North Sydney Leagues Club Ltd v Berecry & Ors

[2002] NSWCA 154

NEW SOUTH WALES COURT OF APPEAL

CITATION:     North Sydney Leagues Club Ltd v Berecry & 2 Ors [2002]  NSWCA 154

FILE NUMBER(S):
40331/01

HEARING DATE(S):    6 May 2002

JUDGMENT DATE:      27/05/2002

PARTIES:
North Sydney Leagues Club Limited (Appellant/First Cross Respondent)
David Kenneth Berecry (First Respondent/Second Cross Respondent)
Venue Security (NSW) Pty Limited (In Liquidation) (Second Respondent)
Craig Noel Lambeth (Third Respondent/First Cross Appellant)

JUDGMENT OF:        Meagher JA Stein JA Pearlman AJA   

LOWER COURT JURISDICTION:       District Court

LOWER COURT FILE NUMBER(S):     DC 4457/00

LOWER COURT JUDICIAL OFFICER:   McGuire DCJ

COUNSEL:
C G Gee QC with P S Jones (Appellant/First Cross Respondent)
B J Gross QC with D R Conti (First Respondent/Second Cross Respondent)
No appearance for the Second Respondent
R S Sheldon (Third Respondent/First Cross Appellant)

SOLICITORS:
PricewaterhouseCoopers Legal (Appellant/First Cross Respondent)
McClellands (First Respondent/Second Cross Respondent)
No appearance for the Second Respondent
Colin Biggers & Paisley (Third Respondent/First Cross Appellant)

CATCHWORDS:
TORT
negligence
patron injured in club
injury caused by security officer
whether delegation of duty of care
whether breach of duty of care
foreseeability of injury
whether security officer acting within scope of his authority
CONTRACT
claim for indemnification
whether breach of contract
whether terms of contract clear
EVIDENCE
credibility findings
conflicting statements
D

LEGISLATION CITED:

DECISION:
Appeal and cross-appeal dismissed with costs

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40331/01
DC 4457/00

MEAGHER JA
STEIN JA
PEARLMAN AJA

Monday, 27 May 2002

NORTH SYDNEY LEAGUES CLUB LTD V David Kenneth BERECRY & 2 ORS

On 6 October 1995, Mr D K Berecry was injured while on the premises of North Sydney Leagues Club Ltd (“the Club”).  He sustained head injuries and resultant brain damage after being struck by a blow from Mr C N Lambeth, a security officer.

Mr Berecry brought proceedings in the District Court against the Club, Mr Lambeth, and Venue Security (NSW) Pty Ltd (“Venue”), Mr Lambeth’s employer.  McGuire DCJ entered a verdict in the sum of $376,923 in favour of Mr Berecry.  His Honour also found that the Club was entitled to contribution from Mr Lambeth and Venue each as to 25% respectively of the verdict.

The Club appeals from the verdict and also maintains its cross-claim for full indemnification from Venue for breach of contract.  The Club’s appeal raises essentially three issues.  First, whether the Club delegated its duty of care by delegating to Venue the tasks of security and control of patrons.  Secondly, whether the Club was in breach of its duty of care.  Finally, there is a challenge to the quantum of the damages.

Mr Lambeth also brought a cross-appeal in which he claims that he is not liable in negligence to Mr Berecry because the blow he delivered was struck in self-defence or in defence of another security officer.  He also challenges the quantum of the damages.

Held:
On the appeal, per Pearlman AJA, Meagher JA and Stein JA agreeing:

1. It was open to the trial judge to conclude that the role of Venue was to assist the Club in carrying out its security functions.  There was no evidence of a delegation to an independent contractor of the Club’s duty of care.

1. The Club could, but did not, intervene in what was a potentially dangerous situation.  It was reasonably foreseeable that injury might occur to Mr Berecry but despite ample and observable warning, the Club’s officials took no action to prevent that injury and accordingly the trial judge’s finding of breach of duty of care should not be disturbed.

2. Mr Lambeth was at all relevant times acting within the scope of his authority (cf Deatons Pty Ltd v Flew (1949) 79 CLR 370).

