Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem

[2009] HCATrans 234

[2009] HCATrans 234

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S191 of 2009

B e t w e e n -

ADEELS PALACE PTY LTD

Appellant

and

ANTHONY MOUBARAK

Respondent

Office of the Registry
  Sydney  No S192 of 2009

B e t w e e n -

ADEELS PALACE PTY LTD

Appellant

and

ANTOIN FAYEZ BOU NAJEM

Respondent

FRENCH CJ
GUMMOW J
HAYNE J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 23 SEPTEMBER 2009, AT 10.20 AM

(Continued from 22/9/09)

Copyright in the High Court of Australia

__________________

FRENCH CJ:   Before we hear from Mr Sexton, Mr Toomey, I see you have filed your amended notice of contention.

MR TOOMEY:   We have, your Honour.  Could I just say something as to why we submit that the amendment ought be allowed.  The matter was raised in our submissions in this Court.  It was raised in the trial court, as is apparent from the judgment of his Honour Judge Sorby at 604, 605 of the appeal books.  It is conceded, as I understand, by my learned friend, after a discussion we had this morning, that it was a live issue in the case.  We say what it amounts to is an unfortunate omission on our part to add it to the notice of contention.

FRENCH CJ:   Can I just ask you, in the light of our discussion yesterday about the nature of the case in relation to risk that you were advancing in argument, why it is that in the notice of contention you are asserting that there was a material increase in an existing risk of injury?  I thought you had accepted that the case really was based on the proposition that by the failure to provide security staff an existing risk of injury was not reduced.

MR TOOMEY:   Your Honour, I think I did so, with respect.  I am not of course doubting what your Honour says, but I do not remember the exact terms, but on reflection, whether mature or immature, we arrived at the conclusion that it was more properly put as the existence of a risk even with the presence of security guards.  That is always the risk of violence from other patrons which risk was increased by the failure of the appellant.  It may be, with respect, your Honour, that you call a chessboard white or you call it black.

FRENCH CJ:   I am not sure about that.  Anyway, that is the basis upon which you are proceeding.  I think perhaps Mr Sexton should know precisely how it is that you are putting that case.

MR TOOMEY:   Yes, your Honour.

FRENCH CJ:   Absent security staff, there is a risk of injury, because somebody might do something bad – this is the proposition I was putting to you yesterday – and cause harm to another patron.

MR TOOMEY:   Your Honour, I must accept that.

FRENCH CJ:   The point of putting security staff on is to reduce the risk of that happening, on your second limb argument.  So how does the failure to engage security staff result in a material increase in an existing risk?

MR TOOMEY:   Well, yes, I see your Honour’s point.  Your Honour, what we are saying is that the proper conduct of the implied contract between the appellant and the respondent required there to be security there.  Even with security there, that proper conduct would have resulted in some risk of injury to the plaintiff.  Because the contract was not conducted by the allowance for security, the risk to the plaintiff was increased.

FRENCH CJ:   When you say “increased”, you mean greater than it would otherwise have been had there been security staff?

MR TOOMEY:   That is what I mean, your Honour.

FRENCH CJ:   Yes, all right.  Thank you.

HAYNE J:   Is the premise for this branch of your argument, Mr Toomey, a premise that “but for” tests of causation are not met?

MR TOOMEY:   I am sorry, I do not quite get the ‑ ‑ ‑

HAYNE J:   Well, is it your argument that we come to consider changes in risk, whether they are increase or decrease let us leave aside, on the premise that but for the absence of security personnel this event would not have happened?

MR TOOMEY:   Certainly that is our primary argument, your Honour.

HAYNE J:   I understand that, and I understood – correct me if I am wrong – that the alternative argument about change of risk was an alternative that was premised on the first argument not being accepted.  You only get to the alternative if the first argument about causation has failed.  Is that right?

MR TOOMEY:   That is correct, your Honour.  It is fallback position, as I think your Honour described it yesterday.

HAYNE J:   Is it not therefore a departure – I am not saying wrong – but a departure from what was decided in Chappel v Hart in this sense?  Chappel v Hart was a case in which but for the failure to warn the event would not have occurred. The questions of risk were considered by the majority in that case in connection with whether liability should nonetheless be found to exist. See particularly 195 CLR 232 at 257, paragraph 67, the last sentence:

Those additional factors combined with the satisfaction of the “but for” test were sufficient to establish causation in this case.

