Services

HG Alert: Have the responsible service of liquor obligations been diluted? 17 Nov 2009

Do licensees need to take care to not serve customers who have passed a certain point of intoxication? According to a recent case in the High Court of Australia, they don’t - at least as far as a general common law duty of care goes.

The case of CAL No. 14 Pty Ltd v Motor Accidents Insurance Board; CAL No. 14 Pty Ltd v Scott was decided on 10 November 2009. The High Court determined that, outside of exceptional cases, a publican owes no general duty of care at common law to customers, which would require the publican to monitor and minimise the service of alcohol, or to protect customers from the consequences of the alcohol they chose to consume.

However, licensees’ statutory obligations under the Liquor Act 1992 (Qld) in relation to the service of alcohol have not been affected by this decision. Licensees must remain vigilant to comply with their statutory obligations when serving alcohol.

The facts of this case

At about 5.15pm on 24 January 2002, two workmates, Mr Scott and his colleague, met for a drink at a hotel in Tasmania after work. After about an hour or so of drinking, Mr Scott’s colleague suggested that Mr Scott should place his wife’s motorcycle, which he had ridden to the hotel, in the storeroom of the hotel. The licensee agreed to this on the understanding that Mr Scott’s wife would pick him up later in the night, and that he would collect the motorcycle the next day. The licensee took the keys for safekeeping.

At about 7.00pm that night, Mr Scott’s colleague’s wife arrived and offered, two or three times, to take Mr Scott home. Mr Scott refused, although he eventually said that he would call his wife to come and get him. His colleague’s wife says she did not detect any signs of intoxication in Mr Scott. Mr Scott’s colleague and his wife left the hotel between 7.45pm and 8.15pm.

Shortly after that, the licensee of the hotel told Mr Scott that he had had enough to drink and it was time to go home. The licensee asked for his telephone number, so he could call his wife to come and get him. Mr Scott became agitated and abusive, and refused to provide the number. A short time later, Mr Scott asked for the return of the motorcycle and the keys. The licensee asked Mr Scott three times whether he was “right to drive”, to which Mr Scott answered “Yes, I’m fine”. The licensee then unlocked the storeroom - Mr Scott mounted the motorcycle, backed it out of the storeroom and drove away, apparently without any difficulty. On the way home from the hotel, Mr Scott died in an accident on the motorcycle.

Proceedings

Mr Scott’s wife began proceedings in the Tasmanian Supreme Court against the proprietor of the hotel, and the individual licensee. The Motor Accidents Insurance Board of Tasmania also began proceedings against the proprietor and the licensee to recover the sums it had paid out to, or on behalf of, Mrs Scott.

In the first instance, the Tasmanian Supreme Court held that the proprietor and the licensee did not owe the relevant duty of care to Mr Scott. The Motor Accident Insurance Board and Mrs Scott appealed to the Full Court of the Supreme Court of Tasmania, who allowed the appeals and held that there was a duty, that duty was breached, and as a consequence of that breach, damage was suffered.

The proprietor and the licensee appealed to the High Court of Australia. The issue for the High Court was whether or not the licensee’s failure to insist that he call Mrs Scott to collect Mr Scott was a breach of duty of care by the licensee and the proprietor.

The High Court found that the proprietor and the licensee did not owe Mr Scott such a duty. Further, if they did, then it had not been breached, and even if they complied with the duty, the accident would not have been prevented.

Licensees’ common law duty of care generally

The duty of care that was pleaded in this case was very specific in its terms. The alleged duty was to take reasonable steps to do what the licensee said he would do – that is, telephone Mr Scott’s wife when he was ready to go home. However, the majority of the judges also examined the general common law duty of care that licensees owe to customers when serving liquor.

The majority concluded that, except in exceptional cases, a licensee does not owe a general common law duty of care not to serve customers who have passed a certain point of inebriation. The High Court affirmed that while licensees are bound by important statutory duties in relation to the service of alcohol and the conduct of the premises, there is no general duty of care at common law which requires them to monitor and minimise the service of alcohol, or to protect customers from the consequences of the alcohol they consume.

Relevantly, the majority stated that “balancing the pleasures of drinking with the importance of minimising the harm that may flow to a drinker is also a matter of personal decision and individual responsibility. It is a matter more fairly to be placed on the drinker than the seller of drink. To encourage interference by publicans, nervous about liability, with the individual freedom of drinkers to choose how much to drink and at what pace is to take a very large step. It is a step for legislatures, not courts, and it is a step which legislatures have only taken after mature consideration”.

The decision of the High Court also reiterated the principle that there are “exceptional cases” where a common law duty of care may exist. Examples of such exceptional cases may include when people are so intoxicated that they are completely incapable of any rational judgment or of looking after themselves and the intoxication results from alcohol knowingly supplied by a publican to that person on the premises. Other cases may include when alcohol is knowingly supplied by a publican to intellectually impaired drinkers, to drinkers known to be mentally ill, or to drinkers who become unconscious.

As a result, licensees need to be aware that, even in light of this decision, there are circumstances when a common law duty of care may be imposed on them when serving alcohol to patrons.

Liquor Act 1992

As licensees are well aware, legislation has imposed stringent requirements on them in relation to the service of alcohol.

Licensees would be familiar with the requirements in section 148A of the Liquor Act 1992 to maintain a safe environment, ensure liquor is served in a way that is compatible with minimising harm from the use of liquor and preserving the good order of the neighbourhood of the premises, and prohibit practices that encourage the rapid or excessive consumption of liquor. Licensees would also be familiar with the prohibition in section 156 of the Liquor Act 1992 on supplying liquor to a person who is unduly intoxicated or disorderly.

These legislative requirements have clearly not been diluted by the High Court’s decision. Breaches of these requirements will likely result in prosecution and could ultimately endanger the continued existence of the liquor licence in certain circumstances.

Conclusion

Licensees should not be under any misapprehension that the decision in this case reduces their statutory obligations or gives them the freedom to serve intoxicated patrons. While the High Court has clarified the general common law duty of care of licensees restricting the service of alcohol, licensees must still comply with the strict legislative regimes that are in place.