SPEDDING v NOBLES; SPEDDING v McNALLY

LEGISLATION CITED: Liquor Act 1982 (NSW), ss 2A, 103, 125

Chordas v Bryant (Wellington) Pty Ltd (1988) 20 FCR 91 (FC of FCA) Club Italia (Geelong) Inc v Ritchie (2001) 3 VR 447 (VSCA) McNally v Spedding; Nobles v Spedding [2005] NSWCA 400 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 CASES CITED: Oxlade v Gosbridge Pty Ltd (unrep, NSWCA, 18 December 1998) Proprietors of Strata Plan 17226 v Drakulic (2002) 55 NSWLR 659 South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR 113 Spedding v McNally; Spedding v Nobles [2005] HCA Trans 367 TAB Limited v Atlis [2004] NSWCA 322

Douglas Spedding - Appellant (40501/06 and 40503/06) PARTIES: Nicole Yvonne Nobles - Respondent (40501/06) Belinda McNally - Respondent (40503/06)

A.M. Colefax SC/P. Newton - Appellant COUNSEL: C.T. Barry QC/C.E. Chrysostomou - Nobles P.A. Beale/S.C. Sloane - McNally

Colin Biggers & Paisley - Appellant SOLICITORS: Pitcher Walton & Co - Nobles Stuart J McDonald & Associates - McNally

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 10455/01; DC 10456/01

LOWER COURT MEDIUM NEUTRAL CITATION: McNally v Spedding; Nobles v Spedding [2006] NSWDC 113

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40501/06 CA 40503/06 DC 10456/01 DC 10455/01

BEAZLEY JA McCOLL JA BASTEN JA

26 February 2007 SPEDDING v NOBLES; SPEDDING v McNALLY Mr Spedding, the licensee of the Bald Faced Stag Hotel, appealed against a decision of the District Court which found him liable in negligence for injuries caused to Ms Nobles and Ms McNally as a result of a fracas at the hotel on 18 October 1998.

Ms McNally had been assaulted and robbed of her watch just outside the hotel by a patron and sought assistance from one of the hotel's employee, Mr Spears. He declined to help and Ms Nobles and Ms McNally suffered injuries in the fracas which took place when they sought to retrieve the watch.

The issues for determination by the Court of Appeal were:

(i) whether the Appellant owned a duty of care to the Respondents to protect them from criminal assault by third parties;

(ii) whether the trial judge erred in drawing the inference that Ms Nobles had told Mr Spears about the assault and robbery, given his Honour's caution as to the likelihood of memory reconstruction by Ms Nobles;

(iii) whether the risk of the vicious attack on the Respondents in the fracas was reasonably foreseeable in the circumstances as known to Mr Spears.

Held per Basten JA (Beazley & McColl JJA agreeing):

1. A duty of care is owed by a licensee to patrons of an hotel to protect them from risk of attack by other patrons. That conclusion depends not on the existence of a "special relationship" recognised by law, but on the element of control: at [50]. Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254; Chordas v Bryant (Wellington) Pty Ltd (1988) 20 FCR 91; South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR 113; Tab Limited v Atlis [2004] NSWCA 322; Club Italia (Geelong) Inc v Ritchie (2001) 3 VR 447, applied.

2. The Liquor Act 1982 (NSW), by conferring a power of control and an obligation to exercise that power, provides the basis for a finding with respect to control which in turn attracts the common law duty of care and inform its contents: at [50].

3. (McColl JA not deciding) Proprietors of Strata Plan 17226 v Drakulic (2002) 55 NSWLR 659 at [89] is not authority for an inconsistent proposition. Heydon JA dealt separately with the existence of a duty based on a legal concept of control, and with the creation of a new category of "special relationship" within which a defendant may be liable for the criminal acts of a third party. The present case falls within the former category. According, while his Honour's strictures in relation to an intermediate court of appeal creating a new category of liability may be accepted, they cannot preclude the application of an established head of liability and were clearly not intended to refer to the line of authority established by Chordas, Oxlade and Cole : at [51]-[54]. Proprietors of Strata Plan 17226 v Drakulic (2002) 55 NSWLR 659, considered; Oxlade v Gosbridge Pty Ltd (unrep, NSWCA, 18 December 1998), applied.

4. No error was demonstrated on the part of the trial judge in following that line of authority: at [55].

1. The trial judge's appraisal of the likelihood of memory reconstruction was not adopted as a blanket approach, but rather his Honour provided a separate reasoned assessment of each aspect of her evidence, as it became relevant, and indicated whether or not he relied upon it: at [33].

2. His Honour rejected Ms Nobles' account of what happened as an eyewitness account, but nevertheless drew an inference to similar effect from the circumstances, other evidence and the absence Mr Spears at the trial. It was open to the trial judge to have been satisfied on the balance of probabilities that the inferences he identified as to the content of the conversation with Mr Spears should be accepted: at [33]-[34].

1. The question of foreseeability was a matter for objective assessment by the trial judge and depended on his Honour's finding as to what Mr Spears had been told: [36].

2. As the trial judge did not err in his assessment of what Mr Spears knew, no error has been demonstrated in his Honour's reasoning and finding that the attack was reasonably foreseeable: at [37]-[40].