I pluck that out as a sentence.

MR TOOMEY:   Yes, your Honour.  Would your Honour give me a moment to read the paragraph.

HAYNE J:   Of course.

MR TOOMEY:   Yes, thank you, your Honour.

GUMMOW J:   Paragraph 67 has to be read with 66, I think.

MR TOOMEY:   Yes, your Honour.

HAYNE J:   The point I ask you to address or to identify is whether you are asking us to go beyond what was decided in Chappel v Hart.  I am not saying that that is good, bad or indifferent, but I just want to understand whether you are saying we need to go beyond what is in Chappel v Hart.

MR TOOMEY:   We would say it is not necessary to go beyond for us to succeed on the notice of contention.  May it please your Honours.

FRENCH CJ:   Mr Campbell, did you have anything to add in relation to your amended notice of contention?

MR CAMPBELL:   I have nothing to add, your Honour.  I should formally seek leave to file the amended notice of contention, nunc pro tunc, your Honour.  We had not made that application in Court yesterday.  Can I just simply say that our position is purely derivative.

FRENCH CJ:   All right, thank you.

MR CAMPBELL:    May it please the Court.

FRENCH CJ:   Yes, Mr Sexton.

MR SEXTON:   Your Honours, I was taking your Honours yesterday afternoon to evidence which went to the other point raised by the notices of contention, namely, that, as my learned friend, Mr Toomey, put it, the sequence of events should have been stopped at the time when the altercation on the dance floor commenced.  I had proposed to continue dealing with that aspect of the evidence, but if your Honours would prefer I can deal with the notice of contention point – it is relevant to that – and then come back to the evidence.

FRENCH CJ:   Whichever suits you, Mr Sexton.

MR SEXTON:   It would suit me, your Honours, to continue with dealing with that evidence as briefly as I can.  I do not think, given the time constraints, that I should take your Honours to this material, but if I could give your Honours references to Mr Bou Najem’s statement at appeal book 399 in paragraphs 12 and 13, to his oral evidence at page 194, at about line 40, and to the other statements of witnesses - Karim Elbaz was at pages 380 to 381 and paragraphs 6 to 12 of his statement; Olivia Baz was at appeal book 385 in paragraphs 9 to 10; Katty Mansour at 389, paragraphs 5 to 12, and Zari Ebrahimi at 395, paragraphs 4 to 11.  What that evidence demonstrates, as I said yesterday afternoon, is that the dispute, altercation, fight – whatever it is called – escalated in a way that would have made it highly improbable that anything more than the six to eight security guards that Mr Jennings had initially proposed in his expert opinion evidence had been present.

The relevance of that is that in the Court of Appeal’s reasons for judgment there was a finding – and this is important, obviously, for the later consideration of causation – that although the primary judge did not make a finding about how many security staff were reasonably required, in paragraph 106 at about line 18 Justice Giles observed that:

It was sufficient for his reasoning in relation to breach of duty to consider access control – one or perhaps two security staff providing access control as the front line of defence.

Then in paragraph 108 on the same page he noted the submission made by the appellant about the dispute on the dance floor but did not consider it because that submission does not meet causation as was, in my view, found by the trial judge.  So that the extent that there is a finding at either the primary level or the intermediate appellate level, it is that one or perhaps two security staff providing access control at the door were required.

HEYDON J:   What does it mean to say “that submission does not meet causation”?  What is the meaning of the sentence in which that expression appears?  It does not cope with the difficulty that in fact there was causation, is that what it means?

MR SEXTON:   I think, your Honour, what it means is that the appellant demonstrating that the dispute on the dance floor could not have been quelled by the reasonable number of security staff does not meet the causation argument about access control.

HEYDON J:   So the focus of Justice Giles’ attack, as it were, is on events at the door late in the incident rather than at the start of the incident on the floor.

