New South Wales Court of Appeal CITATION: Sandstone DMC Pty Limited & Anor v Trajkovski & Anor [2006] NSWCA 205 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 24/07/06 JUDGMENT DATE: 27 July 2006 JUDGMENT OF: Handley JA at 1; Ipp JA at 2; McColl JA at 24 DECISION: Appeal dismissed with costs (the appellants to pay the costs of both respondents). CATCHWORDS: NEGLIGENCE - vicarious liability- liability of nightclub owner and licensee - security officer assaulted first respondent after removing him from nightclub premises - whether security officer was acting within the scope of his employment - New South Wales v Lepore (2003) 212 CLR 511 applied. D CASES CITED: Deatons Pty Ltd v Flew (1949) 79 CLR 370 New South Wales v Lepore (2003) 212 CLR 511 Sandstone DMC Pty Limited (First Appellant) PARTIES: Neil Osborne (Second Appellant) Nikola Trajkovski (First Respondent) Kamil Eurkul (Second Respondent) FILE NUMBER(S): CA 40497/05 I Harrison SC/S Torrington (First & Second Appellants) COUNSEL: K Rewell SC/M Cleary (First Respondent) J Downing (Second Respondent) A R Conolly & Company (First & Second Appellants) SOLICITORS: Stephen Smart & Associates (First Respondent) Lough Wells Duncan (Second Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 959/04 LOWER COURT JUDICIAL OFFICER: Charteris DCJ LOWER COURT DATE OF DECISION: 06/05/05 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40497/05 DC 959/04 HANDLEY JA IPP JA McCOLL JA Thursday 27 July 2006 SANDSTONE DMC PTY LTD & ANOR v NIKOLA TRAJKOVSKI & ANOR Judgment 1 HANDLEY JA: I agree with Ipp JA. 2 IPP JA: The question raised by this appeal is whether Sandstone DMC Pty Ltd ("Sandstone") and Mr Osborne, the employers of Mr Eurkul (a security officer or "bouncer" working at "Rusty's" nightclub in Wollongong), are vicariously liable for damages inflicted by Mr Eurkul when he assaulted Mr Trajkovski after removing him from the nightclub. Sandstone, the first appellant, was the owner and operator of the nightclub and Mr Osborne, the second appellant, the licensee. 3 Mr Trajkovski sued Sandstone, Mr Osborne and Mr Eurkul for damages caused by the assault. He alleged that Mr Eurkul, in the course and scope of his employment with Sandstone and Mr Osborne, punched and kicked him, thereby causing serious injuries. 4 The trial judge, Charteris DCJ, upheld Mr Trajkovski's claims. He ordered a verdict and judgment in favour of Mr Trajkovski against the three defendants in the sum of $350,073. Sandstone and Mr Osborne appeal against these orders. 5 On 11 July 2001 Mr Trajkovski went to an hotel at North Wollongong where he consumed some alcohol. After midnight he went to Rusty's nightclub. There he consumed further alcohol. After he had been at the nightclub for about an hour he was involved in an incident with another patron. The judge concluded: "[Mr Trajkovski] was probably behaving in an unsatisfactory manner to say the least and I think it likely that he was affected to an extent by alcohol; he was disinhibited and I take the view that his behaviour was such as to have justified his removal from the nightclub." 6 Mr Eurkul decided to remove Mr Trajkovski from the nightclub. With one hand, he grabbed Mr Trajkovski from behind by the throat and, with the other hand, grasped his shirt. Holding him in this way, Mr Eurkul dragged Mr Trajkovski through a side door that led to an alley intersecting with Victoria Street (onto which the front entrance of the nightclub opened). Without changing his grip, Mr Eurkul dragged Mr Trajkovski along the alley for some 20 metres to the intersection where he turned left, away from the nightclub, along the verge of Victoria Street. After they had moved for a few metres along the verge, Mr Eurkul released Mr Trajkovski. 7 While so being propelled, Mr Trajkovski struggled and tried to get free, but was unsuccessful. Also, the judge found, Mr Trajkovski "was engaging in much verbal abuse of [Mr Eurkul]". 8 As soon as Mr Trajkovski was freed, he turned around and faced Mr Eurkul. A verbal exchange took place, details of which were not found. Mr Eurkul thereupon punched Mr Trajkovski with his right fist, striking him in the left side of his mouth. Mr Trajkovski stumbled backwards and came forward again. Mr Eurkul kicked him in the middle of the right thigh. The kick was severe. It caused a severe comminuted fracture of the femur. The fractured bone penetrated tissue and muscle. 9 Charteris DCJ found that Mr Eurkul did not intend to cause Mr Trajkovski "permanent" or "serious" injuries but inflicted the injuries "to ensure that a troublesome patron would go on his way and leave the [Club's] vicinity". The judge found that Mr Eurkul "was seeking to serve the interests of his employers … so that a troublesome patron would be removed from the vicinity of the premises." He said, "In pursuit of his belief that he needed to make it clear to [Mr Trajkovski] that he should depart, [Mr Eurkul] unlawfully delivered the punch and kick". 10 The sole issue argued on appeal was whether, in punching and kicking Mr Trajkovski, Mr Eurkul was acting within the course and scope of his employment. 11 Mr Harrison SC, who together with Mr Torrington appeared for Sandstone and Mr Osborne, did not challenge any of the judge's factual findings. 12 Mr Harrison submitted, firstly, that Mr Eurkul's conduct amounted to a "spontaneous act of retributive justice" (the phrase used by Dixon J in Deatons Pty Ltd v Flew (1949) 79 CLR 370 at 382) for which Sandstone and Mr Osborne were not vicariously liable. Mr Harrison submitted that Mr Eurkul was motivated by vindictiveness and spite and whatever he did was not in performance of his duties as a security officer with Sandstone and Mr Osborne. In support of this proposition, he submitted that the assault was of such severity that it could not have been regarded as part of Mr Eurkul's duty as an employee. 