Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: QBE v Orcher; Bowcliff v Orcher [2013] NSWCA 478
• Hearing dates: 5, 6, 7 August 2013
• Decision date: 23 December 2013
• Before: McColl JA at [1]; Macfarlan JA at [2]; Tobias AJA at [4].

Decision

Appeal 2012/310682

1. Appeal allowed.

2. Set aside the orders made by Harrison J on 12 September 2012 and 23 November 2012.

3. Verdict and judgment for the appellant (QBE Insurance (Australia) Limited).

4. The first respondent to pay the appellant's costs of the trial and of the appeal but to have with respect to the latter a certificate under the Suitors' Fund Act 1951, if otherwise qualified.

Appeal 2012/310752

1. Appeal allowed.

2. Set aside the orders made by Harrison J on 12 September 2012 and 23 November 2012.

3. Verdict and judgment for the appellants (Bowcliff Pty Ltd trading as The Bridge Hotel Rozelle and Richard Francis Keough).

4. The first respondent to pay the appellants' costs of the trial and of the appeal but to have with respect to the latter a certificate under the Suitors' Fund Act 1951 (NSW), if otherwise qualified.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: NEGLIGENCE - hotel patron assaulted across road from licensed premises by employee of hotel - employee not a security guard - evidence unclear as to whether assailant crossed road to intervene in dispute involving patron - non-intervention by employees of hotel and employees of security company - whether evidence sufficient to establish breach of duty; APPEALS - appellate review of findings of fact - inferences to be drawn from CCTV footage
• Legislation Cited: Civil Liability Act 2002 (NSW); Law Reform (Miscellaneous Provisions) Act 1946 (NSW); Security Industries Act 1997 (NSW); Suitors' Fund Act 1951 (NSW); Supreme Court Act 1970 (NSW)
• Cases Cited: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420; Angel v Hawkesbury City Council [2008] NSWCA 130; Anikin v Sierra [2004] HCA 64; (2004) ALJR 452; Blacktown City Council v Hocking [2008] NSWCA 144; Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; (2009) 75 NSWLR 649; Cregan Hotel Management Pty Ltd v Hadaway [2011] NSWCA 338; Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118; House v The King [1936] HCA 40; (1936) 55 CLR 499; Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298; Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361; Kuru v New South Wales [2008] HCA 26; (2008) 236 CLR 1; Leighton Contractors Pty Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1; McDonald v The Commonwealth (1945) 46 SR (NSW) 129; North Sydney Leagues Club Limited v Berecry [2002] NSWCA 154; (2002) Aust Torts Reports 81-657; Pledge v Roads and Traffic Authority [2004] HCA 13; (2004) 78 ALJR 572; Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492; Portelli v Tabriska Pty Ltd [2009] NSWCA 17; Roads & Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 234 CLR 330; Rooty Hill RSL Club Ltd v Karimi [2009] NSWCA 2; Sweeney v Boylan Nominees Pty Limited [2006] HCA 19; (2006) 226 CLR 161; Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531
• Category: Principal judgment
• Parties: 2012/310682; QBE Insurance (Australia) Limited (First Appellant); John James Orcher (First Respondent); Bowcliff Pty Ltd trading as The Bridge Hotel Rozelle (Second Respondent); Richard Francis Keough (Third Respondent); 2012/310752; Bowcliff Pty Ltd trading as The Bridge Hotel Rozelle (First Appellant); Richard Francis Keough (Second Appellant); John James Orcher (First Respondent); QBE Insurance (Australia) Limited (Second Respondent)
• Representation: Counsel: 2012/310682; Mr MT McCulloch SC with Ms TA Berberian (First Appellant); Mr JE Sexton SC with Mr CP Heazlewood (First Respondent); Mr RS Sheldon SC (Second and Third Respondent); 2012/310752; Mr RS Sheldon SC (First and Second Appellant); Mr JE Sexton SC with Mr CP Heazlewood (First Respondent); Mr MT McCullock SC with Ms TA Berberian (Second Respondent); Solicitors: 2012/310682; HWL Ebsworth Lawyers (First Appellant - QBE); Carney Lawyers (First Respondent - Mr Orcher); Wotton + Kearney Lawyers (Second and Third Respondent - Bowcliff PL and Mr Keough); 2012/310752; Wotton + Kearney Lawyers (First and Second Appellant - Bowcliff PL and Mr Keough); Carney Lawyers (First Respondent - Mr Orcher); HWL Ebsworth Lawyers (Second Respondent - QBE)
• File Number(s): 2012/310682; 2012/310752

Decision under appeal

• Citation: Orcher v Bowcliff Pty Ltd [2012] NSWSC 1088
• Date of Decision: 2012-09-12 00:00:00
• Before: Harrison J
• File Number(s): 2009/296392

Judgment

The Respondent's case [12]

The approach to be taken on the appeals [18]

The closed circuit television footage - admissibility and use of frames [21]

Some preliminary findings on aspects of the respondent's case [25]

The evidence of Ms Williams [31]

The movements of Izzy, Mr Paseka and Mr Lokotui before Mr Pesaka crossed Wellington Street [41]

Mr Paseka's ERISP [45]

Some findings of the primary judge - can they be maintained? [47]

The CCTV footage analysed - in what direction Mr Paea and the other patrons are looking [59]

Some further evidence [78]

The relevant legal principles applicable to occupiers of licensed premises [80]

Some preliminary comments on liability [85]

The primary judge's reasoning with respect to Bowcliff's liability [94]

The primary judge's reasoning with respect to DSSS's liability [104]

The Respondent's Submissions on the Appeal [112]

Duty of care - Bowcliff and DSSS [112]

Breach of duty - Bowcliff [123]

Breach of duty - DSSS [128]

QBE's appeal should be allowed [133]

Bowcliff's appeal should be allowed [145]

The Issue of apportionment [163]

Damages - Future Economic Loss [169]

Conclusion [185]

1 McCOLL JA: I agree with Tobias AJA's reasons and the orders his Honour proposes.

2 MACFARLAN JA: Subject to the following, I agree with the judgment of Tobias AJA.

3 As, for reasons given by his Honour, it was not established that Mr Paea was negligent in the performance of his duties, determination of the question of whether Bowcliff or DSSS would have been vicariously liable for any breach of duty on his part does not affect the disposition of the appeals. Nevertheless, I note my disagreement with his Honour's conclusion that it would have been DSSS rather than Bowcliff that would have been so liable (see [153] - [152]). On my view of the evidence, Mr Paea, although employed by an independent contractor, was integrated into Bowcliff's business in a manner that entitled Bowcliff to direct Mr Paea not only what he was to do but how he was to do it (McDonald v The Commonwealth (1945) 46 SR (NSW) 129 at 131 - 2). The present case is distinguishable from Sweeney v Boylan Nominees Pty Limited [2006] HCA 19; (2006) 226 CLR 161 where the mechanic who was contracted to fix a refrigerator door "supplied his own tools and equipment, as well as bringing his skills to bear upon the work that was to be done" (at [32], citation omitted). The work that he did was done "as a principal pursuing his own business or as an employee of his own company pursuing its business" (at [33]). In the present case, Bowcliff had its own qualified security guards who were in a position, and entitled, to give Mr Paea instructions about how he was to do his job and Mr Paea was integrated into the hotel's security arrangements.

4 TOBIAS AJA: At approximately 4:50 am on Sunday, 25 November 2007 John James Orcher (the respondent) was felled by a single punch thrown by Mr Tamiano Paseka (Mr Paseka) whereupon he fell to the ground striking his head on the concrete footpath thereby sustaining serious head injuries.

5 The assault took place on the corner of Victoria Road and Wellington Street, Rozelle. On the opposite corner was located the Bridge Hotel (the hotel) of which the third respondent, Richard Francis Keough (Mr Keough) was the licensee and the second respondent, Bowcliff Pty Ltd trading as the Bridge Hotel Rozelle (Bowcliff), was the operator, owner and occupier. Mr Paseka was an employee of Bowcliff.

6 On the relevant evening, the bar manager of the hotel was Mr Benjamin Davies (Mr Davies) and the senior security guard employed by Bowcliff was Mr Heamasi Lokotui (Mr Lokotui). Two other qualified security guards were engaged on that Sunday morning, being employees of DSSS Cousins Pty Ltd (DSSS) whose services were provided by DSSS to Bowcliff through Australian Corporate Protection Pty Ltd, trading as Australian Crowd Management Services (NSW) (ACMS). The two guards so provided were a Mr Stvna Stegnajaic (Mr Stegnajaic) and a Mr Paea.