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40501/06 CA 40503/06 DC 10456/01 DC 10455/01

BEAZLEY JA McCOLL JA BASTEN JA

26 February 2007 SPEDDING v NOBLES; SPEDDING v McNALLY Judgment 1 BEAZLEY JA: I agree with Basten JA. 2 McCOLL JA: I agree with Basten JA, save that I would reserve my position in relation to Heydon JA's statement in Proprietors of Strata Plan 17226 v Drakulic (2002) 55 NSWLR 659 at [89]. 3 BASTEN JA: At some time late in the evening of Saturday, 17 October 1998, three women left the Leichhardt Hotel, Leichhardt in the inner-west of Sydney, intending to walk to the apartment of one of them on Parramatta Road, Leichhardt. On reaching Parramatta Road, they diverted from their course, in order to have a drink at the Bald Faced Stag Hotel, on the corner of Balmain and Parramatta Roads at Leichhardt. At around 1am on Sunday morning, two of the women were assaulted, one of them suffering serious injuries, including a fractured skull. 4 The proceedings have had a tortuous history. They proceeded initially to arbitration and then to a hearing in the District Court, before Finnane DCJ. On 12 September 2003, his Honour gave judgment for the defendant in the action brought by each woman, but assessed damages. His Honour's decision with respect to liability was set aside by this Court, judgment being delivered on 10 November 2004: McNally v Spedding; Nobles v Spedding [2004] NSWCA 400. On 25 May 2005 an application for special leave to appeal to the High Court was refused: Spedding v McNally; Spedding v Nobles [2005] HCA Trans 367. The matter was remitted to the District Court for a re-trial limited to the question of liability. The present appeal is brought from the judgment of Neilson DCJ, delivered on 19 July 2006, in favour of the plaintiffs: McNally v Spedding; Nobles v Spedding [2006] NSWDC 113 The only question on this appeal is whether the licensee of the Bald Faced Stag Hotel, was liable in negligence to the plaintiffs. 5 Although the Appellant sought to raise an issue as to the existence of a duty of care owed by the licensee to customers on the premises, in relation to injuries suffered at the hands of other patrons, for reasons set out below that challenge cannot succeed and the disposition of the appeal must turn upon challenges made to findings of fact. Accordingly, it is necessary to recount the key factual circumstances surrounding the events on the night in question.

Factual background 6 Of the three women who set out from the Leichhardt Hotel, one, Ms Belinda Maloney, although involved in the fracas which occurred at the Bald Faced Stag Hotel, apparently suffered no injury and certainly made no claim. Of the other two women, Ms Nicole Nobles suffered serious injury, her damages being assessed by Finnane DCJ at $430,362. Ms Nobles gave evidence, both at the first trial and at the re-trial. However, on 6 December 1998, about seven weeks after the accident, she had been interviewed by police and had stated that her memory was "a bit of a blur" after commencing to walk down Balmain Road from the Leichhardt Hotel. She continued: "The next thing I can remember is waking up in hospital. I think this was early November or late October before I even realised where I was."

Her statement continued, in relation to her injuries: "I was in hospital for about three weeks in total when I was released. I was suffering from a torn or split bowel. They operated and removed part of my bowel. I also had two fractures to my skull and a fracture to my cheekbone. There was also something about blood on my brain. At this point in time I am pretty depressed all the time. My stomach is on the mend. It was only three days before I left hospital that I was able to walk again. I'm only just beginning to get my hearing back in my right ear." 7 Given this evidence, it was unsurprising that there was a significant challenge to Ms Nobles' evidence as to what happened at the Bald Faced Stag Hotel, on the night in question. As will be seen below, part of her evidence stood alone in relation to the knowledge of the representative of the licensee at a critical point in time. 8 The second plaintiff was Ms Belinda McNally. An assault on her, prior to the women entering the Bald Faced Stag Hotel, was the trigger for the later fracas. The front of the Bald Faced Stag Hotel faced Parramatta Road. In approaching the entrance to the main bar, the three women had passed an entrance to the pool room known as "Ground Control". Outside "Ground Control", Ms Nobles had passed a comment in relation to a young man on a mobile phone standing near the entrance. The man had apparently taken offence and thinking that Ms McNally had made the remark had assaulted her violently and, having knocked her to the ground, removed her watch. The fracas, which later occurred within the pool room, Ground Control, resulted from an attempt by the three women to recover the watch. 9 The third woman was identified as Ms Barbara Maloney, also referred to in the evidence as "Bugsy". She appears to have had alcohol and gambling problems which caused a serious rift between her and the two plaintiffs, within a day or two of the incident. In explaining why there was a falling out with Ms Maloney, and no attempt by Ms McNally to contact her after the incident, Ms McNally stated (Tcpt, 21 November 2005, p 30) that early on the morning of 19 October, Ms Maloney came to see them. She continued: "Basically whilst I was in the hospital Barbara Maloney was coming back just to get money from me just to go back over to the pub and drink and gamble more."

