelled by alcohol is an unfortunate reality, particularly with young adults.
The cases indicate that a higher duty is owed in such cases when compared to circumstances where an intoxicated plaintiff is injured. The issue is generally whether in the particular circumstances of an incident an occupier ought to have reasonably foreseen the circumstances which gave rise to the injury, and therefore taken steps to prevent it.
In Chordas v Bryant (Wellington) Pty Ltd  91 LAR 149, the Federal Court of Australia considered a claim brought by a plaintiff who was a patron in the bar of the Wellington Hotel in Canberra when he was struck by another patron and sustained injuries.
The Hotel employees had notice of the assailant's intoxication but the assailant was not known to be particularly violent or aggressive before the incident. The plaintiff failed because the assailant's intoxication was not of itself sufficient to make it necessary for him to be removed from the bar. In other words, the fact that the assailant was affected by alcohol did not mean that he was forseeably violent.
The Federal Court noted that a duty of care owed by a Hotel to patrons was such that it should take an appropriate course to protect the safety of patrons where it is evident that a patron should be supervised, ejected or warned. It was then noted that the appropriate course in a particular case would depend on the circumstances of the case.
Notably, the Court concluded that a breach of Section 79 of the Liquor Ordinance 1975 (ACT) , being in similar terms to Section 125 of the Liquor Act (NSW) , may be evidence of a breach of a common law duty of care but will not in itself confer a private right of action for damages resulting from its breach.
The result will be different where an assailant is known to be potentially violent or where his or her conduct would lead a reasonable person to draw that conclusion.
In Wormald v Robertson  Aust Torts Reports 81-180, the Queensland Court of Appeal considered a case where the assailant smashed the plaintiff in the face with a glass beer jug at the Argent Hotel in Mt Isa. The assailant has been misbehaving for about 30 minutes before the incident, jumping on tables, breaking glass and molesting other patrons. Two particular complaints had been made about this behaviour to the licensee, but the licensee did nothing.
The plaintiff then tapped the assailant on the shoulder after saying "Enough is enough, Robbo", when the assailant swung around and smashed the jug into the plaintiff's face.
The Court of Appeal found that trouble should reasonably have been anticipated from the assailant's behaviour and the assailant should have been evicted.
The Queensland Court of Appeal described this scenario as a "powder keg" situation.
More recently, in Guildford Rugby League Football & Recreational Club Ltd v Coad  NSWCA 139 the New South Wales Court of Appeal considered a matter in which the plaintiff was injured after falling on broken glass while attempting to avoid a physical fight between two others.
The majority (Ipp AJA and Rolfe AJA agreeing) noted the evidence that after an initial altercation the agitator showed no further signs of aggression and as such no reasonable person in the Club's position would have taken steps to evict the agitator. Accordingly, although it was noted that a Hotel owner had a duty to take reasonable steps to protect one patron from a foreseeable risk of injury from the acts of another patron the majority considered that as peace had apparently been restored there was no breach of that duty by failing to eject the person responsible for the fight.
In dissent Davies AJA referred to a report from an expert in the liquor industry who concluded that after the initial altercation the protagonists should have been removed from the Club, stating that this would be common practice throughout the industry especially if parties were showing any signs of intoxication.
Davies AJA considered that "A manager of licensed premises has a more onerous responsibility than has a manager of un-licensed premises, because of the well-known effect of alcohol upon those who consume it".
Davies AJA further considered that a Club had a responsibility to employ someone, such as security guards, to supervise or control the behaviour of guests. Once again he noted the evidence of the expert that staff should keep an eye on patrons both in respect of their consumption and behaviour and should engage in occasional conversation with patrons so as to assess speech and mood of patrons.
As one would expect, the Courts expect less when considering the supply or consumption of alcohol in a more social setting.
The Courts are generally reluctant to impose a liability on the "social host", largely for public policy reasons.
In the recent New South Wales Court of Appeal decision in Parissis v Bourke  NSWCA 373, the Court considered a claim in which the plaintiff suffered severe burn injuries at a barbeque party at the home of the defendants. The defendants' son, who was then aged 18, invited a number of guests to the party, all of whom were aged between 18 and 25, except for the plaintiff who was aged 17.
The defendants did not supervise the lighting or use the barbeque. Methylated spirits were used to start the barbeque with cooking then finished by 8.00 pm.
At about 2.00 am, attempts were made to re-ignite the barbeque with a number guests pouring methylated spirits from a bottle onto the smouldering barbeque. After several attempts, the spirits exploded and the fireball injured the plaintiff sitting nearby and not participating in the re-ignition.
The New South Wales Court of Appeal overturned the decision of the District Court trial judge in favour of the Plaintiff.
The Court of Appeal did not consider that the householders owed a duty of care, noting that in general social hosts do not owe duties to guests, although circumstances may arise where the foreseeability of harm and the capacity of the host to prevent it may combine to bring a duty of care into existence.
Of note were the following comments:
- The community does not generally expect the host or the owner/occupier of the home to bear [the responsibility of supervision], the burden of which would inevitably result in social functions where alcohol is served becoming a thing of the past.