7 On 11 December 2008 the respondent instituted proceedings against Bowcliff and Mr Paseka. This provoked a number of cross-claims, one of which was brought by Bowcliff against ACMS and another by ACMS against DSSS. This cross-claim was subsequently amended to substitute as the cross-defendant the present first appellant, QBE Insurance (Australia) Ltd (QBE), the insurer of DSSS. DSSS had in the meantime had gone into liquidation. In due course all cross-claims were settled. I note that where dealing with issues of liability I refer to DSSS rather than QBE as the respondents' claim was that DSSS was liable for Mr Paea's alleged negligence. In other contexts such as where reciting submissions, I refer to QBE as the relevant party

8 At an early stage of the hearing before the primary judge the respondent joined Mr Keough as an additional defendant to Bowcliff. Ultimately, the respondent was also given leave to join QBE as a further defendant. Although Mr Paseka had always been a defendant, he did not take any part in the proceedings either as a party or as a witness. In essence, the respondent claimed that each of Bowcliff/Mr Keough on the one hand and DSSS on the other, were negligent in permitting Mr Paseka to assault the respondent.

9 After a lengthy hearing which extended, at various times, from October 2010 to February 2012, the primary judge, Harrison J, in a judgment published on 12 September 2012 found in favour of the respondent against Bowcliff and QBE: Orcher v Bowcliff Pty Ltd [2012] NSWSC 1088. His Honour assessed the respondent's damages in the sum of $1,362,591. As between Bowcliff on the one hand and DSSS on the other, his Honour apportioned responsibility for the respondent's loss and damage as to 30 per cent to be borne by DSSS/QBE and 70 per cent by Bowcliff.

10 Each of QBE and Bowcliff (together the appellants) appeal in separate appeals against his Honour's decision. Both challenge his Honour's finding of negligence on the part of DSSS and Bowcliff/Keough as well as his Honour's apportionment of responsibility between them. Both also challenge so much of his Honour's assessment of damages as relates to the respondent's future economic loss.

11 For the reasons which follow, in my opinion the appeals should be allowed and the judgments in favour of the respondents set aside.

The Respondent's case

12 As against Bowcliff/Keough, the respondent in his Third Further Amended Statement of Claim relevantly alleged that they were negligent in that they permitted Mr Paseka to assault the respondent and/or failed to take any or any reasonable steps to prevent him from doing so. As against DSSS/QBE it was alleged first, that an employee of DSSS (Mr Paea) permitted Mr Paseka, a person who that employee knew or ought to have known was not qualified or licensed to act as a security guard, to cross Wellington Street with the apparent intention of intervening in an altercation involving the respondent and a man called Izzy; secondly, that that employee permitted Mr Paseka to assault the respondent; and, thirdly, that that employee failed to take any or any reasonable steps to prevent Mr Paseka from assaulting the respondent. The relevant employee was Mr Paea. DSSS was said to be vicariously liable for the conduct of Mr Paea as his employer.

13 In his written submissions on the appeals, the respondent stated DSSS's and Bowcliff's duty of care and its breach in a manner that was not always consistent. Essentially, however, his case was that their negligence arose out of Mr Paea (in the case of DSSS) and Mr Lokotui (in the case of Bowcliff) permitting Mr Paseka, an untrained, unqualified and unlicensed employee of Bowcliff, to cross Wellington Street for the purpose of quelling an apparent dispute between the respondent and Izzy in circumstances where there was a foreseeable risk that Mr Paseka would overreact, as he allegedly did, and assault the respondent. It was contended, as I understand the respondent's submissions, that in the case of Mr Paea, he was aware first that there was an altercation between the respondent and Izzy; secondly, that he was aware that Mr Paseka was an employee of Bowcliff; thirdly, that he ought to have intervened when Mr Paseka commenced to cross Wellington Street with the intention of intervening in the alleged dispute between the respondent and Izzy; and fourthly, that he ought to have instructed Mr Paseka not to cross the road and/or not to intervene as he was not qualified or trained as a security guard to do so.

14 In the case of Bowcliff, it was also asserted that its duty of care was breached by Mr Paea as he was under the direction and control of Mr Lokotui, Mr Keough and Mr Davies in that he had been subsumed into the hotel security system; alternatively, that Mr Lokotui should not have left Mr Paseka out on the street which was a place for only trained security staff to work and that, therefore, he should have required Mr Paseka to return inside the hotel.

15 In oral submissions, the respondent asserted that it had never been his case that Bowcliff or DSSS ought to have intervened to prevent Mr Paseka assaulting him immediately prior to the punch being thrown. Rather, his case was that Mr Paseka should never have been permitted to cross the road in the first place; he should never have been allowed to be in a position where, having intervened to apparently quell a disturbance between two hotel patrons, there was the risk of him overreacting.

16 The respondent therefore accepted that his case turned on Mr Paea drawing the inference himself that Mr Paseka was crossing the road to intervene in what was occurring between the respondent and Izzy as distinct from being one of many patrons who crossed the street that night. Such an inference ought to have been drawn by Mr Paea because Mr Paseka was, to Mr Paea's knowledge, an employee of the hotel and was working at the time he crossed the road. He was, therefore, to Mr Paea's knowledge, not just another patron.

17 Alternatively, even if Mr Paea was not aware of Mr Paseka's status as an employee of the hotel, he should have inferred that Mr Paseka was crossing the road with the intention of intervening in the dispute between the respondent and Izzy. That raised the question as to whether such an inference was available on the evidence.

The approach to be taken on the appeals

18 Other than for the evidence of the respondent's partner, Ms Williams, all the evidence relevant to liability was documentary including, in particular, certain CCTV footage referred to below. The relevant principles applicable for such an appeal having that character and those features, as governed by s 75A of the Supreme Court Act 1970, were stated by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [22]-[25], [27] and more recently adopted by Callinan and Heydon JJ in Pledge v Roads and Traffic Authority [2004] HCA 13; (2004) 78 ALJR 572 at [43]. They were summarised by Gleeson CJ, Gummow, Kirby and Hayne JJ in Anikin v Sierra [2004] HCA 64; (2004) ALJR 452 at [37] where their Honours said (omitting references to footnotes):

"It is necessary to accept large functions belonging to an appellate court, such as the Court of Appeal, in reviewing findings of fact of a judge sitting without a jury. Those functions, which derive from the provisions of the legislation governing the Court of Appeal in such proceedings, require that Court to conduct its own independent review of the facts, giving effect to its own conclusions about them. It must do this save to the extent, if any, that the primary judge enjoys advantages that cannot be fully recaptured by the appellate court. In these last respects, the appellate court should defer to the findings of the primary judge except for the very limited circumstances where it is authorised to substitute its own, differing conclusions."

19 To this statement of the relevant principles should be added the following rider from the plurality in Fox v Percy at [23] (omitting references to footnotes):

"On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance'. On the other, it must, of necessity, observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole."

20 The disadvantages of an appellate court referred to in the above extract have no place in the present case. As will become apparent, the case turned to a large extent on the inferences to be drawn from closed circuit television footage ("CCTV") filmed from various locations around the hotel. In this respect, the Court is in as good a position as the primary judge to decide on the proper inference to be drawn from that footage, and while, of course, giving respect and weight to his Honour's conclusion of the trial judge, having reached its own conclusion that he was in error, will not shrink from giving effect to it: Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551 per Gibbs ACJ, Jacobs and Murphy JJ; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [25] per Gleeson CJ, Gummow and Kirby JJ; at [87] per McHugh J.

The closed circuit television footage - admissibility and use of frames

21 As already noted, the hotel is situated on the corner of Victoria Road and Wellington Street, Rozelle. On Saturday 24 and Sunday 25 November 2007, the customer entry to and from the hotel premises was through a door opening onto Wellington Street. A Caltex service station (the service station) is located directly opposite this entrance on the corner of Victoria Road and Wellington Street. Closed circuit television cameras had been installed in and around the hotel premises and were operating on the evening of the events which gave rise to the proceedings.