3. It was open to the trial judge to conclude that it was not possible to find that Venue was in breach of any contractual term, or that the Club was entitled to indemnification, due to the lack of evidence as to the terms and conditions of the contract.

4. It was open to his Honour to accept the evidence of other witnesses over the evidence of Mr Lambeth so as to find that Mr Lambeth’s blow was intentional and unnecessary and was not delivered in self-defence or in defence of another security officer.

5. His Honour’s assessment of damages was not excessive and should not be disturbed.

Orders:

Appeal and cross-appeal dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40331/01
DC 4457/00

MEAGHER JA
STEIN JA
PEARLMAN AJA

Monday, 27 May 2002

NORTH SYDNEY LEAGUES CLUB LTD V David Kenneth BERECRY & 2 ORS

Judgment

1. MEAGHER JA:    I agree with Pearlman AJA.

2. STEIN JA:   I agree with Pearlman AJA.

3. PEARLMAN AJA: 
   Introduction
   On 6 October 1995, Mr David Kenneth Berecry was injured while on the premises of North Sydney Leagues Club Ltd (“the Club”).  He sustained head injuries and resultant brain damage after being struck by a blow from a security officer which caused him to fall onto tiles inside the entrance to the Club.

4. Mr Berecry took proceedings in the District Court against the Club, the security officer, Mr Craig Noel Lambeth, and Venue Security (NSW) Pty Ltd, the employer of Mr Lambeth.  His Honour Judge McGuire entered a verdict in the sum of $376,923 in favour of Mr Berecry.  The trial judge found that the Club was entitled to contribution from Mr Lambeth and Venue Security (NSW) Pty Ltd (“Venue”) each as to 25% respectively of the verdict.

1. The Club now appeals from the verdict, and Mr Lambeth has brought a cross-appeal.  Venue is now in liquidation, and did not appear on the appeal.

2. The Club has appealed on numerous grounds, but essentially they raise the following issues:

3. Delegation of duty of care;

4. Breach of duty of care, including causation and foreseeability;

5. Volenti non fit injuria;

6. Contributory negligence; and

7. Quantum.

In addition, the Club maintains its cross-claim for indemnification from Venue.

1. Mr Lambeth’s cross-appeal was also based on numerous grounds, but essentially he claims that he is not liable in negligence to Mr Berecry, because the blow he delivered was struck in self-defence or in defence of another security officer.  He also raises quantum as a ground of appeal.

2. I deal with all of these grounds (although not in the order set out above), but first it is convenient to refer to the incident.

   The Incident

3. McGuire DCJ made the following findings of fact in relation to what occurred on the Club’s premises at the relevant date:

(a)          A group of persons, including Mr Berecry, were drinking, and they became loud and rowdy.  They were asked to leave the premises, first by Ms T Bloomfield, one of the Club’s duty managers, and then by Mr Lambeth;

(b)          Ultimately, Mr Berecry walked out of the Club with Mr Lambeth beside him, and Mr Lambeth was taunting and abusing Mr Berecry;

(c)          Mr Berecry left the premises, and stood outside the glass entrance door.  Mr Lambeth continued to taunt him, and Mr Berecry, who was agitated, went back inside through the glass doors.  He was not rushing and his arms were at his side;

(d)          When Mr Berecry re-entered through the glass door, he was struck by Mr Lambeth intentionally and unnecessarily.

1. These findings were based on the evidence of Messrs Baker, Carew and Cropper, who were friends of Mr Berecry and with him at the time.  The trial judge noted that there were discrepancies in their respective accounts of the incident, but he found those persons to be “highly credible witnesses” (RAB p 63), and he accepted their accounts in preference to the account proffered by Mr Lambeth.  I shall return to this aspect of the findings later.

   The Club’s duty of care

Did the Club delegate its duty of care?

1. It is not in dispute that the Club owed a duty to take reasonable care for the safety of Mr Berecry whilst on its premises. The issue was whether the Club had, on the facts, delegated its duty of care to Venue by delegating the tasks of security and control of patrons.  If it had done so, the issue would then arise as to whether it nevertheless owed a non-delegable duty of care to Mr Berecry so that the Club remained liable to him despite the appointment of Venue.