- Barbeque parties with liquor attended by young adults occur in their hundreds all over Australia every evening; the perception that the activity, supervised or unsupervised by older adults, is one involving a foreseeable risk of personal injury is, in my opinion, an entirely wrong perception.
- the reasonable response to such a risk was to leave a group of ten or twelve young adults, with their liquor, to their own devices. That is what practically every adult in Australia would do. It is remote from the realities of Australian lives that the older generation would remain awake or keep an eye every few minutes on younger adults until 2.00 am or thereabouts although wishing to retire at about midnight. The magnitude of any risk that an event would occur of the kind which did occur, and the degree of probability of its occurring were very slight".
Once again, the Court of Appeal focused on the particular circumstances of the incident, and what is often termed the " Shirt calculus"; weighing the magnitude of the risk and the reasonableness of the response (see Wyong Shire Council v Shirt (1980) 146 CLR 40).
Unfortunately though, such a measured assessment of a claim is often not received unless and until a matter reaches the appellate courts.
THE REALITY IN THE COURTS IN NSW, AND RISK MANAGEMENT
Since the commencement of the Liability provisions of the Civil Liability Act on 6 December 2002, plaintiffs who are injured as a result of their own voluntary consumption of alcohol to the point of intoxication will have great difficulty in succeeding in the courts in New South Wales. However it must be emphasised that the trial judges in my experience in New South Wales have taken a different view to liability than often taken in the appellate courts (Court of Appeal and High Court). Whereas there are many appellate court decisions stating that the duty to take care is that owed to persons who are taking reasonable care for their own wellbeing, the trial judges traditionally focus on what a defendant could have done to avoid the plaintiff being placed in a situation of risk, even though the plaintiff voluntarily consumed alcohol to the point of intoxication. An example of this was her Honour Judge Sidis in Russell v Edwards . It was our view on the facts that the Common Law as exemplified in Cole should have prevented the plaintiff from succeeding. Even though he was a 16 years old minor, he was old enough to know that excessive consumption of alcohol would lead to an impaired capacity to exercise reasonable judgment. Her Honour however concentrated on what the defendants should or should not have done. She stated that Mr and Mrs Edwards should have closed off the pool to the guests, knowing that alcohol was to be consumed. It is my view that her comments in this regard should be rejected by the Court of Appeal.
Nevertheless the only way the defendants succeeded at trial was by reliance on Section 50. That section is so tough that a plaintiff in the position of Barrett in the UK case, so intoxicated that he was unconscious, should still not succeed. So notwithstanding the habit of trial judges in New South Wales to focus on what alternative measures could have been taken by defendants (with the benefit of hindsight) Section 50 should prevent voluntarily intoxicated plaintiffs from succeeding unless the court is satisfied that the person's intoxication did not contribute in any way to the death or injuries.
As explained above the situation is different where the sober plaintiff is injured as a result of the actions of an intoxicated patron. In such a case it is far easier for a trial judge to find for the plaintiff by saying that the defendant should have stopped serving alcohol to the intoxicated offender before he or she caused injury to the plaintiff, or should have evicted the offender earlier. It is common for plaintiffs to retain Security experts who invariably express an opinion that the defendant should have taken steps earlier to prevent the situation from getting out of hand. Often the defendant's evidence is to the effect that the bar persons or duty staff were aware of their obligations in keeping a lookout for patrons becoming intoxicated. However under cross examination they may concede that they were not vigilant enough, that they had other duties which took them away from observing the behaviour of the patrons, or that the premises were so crowded that there was not enough staff to observe all patrons. Findings of fact are made by trial judges in these situations which can be very difficult to overturn on appeal.
What then can the occupier of a licensed establishment do to prevent the risk of injuries occurring as a result of intoxication?
In situations where there are large events with many patrons I would recommend that the university consider engaging a security contractor to remove intoxicated patrons and to prevent intoxicated patrons causing injury to others, whether by way of fights or accidents. While the engagement of security contractors will not remove the obligations of a licensee under the Liquor Act, in the event of catastrophic injuries occurring as a result of intoxication the licensee may be able to pass on liability to the Security firm, or at least share liability, on the basis of the contractual obligations owed to the licensee by the security firm.
In such contracts the university should consider including an indemnity clause providing that the security firm will indemnify the university for the university's liability in respect of injuries occurring which are contributed to by the acts or omissions of the security contractor, for example by not observing or removing the intoxicated patron who caused the injury.
Otherwise it is really a matter of having enough staff on duty to observe patrons becoming intoxicated, and acting by removing the patrons or preventing the sale of alcohol to the offenders, before the situation gets out of hand.
Students by the nature of their youth are highly spirited, especially after the consumption of alcohol. The Civil Liability Act should prevent actions for damages by students who are injured as a result of their own voluntary intoxication. However care does need to be exercised that the number of patrons at any one time do not excessively outnumber the security and bar staff available.
There are occasions where liquor suppliers provide promotional nights and the sale of their liquor at reduced prices. Cheap liquor creates the risk of more patrons becoming intoxicated. For promotional nights, the universities could consider making it a condition of the supplier promoting its product, that it provide its own security staff to assist the university staff to prevent and deal with intoxication.
It is not possible to remove the risk of injury entirely. However the provision of adequate numbers of security can lessen the risk of injury occurring.
5 August 2005