22 The cameras recorded at the material times a series of views of various activities and incidents both inside the hotel (Camera 5) and outside in the street (Cameras 3 and 6). What is depicted in the CCTV footage figured prominently both at trial and on the appeal. Relevantly for the purposes of the latter is the CCTV footage from Camera 3 which provided a view of the Wellington Street footpath immediately outside the entry door to the hotel and for a short distance up Wellington Street as well as a limited view of the roadway facing away from the intersection adjacent to the service station. Camera 6 was relevant only to the extent that it depicted Mr Paseka felling the respondent. The frame taken from camera 6 at 4:50:53 therefore serves as a time marker by reference to which the events at the Wellington Street exit of the hotel that preceded the assault may be analysed.

23 The problem of a judge "construing" photographs has been the subject of comment in this Court: Blacktown City Council v Hocking [2008] NSWCA 144 at [7] - [13] per Spigelman CJ and at [167] - [171] per Tobias JA; Angel v Hawkesbury City Council [2008] NSWCA 130 at [71] - [72] per Beazley and Tobias JJA. Of course photographs, if otherwise relevant, are admissible but the weight to be attached to them and, in my view, the CCTV footage, is very much dependant on the quality and clarity of the images they depict as well as the context in which they are taken. In my view they can be quite misleading particularly as in the present case where the situation the subject of the footage was very dynamic.

24 As the liability of both Bowcliff and DSSS depended significantly upon what it was found that Mr Paea did or ought to have seen (given, as is noted below, that it was agreed that Mr Lokotui was inside for the relevant period), the CCTV footage of camera 3 became a focal point of the argument on appeal. To that extent, the direction in which Mr Paea is looking, as well as whether the crowd of patrons milling about outside the hotel had their attention drawn to any altercation between Izzy and the respondent, is critical. As elaborated in detail below, the CCTV footage is too obliterated, blurry and unclear at important moments to determine, even on the balance of probabilities, what Mr Paea did see, or (inferring from what the crowd of patrons were or were not looking at) what Mr Paea ought to have seen.

Some preliminary findings on aspects of the respondent's case

25 In the foregoing context, the following should be noted. It was admitted on the pleadings that Mr Paseka was an employee of Bowcliff. However, an issue arose at trial as to whether, at the material times, he was "on duty" or whether he had ceased his duties at an earlier point of time. In this respect, Mr Paseka was employed on a casual basis in the capacity of what is known in the industry as a "glassy"; that is, an employee who is engaged to work only within the hotel premises collecting glasses and essentially ensuring that the areas of a hotel frequented by patrons are kept clean and tidy. Relevantly in the present case, his duties did not extend to collecting bottles outside the confines of the hotel or relieving patrons in Wellington Street of bottles of alcohol.

26 The CCTV footage established that at or about 4:47:43 Mr Paseka, who had exited the hotel into Wellington Street at 4:46:59 and who thereafter relevantly remained outside on the footpath, relieved Izzy of a bottle out of which he was drinking and appeared to dispose of the bottle into a bin near the entry door to the hotel. In this respect it was submitted that it could be inferred, although in fact this was not clear from the CCTV footage, that both Mr Lokotui and Mr Paea were aware of this action on the part of Mr Paseka. Such an inference, if available, was relied upon by the respondent as establishing that Mr Paseka was continuing to carry out his duties as a glass collector in the presence of Mr Lokotui and Mr Paea. It was submitted that by observing Mr Paseka removing the bottle from Izzy, Mr Paea must thereby have become aware that Mr Paseka was an employee of the hotel carrying out his duties as such.

27 As I have indicated, the respondent in the QBE appeal and to a lesser extent in the Bowcliff appeal relied upon the failure of Mr Paea to either prevent Mr Paseka commencing to cross Wellington Street and/or upon his failure to stop him crossing the street, to cross the road himself and thereby prevent Mr Paseka from intervening in the alleged disturbance between the respondent and Izzy. As I have observed, these submissions were based, in part, on the respondent's assertion that Mr Paea knew that Mr Paseka was an employee of the hotel. However, there was no finding by the primary judge that Mr Paea was aware that Mr Paseka was either an employee of the hotel and/or a "glassy". It was nevertheless submitted that as the number of casual employees of the hotel as at 20 November 2007 numbered only 10, and as Mr Paea and Mr Paseka both came on duty on the night in question at the same time, it could be inferred that Mr Paea was aware that Mr Paseka was an hotel employee.

28 It was further submitted that such an inference could be drawn from the fact that there was no evidence that after the assault Mr Paea remonstrated with Mr Paseka. It was suggested that this was because he knew that he was not a patron but an employee. Finally, it was submitted that such an inference could be drawn from the fact that Mr Paea had worked at the hotel on Friday, 12 October 2007 and Saturday, 13 October 2007. However, there was no evidence that Mr Paseka was on duty on those dates.

29 In my view, none of the evidence referred to, whether taken individually or together, would justify the drawing of the inference for which the respondent contends. Although the primary judge found that Mr Paseka was still "on duty" at the time of the assault, as noted above he did not make a finding that Mr Paea was aware that Mr Paseka was an employee of the hotel or was "on duty" at the relevant time. There was no probative evidence that Mr Paea knew anything about Mr Paseka other than that he had exited the hotel from the Wellington Street entrance and that he appeared to know, and was friendly with, other patrons of the hotel who had similarly exited and who had congregated on the footpath.

30 It is apparent from the foregoing that Mr Paea did not give evidence. That fact was not the subject of any Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 submission. Attempts were made to ascertain his whereabouts without success. He had ceased to be an employee of DSSS shortly after the subject incident. As a deal of emphasis was placed upon it, I repeat that in my view the mere fact that Mr Paea may have observed Mr Paseka removing the bottle from Izzy (and from the relevant footage that is far from apparent), was insufficient to permit of an inference that, on the balance of probabilities, Mr Paea knew that Mr Paseka was an employee of the hotel. There was no other probative evidence that Mr Paea knew Mr Paseka was an employee. In any event, although the primary judge found that Mr Paseka removed the bottle from Izzy, he did not find that Mr Paea saw him doing so.

The evidence of Ms Williams

31 Ms Cecily Williams was the partner of the respondent and the mother of his child. The primary judge dealt with her evidence at [21] to [30] of his reasons. She made a statement for the purpose of the proceedings dated 27 August 2010 and had previously made two statements to the police dated 25 November 2007 and 5 December 2007 respectively when they were investigating the assault on the respondent.

32 Ms Williams apparently arrived at the hotel alone at about 1:45 am on Sunday, 25 November 2007. She drank there with friends until approximately 4:30 am. According to the CCTV footage, the respondent arrived at and entered the hotel at 4:37:52. At or about 4:45:55 the respondent, Ms Williams and Izzy were in its ATM room. There was some interaction between them in the presence of Mr Lokotui who ultimately asked them to leave the premises, which they did by the Wellington Street exit at 4:47:10.

33 Both then proceeded across Wellington Street to the service station as Ms Williams wished to use an ATM which was apparently located within the service station building. At 4:47:15 Mr Lokotui exited onto Wellington Street and it was agreed that he had observed the respondent and Ms Williams leave the hotel. It was also agreed that Mr Lokotui did not approach Mr Paea to inform him that the couple had been asked to leave or that there had been any interaction between the respondent and Izzy inside the hotel. Whilst Ms Williams attended to the ATM in the service station, the respondent stood waiting on the corner of Victoria Road and Wellington Street. Her version of the events which then ensued varied between what she said in her statement of 27 August 2010 and what she informed the police in her statements of 25 November 2007 and 5 December 2007.

34 In her 2010 statement Ms Williams stated that when she left the service station building she could not see the respondent standing where she had left him. As recorded by the primary judge at [22] of his reasons, she said that she was half way between the service station doors and the footpath of Victoria Road when she heard a male voice yelling "woman basher". She then walked at a fast pace to where she had left the respondent and saw him facing towards the hotel standing approximately two metres from the footpath upon the roadway. His arms were by his side. Her statement then continued in the following terms:

"I saw a male of Islander appearance who I know as Damien standing immediately in front of [the respondent]. He was wearing a chequered blue and white shirt and blue jeans. At this moment I saw Damien strike [the respondent] with his right hand, which was clenched in a fist, to the left hand side of [the respondent's] face. I saw [the respondent] fall backwards and hit the road with great force. He fell straight back, his body was straight when he fell."

Ms Williams then remonstrated with Mr Paseka who yelled back at her in an aggressive tone "he is a woman basher".

35 In her statement to the police of 5 December 2007 Ms Williams stated that she saw a girl who she knew as Zoe standing on the footpath where she originally had left the respondent at the corner of Victoria Road and Wellington Street. The only other people she saw at the location were Izzy and Mr Paseka. Izzy was known to her as Zoe's boyfriend. Neither Izzy nor Zoe were called to give evidence at the trial.