MR SEXTON:   Yes, your Honour.  It may be that the reason that neither the primary judge nor the Court of Appeal dealt in terms with the argument put forward by the respondents that causation was established by breach in terms of failing to quell the fight on the dance floor was because of the way the evidence unfolded in relation to that aspect of the case.  The starting point, your Honours, is that there was a document from Mr Jennings, which is in the appeal books at page 449, which was tendered by the appellant during the cross‑examination of Mr Jennings and in it Mr Jennings was telling Mr Moubarak’s solicitors, between about line 30 and 40 that he:

would need evidence of what risk factors would justify such action.

This was in relation to security officers, and he said there –

Obviously family restaurants on new years eve do not commonly require security presence unless there is some history of problems to rely upon.

That was on 1 October 2004.  His first report of 5 October 2004 at page 455 of the appeal book in paragraph 7 – and this is before Mr Jennings had any information about previous incidents so this opinion that he was putting forward here was simply on the basis that this was a New Year’s Eve function and it was in Punchbowl.  That appears from the previous page, 454.  What Mr Jennings says in paragraph 7 is:

To properly control such vast numbers of patrons in such a high risk area ‑

In other words, Punchbowl:

would have required at least six fully qualified and trained security officers and only with such a number should the two fighting incidents in which this Plaintiff became involved been prevented from escalating -

It is not quite clear.  I think the “two fighting incidents” meant the fight on the dance floor and then the shooting.  When he came to be cross‑examined Mr Jennings was cross‑examined at some length – and I will not take your Honours through it.  It starts at page 226 of the appeal book and it goes through to page 265, which is where I wish to take your Honours to.  During the course of that cross‑examination it became apparent that a number of the matters which Mr Jennings had referred to in his later reports about prior incidents did not stand up when his description of them was compared to the actual police reports.

As your Honours will see from page 264 there was an issue about Mr Jennings’ availability to continue in the witness box.  I started to ask Mr Jennings a question about the second aspect, which was in relation to the dance floor.  His Honour the primary judge intervened at the top of page 265 and asked this question:

Q.       Before you ask that, if Punchbowl wasn’t in the equation, that is, the location of this restaurant, would a function that had 400 people – from babies or small children through teenage presumably, security young people judging by the plaintiff and his girlfriend, middle‑aged people, their parents, and old people – normally in your experience require six security people.
A.       If we just took those factors into account, your Honour, no.

Q.       Take Punchbowl, the location and your so‑called history ‑

The reason it is described as “so‑called” was because of the attack that had been made on his history.  The answer was:

Just those factors then you probably would not need six security officers.

What Mr Jennings conceded in cross‑examination was that, even with the 400 people, even with the alcohol; even with the late hours, but having regard to the type of people to be expected there but taking into account the location inside and the history of this venue, you would not need six security officers.

My learned friend’s submissions yesterday to the effect that you would expect the reasonable response to provide more than two, so you could have access control and somebody at the door upstairs and somebody monitoring the dance floor, falls at the first hurdle because it is not the reasonable response that is supported by the expert called by the respondents.  That, in our submission, is relevant when what we submit are the correct principles are applied in assessing causation.

The other thing that I should mention is that Mr Jennings had referred in his report, which is at page 493 of the appeal book – I will not take your Honours to that because the statement he makes there is set out in the cross‑examination – at page 254 at about line 55, where I took him to that report and said that in that report:

Q.       You say . . . “The plaintiff was shot at point‑blank range by a deranged patron in what appears to be an attempt to kill him.”  Do you see that?
A.       Yes.

Q.       As I understand it, you accept that there is no material which suggests that on the particular night there was anything to suggest to anyone that there was a deranged patron on the premises who might be likely to shoot anyone.
A.       I believe he has behaved – the gunman’s behaviour up to the point of the shooting could be quite well described as deranged, sir.

Q.       Just tell us what you mean by that?
A.       As I understand it, he had been involved in a fight.  He then ran out of the premises and ran back in carrying a firearm, which I would contend is not the behaviour of a normal, sensible person.

. . . 

Q.       There was nothing that you were aware which suggested this man, if there was a fight, was likely to go and get a gun and shoot someone?
A.       I don’t believe anybody could predict that of anyone.

So there was an evidentiary basis from a security consultant for the submissions that were made by the appellant about the actual behaviour of the gunman following the fistfight with Mr Moubarak.  So, your Honours, it is in that context that I now turn to what, in our submission, are the principles to be applied.