She also gave evidence without objection (p 31) that Ms Maloney was an alcoholic and had a problem with gambling. 10 Although Ms Maloney gave a statement to police, neither the plaintiffs nor the defendant sought to call her. There was no evidence to suggest that any steps were taken to locate her. Accordingly, the only witnesses called for the plaintiffs at the re-trial were the plaintiffs themselves and a Mr Drennan, who was a patron in Ground Control at the time of the fracas. 11 Potential witnesses for the defendant included a Mr Jason Spears, who was the person in charge of the hotel on the evening in question and two employees working behind the bars in the public bar and in Ground Control respectively. The evidence at the re-trial did not disclose whether any other person was in the public bar area of the hotel at any relevant time. However, no witness was called by the defendant at trial. 12 Although there were some secondary factual issues, the case for the Appellant primarily turned on the question whether Mr Spears knew that Ms McNally had not merely been assaulted, but had been robbed of her watch by a patron who was then in the pool room of the hotel. The significance of this evidence was that although Ms McNally was no doubt shaken by the assault, the evidence did not support a conclusion that the women were likely to go back to the pool room on their own, in order to seek revenge for the assault, in circumstances where the assailant was with a large group of friends, both male and female. However, there was evidence to support a finding that they might have returned to the pool room to request return of the watch, which had particular sentimental value for Ms McNally. Accordingly, the question was whether Mr Spears was made aware of the theft. 13 The undisputed evidence was that as the three women passed the entrance to Ground Control, Ms Nobles was a few metres ahead of the other two when she said words to the effect: "Look at the yuppie on the phone."

She then continued on, into the next entrance to the hotel, without realising that the young man on the phone had accosted Ms McNally and, despite her denial, apparently assumed that she made the offensive remark and attacked her. Ms McNally described the incident in her statement to police, in the following terms: "He said to me 'What did you say?' I said 'I didn't say nothing'. He said something after that but I could not understand what it was. He then hit me on the left side of my face connecting with my jaw. He hit me with a closed right fist. I fell to the ground. He then kicked me in the stomach about two or three times. He then took my watch off my wrist and went inside the pool hall." 14 She continued: "Nicole was inside the pub ordering drinks and when we went inside we told her what had happened. She became angry about it and went and told a person at the pub." 15 In her evidence-in-chief, Ms McNally clarified the interchange with Ms Nobles (Tcpt, 21 November 2005, p 8): Q. Did you say something to Ms Nobles? A. Actually another person that was with us had told Nicole what had happened and Nicole had come over to me and I told Nicole what had happened."

The "other person" was identified as Ms Maloney. Ms McNally said there was a later conversation between her and the man employed at the hotel which she recounted as follows (p 9): "Basically all that was really said was that I'd been assaulted out the front of their premises in front of the pool room. I asked him if he could assist me. Basically he had said, 'No, unfortunately we don't have enough staff, I can't assist you.' But he did ask me to show them who they were."

Her evidence continued: Q. What did you do? A. He - I know I looked or walked through somewhere with the gentleman to point out who the person was and then came back and left. Q. Who did you point to? A. Young Mediterranean Lebanese looking young fellow, in Ground Control. Q. Did he appear to you to be in the company of other men of a similar age and background? A. Yes, men and women. Q. How many were there approximately? A. Excluding their girlfriends, probably about 15. Q. You have referred in your statement to a watch having been stolen during the course of the assault? A. That is correct. Q. Was that watch of some significance to you? A. It was to me. Q. Why? A. My parents had actually given it to me. 16 Without the evidence of Ms Nobles, it was necessary for the Court to draw two inferences, if the plaintiffs were to establish that Mr Spears knew about the theft of the watch. The first was that the theft was communicated by either Ms Maloney or Ms McNally to Ms Nobles; the second was that Ms Nobles communicated an account of the theft to Mr Spears. There were at least two reasons for thinking that each of the inferences might reasonably have been drawn. The first was the significance of the watch to Ms McNally; the second was that when Mr Spears indicated that he could not help, the three women left the lounge area without finishing their drinks and almost immediately sought to recover the watch themselves. 17 The trial judge dealt with this issue at [31]. After accepting Ms McNally's evidence that she had identified her assailant to Mr Spears, his Honour continued: "I also accept that, antecedent to that, Mr Spears was advised of what happened to Ms McNally. I have no hesitation in finding that Ms Nobles spoke to Mr Spears. The two were known to each other from previous meetings at the hotel. Ms Nobles had previously danced with him at the hotel. Human experience indicates that the likely topic of conversation would have been what had just occurred at the entrance to Ground Control. If that had not been raised by Ms Nobles with Mr Spears, why would he ask Ms McNally to identify her assailant? That action is only rationally explicable by Mr Spears having been informed of the assault and robbery." 18 The Appellant argued that, unless the trial judge had accepted the evidence of Ms Nobles, which he properly did not, there was no evidence to support the finding that Mr Spears knew that Ms McNally had been robbed of her watch. That, in my view, is to overstate the complaint: it was clearly open to his Honour to draw an inference of that kind from the circumstances to which I have referred above. Whether he did or should have done so absent supporting evidence from Ms Nobles is a more limited issue. There is a separate question as to whether he did rely upon Ms Nobles. He certainly did not refer to her evidence in the passage set out above, but I do not accept the Appellant's strong contention that he could not have done so because he had dismissed out of hand all of her evidence as to what happened at the Bald Faced Stag Hotel. This argument requires an overall consideration of the manner in which he dealt with Ms Nobles' evidence in the course of the judgment. 19 His Honour commenced at [4] considering the reliability of the evidence generally. At [4] (the second use of this paragraph number) he stated: "I formed a favourable impression of each of Ms McNally, Ms Nobles and Mr Drennan and I accept that each sought to tell me the truth. What I must guard against are the prospects of reconstruction and rationalisation."