2. The only evidence at the trial about the contractual relationship between the Club and Venue were two documents both tendered on behalf of Mr Berecry.  One was a letter dated 30 August 1995 (“the Venue letter”) from Venue to the operations manager of the Club.  The other (“the job description”) was a document on the Club’s letterhead containing a description about a job entitled “Security Person”.  No evidence was adduced by the Club or by Venue about the contractual relationship between them.

3. His Honour found that the Club had not delegated its security functions to Venue.  That finding was clearly open to his Honour.  The Venue letter, in rather puffed up language, asserted that Venue would provide to the Club experienced and licensed security personnel to handle all security and crowd control.  The job description, however, stated that the objective of the security person would be to “assist in maintaining good order at all times and ensure that the security and safety of all staff and patrons … is maintained …” (emphasis added).  The operational section of the job description stated that the security officer would take instructions from, and report to, the duty manager.  It stated that such matters as “general misbehaviour” were the “primary role of the management” of the Club, and it repeated that the security officer would “assist management” in the restraint or removal of violent or abusive patrons.

4. The Venue letter and the job description provide some evidence of a relationship between the Club and Venue.  It was a relationship in which Venue was to assist the Club in carrying out its security functions.  Those documents do not provide evidence of a delegation to an independent contractor of the Club’s duty to provide security and safety on its premises.

5. That conclusion is supported by the roles which the Club’s duty managers and Mr Lambeth fulfilled at the relevant time (as I describe in par 18).  They jointly participated in dealing with Mr Berecry and his companions whose behaviour was obstreperous.

6. The finding that the Club had not delegated its duty of care renders it unnecessary for the Court to determine whether or not the duty was delegable as contended for by the Club on the basis of Newcastle Entertainment Security Pty Ltd v Simpson & Ors (1999) Aust Tort Reports 81-528.

Was the Club in breach of its duty of care?

1. The Club asserts that the incident in which Mr Berecry was injured was solely a consequence of the actions of Mr Lambeth, and there was nothing that the Club could or should have done to have averted the injury.

2. As summarised in par 9 above, the trial judge accepted the evidence of Messrs Berecry, Carew, Baker and Cropper that Mr Lambeth was taunting and provoking Mr Berecry as he walked with Mr Berecry to the doors of the Club, and that Mr Lambeth continued to taunt and provoke Mr Berecry through the glass doors.  His Honour found that Mr Lambeth’s provocative behaviour was plainly observable.

1. But the facts demonstrate, and his Honour so found, that the Club could, but did not, intervene in what was a potentially dangerous situation.  Some of those facts were derived from Ex 9 which was a transcript taken from the hearing in the Local Court of a prosecution against Mr Lambeth for assault.  Mr Gee QC, appearing for the Club, claimed that Ex 9 was admitted at the trial only as against Venue and Mr Lambeth.  The transcript of the trial reveals no such conditional admission, and the parties are at issue on this point.  In these circumstances, I proceed on the basis of the transcript.

2. The situation was that Club personnel were standing nearby when Mr Berecry was struck.  One such person was Ms Bloomfield, who had directed Mr Lambeth to ask Mr Berecry and his companions to leave.  Another was Mr S Munroe, another of the Club’s duty managers, and a further person was the doorman, Mr Smith.  As his Honour found, an obvious measure would have been for these Club officials to direct Mr Lambeth away from the door and to instruct him to cease his provocative conduct.  It was reasonably foreseeable that injury might occur to Mr Berecry.  But, despite ample and observable warning that the situation could become dangerous, the officials took no action.

3. Furthermore, this is not a case where Mr Lambeth committed an independent personal act which was not connected with or incidental in any manner to the work which he was expressly or implicitly authorised to perform (cf Deatons Pty Ltd v Flew (1949) 79 CLR 370). The scope of authority of security officers was described by Mr R W Jennings, an expert in security matters. His evidence was that, in carrying out their duties, they should use as little force as is necessary, and that was a matter of judgment. Mr Lambeth said his instructions were to use minimal force. Having regard to this evidence, I am of the opinion that Mr Lambeth was, at all relevant times, acting within the scope of his authority.

