Julia Day v The Ocean Beach Hotel Shellharbour Pty Ltd
[2012] NSWDC 294
•23 April 2012
District Court
New South Wales
- Amendment notes
Medium Neutral Citation: Julia Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2012] NSWDC 294 Decision date: 23 April 2012 Before: Cogswell SC DCJ Decision: Verdict and judgment for first and second defendant against plaintiff. Verdict and judgment for plaintiff against third defendant. Awards of $2500 for general damages, $2500 for aggravated damages and $5000 for exemplary damages.
Catchwords: TORTS - vicarious liability - plaintiff injured when removed from licensed premises by security guard - removal constituted assault and battery - employer of security guard vicariously liable - hotel and licensee not vicariously liable for security guard's conduct - Civil Liability Act 2002 not applicable. DAMAGES - award of general, aggravated, exemplary damages - public humiliation of patron in her local hotel. Legislation Cited: Civil Liability Act 2002 Cases Cited: Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-operative Assurance Company of Australia Ltd (1931) 46 CLR 41.
Deatons Pty Limited v Flew (1949) 79 CLR 370.
Hopper v Reeve 7 Taunt 699.
Naidu v Group 4 Securitas Pty Ltd [2005] NSWSC 618.
New South Wales v Lepore (2003) 212 CLR 511.
Sprod v Public Relations Oriented Security Pty Ltd [2007] NSWCA 319.
State of New South Wales v Steven Charles Radford [2010] NSWCA 276.
State of New South Wales v Williamson [2011] NSWCA 183.
Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161.Texts Cited: RP Balkin and JLR Davis, Law Of Torts, 4th ed (2009) LexisNexis Butterworths.
Fleming's The Law of Torts, 10th ed (2011) Lawbook Co.Category: Principal judgment Parties: Julia Day (Plaintiff)
The Ocean Beach Hotel Shellharbour Pty Ltd (First defendant)
Karma Elliott-Cosmos (Second defendant)
Checkmate Security International Pty Ltd (Third defendant)Representation: Counsel:
E Chrysostomou (Plaintiff)
W S Reynolds (First defendant and Second defendant)
File Number(s): DC 2010/379772
Judgment
Introduction
Julia Day lived near her local hotel, The Ocean Beach Hotel, at Shellharbour. She was a regular patron and the staff knew her. She was there on Friday night 4 July 2008. She had met her sister and friends. She was drinking sparkling wine from piccolo sized bottles. She said she was a bit tipsy. She ran into someone and spilt some wine on him. The staff thought she should be removed. Whether they were right or wrong in that assessment I do not need to decide. What this case is about is how she was removed.
A security guard pulled the stool she was sitting from behind. Julia Day did not know that he was doing that so she fell heavily on to the floor landing on her bottom. Julia Day claims that she was seriously injured by the fall and so she has sued those she sees as responsible: the security company which employed the security guard, the hotel and its licensee.
The security company has not filed any defence and did not turn up for the Court hearing. Concerns are held for its viability. Hence it becomes important for Julia Day to succeed in her case against the hotel and the licensee.
There was filed in Court on 28 October 2011 by Julia Day's lawyers a document called 'Amended Statement of Issues'. This document sets out the issues which Julia Day's lawyers say that I need to decide in this case. It is a helpful document and submissions have been addressed - at least on behalf of Julia Day - to the issues in that document and I will decide the case by reference to those issues. I do not propose to recite the evidence which was given by various witnesses or tendered in the form of exhibits, except to the extent that I need to in making findings. There was no transcript taken of the proceedings, so I rely upon my own notes in any references to evidence given by witnesses.
I need to make findings in the course of my judgment about three essential issues. The first is what happened. The second is what the relationship was between the security guard on the one hand and the hotel and licensee on the other hand. The third issue (which I should decide regardless of whether I find anyone liable) is what injury was suffered by Julia Day and what damages if any should be payable to her.
I will turn now to the first issue in the Amended Statement of Issues (which, when filed, I marked MFI 6).
Whether an assault and/or battery was committed upon the plaintiff by James in the pulling/removing the stool from under the plaintiff (the "wrongful act")
The reference to James is a reference to the security guard who was named Matthew James. Deciding what happened in this case is made relatively easy by two pieces of evidence. Matthew James gave evidence in the Local Court in a prosecution of Julia Day for failing to leave the hotel when she was asked. A transcript of Matthew James' evidence was tendered in this case and marked exhibit K. Matthew James gave evidence about asking Ms Day to leave and the fact that she was not leaving. He waited for about 3 minutes. He was asked what happened after that. He said at T5 that after that, "I went to take back the barstool that she was sitting on". He said his intention in taking back the stool was to "get her standing up". Asked how he took the stool he said that he "just started to hold onto the stool and then pull back". He said that after that Julia Day "because she was intoxicated, couldn't stand properly and she fell onto the ground".
The other piece of evidence which makes a finding on what happened relatively straight forward is exhibit B. Exhibit B is a DVD extracted from a security camera which was used inside the hotel. As is often the case these days incidents which later become the subject of a court case are recorded by closed circuit television in many instances. That happened in this case. I am satisfied, on viewing it, that it depicts Matthew James removing the barstool from behind Julia Day. It is clear that she was not expecting this. Not only that, it is clear that he regarded her as being affected by the alcohol that she was drinking. She then fell to the ground.