The first proposition is the proposition that Justice Hayne raised earlier in relation to the notice of contention which is that you do not get to the question that was raised in Chappel v Hart in terms of the risk eventuating unless it has been established on the balance of probabilities that that risk eventuated.  That was what Justice McHugh was saying in Chappel v Hart.  He did not say that an increased risk of injury and the injury eventuates.  He was talking about the increased risk eventuating in circumstances in which the question was whether, even though the “but for” test was satisfied was there a legally causative result?

Now, your Honours, we have given your Honours this morning - hopefully your Honours have Roads and Traffic Authority v Royal, in which a similar but not identical issue to that thrown up by the amendment to the notice of contention was considered in this Court, and before I go to that, can I say that our submission is that however it is formulated by the respondent, the issue which is thrown up by the amendment to the notice of contention is the question of whether the proposition that the provision of security staff would have reduced the risk is sufficient to establish causation.

Can I take your Honours firstly to the judgment of your Honours Justices Gummow, Hayne and Heydon.  Your Honours in paragraph [17] identify the complaint made by the appellant in that case, which is that:

the Court of Appeal moved straight from a conclusion that the appellant was in breach of duty to consideration of whether the defendant’s supervening conduct broke the chain of causation, without first examining whether the chain of causation actually existed.

The way in which that had been done is identified in paragraph [23] in the second half of the paragraph in the sentence:

In that earlier passage, the majority said that the cross‑intersection design adopted by the appellant in 1993 “gave rise to a statistical inevitability of a proportion of cross-vehicle crashes … While it does not make the present accident inevitable it did materially contribute to its occurrence, by creating a heightened risk of such an accident”.

Then at paragraph [25], in the last sentence, your Honours deal with that by saying:

In short, even if it could be said that the appellant’s breach of duty “did materially contribute” to the occurrence of an accident, “by creating a heightened risk of such an accident” due to the obscuring effect of one vehicle on another in an adjoining lane, it made no contribution to the occurrence of this accident.

That was because there was no obscuring vehicle in an adjoining lane.  In paragraph [31] your Honours referred to Betts v Whittingslowe, in [32] to March v Stramare and in [33] to Bennett v Minister of Community Welfare and your Honours observed that the defendant relied on the application of the test stated by Justice Gaudron, and said:

That application is unconvincing.  In the first place, Gaudron J’s reasoning proceeds on the assumption that a chain of causation has been established:  that assumption is not made out here. 

Justice Kiefel dealt with the issue in more detail, commencing at paragraph [134] and paragraph [135], observing:

The but for test has clear limitations -

and in paragraph [136] pointing out that Justice Santow had:

reasoned from a failure, on the part of the RTA, to reduce an identifiable risk, to a conclusion of liability.

Justice Kiefel then in [137] to [139] pointed out that Justice Dixon’s reasons in Betts do not suggest any presumption to operate or any alteration to the requirement of proof of causation and at [140] the statement of Justice Dixon in Betts does not provide support for a conclusion of liability to be drawn from a failure to address or reduce a risk.

GUMMOW J:   It is really [141], is it not?

MR SEXTON:   Yes, your Honour.

GUMMOW J:   The first sentence in [141].

MR SEXTON:   Yes, your Honour, and in particular [144]:

The present state of authority does not accept the possibility of risk of injury as sufficient to prove causation.

That is the first point, that is, whether or not there is sufficient in this case to prove on the balance of probabilities that the provision of one or two security guards would have made any difference.  Her Honour refers to the judgment of Chief Justice Spigelman in Seltsam v McGuiness 49 NSWLR 262. If I could take your Honours very briefly to that. There are two passages in particular which I want to take your Honours to. The first is at page 275 in paragraphs 80 and following where his Honour says:

The common law test of balance of probabilities is not satisfied by evidence which fails to do more than establish a possibility.

His Honour then refers to a number of authorities which support that proposition.  Then at 119 on page 280 his Honour says:

There is a tension between the suggestion that any increased risk is sufficient to constitute a “material contribution”, and the clear line of authority that a mere possibility is not sufficient to establish causation for legal purposes.  The latter is too well-established to be qualified by the former.  The reconciliation between the two kinds of references is to be found in the fact that, as in Chappel v Hart and in the cases that suggest the former, the actual risk had materialised.  The “possibility” or “risk” that X might cause Y had in fact eventuated, not in the sense that X happened and Y had also happened, but that it was undisputed that Y had happened because of X.

