Australia: Civil Liability: A Hotelier’s Duty Of Care: Am I My Brother’s (Inn) Keeper?

A recent decision of the High Court of Australia, CAL No 14 Pty Ltd (Tandara Motor Inn) v Motor Accidents Insurance Board (Scott) (2009) HCA 47, has attracted national attention in relation to the duty of a hotelier to monitor and minimise the service of alcohol to customers.

THE FACTS

Mr Scott died on the evening of 24 January 2002 whilst riding his wife's motorcycle home after consuming approximately 6-7 cans of bourbon and cola at a local hotel. It was accepted as part of the factual background that intoxication had played a part in Mr Scott's motorbike collision which led to his death.

The potential for liability on the part of the hotelier arose because of an arrangement between the hotelier and Mr Scott entered into earlier that evening. The arrangement was initiated when a friend of Mr Scott entered the hotel, advising that he believed a police breath analysis unit was going to be set up later that evening on a route that Mr Scott may have taken to ride home.

An arrangement was made with the hotelier whereby the motorbike would be stored in a shed and when Mr Scott was ready to leave the hotel, his wife would be contacted, who would come to collect him.

At approximately 7.45 pm, Mr Scott's friend left the hotel in the company of his wife, who had come to collect him. That person offered on three occasions to take Mr Scott home as well, but he refused. That person's observations were that he appeared okay.

Approximately 15 to 30 minutes later, the hotelier advised Mr Scott that he had had enough to drink and offered to call Mr Scott's wife. Mr Scott aggressively refused the offer.

Mr Scott requested that the hotelier provide the keys to the motorcycle and give access to the motorcycle. The hotelier asked whether Mr Scott considered he was okay to ride and he replied, it is said, that he was.

Tragically, Mr Scott died when his motorcycle left the road. There was no other vehicle involved.

DUTY OF CARE

The Full Court of the Tasmanian Supreme Court found that there was a duty of care on the hotelier.

The duty was broadly described as a duty to take reasonable care to avoid Mr Scott riding his motorcycle while affected by alcohol.

The breach of that duty of care was said to arise from a number of factors, namely:

• a failure to ring Mrs Scott and have her attend the premises;
• a failure to deflect, delay, stall or provide resistance to Mr Scott leaving the hotel;
• a refusal to hand over the motorcycle; and
• a failure to drive Mr Scott home.

However, on appeal, the High Court found that there was no relevant duty of care in the circumstances.

Importantly, the High Court stated that a person in the position of the hotelier, while bound by important statutory duties in relation to the service of alcohol and the conduct of the hotel premises in which it was served, owed no general duty of care at common law to customers which required the hotelier to monitor and minimise the service of alcohol or to protect customers from the consequences of the alcohol they chose to consume.

The High Court, however, did acknowledge that there may be "exceptional cases" where a duty of care may arise. Mr Scott's circumstances were not found to constitute an exceptional case.

As to what an exceptional case may be, the High Court indicated in its reasoning that in circumstances of extreme inebriation, where it could be conclusively presumed that a person had gone beyond any ability to take care of themselves, a hotelier may have some duty.

The High Court's decision sends a strong message that individual responsibility is pivotal in relation to the consumption of alcohol. The responsibility for taking care rests upon the individual consuming the alcohol, not the person who serves it.

RELEVANCE TO SOUTH AUSTRALIA

The case has relevance nationwide, notwithstanding that the High Court took into account the local Tasmanian liquor licensing laws in arriving at its decision, and that Tasmania's Civil Liability Act (which modified the common law in relation to negligence) was found not to be applicable at that time because the legislation was enacted after Mr Scott's death. We consider that South Australian legislation, in particular the South Australian Civil Liability Act, does not detract from the formulation of the duty of care as stated by the High Court.

Therefore, a hotelier, restaurateur or other person who serves alcohol to another does not, in the words of the High Court, have a general duty of care which requires them to "monitor and minimise the service of alcohol or to protect (them) from the consequences of the alcohol they choose to consume".

The High Court however specifically distinguished that duty from situations where a hotelier may have a duty of care to customers who suffer harm at the hands of a third party.

On the same day that it delivered its decision in this case, it delivered a decision which addresses this issue, being the decision of Adeels Palace Pty Ltd v Moubarak & Najem, which is also considered in this edition of the DWReport.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.