This note of caution was undoubtedly required. As he had noted, each was moderately affected by alcohol at the time of the events in question, Ms Nobles in particular had been seriously injured and the events had occurred some eight years prior to the re-trial. He continued his explanation of the need for caution in relation to Ms Nobles at [5] in the following terms: "Ms Nobles sustained very serious injuries, including a head injury. A CT scan of the brain revealed fractures of the skull, a shallow extra-axial haemorrhage in the left fronto-temporal region and an associated subarachnoid haemorrhage. She was in hospital for about three weeks. She was rendered unconscious in the assault and was still unconscious when the ambulance officers removed her from the hotel. The evidence before me suggested a number of weeks of post-traumatic amnesia. Ms Nobles was interviewed by the police on 6 December 1998."

His Honour then set out the statement quoted at [6] above. 20 His Honour also referred to a note taken by a clinical neuropsychologist on 9 December 1998 that Ms Nobles had no memory of the assault that had occurred: at [6]. He referred to her evidence before Finnane DCJ in which she had said that her memory was "a little bit clearer from the trip down from Leichhardt to the hotel but otherwise there's no memory after that". That evidence was given after Ms Nobles had told Finnane DCJ what had happened at the Bald Faced Stag Hotel: at [8]. Neilson DCJ continued: "In her evidence before me, Ms Nobles became confused as to the route taken between the Leichhardt Hotel and the Bald Faced Stag Hotel, and in cross-examination admitted that she had 'honestly' no memory of the actual route taken between the two hotels. Although Ms Nobles volunteered on one occasion that '[s]ometimes my memory kicks in', I have concluded that it is more probable than not that Ms Nobles' recollection of events at the Bald Faced Stag Hotel is a reconstruction, probably based on the memories of Ms McNally." 21 His Honour thought that the process of reconstruction was likely to have occurred during a period after October 1998 when Ms Nobles and Ms McNally were living together and "it is likely that what occurred on 18 October 1998 was discussed, supplementing Ms Nobles' limited recall". His Honour continued, at [9]: "This is perfectly understandable, it is not collusion, but it does explain, in my view, how Ms Nobles now 'remembers' what she could not remember in December 1998." 22 This cannot have been a complete explanation of the process of reconstruction, because Ms McNally was not, on any view, present when Ms Nobles spoke to Mr Spears. It is possible that Ms Maloney overheard that conversation, but, as noted at [9] above, the relationship with Ms Maloney appears to have ceased while the two injured women were in hospital. 23 In her evidence-in-chief, Ms Nobles was asked to say what happened when she entered the Bald Faced Stag Hotel and bought a couple of beers. She stated (Tcpt, 21 November 2005, p 37): "A. I walked back to the table and I think I'd gone to the bar to order some beers and I think Bugsy's come up and said Belinda's been bashed. And I've taken the beers back to the table and Belinda she's been bashed and her watch was stolen, and I went straight to Jason and I told him to see if he could help. Q. What did you say to Jason and what did Jason say? A. If I recall I said, 'Jason, my girl's just been beat up by some bloke outside and he's taken her watch. Can you help me?' And then he's like, 'Can you point him out?' And I've gone to where the door is and Belinda assisted and pointed him out, and Jason said, 'I'd love to help you Nic but I don't have the manpower"." 24 She gave evidence as to a number of other events which occurred around that time, including the steps which were taken between that point and the fracas in Ground Control. She did not pretend to recall details: for example, she said she recalled Belinda identifying the man that assaulted her and where he was in the pool room, but not whether he was playing pool. Nor could she recall whether the men he was with had drinks. She recounted the conversations which led them to leave the hotel, walk to the doors from Parramatta Road into Ground Control and the discussion between them. In some respects her evidence expressed hesitation. Unsurprisingly, she was challenged on the basis of her memory and the fact that she appeared to have none when spoken to by the police some seven weeks after the assault. Her explanation for that (Tcpt, p 53-55) was, in substance, that she had not been very well at the time and that she understood the police inquiries to be directed to identifying her assailant or assailants. She gave the following answers in cross-examination: Q. You understood when you went to make that statement that it was for the purpose of helping the police and their inquiries? A. They knew I couldn't help them. Q. You knew when you went there that the purpose of the statement was to help the police in their inquiries, didn't you? A. No. Q. What did you think you were going there for? A. But Belinda was there, 'cause Belinda knew the facts and Belinda went through a picture line-up with all these Lebanese boys who had criminal records. I just went there to make a statement to the best of my knowledge what had happened to me, that's it. They knew I couldn't help. 25 Much of the cross-examination, and Ms Nobles' evidence generally, concerned the time at which the three women had gone to the Leichhardt Hotel, the time at which they left and the route they took to get to the Bald Faced Stag Hotel. On their evidence, there appeared to be a gap of about three hours between the time they left the Leichhardt Hotel at 9.30pm and the time at which they must have arrived at the Bald Faced Stag Hotel, less than a kilometre away, on the basis that no more than half an hour could reasonably have passed between their arrival and the call to the police a few minutes after 1am. However, nothing turned on any of this evidence for the purposes of the appeal. 26 In the passage noted above, whether it amounted to a self-caution, or rejection, it is clear that his Honour was addressing Ms Nobles' evidence of what happened at the Bald Faced Stag Hotel. Yet, in his discussion of the facts with respect to that part of the evening, starting at [18], he referred to evidence given by Ms Nobles on more than one occasion. In my view it is clear that his Honour did not reject out of hand everything that Ms Nobles said about that part of the evening: rather, he assessed specific parts, bearing in mind, and on occasion referring expressly to, his stated intention to approach it with caution. 27 Thus, at [18], he rejected Ms Nobles' evidence that the door between the public bar and Ground Control was locked or not in use, but he did so on the basis of preferring the evidence of Mr Drennan. At [22], his Honour considered the description of the group of young men and women in Ground Control in the following terms: "They were described by Ms McNally as being between 18 and 20 years old with a distinctive hairstyle and dress, wearing white singlets, chains and crosses. A colourful description of the gang was provided to Finnane J by Ms Nobles … but is likely to be a reconstruction based on stereotypes."