36 Ms Williams' oral evidence put a slightly different slant on her recollection. She reiterated that when she was approximately half way between the front door of the service station and the street she could see the top of the respondent's head and was hearing things called out. She then moved somewhat more quickly and took a shortcut through some vegetation on the border of the service station and Wellington Street. She then had full view of the respondent. At the point when she arrived close to the corner of Wellington Street and Victoria Road, Izzy and Zoe were off to her left (which would put them in Wellington Street).

37 At [28] of his reasons his Honour then set out the following exchange:

"Q. So when you got to the top of that shortcut, Mr Orcher was clearly visible to you; is that right?

A. Correct.

Q. Was there anybody else near him?

A. When I come up, Paseka was yelling something across the road at him, towards him, because John was looking at him.

Q. Was did Mr Orcher say, if anything?

A. No, I remember him looking in that direction. I didn't hear any I know John's tone of voice if it was him calling out. But I'd rushed because someone was calling towards, and I could see him looking.

Q. Could you hear what was being said?

A. Yes.

Q. Was Mr Paseka yelling things like "dog"?

A. No.

Q. And he was yelling things that were personally insulting to Mr Orcher; is that right?

A. Correct.

Q. So you got to the top of the shortcut?

A. Yeah.

Q. And then I take it that Mr Paseka at some point crossed the road?

A. It happened so quick. John stepped out on the road and he come straight across the road and he sort of and before even like a proper aggression, tone or argument could happen, whack.

Q. Very quick?

A. Very quick. He hit him when he hit him, it was his right hand. He hit him, it was John's left here, because when he hit him, it split him here when I got to him (indicates). It happened that quick. Tamiano had hit him my mind just I sort of I seen the connect, bang, done. I heard the thump and I just ran up to Tamiano and I started hitting him.

Q. But from the time of you getting to the top of this shortcut that you had taken...

A. Yes.

Q. ...until the punch that hit Mr Orcher, it was a matter of seconds; would you agree with that?

A. Within a minute, yeah. It's sort of within yeah. So I got up there something, I heard "Woman basher" was called out, and he stepped on the road and then he come across and it just happen.

*****

Q. What you do remember was you got to the top and heard "woman basher" called out?

A. Yeah, looked across the road.

Q. You saw Mr Paseka?

A. Yes. He come diagonal straight across the road. There was no going to the lights to cross the road or anything, just come

Q. Straight across?

A. Yeah.

Q. I'm not suggesting that you would or you should, but you couldn't have done anything to stop it in the time available, could you?

A. No, I couldn't."

38 Ms Williams also stated that she and the respondent walked out of the hotel and across Wellington Street on their own. She thought Izzy was already across the road but this is not borne out by CCTV footage which establishes that Izzy exited onto Wellington Street at 4:47:21 which was some 11 seconds after the respondent and Ms Williams left the hotel by the Wellington Street exit and immediately proceeded across that road. Further, the footage establishes that Izzy remained in the vicinity of the hotel entry until he crossed Wellington Street at about 4:47:46 at which time Mr Lokotui re-entered the hotel. At [29] of his reasons the primary judge referred to some evidence of Ms Williams to the effect that shortly before he crossed Wellington Street Mr Paseka had been standing effectively shoulder-to-shoulder with Mr Paea. Her evidence was to the effect that Mr Paseka was observed by her standing on the stairs of the front entrance with a security guard also at that location. They were standing within a metre of each other. In re-examination the following exchange occurred:

"Q. When you saw Mr Paseka on the other side of the road-

A. Yeah.

Q. -yelling out "Woman basher"-

A. Yeah.

Q. -are you familiar with the uniform that the security guards wear at the Bridge Hotel?

A. I haven't been back there [f]or ages. I think it's all black.

Q. Was there anyone wearing that uniform near Mr Paseka when he was yelling out?

A. Yes.

Q. How far away from you?

A. He was standing right - at the entrance door where the bouncer stands, he was standing there like that."

39 There are a number of difficulties associated with accepting this evidence of Ms Williams as reliable. First, the CCTV footage does not depict Mr Paseka standing close to Mr Paea at any relevant time. Secondly, if he was in the vicinity of Mr Lokotui who exited onto Wellington Street from the hotel at 4:47:15 and re-entered it at 4:47:46, nothing was put to Mr Lokotui in cross-examination to suggest that he had heard Mr Paseka yelling out "woman basher" or any other insults directed at the respondent. The CCTV footage establishes that it was not until 4:48:32 that Mr Paseka commenced to cross Wellington Street.

40 The primary judge did not make a specific finding that Ms Williams' version of events was accurate or should be accepted. As I have indicated, it is simply at odds with the CCTV footage. It is also at odds with the record of an interview (the ERISP) with Mr Paseka to the police on 15 February 2008. Selected portions of the ERISP became "Exhibit Q" and other selected portions became "Exhibit AC". Importantly, at [34] of his reasons his Honour noted that neither of those Exhibits became evidence in the proceedings against QBE.

The movements of Izzy, Mr Paseka and Mr Lokotui before Mr Pesaka crossed Wellington Street

41 According to the CCTV footage Mr Paseka exited the hotel premises onto the Wellington Street footpath at 4:36:59. In the ERISP he said that he went outside "for a smoke, just chilling with the bouncers there". He is seen smoking a cigarette with a group of males at the entrance to the hotel as Mr Paea watched at 4:37:05. He then walked up Wellington Street with two other males at 4:37:26. At 4:47:15 Mr Lokotui exited the hotel onto Wellington Street and Mr Paseka can be seen further up that street.

42 At 4:47:21 Izzy exited onto Wellington Street and at 4:47:34 is seen speaking to Mr Lokotui on the Wellington Street footpath. Izzy is holding a bottle and appears to point across Wellington Street. At this juncture Mr Paseka has not returned from further up Wellington Street. He did so at 4:47:43 when he suddenly took the bottle from Izzy as Mr Lokotui watched. At 4:47:46 Mr Lokotui re-entered the hotel and Izzy walks across Wellington Street as Mr Paseka apparently bends down to put the bottle which he had taken from Izzy into a bin near the entry to the hotel. As I have noted at [26] above, one cannot tell from the CCTV footage that Mr Paea observed Mr Paseka relieving Izzy of the bottle as Mr Paseka was standing between Izzy and Mr Paea, thus obstructing Mr Paea's view of what Mr Paseka was doing. In any event Mr Paseka's actions were consistent with him being a responsible patron of the hotel.

43 At 4:48:01 Mr Paseka is seen embracing patrons and kissing others. This is 2 minutes and 52 seconds before the assault. It is somewhat at odds with Ms Williams' evidence that Mr Paseka was acting in an aggressive manner and calling out words like "woman basher" directed at the respondent: in other words, that Mr Paseka was exhibiting a potentially violent disposition. At 4:48:27 it is alleged by the respondent but denied by the appellants that Mr Paea was looking across Wellington Street as was one female patron and a bald gentleman. The respondent asserted that this was the first time that Mr Paea looked across Wellington Street towards its intersection with Victoria Road subsequent to the respondent and Ms Williams leaving the hotel. It is about 40 seconds after Izzy had crossed the road and more than 5 seconds before Mr Paseka commenced to cross Wellington Street at 4:48:32, 2 minutes and 21 seconds before the assault.

44 The relevance of the foregoing is threefold. First, the primary judge found that because Mr Paseka relieved Izzy of a bottle of alcohol, he must still have been on duty at the time he crossed Wellington Street and this must have been known to Mr Paea. However, and secondly, one could not say with confidence, given the quality of the CCTV footage, that the actions of Mr Paseka were, a matter of probability, observed by Mr Paea due to his line of sight being obstructed by Mr Paseka. Thirdly, Mr Paseka did not appear to be acting at the time he crossed Wellington Street as an employee of the hotel given his conduct towards other patrons. I shall return to these matters later in these reasons when dealing with his Honour's findings.

Mr Paseka's ERISP

45 At this point it is appropriate to set out the relevant parts of Mr Paseka's ERISP admitted into evidence only against Bowcliff:

"Q182 Ah hmm.

A And then that's when I saw, well, I saw that guy and the Abo guy [the respondent] talking to oh, arguing over some girl. [He is referring to when he had gone outside "for a smoke"]

Q183 Ah hmm.

