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High Court decision is welcome news for licensees

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Earlier in the year we reported on the decision of the Tasmanian Supreme Court in Scott v C.A.L. No. 14 Pty Ltd (click here to read article), which signalled a radical shift in the law relating to licensee duty of care. The decision was a significant extension of the responsibility that a licensee has for an intoxicated patron.

In this case, Mr Scott was killed after leaving the Tandara Motor Inn (“the Inn”) on his motorcycle. The licensee (owner) allowed Scott to park his motorcycle in the store room of the Inn and took his keys. He continued to sell alcohol to Scott on the premise that Scott’s wife would collect him later in the night. As Scott grew more intoxicated he became aggressive and demanded that the licensee retrieve his bike and return his keys. The licensee relented and Scott rode away on his motorcycle, only to crash to his death shortly after.

Scott’s wife successfully sued the licensee of the Inn on the basis that her husband was owed a duty of care. The decision of the Tasmanian Supreme Court sent shockwaves through the hospitality industry, and licensees were left fearful about the potential for expansive civil liability. The decision was criticized because licensees were exposed to liability of an undefined and seemingly indeterminate scope.

However, the hospitality industry breathed a collective sigh of relief last week when the High Court allowed an appeal by the licensee against the decision. The Court unanimously decided that drunken individuals must be responsible for their own actions. The Court showed its preference for individual responsibility, rather than imposing a general duty of care on licensees to protect patrons from the consequences of getting drunk.

The Court found that, save for certain exceptional circumstances, a licensee “owes no general duty of care at common law to customers … (requiring) them to monitor and minimise the service of alcohol or to protect customers from the consequences of the alcohol they choose to consume”. One of the reasons for this approach was that it was extremely difficult for a person serving alcohol to monitor the level of inebriation in every individual customer.

The Court was so firm in its view, that three of the judges delivered very detailed judgments to ensure that the law was clear and to avoid any potential for “interfering paternalism” in future cases of this nature.

Whilst this decision limits the scope of civil liability, licensees still need to remain vigilant and ensure that they comply with the relevant liquor licensing laws and responsible service of alcohol.

Please contact one of our Hospitality lawyers for further information.

Author: Nick Rimington – 13/11/2009