This is a clear example of his Honour continuing to refer to the evidence of Ms Nobles, but rejecting it. 28 After referring to the assault on Ms McNally outside Ground Control, by the young man with the mobile phone, his Honour continued at [26]: "Ms Nobles preceding the other two women, was unaware of what had happened behind her. She entered the hotel through the central entry, into the public bar. She was ordering drinks."

It may be that that material was drawn by inference from evidence given by Ms McNally, part of which was then quoted by his Honour, including the fact that Ms Nobles had spoken to "a person at the pub" after hearing of the incident outside Ground Control. His Honour continued at [27]: "The 'person at the pub' to whom Ms Nobles spoke was Mr Jason Spears. Both the plaintiffs believe that he was the defendant's son."

This fact must have been derived, at least as to her belief, from Ms Nobles' evidence. 29 His Honour then continued at [28] and [29] to set out Ms McNally's evidence as to what happened thereafter, including her attempt to identify to Mr Spears the person who had assaulted her. At [30] his Honour continued: "The evidence of Ms Nobles on this gives greater detail but, for reasons that I have already given, is likely to be unreliable."

He then discussed in some detail evidence given by Ms Nobles about the door between the two halves of the hotel and whether it was physically possible to identify someone in Ground Control through the glass door. Again, his Honour accepted the evidence of Mr Drennan in preference to that of Ms Nobles on this point, although he concluded that he did not need to reach any precise conclusion in relation to physical layout of the hotel at that time. 30 His Honour then set out the passage in relation to the conversation between Ms Nobles and Mr Spears, set out at [17] above. He accepted the evidence of Ms McNally that the three women had then left the hotel immediately, leaving their unconsumed drinks behind and had turned east down Parramatta Road: at [32]. His Honour continued: "33. Ms Nobles' evidence in cross-examination as to what happened at this time is this: 'Q: Was it at that moment, when he said he'd like to help you but he couldn't because of an absence of manpower, that you announced that you were leaving the premises? A: I just told my guy, just sit babe, let's not worry about it, let's just go home. I'll get you another watch. Q: Is it in fact the case that you probably said to Ms McNally, 'this is fucked, let's not worry about it, let's just go home'? A: Well, be working in concrete, sir, that's every second word so I could have said F U C K.' 34. The statement, which Mr Colefax put to Ms Nobles, is that which she volunteered to Finnane J … as being probable. The important point, however, is that the cross-examiner accepted (and had earlier accepted) that the person to whom Ms McNally identified her assailant was Mr Jason Spears." 31 After leaving the public bar, his Honour accepted that the three women "for a reason the evidence does not disclose, tarried for a short period outside the entrance of Ground Control, where Ms Nobles had taken a seat on a public bench": at 45. His Honour accepted the evidence of Ms McNally to the following effect, at [36]: "… Barbara then saw the guy who assaulted me and took my watch. She was standing in the doorway of the pool room and he was standing with a lot of Mediterranean males. She said 'We don't want any trouble, can we just have the watch back?' One of them said 'If you want it, come inside and get it.' The three of us decided to go in and we walked up to the guy who just said that and I said 'I'm here now, can I have my watch?' He said 'I don't know what you are talking about, what watch?'. They started talking in their own language. I was then hit on the back of the head with a pool cue. I fell to the ground and then got back up. I tried to hit the man that hit me. The next thing I knew was that I was getting hit by pool cues and then kicked whilst I was on the floor. I could hear the girls that were in the pool hall egging them on. They were yelling 'Get the dykes'." 32 One aspect of this evidence, relied on by the defendant, was that Ms Maloney and Ms McNally were apparently willing to re-enter Ground Control to seek Ms McNally's watch, despite the previous assault. Ms Nobles was reluctant, but followed them in. However, the fact that the other two women apparently went in willingly (although in response to what may have been a disingenuous invitation) suggested that they did not see the situation as dangerous and that, accordingly, the attacks which occurred were not reasonably foreseeable. As his Honour noted, Ms Nobles also gave evidence in this regard before Finnane DCJ: at [49]. "Q: … Did you believe that because they seem to be sincere and inviting Ms Maloney [into] the Ground Control bar that there was nothing to indicate that this was going to be a violent attack? A: No. HH: Q: I suppose it is a matter of common sense. You would not have gone in if you thought there was going to be a fight? Nobles: A: Not, being a woman, your Honour, no. HH: Q: If you like fighting I suppose, some people like fighting. Nobles: A: I hate fighting."

