Duties and responsibilities of venue operators, security companies and patrons: Bondi Beach Foods Pty Ltd v Chadwick [2023] NSWCA 265

The NSW Supreme Court of Appeal has recently delivered its judgment in the decision of Bondi Beach Foods Pty Ltd v Chadwick [2023] NSWCA.

This appeal arose out of proceedings brought by Mr Clinton Chadwick in relation to injuries he sustained at The Bucket List at Bondi when another patron (Mr Martin) struck him repeatedly with a stool.

Background

On 22 December 2017 Mr Martin and a group of friends were drinking at a VIP table in the outdoor area of The Bucket List. They arrived at the Bucket List at 5.03pm but had been drinking since earlier in the day.

Mr Chadwick and his two friends arrived at The Bucket List at 6pm. They walked past Mr Martin’s table at 6.01pm. A verbal interaction between the two groups occurred. Mr Chadwick and his friends then went to the bar and purchased some alcoholic beverages. They walked around the premises to find a table, before returning to the vicinity of Mr Martin’s table at around 6.06pm.

At 6.06pm, a further verbal altercation took place between Mr Chadwick’s group and Mr Martin’s group. There were 2 RSA Marshals from the security contractor, Crossguard Group Pty Ltd (Crossguard) in the vicinity, watching the altercation. Relevantly, the RSA Marshals did not have the authority to touch patrons or escort them from the premises.

At 6:08pm Mr Chadwick pushed Mr Martin. In response, Mr Martin threw a jug towards Mr Chadwick, which smashed on the ground. One of Mr Chadwick’s friends subsequently pushed Mr Martin. A short time later Mr Chadwick moved rapidly towards Mr Martin, attempting to punch him in the face. Mr Martin then proceeded to pick up a stool which he used to hit Mr Chadwick three or four times. Mr Chadwick fell to the ground sustaining injuries, including a mild traumatic brain injury (the Incident).

Mr Chadwick commenced proceedings in the Supreme Court of NSW against Bondi Beach Foods Pty Ltd (Bondi Beach Foods) as the owner and operator of The Bucket List and the security contractor, Crossguard, for damages arising as a result of the injuries he suffered in the Incident.

Primary decision

Mr Chadwick’s claim in negligence was advanced on two grounds:

1. Mr Martin and his friends demonstrated symptoms of intoxication in the hour prior to his arrival at The Bucket List such that Bondi Beach Foods and Crossguard were in breach of their duty of care for failing to them from the premises.
2. If there had been sufficiently licensed security guards present in the seconds proceeding the altercation they would, more likely than not, have intervened, deescalated the situation and prevented Mr Chadwick from being injured.

Mr Chadwick succeeded on both grounds at first instance.

The primary judge awarded Mr Chadwick damages of $200,706.40 after making a reduction of 20% for Mr Chadwick’s contributory negligence. Bondi Beach Foods and Crossguard were held to be equally liable.

Grounds of Appeal

Bondi Beach Foods and Crossguard appealed against the findings of duty, breach, causation, damages and contributory negligence. Crossguard also appealed the apportionment of liability.

Mr Chadwick filed a cross-appeal in relation to damages – and in particular, the assessment of economic loss.  The grounds of appeal are broadly summarised below:

1. The primary judge failed to properly identify the relevant risk of harm. It was submitted that the risk of harm was too wide and did not identify the risk of harm with sufficient particularity.
2. The primary judge failed to accurately identify the content of the duty of care it owed to Mr Chadwick having regard to the particular circumstances of the case.
3. Bondi Beach Foods also appealed several findings of fact made by the trial judge, including:
   • That an inadequate contention of security personnel, both as to numbers and as to their capacity, was present at all times;
   • That there was a distinct inadequacy in the monitoring of persons entering the premises;
   • That unruly conduct, often violence, were common occurrences at the venue;
   • That the Incident occurred in a high-risk period;
   • That the conduct of Mr Martin and his group was disruptive and aggressive and required intervention;
   • That properly staffed, with licensed security guards, there was a real possibility the fight could have been avoided.
4. The primary judge erred in finding that that Bondi Beach Foods and Crossguard breached the duty of care they owed to Mr Chadwick.
5. Causation;
6. Assessment of contributory negligence; and
7. Assessment of economic loss.