A And they were pretty loud. I walked over....

Q184 Yep.

A ...and then um, oh, I go um, they started talking about, "Oh, he's trying to hit on him, or, He's trying to hit on her."

Q185 Who said this?

A Um, the, the guy that got hit.

Q186 O.K.

A Saying, "Why are you hitting on my missus?"

Q187 Ah hmm.

A "Got a kid to him." And then I just told 'em to calm down um, yeah, calm down and then is that a, he goes, "Mate, do you want a go, I'll take all of youse on now." And started jumping around.

Q188 Ah hmm.

A And he has his hands up too.

Q189 Yeah.

A Had his hands up too. And um, it looks like he was going to throw a hook or something.

Q190 Ah hmm.

A I was just standing there. I walked back, I took a step back, walked forward and then he said something to me and as soon as he said something I just hit him.

...

Q236 And, and could you, what were they saying?

A Oh, they were just arguing, "Why are you, why are you trying to hit on my missus." And then he turned around and goes, "I'm not trying to hit on your missus, I know that girl." Something, blah blah blah, I just heard it, and then that's when he started going, "Oh, mate, calm down, calm down["]. And the that's when he started getting, jumping up with his hands open.

Q237 Ah hmm.

A And that's when he started to say something and I just turned around and just hooked him.

Q238 So when you, when you saw them talking on the corner....

A When they started kind of talking a bit loud.

...

Q638 I'm just going to run through everything that we've got through.

A No worries.

Q639 OK. You were at the Bridge, Last Bridge Hotel ....

A Ah hmm.

Q639 .....at Rozelle.

A Yes.

Q640 You started work at about 10 to 12.00.

A Yes.

Q641 Whilst you were working you had a number of burbon and Cookes. [sic]

A Not while I was working.

Q642 Well, on your breaks....

A Yeah.

Q642 ....you had bourbon and Coke. Yep. And then at one stage you told your manager, Ben, that you'd had a bit too much and....

A Yes.

Q642 ....you couldn't work anymore.

A Yes.

Q643 OK. You've then gone out the front...

A Yes.

Q643 ...to have a smoke...

A Yes.

Q643 ...and there was a bouncer outside but you can't remember his name.

A Yes.

Q644 OK. You've seen an Aboriginal guy [the respondent] and a Tongan guy [Izzy]...

A Yes.

Q644 ... standing on the corner at the traffic lights near the Caltex....

A Yes.

Q644 ... and they were having an argument about a girl.

A Yes.

Q645 OK. And you've walked over.

A Yes.

Q646 Yeah. You've tried to get them to calm down....

A Yes.

Q646 ....and the Aboriginal guy has shaped up...

A Yeah.

Q646 ....bouncing around, said you know, let's have a go.

A Yeah. "I'll take all of youse." That's what he said.

Q647 Yep.

A Yep.

Q648 OK. You thought he was going to hit you.

A Yeah.

Q649 You've stepped back....

A Yes.

Q649 ...and he said something to you that you can't remember what it is.

A Yes.

Q650 And then you've hit the jaw...

A Yes.

Q650 ....with your right hand....

A Yes.

Q650 ....on his left jaw.

A Yes.

46 The foregoing was the only evidence as to the nature of the alleged altercation between the respondent and Izzy which underpinned his Honour's findings that it was such that Mr Paea should have prevented Mr Pesaka from intervening in it.

Some findings of the primary judge - can they be maintained?

47 At [126] of his reasons his Honour recorded a submission by Bowcliff that Mr Paseka's answers given to the Police in his ERISP were untested and, to the extent the ERISP contained a version which was favourable to Mr Paseka, it was unreliable: it was in Mr Paseka's interest when talking to the police to involve Izzy as it tended to validate his intervention.

48 His Honour made no specific finding with respect to this submission although, as will appear, it seems that he rejected it and accepted that the events as chronicled by Mr Paseka in his ERISP were reliable and should be accepted. If this be so, then the primary judge must implicitly have rejected the evidence of Ms Williams which, so it was submitted by Bowcliff, did not support a case that Izzy was involved in any confrontation or argument with the respondent on the opposite side of Wellington Street in which Mr Paseka felt constrained to intervene. Izzy was not implicated in Ms Williams' statements or oral evidence: all the yelling came from Mr Paseka. Again there was no express finding with respect to this submission. It ought to be noted that the description by Mr Paseka in the ERISP as to what was occurring between the respondent and Izzy went no higher than that they were talking or arguing about a girl. In answer to Q183 he said "they were pretty loud" whereas in answer to Q238 he said that they were "talking a bit loud", and in answer to Q236 he said they were "just arguing".

49 The finding of fact by his Honour at [168] is based upon his acceptance of the version of the events provided by Mr Paseka to the police in his ERISP. It is convenient to set out that finding in full:

"Fourth, I find that before [the respondent] was assaulted there was a prior incident involving a confrontation between [the respondent] and Izzy. This follows from, among other things, the description of events given by Mr Paseka in his police interview when he said that [the respondent] and another man were arguing pretty loudly over some girl and that he 'told them to calm down'. It is this 'disturbance' that [the respondent] contends the people located on the hotel side of Wellington Street were looking at on the opposite side of the road. The incident occurred during a period of approximately two and a half minutes between when Mr Paseka is seen to walk out of shot in the CCTV footage to cross the street and the time when he punched [the respondent]. It follows that I find that Mr Paseka was attracted to cross Wellington Street, where he punched [the respondent] within approximately two and a half minutes of doing so, as the result of [the respondent] participating in a verbal exchange with Izzy."

50 A number of observations may be made with respect to this finding. First, although his Honour found that the elapsed time between when Mr Paseka commenced to cross Wellington Street to the time of the assault was "approximately two and a half minutes", based on the CCTV footage it was, to be precise, 2 minutes and 21 seconds. Secondly, it is not clear that the contention referred to by his Honour in the third sentence of [168] constituted a finding of fact. It will be necessary to analyse more closely the CCTV footage to determine the validity, if any, of that contention. Thirdly, at [169] the primary judge accepted that he was unable to determine what was or might have been the precise nature or extent of the verbal exchange between the respondent and Izzy. His Honour accepted that it was apparent that it did not involve physical violence; rather, it appeared only to have been a case of the respondent and Izzy "trading verbal abuse". His Honour accepted the relative paucity of the evidence concerning this so-called disturbance. Ultimately, the issue is whether Mr Paea and/or Bowcliff were in breach of their duty of care to the respondent by failing to respond to the disturbance which his Honour described as "potentially violent, and certainly quarrelsome and disorderly conduct" and which assumes that "trading verbal abuse" in the location where it occurred could legitimately fall within that description.

51 Fourthly, there is an inconsistency, in my respectful view, between his Honour's apparent acceptance of the course of conduct of Mr Paseka and his unchallenged finding at [207] of his reasons that Mr Paseka's assault on the respondent was a gratuitous and unprovoked attack borne of some unknown and unexplained personal animosity towards, or resentment of, him. If this be so, and it was on the basis of that finding that his Honour considered that neither Bowcliff nor Mr Keough were vicariously liable for Mr Paseka's assault upon the respondent, then the reliability of Mr Paseka's apparently reasonable response (other than the actual assault) to the alleged argument between the respondent and Izzy is called into question. In other words, if Mr Paseka's actions were, as his Honour found at [207], "borne of some unknown and unexplained personal animosity towards, or resentment of, [the respondent]", then it is very difficult to accept that Mr Paseka proceeded to intervene in that argument by calling upon the respondent and Izzy to "calm down" merely because they were arguing loudly.

52 In any event, and importantly, at [169] his Honour made the following finding:

"Quite apart from the question o[f] whether it did warrant or necessitate intervention, it seems that by the time Mr Paseka had crossed the road, the incident between [the respondent] and Izzy had already ended or was ending. This much emerges from the fact that Mr Paseka only seems to have engaged or to have become involved with [the respondent], and Izzy appears to have retreated, actually or notionally, in all respects from the confrontation."

53 The respondent ultimately challenged this finding upon the basis that it was unsupported by any evidence. If the finding stands then certainly so far as Mr Paea is concerned, the respondent's case fails. On the other hand, if the primary judge was correct in accepting the sequence of events recorded by Mr Paseka in the ERISP, then the "incident" between the respondent and Izzy was continuing at least until Mr Paseka requested them to "calm down". According to Mr Paseka the respondent and Izzy were arguing over a girl; Mr Paseka heard it and that's when he said "oh, mate, calm down, calm down". Thereupon, according to Mr Paseka, the respondent jumped up with his hands open confronting Mr Paseka which immediately resulted in the assault.