Nielson DCJ continued at [50]: "This suggests that Ms Nobles believed that it was futile to seek recovery of the wristwatch but nevertheless followed Ms McNally to give her support. However, for reasons that I have already given, this is likely to be a reconstruction by Ms Nobles." 33 Assessing the whole of his Honour's reasoning in relation to evidence given by Ms Nobles, it is clear that his initial appraisal of the likelihood of reconstruction was not adopted as a blanket approach, but rather his Honour provided a separate reasoned assessment of each aspect of her evidence, as it became relevant, and indicated whether or not he relied upon it. The last passage set out above demonstrates that his Honour rejected Ms Nobles' account of what happened, as an eyewitness account, but nevertheless drew an inference to similar effect from the other evidence. In my view that is how the critical passage at [31], set out above at [17], should be understood. I do not infer that, without expressly saying so, his Honour adopted this aspect of Ms Nobles' evidence: rather, he inferred from the circumstances and other evidence that the conversation which occurred with Mr Spears included reference to the robbery. As already noted, in my view that inference was open to him. 34 Had Mr Spears given contrary evidence, the inference might readily have been displaced. However, Mr Spears was not called and did not give evidence. He was an important witness, but there was no explanation given for the failure to call him at the re-trial. In his absence, it was open to the trial judge to have been satisfied on the balance of probabilities that the inferences he identified as to the content of the conversation with Mr Spears should be accepted. Accordingly, I would reject the Appellant's challenge to his Honour's fact-finding with respect to this matter.

Foreseeability breach and causation 35 Secondary challenges were mounted by the Appellant in relation to his Honour's conclusion that the risk of the vicious attacks on Ms Nobles and Ms McNally were reasonably foreseeable in the circumstances as known to Mr Spears, being the defendant's representative in charge of the hotel immediately prior to the assaults and to his Honour's conclusion with respect to causation. 36 The question of foreseeability was a matter for objective assessment by the trial judge; it did not depend on whether the defendant or his agent in fact foresaw the risk. The conclusion did, however, depend on his Honour's finding as to what Mr Spears had been told and the challenge was thus in part derivative. Further, the assessments of risk which appear to have been made by people present at relevant times may well provide some evidence as to the proper inference. As his Honour noted, the evidence that Mr Spears had said he could not offer assistance "because he had insufficient manpower, indicates that he perceived that the gang, if one of them were approached, would act in consort": at [52]. He continued: "This perception of Mr Spears must be attributed to the defendant. The defendant was aware that the gang would support the violent offender, probably in a similar manner. In my view it was reasonably foreseeable by the defendant that the gang might behave violently towards those such as the plaintiffs, a small number of vulnerable women who, to some, might appear to be 'different'." 37 Once Mr Spears' state of knowledge is accepted, the Appellant makes, in effect, two complaints about his Honour's approach to the question of foreseeability. First, he says that the reasons given demonstrate an assumption about the tendencies of the others in Ground Control, being referred to as "the gang". Secondly, the suggestion that the violent eruption was foreseeable was said to be inconsistent with the assessment made by Ms McNally and Ms Maloney that it was safe to enter. 38 I agree that the pejorative appellation "the gang", applied indiscriminately to a group of young people, could demonstrate a judgment formed with the view of hindsight. However, in the circumstances I do not think the complaint has substance. Once the plaintiffs' story as to the first incident was accepted, it was apparent that the group of young men and women in Ground Control included one at least who was willing to act with impulsive violence towards a young woman on the basis of reasonably mild provocation. That fact, combined with the apparent assessment of the situation by Mr Spears, gave more than adequate support for the inference which his Honour drew. 39 The fact that two of the women were beguiled into a decision to re-enter Ground Control should no doubt be placed in the balance, but might readily be given little weight in determining what a reasonable person in the position of Mr Spears would have thought. As his Honour found, the women were undoubtedly affected by alcohol and Ms McNally's judgment may have been further affected by her sentimental attachment to her watch. 40 As the judgment indicates, numerous issues were raised at trial by the defendant in relation to the precise nature of the breach of duty and its causal connection with the harm suffered. These included whether Mr Spears should have anticipated that the women would seek to re-enter Ground Control, whether it was reasonable to expect him to seek assistance from the police, when the women did not ask him to and other similar matters. Again, the complaints with respect to causation were to a large extent derivative and counsel acknowledged that the primary issue concerned the knowledge which could properly be imputed to Mr Spears. No error was demonstrated with respect to his Honour's consideration of and reasoning on these factual issues, to the extent they raised separate questions.

Content of duty 41 A major thrust of the defendant's case in this Court, as it appears to have been below, was that the defendant simply owed no duty to the plaintiffs to protect them from criminal assaults by third parties. His Honour spent some little time in dealing with similar arguments put to him; indeed, probably more than was necessary, given that the state of authority in this Court was against the submissions for the defendant. This was partly conceded in the course of argument on the appeal, but Mr Colefax SC sought to identify a difference of opinion in the authorities, from which a contrary view might be drawn, in the sense that it would be open to this Court to reconsider earlier suggestions that such a duty did exist. 42 The Appellant's argument commenced with a dictum in the judgment of Hayne J in Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254, in which Gaudron J joined. Modbury Triangle involved an assault on an employee of a tenant of a shopping centre. The attack occurred in the car park, after the shopping centre floodlights had been turned off at night. The question was whether the landowner was liable for failing to take reasonable steps to protect the employee of a tenant against the deliberate wrongdoing of a third party. The issue, as identified by Gleeson CJ at [17] was as follows: "The point of debate concerns whether the appellant owed a duty of a kind relevant to the harm which befell the first respondent. That was variously described in argument as a question concerning the nature, or scope, or measure of the duty. The nature of the harm suffered was physical injury inflicted by a third party over whose actions the appellant had no control."