Your Honours, in our submission, unless the respondents establish on the “but for” test that the provision of security would have prevented this event occurring, then the issue that is raised by the amendments to the notices of contention fail at the outset.

The other thing which I want to say in relation to the submission about proof on the balance of probabilities is that reference was made by Mr Toomey yesterday to what your Honour Justice Heydon said in Drakulic at paragraphs 94 and 95, picking up on the word “hinder” from Justice Hayne’s reasons in Modbury.  What your Honour Justice Heydon said there was that “hinder” in that context means to substantially reduce the risk.  What we are dealing with here on the first limb in terms of would unarmed security guards have made any difference, is a mere possibility.  It is speculative, it is conjecture and it is no answer to say, as my learned friend, Mr Toomey, did yesterday, one would expect there would be large Fijians there.  The issue is not ‑ ‑ ‑

MR TOOMEY:   I was actually referring to Tongans.

MR SEXTON:   All right, Tongans.  It is not a question of how big they are or how burly they may be, the question is whether, as my learned friend said on a number of occasions, and as Mr Jennings opined without any supporting reasons, they would have been prepared to take a bullet.  That is really what it boils down to and the probabilities of that are exceedingly low.  So, your Honours, for those reasons we would submit that the respondents fail on the issue on causation.

FRENCH CJ:   I suppose there is a difficulty that one can conflate duty of care and causation in this risk analysis area.  There is a risk in the sense of some finite probability of a range of events occurring, including the particular event which did occur, and there is a low probability of that occurring because it is an extreme event.

MR SEXTON:   Yes.

FRENCH CJ:   If you interpose security staff, then it may be that the risk of a range of events occurring is reduced and so the probability is reduced because there is a range of things that security staff can do, but that does not affect the causal analysis getting to the event which did occur.  It might just goes to the question of whether there has been a breach of the duty of care or not.  The duty is to reduce the level of risk to a certain level and if you have done that – whether you do that or not may not affect the causal analysis I suppose is really what you are saying.

MR SEXTON:   That is so, your Honour, and similarly, although my learned friend, Mr Campbell, sought to put causation in terms of what we are dealing with here is the Club Italia concept of creating an environment, even if that is the correct analysis of the basis on which the duty is imposed, which we contest for the reasons given in‑chief, one still has to approach causation by answering the question, if there had been one or two security guards unarmed, would the shootings have occurred?  I have already made the submissions in‑chief about why the answer to that, on the balance of probabilities, must be yes in the circumstances of the case.  They are my submissions in reply.

FRENCH CJ:   Thank you.

MR SEXTON:   Your Honour, I am sorry, of course, section 5D.

FRENCH CJ:   Yes.  Perhaps we were engaging in our own avoidance strategies.

MR SEXTON:   Your Honours, subsection (2) is directed towards an exceptional case.  For the reasons which I have already given, this is not an exceptional case.  In terms of the application of legal principle in relation to causation, it is a straightforward case.  The question raised is, as a matter of robust common sense, would one or two unarmed security guards have prevented the gunman re‑entering and shooting.  The first point is that subsection (2) does not apply.  The second point is that subsection (2) applies in accordance with established principles.  The matters I have been addressing this morning are the established principles and they do not admit of subsection (2) being prayed in aid of the type of causation which is raised in the amended notices of contention.

GUMMOW J:   How does the mixing together of concepts in subsection (2) work?  How does one disentangle it?  First you have to find what an exceptional case is, but somehow you are still applying established principles.

HEYDON J:   Is that an attempt to capture what one might call a misunderstanding of Betts v Whittingslowe and Bennett’s Case?

MR SEXTON:   It may be, your Honour.

HEYDON J:   So the Parliament has, in effect, made an erroneous assumption as to the condition of the law.

MR SEXTON:   Maybe, your Honour. 

HAYNE J:   Or is it directed to the asbestos‑type case, the Fairhaven issue?

MR SEXTON:   The second reading speech suggests that it is, your Honour, but the second reading speech – I can provide copies as expressed in terms of the intention of Parliament which is not regarded as being something which can inform judicial consideration of the meaning of a provision.