13 Secondly, Mr Harrison submitted that the assault was committed at a stage when Mr Eurkul owed no duties to his employers – that is, after he had completed removing Mr Trajkovski from the nightclub. Mr Harrison submitted that, at the time of the assault, Mr Eurkul was well clear of the premises and had given no indication of intending to return. He submitted, on these grounds, that the assault was a "private matter" between Mr Eurkul and Mr Trajkovski. 14 In New South Wales v Lepore (2003) 212 CLR 511 Gleeson CJ discussed the legal principles to be applied in regard to the vicarious liability of an employer for the unauthorised acts of an employee. His Honour said at 536, [42]: "The best known formulation of the test to be applied is that in Salmond, Law of Torts in the first edition in 1907 (at 83) and in later editions …: an employer is liable even for unauthorised acts if they are so connected with authorised acts that they may be regarded as modes – although improper modes – of doing them, but the employer is not responsible if the unauthorised and wrongful act is not so connected with the authorised act as to be a mode of doing it, but is an independent act." The Chief Justice observed (at 539, [51]) that the test serves well in many cases, but it has its limitations. 15 Gleeson CJ commented upon Deatons Pty Ltd v Flew. In that case a barmaid threw the contents of a glass of beer, and then the glass itself, into the face of the plaintiff, who thereby lost an eye. There were conflicting versions as to the facts, but, as Gleeson CJ explained at 539, [50]: "The [High] Court considered that, on either version of the facts, the employer was not vicariously liable for the trespass: on the plaintiff's version what the barmaid did was a gratuitous, unprovoked act; the only alternative view open was that it was an act of personal retribution. Either way, it was not incidental to the work she was employed to do. It was emphasised that it was not the duty of the barmaid to keep order in the bar. There were other people to do that. Her job was merely to serve drinks. Her conduct was not an excessive method of maintaining order. It was 'a spontaneous act of retributive justice'." The Chief Justice remarked at 539, [51]: "If, on the facts, it had been possible to treat maintaining order in the bar as one of the barmaid's responsibilities, and if, on the facts, it had been open to regard her conduct as an inappropriate response to disorder, then the jury could properly have held the employer liable in trespass. However, the barmaid's only responsibility was to serve drinks, and throwing a glass of beer at a customer could not be regarded as an improper method of doing that." And went on to say at 540, [54]: "Where acts of physical violence are concerned, the nature and seriousness of the criminal act may be relevant to a judgment as to whether it is to be regarded as a personal, independent act of the perpetrator, or whether it is within the scope of employment. A security guard at business premises who removes a person with unnecessary force may be acting in the course of employment." 16 Gummow and Hayne JJ (at 591, [231] in Lepore) said that vicarious liability, in the case of an intentional tort of an employee may be established, inter alia, "if the wrongful act is done in intended pursuit of the employer's interests or in intended performance of the contract of employment". 17 Kirby J's observations on this issue are contained at 610, [297] to 623, [333]. The headnote to the case appropriately summarises his Honour's remarks as follows: "To satisfy the imposition of vicarious liability, there must be a sufficiently close connection between the employer's enterprise and the acts alleged to constitute wrongdoing of the employee. The expression 'connection' potentially connotes either a causal or temporal connection, or both, between those acts and the employment. …" 18 On all the abovementioned criteria laid down in Lepore, the appeal must fail. 19 Firstly, removing disorderly patrons and persuading them not to return to the nightclub was part of Mr Eurkul's responsibilities and it was open to the trial judge to regard his conduct "as an inappropriate response" (in the words of Gleeson CJ at 539, [51]) to Mr Trajkovski's conduct. 20 Secondly, the judge's unchallenged finding that the assault was committed "to ensure that a troublesome patron would go on his way and leave the club vicinity" satisfied an element that Gummow and Hayne JJ said (at 591, [231]) was capable of establishing vicarious liability, namely, the doing of a wrongful act in intended pursuit of the employer's interests or in intended performance of the contract of employment. 21 Thirdly, on his Honour's finding, there was a close causal connection between the acts causing injury and the employment (the acts being perpetrated in the belief that the employers' interests were being furthered) and there was a close temporal connection (a matter of seconds) between the completion of the physical removal and the assault. Thus, the element of a sufficiently close connection (required by Kirby J) was satisfied. 22 Irrespective of whether Mr Trajkovski gave any indication of his intention to return, on the judge's findings, the assault was committed to persuade him not to return. On this basis, the assault was committed at a time when Mr Eurkul was continuing to carry out his duties as an employee. The assault was a vicious one, but the judge found that Mr Eurkul did not intend to cause Mr Trajkovski permanent or serious injuries. There was no finding that the assault was committed out of vindictiveness or spite; rather, the finding is that Mr Eurkul assaulted Mr Trajkovski because he thought that, by punching and kicking him, he would cause Mr Trajkovski to go on his way. These matters, together with the other factors that I have set out, answer Mr Harrison's submissions. 23 I would dismiss the appeal with costs (that is, the appellants to pay the costs of both respondents). 24 McCOLL JA: I agree with Ipp JA. ********** 27/07/2006 - Para [22] 1st line: "Mr Eurkul" deleted and replaced with "Mr Trajkovski". - Paragraph(s) [22] 1st line. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.