The Court held (Kirby J dissenting) that the landowner's duty did not extend so far. 43 Hayne J agreed with the Chief Justice, but added some additional reasons, which provided the foothold for the Appellant's argument in the present case. The gist of his Honour's reasoning was that "the coherence of tort law depends upon 'the notions of deterrence and individual responsibility'", a phrase adopted from Professor Stapleton: at [116]. Those principles, his Honour noted, would not be furthered by imposing on a person "a duty to take steps to control [the conduct of the assailant] … if the person said to owe the duty has not the capacity to fulfil it": at [114]. His Honour continued at [117]: "Established principle provides the answer to the present problem because it reveals that there is no duty to control the criminal conduct of others except in very restricted circumstances. Being an occupier of land should not be added to those exceptional cases, at least where the complaint that is made by the plaintiff is not about the occupier failing to control access to or continued presence on the premises (cf Chordas v Bryant (Wellington) Pty Ltd (1988) 20 FCR 91; Public Transport Corporation v Sartori [1997] 1 VR 168). I would wish to reserve for consideration in a case in which they are raised the questions that are presented by a complaint of that last kind." 44 The Appellant sought to combine that statement with a particular passage from the reasons of this Court in Proprietors of Strata Plan 17226 v Drakulic (2002) 55 NSWLR 659. In that case, the owner of a unit in a residential building had been assaulted and robbed by an intruder, when returning from work in the early hours of the morning. The front door to the building was fitted with a lock, but it was not in use at the time of the assault. As in Modbury Triangle, there were disputed questions of causation, but relevant for present purposes was the question whether the body corporate owed its tenant a duty to take reasonable precautions for her safety whilst on the premises. In relation to the failure to install a satisfactory security system, which was described as liability based on 'non-feasance', Heydon JA stated at [32]: "The indications that the trial judge was proceeding on the non feasance basis includes passages in which he describes the relationship between the plaintiff and the defendants as 'special' in the Modbury sense of 'special relationship'. They also include the trial judge's quotation of passages in which Hayne J posed and left open the question whether a failure to control entry by criminals onto premises creates liability: the trial judge answered that question affirmatively." 45 After setting out the respective arguments of the parties, his Honour discussed the reasoning in Modbury Triangle, including particularly the question of control. After referring to circumstances in which it is well-established that a duty exists, based on the duty to control the conduct of others, his Honour concluded at [75]: "In none of these senses can it be said that the defendants here had control over the assailant: they had no power to assert control over him, they could not assert authority over him, they were not expected to be able to control him as of right." 46 Having dismissed the element of control, he considered other bases of a duty of care, including "assumption of responsibility", "special vulnerability" and the existence of a "special relationship". It was the last possible category to which his Honour was directing attention when he made the comments upon which the Appellant presently relies, at [89]. Thus, his Honour stated: "If new categories of 'special' relationship are to be created within which a defendant is to be liable for the criminal acts of third parties, the step is not merely factual. It would involve a matter of law - indeed a change in the law. A change in the law of that order of significance is not something which this Court should undertake. It is a matter for the High Court. That conclusion is fortified by the fact that Gleeson CJ was not prepared, because it was not necessary to do so, 'to express a concluded opinion as to whether foreseeability and predictability of criminal behaviour could ever exist in such a degree that, even in the absence of some special relationship, Australian law would impose a duty to take reasonable care to prevent harm to another from such behaviour': (at 268 [34]). It is also fortified by the fact that Hayne J specifically left the matter open: (at 293 [117]). And it is fortified by Hayne J's decision to reserve consideration of a different question, namely whether an occupier owes a duty of care to control the criminal conduct of third parties by failing to control their access to or continued presence on the premises: (at 293 [117])." 47 Mason P, who generally agreed with Heydon JA, also made remarks on this topic at [6], where his Honour stated: "In other words, the case falls within the general principles discussed in Modbury Triangle … . And it does not attract possible exceptions discussed therein, relating to (1) 'a high level of recurrent, predictable criminal behaviour' (per Gleeson CJ at 268 [33]); see also Hayne J (at 293 [117]); cf Callinan J (at 300 [143]), … and (2) to occupiers who fail to control access to or continued presence on the premises (per Hayne J at 293 [117]). I agree with Heydon JA's comments about these two possibilities and their inapplicability to the facts of the present case." 48 Hodgson JA also agreed with Heydon JA on this aspect of the case: at [146]. 49 By way of contrast, the Appellant acknowledges that there is authority, both in this Court and in the Full Court of the Federal Court, which supports the existence of a duty of care owed by licensees to patrons in relation to the risks of violent behaviour of other patrons. Those decisions include Chordas v Bryant (Wellington) Pty Ltd (1988) 20 FCR 91 (FC of FCA); Club Italia (Geelong) Inc v Ritchie (2001) 3 VR 447 (VSCA), and in this Court South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR 113; TAB Limited v Atlis [2004] NSWCA 322. 