Final decision

The Court of Appeal (per Leeming JA, Gleeson and Payne JJA agreeing) allowed the appeal in part.

The Court of Appeal confirmed the importance of properly identifying the risk of harm in order to apply sections 5B and 5C of the Civil Liability Act 2002. It did not, however, consider that the primary judge had erred in identifying the risk of harm as the risk of physical injury from an intoxicated person.

While acknowledging that the risk of harm had a “wider characterisation”, the Court of Appeal found there was no error in this approach.

The Court of Appeal held that the primary judge had not erred in establishing the nature and scope of the duty owed by Bondi Beach Foods and Crossguard to Mr Chadwick. It found that the primary judge correctly characterised the duty owed by Bondi Beach Foods and Crossguard as one to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons.

The Court of Appeal noted that duties of care do not ordinarily exist contingently on the particular circumstances of the case. It said it is the particular circumstances of the case which mean that they have or have not been breached.

The Court of Appeal held that Bondi Beach Foods and Crossguard should not have been found liable in negligence to Mr Chadwick for failing to turn Mr Martin and his group out of the premises before Mr Chadwick arrived. It found that Mr Martin did not demonstrate signs of intoxication, prior to Mr Chadwick’s arrival, even though members of his group may have. In addition, the Court of Appeal was not convinced that had other members of Mr Martin’s group been asked to leave, that Mr Martin himself would have followed.

The Court of Appeal did, however, find that both Bondi Beach Foods and Crossguard had breached their duty of care to Mr Chadwick for failing to have at least two licensed guards on the security premises at the time of the Incident. In reaching this conclusion, the Court of Appeal had regard to the venue’s history of violence and intoxication and the time when the Incident occurred, which it considered to be high-risk.

The Court of Appeal determined that the apportionment of 50/50 made by the primary judge was correct. It held that the duty owed by Crossguard was breached when it supplied four security personnel, none of whom was a licensed security guard. It found that had at least 2 licensed security guards been provided their intervention would have prevented Mr Chadwick from being struck.

With respect to Bondi Beach Foods, the Court of Appeal found that given the risk of physical violence from patrons at the premises, it should have ensured that there were adequate security arrangements in place, including the provision of at least 2 licensed security guards.

With respect to contributory negligence, the Court of Appeal considered the finding of 20% made by the primary judge to be in error. The Court of Appeal said the evidence supports a finding that Mr Chadwick escalated the dispute from verbal to physical and then sought to re-insert himself into the fray after the RSA Marshals had attempted to intervene. The Court of Appeal held that if Mr Chadwick had not acted in that way, he most likely would not have been injured. It increased Mr Chadwick’s contributory negligence to 50%.

The Court of Appeal rejected Mr Chadwick’s cross appeal on damages, concluding that the overwhelmingly likely position would have been that Mr Chadwick would have continued attempting to run a loss-making business if the Incident had not occurred. The Court of Appeal also held that Mr Chadwick had failed to establish any case for future economic loss.

After reducing Mr Chadwick’s damages to remove the award for future economic loss and deducting 50% for contributory negligence, the Court of Appeal entered judgment in favour of Mr Chadwick for $112,941.50.

Key takeaways

The decision in Bondi Beach Foods Pty Ltd v Chadwick [2023] NSWCA highlights the importance of venues:

• having adequate security measures in place, and
• ensuring that persons engaged to perform security services are fully licensed and competent to perform their duties (especially in venues with a history of violence and intoxication).

The decision also underscores the importance of monitoring patrons for signs of intoxication or violence – however, it is noted that even if some members of a group are displaying such signs, it is still reasonable for security to take steps short of asking that member to leave.

The decision reinforces that whilst the duties of care owed by operators of venues and security companies can be distinct, both can be held liable for breaches of those duties.

The decision is also a reminder of:

• the importance of identifying the risk of harm in order to apply sections 5B and 5C of the Civil Liability Act 2002;
• the factors to be taken into account when assessing contributory negligence;
• buffers can be awarded for future economic loss where it is difficult or impossible to be more precise; and
• the need to satisfy the criteria of section 13 of the Civil Liability Act 2002 when assessing future economic loss.

If you have a query relating to any of the information in this piece, or would like to discuss a similar matter – please don’t hesitate to get in touch with Nicole Oglesby, Principal within McCabes’ Insurance Division today.