The first and second defendants, namely the hotel and the licensee, were both represented by Mr W S Reynolds of counsel. Ms Day was represented by Mr E Chrysostomou of counsel. One of the points argued by Mr Reynolds regarding this first issue is that there is missing from the evidence proof of a necessary element of the tort of assault. The tort of assault is the cause of action which Julia Day relies upon in suing the various defendants. The necessary element which Mr Reynolds argued is missing was intention or reckless indifference. I do not accept that submission. It seems to me to be accepted in Australian law that a defendant's intention does not have to extend to injuring or harming a plaintiff. See RP Balkin and JLR Davis, Law Of Torts, 4th ed (2009) LexisNexis Butterworths at 32 at [3.2]) and Fleming's The Law of Torts, 10th ed (2011) Lawbook Co at [2-60] at p 34.
Although Mr Reynolds pointed to evidence from Julia Day and from Mr James' evidence in the Local Court about his own intentions, I am satisfied from viewing exhibit B that Mr James pulled the chair from under Ms Day so that she was no longer supported and inevitably fell to the ground. As Gibbs CJ said as long ago as 1817 in Hopper v Reeve 7 Taunt 699:
"[H]e who throws over a chair or a carriage in which another person is sitting, commits a direct trespass against the person of him who is sitting in that carriage or chair, and that the action of trespass may be well maintained for it."
I also accept generally [61 - 67] of Mr Chrysostomou's written submissions and conclude in those terms that the "intentional pulling of a barstool from under the plaintiff causing the plaintiff to fall and injure herself is a battery".
I turn now to the second issue identified in the Amended Statement of Issues. That is a complex issue which is divided helpfully into various sub issues. The primary heading is described as follows.
If an assault and/or battery was committed upon the plaintiff by Mr James whether the first/second defendant and third defendant are liable for the wrongful act of James as joint tortfeasors.
I repeat I am satisfied that an assault and battery was committed upon Ms Day by Matthew James in pulling or removing the stool from under her when she did not realise what he was doing and when she was affected by alcohol.
The first subheading or sub issue which I will put as a heading is described as follows.
As to liability of the third defendant whether the third defendant is vicariously liable for the wrongful act of James as employer - whether the wrongful act is so closely connected with the authorised acts as to be regarded as a mode of doing the authorised act.
The issue here is this. An employee employed to do a particular range of tasks may commit a wrongful act in engaging in those tasks. If such a wrongful act is completely unrelated to the tasks which the employee is charged with undertaking, then the law is reluctant to fix the employee's employer with vicarious liability for that wrongful act. If however there is some connection between the wrongful act and the employee's employment then the law of vicarious liability may fix the employer with liability.
The first question which I have to resolve is whether I am satisfied on the balance of probabilities that Matthew James was in fact employed by the security company (which is named Checkmate Security International Pty Limited and is the third defendant).
Mr James himself in the evidence he gave in the Local Court in exhibit K said at T1 that he was "currently employed by Checkmate Security International" and that he had been employed by Checkmate Security International for close to two and a half years, including on 4 July 2008.
In addition, a statement of cross-claim filed against Checkmate in these proceedings pleads that Mr James "was an employee" of Checkmate. No defence has been filed to that cross-claim so the allegation stands admitted. In addition, there is evidence from the second defendant (the licensee, Ms Karma Elliott-Cosmos) at T68 of her evidence in the Local Court which became exhibit H, that certain security guards - I infer including Mr James - were "employed by the same security company". The fact that Mr James was employed by the third defendant is also consistent with the evidence of the proprietor of the hotel, Mr Dennis, regarding sign-on sheets which were kept at the hotel and filled in by the security staff. The relevant one became exhibit 2 in these proceedings.
Mr Reynolds on behalf of the hotel and the licensee made no submission regarding the liability of Checkmate, except to assert that Checkmate was liable for the conduct of Mr James who was employed by it.
Mr Chrysostomou addressed the question whether the way that Mr James chose to deal with the problem of removing Julia Day from the hotel was within the scope of his employment. He submitted at [79] of his written submissions that Mr James' act "in turning out the plaintiff from the hotel by pulling or removing the barstool was 'so closely connected' with his authorised act that it should be regarded as a mode, albeit an improper mode, of carrying out his authorised act". He went on to submit that it followed that Checkmate should be held vicariously liable for Mr James' assault and battery of Ms Day.
This question of whether acts are committed in the course of employment or not was addressed by the New South Wales Court of Appeal in Sprod v Public Relations Oriented Security Pty Ltd [2007] NSWCA 319. Ipp JA, with whom Tobias JA and Hislop J agreed, said over [1 - 2] the following:
"In recent times there have been several cases where a patron of a club, hotel or similar establishment is assaulted by security guards or bouncers and seeks to hold the security firm that employed the bouncers vicariously responsible for his injury. This is another such case.