50 The Appellant's reliance on Drakulic is misplaced, for a number of reasons. First, it is clear from the authorities which have upheld the existence of a duty of care owed by a licensee to patrons that that conclusion depends not on the existence of a "special relationship" recognised by law, but on the element of control. Although the Liquor Act 1982 (NSW) does not impose a statutory duty of care on licensees, enforceable by patrons, by conferring a power of control and an obligation to exercise that power, the statute provides the basis for a finding with respect to control, which in turn attracts the common law duty of care and informs its content. The relevant statutory provisions may be found in s 2A of the Liquor Act which identifies as a primary object of the statute "the minimisation of harm associated with the misuse and abuse of alcohol (such as harm arising from violence and other anti-social behaviour)", in combination with s 103(1) which empowers a licensee or an employee of a licensee to "turn out, or cause to be turned out of the licensed premises", any person who is intoxicated. The section authorises the use of "such reasonable degree of force as may be necessary" to turn a person out: s 103(3A). In addition, s 125 of the Liquor Act provides: 125 Conduct on licensed premises (1) A licensee shall not: … (b) permit intoxication, or any indecent, violent or quarrelsome conduct on his or her licensed premises. 51 As already noted, Heydon JA in Drakulic dealt separately with the existence of a duty based on a legal concept of control, and with the creation of a new category of "special relationship" within which a defendant may be liable for the criminal acts of a third party. The present case falls within the former category, while his Honour's comments at [89] were directed to the latter. Accordingly, while his Honour's strictures in relation to an intermediate court of appeal creating a new category of liability may be accepted, they cannot preclude the application of an established head of liability. Nor should any such intention be imputed to the briefer comments of the President. In Oxlade v Gosbridge Pty Ltd (unrep, NSWCA, 18 December 1998, at p 3) Mason P stated: "It is exceptional for the law to impose a duty to exercise care in controlling a third party to prevent the third party doing damage to another (see generally Smith v Leurs (1945) 70 CLR 256). But a duty to exercise reasonable care to protect patrons has been imposed upon the manager of an hotel as regards intoxicated or dangerous customers. Whatever the outer limits of such duty, it encompasses the protection of a patron while he or she is on or departing from the licensed premises." 52 This passage, together with a passage to similar effect in Chordas, were cited as part of the "generally accepted" legal principles applicable to licensed premises, by Ipp AJA, with whom Heydon and Santow JJA agreed, in South Tweed Heads Rugby League Football Club Ltd v Cole at [153]-[155]. The judgment in Cole was handed down a few months earlier than that in Drakulic, although the hearing in Drakulic occurred a week earlier than the hearing in Cole. The Appellant's argument would require one to infer that the Court in Drakulic was intending, inferentially, to set aside a line of authority which it had so recently affirmed. Not only is this contention inherently implausible, it is based upon a failure to acknowledge that Heydon JA in Drakulic expressly referred to both Chordas and Oxlade, addressing more specifically the primary judge's findings with respect to control of access to the premises. After setting out relevant passages from the comments of Hayne J in Modbury Triangle, Heydon JA continued: "110. It is therefore necessary to deal with the trial judge's reliance on what Hayne J said, or at least on one answer to the issue which he posed. 111. At the point in his reasoning where he reserved the question of whether [liability could arise from?] a failure to control access to or continued presence on the premises, Hayne J referred to two cases which give guidance as to what he had in mind. These were Chordas v Bryant (Wellington) Pty Ltd (1988) 20 FCR 91 and Public Transport Corporation v Sartori [1997] 1 VR 168. … 113. Cases like the Chordas case are remote from the present circumstances. They deal with a special factual position. They recognise that the duty to take reasonable care to avoid a reasonably foreseeable risk of injury to lawful visitors owed by the occupier or person in control of a restaurant or other outlet for the on-site consumption of alcohol extends to the injuries caused by tortious or criminal acts of other lawful visitors. A justification for this is that it is highly foreseeable that some patrons may either arrive intoxicated or become intoxicated, and a segment of these may become violent. Hayne J suggests that justification lies in a duty of the publican to supervise the behaviour of patrons, to desist from serving them while intoxicated, and in the last resort to eject them. In most jurisdictions there is usually a statutory duty to eject intoxicated persons, and there is usually a statutory defence to criminal prosecution and tortious proceedings if no more than reasonable force is used." 53 His Honour then noted that Club Italia might be treated as an extension of the principle, but was not treated by the Victorian Court of Appeal as falling within Chordas. His Honour continued: "115. The duty of those who run establishments serving alcohol to avoid injury being caused by drunken patrons to other patrons (and perhaps other persons such as police officers, if that solution to Club Italia , not in terms adopted by the Victorian Court of Appeal, is available) has not in this State be widened into a duty to avoid injury being caused to drunken patrons by reason of their drunkenness: South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR 113. 116. The authorities referred to by Hayne J do not point to any body of law which would make it right for this Court to answer the question he reserved in a manner favourable to the interests of the plaintiff in this case. To do so would be to change the law, and the law at least in this particular field should only be changed by the High Court." 54 It is clear from this passage that, as might be expected, Heydon JA affirmed the principles accepted in Chordas, Oxlade and Cole (but not extended in Cole) whilst distinguishing those cases from the facts in Drakulic. His Honour made explicit his view that the comments of Hayne J in Modbury Triangle do not cast doubt on that line of authority and finally made it clear beyond doubt that his strictures about extending the common law were not intended to refer to that line of authority. 55 In the present case, the trial judge correctly applied the principles established in Chordas and applied by this Court in Oxlade, Cole and Atlis and accepted in Drakulic. Apart from the contentions with respect to Drakulic addressed above, no argument was presented which would permit or even encourage this Court to depart from that line of authority. Accordingly no error was demonstrated on the part of the trial judge in this respect.

Conclusion 56 The appeal should be dismissed with costs. **********

27/02/2007 - Amending lower court file number - Paragraph(s) Coversheet

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