54 What is not clear, no doubt due to the inability to call relevant witnesses such as Mr Paseka, Izzy and Zoe, is whether Mr Paseka's request to the respondent and Izzy to "calm down" was said to them on his arrival across the road or some time thereafter. As already noted, the time lapse between when Mr Paseka commencing to cross Wellington Street and the assault was 2 minutes and 21 seconds. The point within that time period when Mr Paseka requested the respondent and Izzy to "calm down" is simply unknown. This was recognised by the respondent in his written submissions which accepted that the ERISP was less than clear in some respects and possibly unreliable in others. Nevertheless, it was submitted that it presented a sufficiently clear picture of what occurred between the time when Mr Paseka was seen crossing the street on the CCTV footage and his assault on the respondent. On the other hand if Ms Williams' evidence is accepted, the argument between the respondent and Izzy had ceased well before the assault and his Honour was correct in so finding at [169] of his reasons.

55 However, if the primary judge's finding that by the time Mr Paseka had crossed the road the incident between the respondent and Izzy had already ended or was ending is accepted, then there is no evidence as to what occurred between the three of them or between the respondent and Mr Paseka for the best part of 2 minutes or more.

56 What results from the foregoing is as follows. His Honour appears to have accepted the account contained in Mr Paseka's ERISP of what was happening between Izzy and the respondent over Ms Williams' account. This means that his Honour accepted that there was in fact a dispute between Izzy and the respondent. However, the reliance placed on the ERISP evidence, which suggested that Mr Paseka was looking to quell a verbal argument between Izzy and the respondent, is at odds with his Honour's findings that Mr Paseka was motivated by personal animosity towards the respondent. Acceptance of the ERISP evidence is also at odds with his Honour's finding that the argument was cooling down at the time Mr Paseka arrived. With respect, his Honour's findings relating to the nature and intensity of the dispute, and who was present cannot be maintained because they rely upon conflicting evidence which his Honour did not resolve, and which in my view cannot be resolved.

57 I would add that although the primary judge found at [185] that Mr Paseka had assaulted a Mr Tyrone O'Reilly on 17 November 2007, he made no finding to the effect that any of Mr Paea, Mr Lokotui, Mr Keough or Mr Davies was aware of that assault or that otherwise they were aware or ought to have been aware of any propensity on the part of Mr Paseka to violence. His Honour also found (at [186]) that Mr Paseka was not severely intoxicated or heavily affected by intoxicating liquor at the time of the events in question and, in fact, he did not appear to be even moderately affected by alcohol at the relevant time. Furthermore, there was no finding by his Honour rejecting the evidence of Mr Davies that Mr Paseka was generous and friendly to patrons and other staff members; that he never saw him as anything other than polite and respectful to others and that he had never witnessed any sign of aggression on Mr Paseka's part. Mr Keough gave evidence to the same effect when he said that he never knew Mr Paseka to be violent in any way, nor was he aware that he had been in any previous altercation with any person - he found him to be level headed and polite in all his dealings with him. None of this evidence was challenged. Its effect was that there was nothing to suggest to Mr Paea or anyone else that Mr Paseka had a propensity to become violent.

58 These findings are relevant because they go to whether Mr Paea should have prevented Mr Paseka from crossing Wellington Road, or whether Mr Paea should have been quelling the dispute between Izzy and the respondent. I have found that the evidence relied upon by his Honour did not establish that the nature of the alleged argument across Wellington Street did in fact draw, nor ought to have drawn, Mr Paea's attention to the point where he was required to intervene. The evidence does not suggest that Mr Paea was aware of any history of violence on the part of Mr Paseka's, so it could not be said that Mr Paea should have been paying particular attention to any intervention by Mr Paseka in a verbal argument between the respondent and Izzy. Furthermore, in my view, the evidence does not establish to the necessary degree of confidence that Mr Paea was aware of any such verbal argument.

The CCTV footage analysed - in what direction Mr Paea and the other patrons are looking

59 I have found at [47] - [58] that the primary judge's finding that Mr Paea was aware of an altercation between the respondent that required his intervention, or the prevention of Mr Pesaka's intervention, either before or after the latter crossed Wellington Street cannot be maintained. As I have said, this case is one in which the duty of the appellate court is to decide the case - the facts as well as the law - for itself and reach its own conclusions as to the inferences that may be drawn from the evidence: Warren v Coombes (at 552, 553). This is what I have attempted to do.

60 The only objective evidence of what did occur is the CCTV footage. It is at this point that a close analysis of that footage becomes necessary to determine the extent to which, if at all, the attention of Mr Paea and the other patrons milling outside the Wellington Street entrance to the hotel were attracted to the so-called disturbance between the respondent and Izzy. In this respect there is a difference of opinion between the respondent on the one hand and the appellants on the other as to the proper interpretation of what is depicted in a number of frames of the CCTV footage.

61 Each party initially provided their own chronology of the relevant CCTV footage of Camera 3 which included the one frame from Camera 6 referred to at [22] above. At the direction of the Court, the parties combined their chronologies into a single document (the chronology). The chronology recorded 58 frames of the CCTV footage, commencing on Sunday 25 November 2007 at 4:36:59 and concluding at 5:14:31. However, the critical period relates to frames 9 (4:47:10) to 39 (4:50:53), a period of 3 minutes and 43 seconds (the critical period). It will be necessary to analyse the CCTV footage covering this period in some detail. For the purpose of the analysis which follows, I have referred to the frames in the chronology which in all cases I have checked against the original footage.

62 At [201] the primary judge found that up to and including the point where the respondent was escorted from the hotel and onto Wellington Street at 4:47:10, neither Bowcliff nor Keough and, I would add, DSSS had breached any duty that they owed to the respondent to take reasonable care for his safety as a patron of the hotel. Thus, as his Honour noted at [203], the critical period were the events which occurred between 4:47:10 and 4:50:53, a period of 3 minutes and 43 seconds: see [61] above. In fact, the critical period is less than that, for it only commences at 4:47:46 when Izzy is seen to walk across Wellington Street presumably in the direction of where the respondent was then standing on the corner of that street and Victoria Road outside the service station. The elapsed period of time between 4:47:46 and 4:50:53, being the time of the assault, is 3 minutes and 7 seconds.

63 Nothing appears to have occurred to attract anyone's attention to the respondent and Izzy before 4:48:27 when it is asserted that for the first time Mr Paea looked across Wellington Street after the respondent had left the hotel. That was approximately 40 seconds after Izzy crosses the road and is 2 minutes and 26 seconds before the assault. However it is not clear that Mr Paea is looking across Wellington Street in the 4:48:27 frame although one patron appears to be doing so whilst approximately six or seven patrons are gathered on the footpath outside the entrance to the hotel but are paying no attention to what, if anything, was occurring across the road.

64 The next frame is at 4:48:32, some 2 minutes and 21 seconds before the assault. It reveals that Mr Paseka has commenced to cross Wellington Street. Again and as noted at [24] and [63] above, it is difficult to determine precisely where Mr Paea is looking given the blurred image of his face and the glare effect of vehicle headlights. I would reject the submission that in this frame Mr Paea was clearly watching what Mr Paseka had been watching. Again, among the relatively large number of patrons congregating on the footpath outside the entry to the hotel only one appears to be looking across Wellington Street. One would infer that at that point there is nothing occurring on the other side of the road which would attract their attention. The frame in which it is alleged that Mr Paea is observing events across the road is at 4:48:36. I would reject the submission contained in the chronology that there were events happening across the road which were attracting the close attention of Mr Paea. Again, apart from two and possibly three persons who appear to be looking across the road, none of the other patrons on the footpath appear to show any interest in what, if anything, is occurring across Wellington Street.

65 At 4:48:40 a patron commences to cross Wellington Street and it would appear that Mr Paea is looking at him. The same person who has been looking across the road since 4:48:27 is still doing so and for the first time a gentleman in a striped orange top appears to look across the road. In this frame Mr Paea is watching the patrons.

66 The frame at 4:48:41 shows four persons including the two already mentioned appearing to look across Wellington Street. There is a dispute as to whether Mr Paea is doing so. Again, the image of Mr Paea's face is not clear. This is approximately 9 seconds after Mr Paseka commenced to cross the road.