In Zorom Enterprises Pty Limited v Zabow [2007] NSWCA 106, Basten JA said ([at 21]):
'The underlying principle is not in doubt: an employer will be liable for the act of its employee "only if the act is shown to come within the scope of the servants authority either as being an act which he was employed actually to perform or as being an act which was incidental to his employment": Deatons Pty Limited v Flew (1949) 79 CLR 370 at 378 (Latham CJ).
However, the precise application of that principle, as I have stated, can give rise to difficulties."
Ipp JA very thoroughly reviewed the authorities, including the High Court's decisions in Deatons Pty Limited v Flew (1949) 79 CLR 370 and in New South Wales v Lepore (2003) 212 CLR 511. Ipp JA said the following at [52] -
"One thing seems to be clear according to the weight of authority. There are circumstances under which an employer may become vicariously liable for unauthorised acts of an employee, even when those acts are criminal and even when the employer has expressly instructed the employee not to perform acts of that kind."
His Honour had earlier referred at [46] of the judgement in Sprod to what Gleeson CJ had said at 540 [54] of Lepore in the following terms -
"Where acts of physical violence are concerned, the nature and seriousness of the criminal act may be relevant to a judgment as to whether it is to be regarded as a personal, independent act of the perpetrator, or whether it is within the scope of employment. A security guard at business premises who removes a person with unnecessary force may be acting in the course of employment. On the other hand ... extreme and unnecessary violence, perhaps combined with other factors, such as personal animosity towards the victim, might lead to a conclusion that what is involved is an act of pure personal vindictiveness."
At [54] of Sprod, Ipp JA said the following -
"It is not easy to trace a certain and secure path through the dicta. The safest course is to attempt to apply all of them to the facts of the particular case. The answers that this course produces will assist in resolving the issue, particularly if the answers, or a substantial majority of them, are the same."
In undertaking that process described by Ipp JA, I have reached the same conclusions as his Honour did in Sprod. I do regard the assault by Matthew James on Julia Day as incidental to his employment as a security guard in the sense of the word "incidental" used by Latham CJ in Deatons. The assault was not a gratuitous unprovoked act and had a great deal to do with the performance of Mr James' duties as Ipp JA also concluded regarding Sprod's case at [80]. The act was, in a sense, "performed as on behalf of the employer" and "in the supposed furtherance of the interests of the employer". Those two expressions were adopted by Ipp JA from Latham CJ's judgment in Deatons. Mr James was not acting as a stranger in relation to Checkmate Security. Mr James could be said to have committed an excess beyond the scope of his authority. I also conclude as Ipp JA said at [81] - paraphrasing Sir Owen Dixon's judgment in Deatons - that Mr James' assault "was an improper act due to ill judgment but done in the supposed furtherance of the master's (the respondent's) interests."
I therefore accept Mr Chrysostomou's submission contained in [79] of his written submissions that "the third defendant is vicariously liable for the wrongful act of James".
That conclusion does not necessarily greatly help Julia Day because, as I said earlier, concerns were expressed about the viability, indeed the continuing existence, of the third defendant, Checkmate Security International Pty Limited. The real focus of Mr Chrysostomou's case on behalf of his client was in fixing liability for Mr James' act on the hotel or the hotel's licensee. Hence, the remaining sub-issues in issue 2 are directed to various ways in which I might find either the hotel or the licensee legally responsible for the wrongful act of Mr James.
The first sub-issue is described as follows.
As to the liability of first/second defendant, whether it is vicariously liable for the act of James as "employer" (employer/employee basis).
Mr Chrysostomou indicated in the course of the proceedings that he no longer pressed an argument to the effect that Mr James was employed by the first or second defendant. That in my opinion was a responsible and correct concession to make. Therefore I need to turn to the alternative basis which Mr Chrysostomou relied upon to fix liability on the hotel or the licensee. The sub-issue which deals with the first of those alternatives is this.
Whether the first/second defendant is vicariously liable on any other basis (principal/agent or independent contractor), whether it expressly directed James to do it or if as agent the act complained of is within the scope of the agent's authority.
Mr Chrysostomou reviewed that issue over [81 - 89] of his written submissions and frankly concluded that "a more satisfactory resolution to this issue is to be found elsewhere". An argument on that issue was pressed no further. The next issue is this.
Whether the first/second defendant directly authorised the acts by James amounting to the tort.
The source of authority relied upon by Mr Chrysostomou for this ground of liability is the High Court's judgment in Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Cooperative Assurance Company of Australia Limited (1931) 46 CLR 41. That basis of liability, Mr Chrysostomou argued, was approved by the New South Wales Court of Appeal in Starks v RSM Security Pty Ltd [2004] NSWCA 351. Mr Chrysostomou developed his argument over [90 - 133] of his written submissions. The first question which Mr Chrysostomou dealt with is identifying the act that has to be "directly authorised". Mr Chrysostomou helpfully set out the issue at [95] of his written submissions in the following terms -
"In the present case, it is submitted the central issue is whether it is the wrongful act per se which must be directly authorised (i.e. 'remove bar stool/pull off the bar stool') before liability is sheeted home to the principal (narrow), or whether the act authorised (ask her to leave the hotel/get rid of her) includes the wrongful act amounting to the tort. (ie 'remove bar stool/pull off the bar stool) (broad)."