4. The inescapable conclusion is that the Club breached its duty of care to Mr Berecry, and the trial judge was not in error in so finding.

The Club’s cross-claim against Venue

1. The Club asserts that it was a term of the contract between it and Venue that Venue would provide to the Club experienced security personnel who were to “provide the highest level of professional security to a business community requiring totally dependable service …”.  The Club claims that Mr Lambeth’s assault upon Mr Berecry was a breach of that term of the contract, and that, accordingly, the Club is entitled to be fully indemnified by Venue in respect of any damages and costs associated with defending Mr Berecry’s claim and pursuing its cross-claim against Venue. 

2. The trial judge rejected this claim on the basis that he was not able to determine the true terms and conditions of the contract and that as a consequence he was not prepared to find that Venue breached any implied or express contractual obligation (RAB p 78).

3. In my opinion, this finding was open to his Honour.  Neither the Club nor Venue adduced any evidence as to their contractual relationship.  The only documents evidencing some sort of relationship were the Venue letter and the job description, but neither of those documents provides any evidence of the precise terms and conditions of the contract.  The most that can be gleaned from those documents is that, on the one hand, Venue offered to provide qualified professional security personnel to assist the Club in carrying out security functions, and, on the other hand, the Club provided a description of the duties and responsibilities of a person who might so assist it.  Whether the Club accepted Venue’s offer, and upon what terms and conditions, is simply not in evidence.  It follows that the Club has not established that Venue was in breach of any contractual term, and the trial judge’s dismissal of its cross-claim should not be disturbed.

The Club’s further grounds of appeal

1. The Club claimed that it had raised the defence of volenti non fit injuria at the trial, but it was asserted on behalf of Mr Berecry that such a defence was neither pleaded by the Club nor raised in submissions at the trial.  In any event, the trial judge found that Mr Berecry had his arms at his sides when he returned through the glass doors, and that he was not rushing.  The suggestion that Mr Berecry was threatening to fight and perceived the danger of doing so cannot be sustained on the evidence accepted by his Honour.  Accordingly, a defence of volenti non fit injuria has not been made out.

2. On a similar basis, the trial judge rejected a reduction in the verdict on the basis of contributory negligence.  The trial judge accepted that Mr Berecry had orally abused Mr Lambeth, but his Honour did not accept that Mr Berecry re-entered the Club in a violent manner or that Mr Berecry would have expected to be assaulted by Mr Lambeth.  The evidence of Messrs Baker, Carew and Cropper establishes that Mr Berecry was agitated and himself abusing Mr Lambeth on his way out of the Club and whilst outside the glass doors.  The video photographs (to which I refer in par 32) reinforce this impression of Mr Berecry’s conduct, because they show him apparently shouting outside the glass doors and at one time pointing with his finger.  But, as I have earlier set out, Mr Berecry returned through the glass doors with his arms at his side, and the video photographs support that finding.  It was accordingly open to his Honour to find that Mr Berecry’s conduct did not contribute to the injury inflicted upon him.

Credibility and the cross-appeal

1. Mr Lambeth’s case is that the trial judge fell into error in accepting the account of the incident put forward by Messrs Berecry, Baker, Carew and Cropper.  That account was inconsistent with the account put forward by Mr Lambeth and by Mr M The, another security officer.  It was put that, in resolving that inconsistency, the trial judge failed to give proper weight to the evidence of Mr The, whose account corroborated that of Mr Lambeth.

2. Messrs Baker, Carew and Cropper were adamant in their testimony that Mr Berecry walked back through the glass doors with his arms at his side.  They each denied, in various ways, that Mr Berecry had his arms raised or that he lunged towards Mr Lambeth or went to strike him.  Mr Lambeth’s account, however, was that Mr Berecry came through the door towards him with one of his arms raised, and that he ducked his head to avoid being struck by Mr Berecry.