67 The next relevant frame is at 4:48:56. The respondent asserts that Mr Paea has now turned his body towards the street but even if this be so it would appear that he is looking towards Victoria Road and not across Wellington Street. It is common ground that at this point none of the other patrons (of which there appear to be four or five) milling about outside the entrance of the hotel are looking in the direction of the respondent.

68 The same comment applies to the frame at 4:48:58 where it is conceded by the appellants that Mr Paea is looking towards Wellington Street but none of the other patrons standing outside the entrance to the hotel are doing so. It was at this point that a taxi turns illegally from Victoria Road into Wellington Street which was a one-way street towards Victoria Road. It may be that Mr Paea was looking towards the taxi rather than the respondent. One does not know. What is clear, however, is that none of the patrons standing outside the entry to the hotel were attracted to what, if anything, was then occurring across the road.

69 At 4:48:59 Mr Paea appears to be looking across Wellington Street but none of the patrons on the footpath are doing so. At 4:49:07 Mr Paea appears to be facing towards Victoria Road and again none of the patrons on the footpath are looking across Wellington Street. If anything, Mr Paea is watching the patrons outside the entry door.

70 At 4:49:20 it is asserted that Mr Paea is directly observing events across the road which are now attracting the attention again of some patrons. However, the glare in the frame due to the headlights of the taxi makes it impossible to determine in which direction Mr Paea is looking. I would also reject the submission that any of the patrons are depicted in this frame as looking across the road.

71 At 4:49:25 a female patron commences to cross Wellington Street and Mr Paea appears to be looking at her. Again, nothing across the road appears to be attracting the attention of the other patrons milling about outside the Wellington Street entry to the hotel.

72 The frame at 4:49:27 makes it difficult due to the glare of vehicle headlights to determine whether Mr Paea is looking across Wellington Street. It would appear that two out of five patrons are looking in that direction. At 4:49:32 a bald man wearing a black shirt crosses Wellington Street and Mr Paea appears to be looking in his direction. Two patrons appear to be looking across the road but others are not.

73 At 4:49:49 a woman in a white shirt and headband commences to cross Wellington Street and it would appear that Mr Paea is looking at her. None of the patrons appear to be attracted to anything across the road.

74 According to the respondent the frame at 4:50:17 reveals Mr Paea continuing to observe events across the street. It is asserted by the appellants that Mr Paea's body is turned towards Victoria Road although his head is slightly turned towards Wellington Street. None of the patrons then outside the entry door to the hotel are looking across Wellington Street.

75 The frame at 4:50:23 shows a man in a white shirt crossing Wellington Street and Mr Paea appears to be watching him. This is 30 seconds before the assault. The respondent does not assert that any of the patrons shown in that frame are looking across the road. On the other hand it is asserted that in the frame at 4:50:27 both Mr Paea and some three patrons are observing events across the street. Again the image is not sufficiently clear due to headlight glare to be able to assert with confidence that Mr Paea is looking across the street and the same comment applies to the patrons.

76 At 4:50:38 Mr Paea has for the first time left his post and is observed walking towards the hotel entry door. This is about 15 seconds before the assault. Although it is asserted that one patron on the footpath is looking across the road this is not clear as he appears to be speaking to two other persons. At 4:50:45 Mr Paea is observed speaking to his co-security guard, Mr Stegnajaic, at the hotel entry door. This is 8 seconds before the assault. At 4:50:49 Mr Paea is looking across Wellington Street although it is more difficult to determine whether the patrons, of which there appear to be three, are doing likewise. Four seconds later the assault occurs.

77 In summary, the CCTV footage appears to indicate and the appellants accept that on a few occasions Mr Paea is looking across Wellington Street. Further, one or more patrons occasionally look across Wellington Street but then appear to lose interest. In particular, it would appear that the last time in which the CCTV footage clearly shows a number of patrons looking across Wellington Street is at 4:48:41 and, possibly, 4:49:27 and 4:49:32. There is a possibility that two patrons were looking across the road at 4:50:23. In addition, the patrons were either not attracted to what was allegedly occurring between the respondent, Izzy and Mr Paseka, or if on occasion they were, this interest was not maintained. This is indicative of the fact that whatever was occurring across Wellington Street was not of a serious nature.

Some further evidence

78 The only other evidence with which it is necessary to deal is Exhibits "M" and "N" referred to by the primary judge at [32] and [33] of his reasons. Exhibit "M" appears to be an internal document of Bowcliff headed "Bridge Hotel Security" which instructs its employees while controlling the entrance of the front door of the hotel relevantly as follows:

"- Maintain vigilance

...

- Also, do not get into arguments with patrons no matter that they may be unreasonable. Do not get into a fight nor strike anyone. We are here to dissolve argument and not to participate. Aggression by security will not be tolerated and you will not be working here.

...

- Under our licence we have an undertaking to ensure patrons depart the hotel and neighbourhood in a quiet and orderly manner and to ensure that they do not disturb the neighbourhood. To this end on busy nights we need to patrol outside and in the vicinity of the premises to ensure this. If you cannot leave your station at the time of an incident, then notify other staff or management."

79 Exhibit "N" is a Liquor Administration Board of New South Wales Licence History Sheet relating to the hotel. It lists what are described as "special conditions" attaching to the hotel licence and relevantly includes the following:

"4) That the licensee shall take all reasonable steps to ensure: -

a) that the patrons depart the hotel and the neighbourhood in a quiet and orderly manner; and

b) that patrons do not congregate on the footpaths of the street surrounding the hotel, to the disturbance of the neighbourhood.

...

7) That security personnel shall be employed at the hotel on the following nights outlined below: -

...

On the occasions that more than one (1) door person is employed, those door persons shall patrol outside the premises and in the vicinity of the premises to ensure that the above mentioned undertakings are complied with."

There was no finding by his Honour that either of those Exhibits were ever seen by Mr Paea.

The relevant legal principles applicable to occupiers of licensed premises

80 The primary judge set out 12 legal principles at [189]-[200] that are applicable to occupiers of licensed premises. Relevantly, and this was common ground, Bowcliff and Mr Paea were under a duty to take reasonable care to prevent injury to an hotel patron from the violent, quarrelsome or disorderly conduct of other patrons: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420 at [26]. In determining whether there has been a breach of duty it is necessary to consider the provisions of s 5B of the Civil Liability Act 2002 (NSW). Whether in any particular case there was a foreseeable risk of harm to a plaintiff depended on the facts of the case. It is noted by Giles JA in Cregan Hotel Management Pty Ltd v Hadaway [2011] NSWCA 338 at [70] that what is reasonable with respect to the safety of a hotel patron always depends on the circumstances. In the same case, Basten JA stated at [81] the principles in the following terms:

"There was no dispute on the appeal that the owner and operator of licensed premises owed a duty of care to its patrons, which extended to taking reasonable care to prevent them being attacked by other persons who were aggressive, or were likely to be aggressive because affected by liquor: see Chordas v Bryant (Wellington) Pty Ltd (1988) 20 FCR 91, applied by this Court in Wagstaff v Haslam [2007] NSWCA 28; 69 NSWLR 1 at [39]. The earlier cases in which such claims have been upheld by injured patrons have mainly related to attacks which occurred on licensed premises, as in Wagstaff: see also Spedding v Nobles; Spedding v McNally [2007] NSWCA 29; 69 NSWLR 100; Collingwood Hotel Pty Ltd v O'Reilly [2007] NSWCA 155 and Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; 239 CLR 420, although in each of the latter cases the claims failed on the facts. There have been further cases where claims have been brought in respect of assaults which occurred beyond the boundaries of the licensed premises."

81 As Allsop P, Hodgson and Macfarlan JJA agreeing, observed in Portelli v Tabriska Pty Ltd [2009] NSWCA 17 at [60], the duty of care of a publican or security firm was recently stated by Bell JA (as she then was), with whom Allsop P and Basten JA agreed, in Rooty Hill RSL Club Ltd v Karimi [2009] NSWCA 2 at [33]-[35]. In Rooty Hill RSL Club Ltd v Karimi at [33] Bell JA stated the relevant principles, omitting citations, in the following terms:

"The law recognises that the occupiers of licensed premises may be liable for the tortious or criminal conduct of patrons... The basis of the liability lies in the control exercised by the occupier over patrons and the occupier's knowledge, or ability to know about, the intoxicated condition of patrons... The element of control is subject to statutory obligations not to permit intoxication or violent or quarrelsome conduct on licensed premises and to remove those who engage in such conduct."