Mr Chrysostomou argues that both interpretations are correct - the broad and the narrow.
His argument in favour of the broad interpretation is set out over [99 - 114] of his written submissions. His argument depends on a close textual analysis of the words used by Beazley JA at [25] in Starks, namely "directly authorised the wrongful act". In addition the argument turns, as frankly acknowledged by Mr Chrysostomou, on the words used in para (v) of the headnote in Starks. I do not think the words of the judgment - and especially not the headnote - should be so closely analysed to form the basis of an argument. The words of a judgment are not like the provisions of a statute. Beazley JA stated the proposition and the authoritative support for it. The question is whether it is the wrong itself which must be directly authorised.
When CML (which refers to Colonial Mutual Life Assurance Limited) is examined, it is clear to me that the answer to that question is yes. Sir Owen Dixon at 48 refers to a person who has "directly authorised the doing of the act which amounts to a tort". At 49 his Honour refers to a principal's liability "for wrongful acts which he did not directly authorise". His Honour refers at 49 to a "learned writer" who says that the "principals have been held liable for the wrongs of their agents which they told them to commit." Gavan Duffy CJ and Starke J at 46 "apprehend that one is liable for another's tortious act 'if he expressly directs him to do it or if he employs that other person as his agent and the act complained of is within the scope of the agent's authority'."
In my opinion their Honours are describing the authorising of the wrongful act itself, not a class of acts which could include the wrongful act. This is particularly borne out by the distinction made by Gavan Duffy CJ and Starke J between the express direction to do a tortious act and a tortious act which is within the scope of an agent's authority. It is only where the actor is an agent that it "is not necessary that the particular act should have been authorised" and a "class of acts" is sufficient. That distinction is not applied to the first alternative basis of liability. I therefore reject Mr Chrysostomou's argument in support of what he called the "broad" interpretation.
I now turn to Mr Chrysostomou's argument for the "narrow" interpretation. Mr Chrysostomou sets that argument out over [115 - 133] of his written submissions. He advances three arguments. They are first based on the evidence of Ms May, a manager employed by the hotel on the night of the incident, and on the evidence of Ms Elliott-Cosmos the licensee who is the second defendant. Next it is based upon the evidence of Mr James given in the Local Court. Thirdly it is based upon the evidence of the actions taken on behalf of the first defendant hotel and the second defendant, Ms Elliott-Cosmos, after the incident.
None of the arguments, in my opinion, succeeds. The first argument relies upon evidence given by Ms May and Ms Elliott-Cosmos in the lower court proceedings after they were shown the DVD of the incident from the closed circuit television. Mr Chrysostomou (who also appeared for Ms Day in the Local Court), in cross-examining those witnesses, picked up expressions used by them in answering questions in cross-examination. Both qualified their answers by saying they were not there on the spot with Mr James. All that was "directly authorised" was the removal of Ms James from the hotel because of intoxication. Neither Ms Day nor Ms Elliott-Cosmos directly authorised a tortious assault. Nothing in their evidence suggests what I think their Honours had in mind in CML as the express telling of the actor to do the act amounting to the tort. Here all that was authorised was that Julia Day be removed. I do not think anything turns on Ms May's choice of the expression in evidence to "get rid of her".
Turning to the second piece of evidence relied upon by Mr Chrysostomou, namely the evidence of Mr James, I do not think his answers reinforce the argument based upon the evidence of Ms May and Ms Elliott-Cosmos. Mr James's belief in the correctness of what he did cannot bring about a direct authorisation by Ms May or by the licensee.
Turning to the third source of evidence relied upon by Mr Chrysostomou, namely the actions of the hotel and the licensee afterwards, I do not agree that the fact that Ms May and the licensee Ms Elliott-Cosmos gave statements and evidence in the Local Court in support of the prosecution of Ms Day for failing to leave when required leads, to as Mr Chrysostomou maintains, the inference that "the first and second defendants sanctioned, approved and directly authorised the 'wrongful' actions of James at the time" (this is argued at [133] of his written submissions). The charge focuses on Julia Day's response to a request to leave which all agree was authorised by the licensee, not on Mr James' means to "turn [her] out" as the Liquor Act 2007 says in s 77. I do not draw the inference which Mr Chrysostomou invites me to draw.
I therefore reject Mr Chrysostomou's argument in support of the narrow interpretation and I turn to the next issue which he argues in support of fixing liability on the first or second defendant. That issue is described as follows.
Whether the first/second defendant is vicariously liable on another basis, namely whether James, inter alia, was subject to its general direction and control, or acting as true agent representing the principal in dealing with third parties.