GUMMOW J:   Where do we see it in the speech?

MR SEXTON:   The paragraph on the bottom of the first page, your Honour, in the second sentence may be relevant, but it is the second paragraph on page 2 in the first sentence of the third paragraph.

HEYDON J:   Say that again.  The second paragraph on page 2 beginning “It is only for”, that one?

MR SEXTON:   No, the paragraph above that, your Honour, “Although people might argue”.

HEYDON J:   Yes, and which sentence?

MR SEXTON:   Then the sentence which your Honour has just identified.

FRENCH CJ:   Well, despite its application to dust diseases, the words are general, are they not?

MR SEXTON:   Yes.

HEYDON J:   It says, “it is not intended that the bill extend the common law in any way”.

MR SEXTON:   That is so, your Honour.

HEYDON J:   Mr Carr is not, of course, an Act of Parliament.

MR SEXTON:   No, your Honour.

HAYNE J:   One wonders what the court is that is referred to, “This exception was developed by the court for those rare cases”.

MR SEXTON:   The use of a second reading speech in relation to this particular piece of legislation was discussed by the New South Wales Court of Appeal in Harrison v Melhem in 72 NSWLR 380.

GUMMOW J:   But the statement on page 2 at about line 10:

Rather, it is to focus the courts on the fact that they should tread very carefully when considering a departure from the but for test.

I do not understand it.  The courts do not apply the “but for” test.

MR SEXTON:   No, your Honour.

HEYDON J:   Did the Ipp Committee report itself contain any ancestor to section 5D(2)?

MR SEXTON:   Your Honour, I have not been able to follow that line of inquiry through overnight.

FRENCH CJ:   The “but for” test here is contemplated only in relation to what is called “factual causation”, but that does not answer the causation question.

MR SEXTON:   No, your Honour.

FRENCH CJ:   Would it be right to say that a situation which it covers is a situation of the creation of a risk of harm?

MR SEXTON:   Yes, your Honour.

FRENCH CJ:   Even though it might not be a greater than 50 per cent chance of harm?

MR SEXTON:   Possibly, yes, your Honour, but nevertheless, it is constrained, or the operation of that subsection is constrained by the words “in accordance with established principles”.

FRENCH CJ:   There may be conditions.  Let us take the disease condition where you have a lot of complex variables all playing a part in the ideology of the disease and it may be that the act or omission which is said to constitute negligence cannot be said to have been a necessary condition of it.  It may be that the disease would have developed otherwise, but it is a contributor on the limited state of knowledge that we have, which is why it is expressed in terms of chance and probability and so forth perhaps.

MR SEXTON:   It is a type of case of which Seltsam v McGuiness was an example and McGee was an example where there was dermatitis, there was no medical evidence to connect the lack of washing facilities.

FRENCH CJ:   That analysis is still only talking about factual causation, because it is then you get into this sort of normative bit in the second part of subsection (2) before you decide finally on the issue.

MR SEXTON:   Yes, your Honour.

HAYNE J:   For my own part, I would be much assisted by knowing whether there is anything in the ancestry or in the report which bears on what appears in the second reading speech.

GUMMOW J:   It is said to be a triumph of common sense.

HAYNE J:   I am so glad.

MR SEXTON:   I apologise, your Honours, but my learned friend has handed me a copy of.....book on the Civil Liability Act which contains some extracts from ‑ ‑ ‑

HAYNE J:   I would rather, for my part, if the parties went back and read the whole report and digested what they say is relevant rather than mediated by someone else’s view.

MR SEXTON:   That will obviously be more appropriate, your Honour.

FRENCH CJ:   It might assist us to have a supplementary submission which is more considered than you are able to offer, as it were, on the run by reference to the report and I imagine that would, I suppose, come from you in the first instance within seven days.

MR SEXTON:   Yes, your Honour.

FRENCH CJ:   Mr Toomey and Mr Campbell, another seven days after that.

MR TOOMEY:   Yes, your Honour.

MR CAMPBELL:   Yes, your Honour.

FRENCH CJ:   Yes, thank you.  The Court will reserve its decision and we will adjourn shortly to reconstitute.

AT 11.06 AM THE MATTER WAS ADJOURNED