3. His Honour rejected the evidence of Mr Lambeth because the account Mr Lambeth gave at the trial was inconsistent in a material respect with prior statements he had made.  At the trial, Mr Lambeth’s evidence was that he had struck Mr Berecry in self-defence, because he believed that Mr Berecry was coming back through the door to hit him.  However, in earlier statements made to the Club and Venue respectively, Mr Lambeth described his blow to Mr Berecry as being a reaction to a rapid and hostile move made by Mr Berecry towards Mr The.  Mr Lambeth made a similar statement in the course of giving evidence in the prosecution in the Local Court.  These prior inconsistent statements, especially the contradictory account given on oath, led his Honour to doubt the veracity of Mr Lambeth.

4. A statement made by Mr The was admitted into evidence at the trial.  It supported Mr Lambeth’s earlier accounts of the incident because it described Mr Berecry as lunging towards Mr The.  However, Mr The could not be located and he was not called to give evidence.

5. A number of photographs taken from a video that recorded some of the events during the incident were in evidence at the trial.  They are somewhat equivocal in their depiction of the incident; on balance, however, they seem to support the accounts given by Messrs Baker, Carew and Cropper.  Whilst standing outside the doors, Mr Berecry appears agitated, and at one instance, has his finger raised and pointing.  Mr Lambeth appears on the inside of the doors, sometimes facing Mr Berecry and at least at one instance with his back to the doors.  But when the doors are shown as re-opening, Mr Berecry appears to be coming through, with his arms at his side, towards Mr Lambeth who appears to be standing at a slight angle to the opening doors.

6. The contradictory accounts given on oath by Mr Lambeth, the non-availability of Mr The, and the video photographs all provide a credible basis for his Honour to have rejected their respective accounts of the incident in favour of the accounts given by Messrs Baker, Carew and Cropper which were consistent in their respective descriptions of Mr Berecry’s behaviour as he came back through the doors.  There is no basis for concluding that his Honour failed to use or palpably misused the advantage which he had of seeing and hearing the witnesses (Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178 - 179). His Honour’s finding that Mr Lambeth’s blow was intentional and unnecessary should not be disturbed.

Damages

1. The trial judge made two significant assessments of damages.  He allowed $110,000 for general damages, based upon his finding that Mr Berecry suffers a permanent disability, manifested by loss of memory, depression (particularly in social situations), loss of taste, change in personality, and tiredness.  His Honour also found that Mr Berecry, a motor mechanic, had a continuing economic incapacity, and his Honour allowed an average of $200 per week net until aged 65.  After applying appropriate discounts, his Honour allowed $210,800 for future economic loss.

2. Both the Club and Mr Lambeth claim that the assessment of general damages is excessive.  They claim that Mr Berecry had performed well at TAFE, that he had been able to live by himself, travel overseas, operate his own bank accounts, and generally lead a normal life.  The trial judge accepted, however, that Mr Berecry suffers a permanent disability, and that the injury that he sustained had a major impact upon his quality of life and his capacity to function normally, although he is not physically disabled. Having regard to his Honour’s findings, his assessment of $110,000 for general damages does not appear to me to be manifestly excessive.

3. As to the issue of the assessment of future economic loss, a submission was made on behalf of Mr Lambeth that, based on Mr Berecry’s actual earnings at the relevant date and the actual earnings of other mechanics at his place of work, the proper assessment should have been between about $124,000 and $135,000, whereas his Honour assessed the figure at $210,800.  The Club’s damages schedule suggested an allowance of $50,000 in this respect.  In making his assessment, his Honour took into account Mr Berecry’s diminished productivity rate of 80% in comparison with other mechanics, and found that, although Mr Berecry has been employed to date by “sympathetic” employers, he would find it longer to regain employment than if he was unimpaired.  Furthermore, his Honour took into account Mr Berecry’s ongoing tiredness, and that Mr Berecry would be unable to conduct his own repair business. 

4. These are important findings that were open to his Honour on the evidence, and they form the basis for concluding that his Honour’s assessment of $210,800 for economic loss is not manifestly excessive.

   Orders

1. In accordance with the reasons I have set out, I would dismiss the appeal and the cross-appeal both with costs.

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LAST UPDATED:               28/05/2002