Mr Chrysostomou argues over [134 - 135] of his written submissions that the Court of Appeal's judgment in Starks provides two bases to fix liability on the hotel and the licensee. The two bases are on the one hand "direction and control" and on the other hand "representation". The passage quoted in [134] of the written submissions, and upon which Mr Chrysostomou's argument stands, is from a headnote which is part of the published judgment from the Court of Appeal database. The headnote is stated in broad terms - "may be liable" - but to my mind the judgment itself does not support the specific terms of the first component, namely "where the principal exercised a significant degree of control and direction over the actions of the independent contractor". Beazley JA had referred extensively to and analysed the judgment of the High Court in Hollis v Vabu Pty Limited (2001) 207 CLR 21; [2001] HCA 44. At [30] in Starks, Beazley JA said that the High Court in Hollis v Vabu "noted that control was one of the factors underlying the doctrine of vicarious liability but was not the only one". Only one of the four aspects which Beazley JA focussed on from McHugh J's judgment in Hollis v Vabu was direction and control. I do not propose to approach this issue by singling out as one basis of liability - as Mr Chrysostomou has done - direction and control.
Mr Chrysostomou then examines the second claimed basis of liability, namely representation. To my mind Mr Chrysostomou's reliance upon Starks is misplaced. That is because the High Court has spoken again since Starks on the same topic. In Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 the High Court made it clear at 167 ([13]) that "application of terms like 'representative', 'delegate' or 'agent' ... must not be permitted to obscure the need to examine what exactly are the relationships between the various actors." Their Honours were of the mind that the finding of liability in CML "depends directly upon the identification of the independent contractor as the principal's agent (properly so called) and the recognition that the conduct of which complaint is made was conduct undertaken in the course of, and for the purpose of, executing that agency". (Their Honours made that observation at 170 ([22]).) Their Honours in discussing CML said liability could be established "because of the closeness of the connection between the principal's business and the conduct of the independent contractor for which it is sought to make the principal liable. The relevant connection is established by the combination of the engagement of the contractor as the agent of the principal to bring about legal relations between the principal and third parties, and the slander being uttered in the course of attempting to induce a third party to enter legal relations with the principal." (Their Honours made that observation at 171 ([24]).)
It is significant that Starks was decided before the High Court judgment in Sweeney. Beazley JA was careful not to adopt McHugh J's principle and her Honour said at [34] that it was not necessary for "this Court to explore the territory of potential liability of a principal for the acts of an independent contractor identified by McHugh J". In Sweeney, Kirby J was alone in exploring that territory but the majority confined the influence of CML in a way that indicated that McHugh J's and Kirby J's instinct in developing the principle was not to be embraced. (See also RP Balkin and JLR Davis, Law Of Torts, 4th ed (2009) Lexis Nexis Butterworths at 719 - 720 at [26.2].)
It is clear, and I have found, that Matthew James was employed by Checkmate Security and Checkmate Security was an independent contractor. Mr Chrysostomou on behalf of his client has properly abandoned the claim that Mr James was engaged by the hotel or by the licensee. The High Court has said in Sweeney that "the person engaging the [independent] contractor will generally not be vicariously liable" for the conduct of independent contractors. (Their Honours made that observations at 167 ([12]).) The principal was liable for the independent contractor's actions in CML "because of the closeness of the connection between the principal's business and the conduct of the independent contractor for which it is sought to make the principal liable." The relevant connection was as I have already set out: the combination of the engagement by the contractor of the agent to bring about legal relations and the slander being uttered in the course of attempting to induce a third party to enter into such relations with the principal.
The High Court said at 171 ([27]) that "the distinction between independent contractors and employees has been critical to the definition of the ambit of vicarious liability." It seems to me that, apart from exceptions which are not relevant, Mr Chrysostomou must demonstrate either that the hotel or the licensee employed Mr James or that there is a "closeness of the connection between the principal's business and the conduct of the independent contract for which it is sought to make the principal liable".
In my opinion the following factors mean that Julia Day in this case has failed to discharge her burden of proving such a closeness of connection. The factors are represented in these findings. The uniforms of Mr James and the other security guards were different from the uniforms of hotel staff. The uniforms were provided by Checkmate who also provided two-way radios to its security guards. Security guards may or may not work at the Ocean Beach Hotel site. Checkmate Security sent enough guards to cover that particular job. The guards maybe sent elsewhere. They may even be reallocated on the same night. The hotelier and staff had general control of security staff such as Mr James but that control was limited to where in the premises they should work and on what task, but in my opinion, not how to do the task. Mr James and other security staff could delegate any tasks which they were asked to do to another guard. Indeed that happened in this case initially when Mr James asked another guard to attend to the issue. There were supervisors and inspectors employed by the security company who were concerned with how the guards were going about their job. At every job, including at this hotel, one of the guards there was a supervisor and the hotel and the hotel staff would deal with that supervisor in any issues to do with the guards.
I turn now to another alternative basis that Mr Chrysostomou relies upon to fix liability on the hotel or its licensee. That issue can be described as follows.
As to liability of the first/second defendant whether they are vicariously liable on what is described as the "special circumstances" basis (Quarman v Burnett).
Despite a reference to Quarman and Burnett (1840) 6 M & W 499, 151 ER 509 in the New South Wales Court of Appeal's decision in Whitehouse Properties t/as Beach Road Hotel v McInerney [2005] NSWCA 436, I do not think this provides a distinct basis of liability for a plaintiff such as Julia Day to rely upon. In Whitehouse the question turned upon the finding (at [24]) that "the hotelier had effectively assumed a responsibility for the management and supervision of the security guards, in relation to the evicting of patrons."
I do not make that finding in this case.
In addition the High Court examined Quarman v Burnett, both in Scott v Davis (2000) 204 CLR 333 and in Sweeney. In Scott and Davis, Hayne J said at page 432 ([294]) the following -
"By the middle of the nineteenth century, then, authority suggested that to hold an owner liable for the acts of another who drove the owner's carriage and who was not a servant of the owner, it was necessary to establish that the owner in fact had controlled the driver's conduct."
In Sweeney the majority said at pages 166 - 167 ([11]) the following:
"Three recent decisions of this Court have examined questions of vicarious liability: Scott v Davis, Hollis v Vabu Pty Ltd and New South Wales v Lepore. It is unnecessary to rehearse all that is established by those decisions. It is important, however, to begin examination of the issues in this appeal from a frank recognition of some considerations that are reflected in those decisions. First, "[a] fully satisfactory rationale for the imposition of vicarious liability in the employment relationship has been slow to appear in the case law". Secondly, "the modern doctrine respecting the liability of an employer for the torts of an employee was adopted not by way of an exercise in analytical jurisprudence but as a matter of policy". That may suggest that the policy to which effect was given by "the modern doctrine" is clearly identified, but, as is implicit in the first proposition, the policy which is said to lie behind the development of the modern doctrine is not and has not been fully articulated. Thirdly, although important aspects of the law relating to vicarious liability are often traced to the judgment of Parke B in Quarman v Burnett, neither in that decision, nor in other early decisions to which the development of the doctrine of vicarious liability may be traced, does there emerge any clear or stable principle which may be understood as underpinning the development of this area of the law. Indeed, as is demonstrated in Scott, the development of the law in this area has not always proceeded on a correct understanding of the basis of earlier decisions."
In my opinion this does not provide a distinct basis of liability which can be relied upon by Julia Day in this case and she needs to establish or fix liability on the hotel or its licensee on one of the other bases advanced.
The last of the optional bases of means of fixing liability on the hotel or the licensee was described as follows.
As to liability the first/second defendant, whether they are vicariously liable on any other basis, namely the "estoppel" basis.
This argument is based upon remarks of Gaudron J in Lepore at 561. Mr Chrysostomou argues at [179] of his written submissions that in the decision of the New South Wales Court of Appeal in Nationwide News Pty Ltd v Naidu; ISS Security Pty Ltd v Naidu [2007] NSWCA 377 "the estoppel ground was applied to the facts of the case" by the Court of Appeal.
What it seems to me the Court of Appeal said focussed on a finding made at first instance by Adams J at [219] in Naidu v Group 4 Securitas Pty Ltd [2005] NSWSC 618 in the following terms -
"In this case, I consider that the application of this principle would result in News and Group 4 being estopped, as against the plaintiff, from denying that Mr Chaloner [the alleged perpetrator of the tort] was acting as their servant, agent or representative in connection with the acts (except the 'external' acts) of which he complains. Although this may not be a sufficient test under this rule, I think it is clear that there was a very close connection between what Mr Chaloner did to the plaintiff and what he was engaged to do. I note that Gaudron J thought that 'it seems there may have been a close connection between the acts of the teacher and that which he was authorised to do, namely chastise the plaintiff for his misbehaviour' although, in the result, the fact-finding process at first instance did not permit a resolution of the question."
The test formulated by Gaudron J in Lepore at 561 ([131]), is -
"[W]hether the person in question has acted in such a way that a person in the position of the person seeking the benefit of the estoppel would reasonably assume the existence of a particular state of affairs. In the case of vicarious liability, the relevant state of affairs is simply that the person whose acts or omissions are in question was acting as the servant agent or representative of the person against whom liability is asserted."
So the question for me may be whether the actions of the hotel or the licensee be such that a person in Ms Day's position "would reasonably assume that [James] was acting as a servant, agent or representative of the hotel or the licensee."
However before deciding that question, in my opinion the observations of Gaudron J upon which this basis of liability relies has to be seen in the light of Sweeney; so too does Nationwide News v Naidu, which did not refer to Sweeney at all.
For the reasons already given, I would regard a finding that Mr James was acting as "agent or representative" as falling foul of what the High Court said in Sweeney. I would therefore reject all of the argued basis of fixing liability for the action of Matthew James on the hotel or the hotel's licensee.
There are several additional issues referred to in the amended statement of issues and I will give my decision on those issues. Issue 3 is in the following terms.
Whether ss 47 - 50 of the Civil Liability Act applies
A preliminary issue is whether the Civil Liability Act 2002 applies at all. Mr Chrysostomou argues that the Civil Liability Act does not apply to Julia Day's case because of s 3B(1)(a) of that Act.
Mr Reynolds says I should reject that argument because this is not a case of "civil liability of a person in respect of an intentional act that is done by the person with intent to cause injury." Mr Reynolds argues that although Mr James' act may have been intentional, the evidence does not show that he did it with intent to cause Julia Day injuries. Mr Reynolds points to the two references in the provisions to a defendant's state of mind, namely "intentional act" and "intent to cause injury".
This seems to be quite a plausible argument. Essentially Mr Chrysostomou responds that not only does the law presume that damage is presumed to be intended by a tortfeasor of an intentional tort, but that I should infer that it was Mr James' intention in this case.
His legal argument is based upon what was said in the New South Wales Court of Appeal decision in State of New South Wales v Williamson [2011] NSWCA 183 at [52].
I think Mr Chrysostomou's legal argument is correct. A similar legal issue arose in Williamson. One of Mr Williamson's claims was for damages for an intentional tort of assault. A defence was that the intentional acts said to amount to assaults were not "done ... with intent to cause injury" at [42]. Campbell JA, with whom at least Macfarlan JA agreed, accepted a submission that "damage that is the natural and probable consequence of a tortious act, is presumed to have been intended by the tortfeasor." (His Honour said that at [52].)
I agree with Mr Chrysostomou that the cause of action falls within s 3B(1)(a) and is therefore excluded from the provisions of the Civil Liability Act.
If the Civil Liability Act did apply, Mr Reynolds argued that because Julia Day was intoxicated I should reduce any damages by at least 25 per cent. He relies upon s 50(4). Although I have decided that the Civil Liability Act does not apply, I should in deference to the argument consider his submission about s 50. Am I satisfied that Ms Day's "injury...is likely to have occurred even if [Ms Day] had not been intoxicated"? But even if I am satisfied that an injury "is likely to have occurred, even if [Ms Day] had not been intoxicated", am I further satisfied that her "intoxication did not contribute in any way to the cause of the...injury" (to use the terms of s 50(3))?
There are two ways of looking at the causes of the injury. One is the immediate cause: Ms Day fell to the ground because the chair was pulled from under her. The other is a slightly more remote cause, Ms Day was injured because she was intoxicated and had to be removed.
Clearly I cannot be satisfied if the second meaning is correct; but nor can I be satisfied that her intoxication did not contribute "in any way" if the first meaning is correct. Ms Day may have been less alert or wary of Mr James' presence or behaviour behind her. Her ability to control her fall or break it by holding out a hand may have been compromised by her intoxication.
Hence if the Civil Liability Act did apply, I would accept the presumption of contributory negligence by at least 25 per cent.
The fourth issue is as follows.
Whether the first/second defendant is entitled to contribution from the third defendant pursuant to its Notice of Cross Claim.
This issue does not arise because of the findings that I have made, nor can I find a note of any considered attention given to this issue in counsel's addresses.
In light of these factors and the fact that the third defendant, Checkmate Security, did not appear in the trial, I do not propose to deal with this issue.
The fifth issue is this.
Whether the plaintiff is entitled to damages, for general damages, aggravated damages or exemplary damages.
I first consider general damages.
I accept Dr Schutz's opinion that the incident was no more than a "self limited episode of a mild low back strain with no later untoward consequence" - expressed at p 7.5 of one of his reports - causing "transient minor lower back symptoms lasting three or four days with full recovery" (at p 8.4).
The reasons I accept that opinion are these. The only alternative opinion is Dr Maniam. Dr Maniam does not explain the causal relationship between the incident and Julia Day's surgery and ongoing symptoms. One infers from his report that he thinks there is a causal relationship. The doctor refers to "sequence of the incident" and "a consequence of the injuries", but does not satisfactorily explain to my mind the medical link between the incident and events a year later. The "events a year later" is a reference to back surgery which Julia Day underwent on 8 August 2009. There was a good deal of documentary evidence about Ms Day's admission to Shellharbour Hospital about a year after the incident (on 2 August 2009), examinations of her back undertaken there and the surgery which occurred 6 days later at Wollongong Hospital, when she was operated on by Dr Khawaja. On the other hand Dr Schutz sets out a far more comprehensive history. Dr Schutz refers to a "volume of enclosures", which expression is explained in exhibit L and includes information which made its way into evidence.
On Julia Day's evidence, she felt lower back pain for 3 days after the incident, but did not see a doctor. Julia Day, to her credit, frankly acknowledged that in those three days the pain was not always more severe than before the incident, but said - according to my note - that after the incident the lower back pain was generally more severe and more frequent.
When Julia Day was admitted to Shellharbour Hospital on 2 August 2009 the history she gave was of "chronic back pain from an epidural and accident 8 years ago and says it flares up about once a year and lasts a few weeks. States it is worse this time, has been painful for 7 weeks and this morning she woke up and couldn't move at all due to the pain which she says was 10/10 then." There was also a history of "[k]nown LBP with occasional flare-ups" "since 2001 after epidural injection for labour". The "exacerbation has been since last few days while she was 8 weeks pregnant". The notes also said Ms Day "has a flare-up every year, states same bad for 7 weeks now". There was a short history taken by the Ambulance Service on 2 August 2009, but I cannot read it from the Exhibit. I assume that anything important would have been drawn to my attention by counsel.
On 4 August 2009, Ms Day told the Ambulance Service that "they have a family history of back problems".
However, there was, on 7 August 2009, a history given by Julia Day to a social worker at one of the hospitals about the incident at the hotel a year earlier.
There was no report from the operating surgeon, Dr Khawaja, to assist me.
Mr Chrysostomou said I can accept his client's evidence as to what she was like post the incident. I do not reject that evidence, but the question is, as Mr Chrysostomou correctly points out at [206.3.2] of his submissions, "whether it's more probable than not, the incident aggravated the plaintiff's pre-existing condition". Mr Chrysostomou goes on to say that, if that is so, "then it's more probable than not that was a cause (although not the sole cause) of plaintiff's admissions and surgery".
I am not satisfied on the balance of probabilities that any aggravation of Julia Day's pre-existing condition contributed to her hospital admission. The reasons I am not satisfied are these:
(a) there was a history of long-standing back pain with regular flare-ups;
(b) there was an almost complete absence of complaint in the hospital records about the incident at the hotel;
(c) there is an absence of medical evidence demonstrating treatment or advice which Julia Day received between the incident and the hospital, even though she said that she had complained;
(d) there is no firm medical evidence of a link, on the other hand;
(e) there is firm medical evidence of a lack of a link.
I repeat I find Dr Schutz's opinion persuasive that Julia Day suffered "transient minor lower back symptoms lasting 3 or 4 days with full recovery".
Mr Chrysostomou levelled some criticisms at Dr Schutz's report at [207] of his written submissions and those criticisms have some merit. Dr Schutz had overlooked the social worker's history, but there were plenty of other histories given by Julia Day which omitted reference to the incident, so that does not nullify the social worker's understanding of the history, although Dr Schutz's opinion may lose some of its force. I do not reach any conclusions about Dr Schutz not seeing the CCTV. It may have affected those opinions, but the opportunity was not taken to show him. I do not think there is any force in Mr Chrysostomou's submissions about Dr Schutz's opinions regarding 3 or 4 days full recovery being lessened by a complaint of back pains on the fourth day. The medical evidence is not helpful. Neither doctor was called to be cross-examined over issues the subject of criticism. There is no evidence from the operating surgeon, nor from any treating general practitioners between the incident and the operation. It may be, as Mr Chrysostomou acknowledges at [206.3.1] of his written submissions, that "the plaintiff's evidence generally is that her condition became worse after the incident" but a finding - in absence of cogent medical evidence - that the incident contributed to the admission to hospital would in my opinion require more contemporaneous medical evidence and a history of complaints. I am not satisfied on balance of a link.
I would regard $2500 as an appropriate award of general damages for what Dr Schutz described as "transient minor lower back symptoms, lasting three or four days with full recovery."
I turn now to the final questions of whether Julia Day would be entitled to aggravated damages or exemplary damages.
Mr Reynolds argues that the claim for exemplary and aggravated damages is not maintainable because of s 21 of the Civil Liability Act. I have found that the Civil Liability Act does not apply. If it did apply, to deal with Mr Reynold's argument, the obvious problem with his argument is that the section refers to the act or omission of "negligence", and this is not a negligence case, but an intentional tort case.
Mr Reynolds argues that that problem is solved by s 11A(3), which says that a "court cannot award damages, or interest on damages, contrary to this Part". Section 21 is in the same Part of the Act as s 11A. The obvious answer to that is that an award of exemplary or aggravated damages for assault would not be "contrary to this part" because the part prohibits such damages only in negligence cases.
But, says Mr Reynolds, "contrary to this Part" essentially means "unless provided for in this Part", or "other than provided for in this Part".
I do not accept that argument either. Not only is it inconsistent with the ordinary meaning of "contrary to the Part" but it purports to make the Part a self-contained code. The language of the provisions is mostly prohibitions. It does not read as a code of the available heads of damages.
I must bear in mind the distinction between aggravated damages, which are compensatory, and exemplary damages, which are punitive. See State of New South Wales v Steven Charles Radford [2010] NSWCA 276 at [90 - 97]. This way of evicting Ms Day must have been particularly humiliating. It was a Friday night, and Ms Day was a regular customer. She was publicly humiliated in familiar surroundings. I would award aggravated damages of $2500.
Exemplary damages are another matter. It would be regarded as a message being sent to the security company Checkmate Security International. This is not a way to deal with a patron. It must be deterred, especially since Mr James defended his own actions. I think that the third defendant should pay exemplary damages of $5000.
Verdicts and judgment
Accordingly, in these proceedings, I enter verdict and judgment for the first and second defendants against the plaintiff. I enter verdict and judgment for the plaintiff against the third defendant in the sum of $10,000.
HIS HONOUR: Mr Tinevski, Mr O'Connor, where do we go from there?
SPEAKER: Costs just follow the event, your Honour, unless my friend has got other--
HIS HONOUR: All right, the plaintiff should pay the costs of the first and second defendants. The third defendant should pay the plaintiff's costs in all cases as agreed or assessed.
HIS HONOUR: Is there anything else that I need to deal with? I don't think so, but just checking.
SPEAKER: No, your Honour, I don't think there is.
SPEAKER: Not from my perspective, your Honour.
HIS HONOUR: Thank you, gentlemen.
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Amendments
21 August 2013 - Judgment appealed in Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250
Decision last updated: 21 August 2013
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