82 In Portelli the President at [61]-[69] returned to the issue of control in the context of the imposition of a duty of care. Relevantly, he observed:

"... I have reservations about whether it can be said, as the primary judge did, that the duty cannot extend to any circumstances where the wrongdoing causing injury to the plaintiff occurred in a public street. The element of control which, together with the statutory obligations and occupation of the site, is the foundation of the duty may in appropriate circumstances apply to control of the victim (or at least circumstances which attend the victim) as well as of the aggressor. The fact that the aggressor has been put out of the hotel may not exhaust the obligation of the licensee or occupier to take reasonable steps to respond to a foreseeable risk of injury to the remaining patron. ... Care must be taken, however, to prevent recognition that the control able to be exercised by the licensee or occupier can be the foundation of a duty of care to a patron becoming transformed into a proposition that the licensee or occupier has a positive obligation to become the protector and guardian of the so called "innocent" patron whenever danger outside the hotel can be reasonably apprehended....

...

The usual duty of care of an occupier to entrants must be recognised. Further, the conduct (whether as occupier or otherwise) of a public house or other place of entertainment may, of itself, create foreseeable risks to the safety of attendees, which may include the possible violent or rowdy behaviour of some attendees. This may found a duty based on control (perhaps springing in part from occupation) to exercise reasonable care to avoid harm to attendees from such risks ... Nevertheless, it may mislead to speak, invariably, in terms of a generalised duty of care of a publican to take reasonable care for the safety of persons on occupied premises. The question will always be whether, in the circumstances, a duty was owed to the plaintiff, in respect of the damage suffered by him or her, to exercise reasonable care in some relevant respect arising from the occupation of premises, the control involved in any such occupation, any statutory responsibilities in relation to the licence or in relation to the conduct of the establishment and any assumption of responsibility." (citations omitted)

83 Without repeating them, the first eight of the 12 principles stated by the primary judge emphasise the element of control able to be exercised by a publican as a foundation of his duty of care owed to a patron. Furthermore, the boundary of that duty cannot always or necessarily be confined to the curtilage of the licensed premises but may extend beyond it.

84 Nevertheless the relevant scope of the duty is to be derived from the following passage in the judgment of the High Court in Adeels Palace at [26]:

"In the circumstances reasonably to be contemplated before the restaurant opened for business on 31 December 2002 as likely to prevail on that night, Adeels Palace owed each plaintiff a duty to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons. The duty is consistent with the duty imposed by statute upon the licensee and which was a duty enforceable by criminal processes. No question arises of translating a statutory power given to a statutory body into the common law "ought". The duty is not absolute; it is a duty to take reasonable care. It is not a duty incapable of performance. .... Although it is a duty directed to controlling the conduct of others (for the avoidance of injury to other patrons) it is a duty to take reasonable care in the conduct of activities on licensed premises, particularly with regard to allowing persons to enter or remain on those premises."

Some preliminary comments on liability

85 This statement of the scope of the duty in Adeels Palace is cast in terms of taking reasonable care to prevent injury to patrons "from the violent, quarrelsome or disorderly conduct of other persons". The primary judge placed emphasis on this expression at [205] of his reasons stating that what occurred between the respondent and Izzy was "plainly quarrelsome and disorderly conduct" and that it was this "disturbance" that provided Mr Paseka's fateful intervention. But who were the relevant "other persons"?

86 In the context of the present case the relevant duty imposed on Bowcliff and/or Mr Paea was to prevent injury to the respondent from the violent, quarrelsome or disorderly conduct of Mr Paseka. The difficulty with applying that proposition to the present case is that there was no suggestion, until the assault actually occurred, of any such conduct on his part. His Honour attributed the relevant quarrelsome and disorderly conduct to the respondent and Izzy but they were not in the present case the "other persons" to which the relevant legal principle is directed.

87 Thus at [169] of his reasons the primary judge, when referring to the respondent and Izzy "trading verbal abuse", regarded that conduct as "potentially violent, and certainly quarrelsome and disorderly, conduct". But even if it be correct that the incident as between the respondent and Izzy was quarrelsome and disorderly and even potentially violent, that conduct obviously cannot be attributed to Mr Paseka.

88 At [205] his Honour records the submission of the respondent that Bowcliff directly breached its duty of care by failing to prevent injury to him as a patron, caused by the violent, quarrelsome or disorderly conduct of "other persons" in the vicinity of the hotel, and by failing to take precautions against a risk that an untrained and unqualified person intervening in an altercation between he and Izzy might overreact and cause him harm. His Honour went on to acknowledge that the precise nature and extent of the altercation between the respondent and Izzy was not known with any certainty albeit, so his Honour found, that it undoubtedly attracted Mr Paea's attention "although regrettably not his involvement". It was also unclear as to what stage the altercation had reached when Mr Paseka decided to become involved.

89 One can accept that had there been an altercation between the respondent and Izzy on the footpath of Wellington Street outside the entry to the hotel, that Mr Paea would have been under a duty to intervene in his capacity as a trained security guard, to quell any possible disturbance. Equally, if Mr Lokotui had been present on the footpath and observed disorderly conduct on the part of the respondent and Izzy, he also would have been under a duty to intervene to ensure that the situation did not escalate.

90 The difficulty in the present case is that the so-called altercation took place on the other side of Wellington Street. Certainly, one can accept that the location where the assault took place was in the vicinity of the hotel but it was significantly separated from it by a three lane road and involved two patrons having, at highest, an argument on the corner of Wellington Street and Victoria Road, the latter being a main traffic artery. There was no evidence that their altercation was relevantly disturbing the neighbourhood although his Honour (at [208]) concluded that it did without further elaboration. Of course, there may be a point where the altercation is such that, as a matter of judgment, a security guard aware of it should intervene to bring it to a peaceful end, but that would depend upon the particular circumstances at the time including the judgment of the security guard as to whether it appeared that the altercation was starting to get out of hand. There was no evidence that that was the case in the present instance.

91 I would interpose at this point that the respondent relied heavily on evidence from Mr Keough and Mr Lokotui to the effect that if there were a number of people across the road involved in conduct which caused concern to a security guard, the hotel's security system would allow for that guard to cross the road to investigate. However, Mr Keough qualified his answers by stating that whether the guard would cross the street would depend on the situation and the particular circumstances. Thus, the following exchange occurred with Mr Keough:

"Q. That might be a situation where you might depend upon the judgment of the guards who have had the training and the licences; would that be correct?

A. Yes.

Q. But it would certainly be within your expectation as the licensee of the hotel that they might think it appropriate for them both to go over, would you agree?

A. Sure. We're assuming of course, that they were patrons of the hotel.

Q. Yes, we are assuming that.

A. Yeah.

Q. Looking at what we have seen of the actions in that segment of DVD that I have shown you of the actions of the security guards depicted in that segment, their actions are consistent with the implementation of the security system which the hotel had implemented in accordance with its view of its obligations on that occasion?

SHELDON: I object. That depends on what's happening over the road on this witness's evidence.

HIS HONOUR: I suppose that's true. You may need to incorporate an assumption.

CAMPBELL: Yes, I will.

Q. Let's assume that what the security guards have detected across the road is a group of a few patrons who have left the hotel gathering across the road and without knowing precisely what has occurred the security guard detects that some kind of incident has happened or is developing. Now, adding that to the various assumptions I have asked you to make, you agree with me that what we see on the video I played to you of the actions of the three security guards is consistent with the implementation of the security system that the hotel had in place on that night?

A. Yes, but it's also part of their training and their operations manager would have instructed them. It's not just the hotel thing, it's part of their operating procedure for any security guard."

92 The following further exchange then occurred:

"Q. Mr Keough, I think you were being asked whether or not in 2007 it was sometimes the practice of security staff retained by the hotel to cross Wellington Street to deal with incidents occurring there?

A. If there was unruly behaviour and people were loud and things like that you might go over and calm them down, yes. You might not have to go over there. You may go halfway, you may go over there and say, "Calm down, fellows, it's too loud." If you are talking about an altercation, it would depend on whether how long after, where was it located, did they go somewhere else. If anyone's

safety was in jeopardy I would always go over, but I don't know that security always would."

I shall refer below to the cross-examination of Mr Lokotui on behalf of the respondent. It is noteworthy that the reaction of the security guard assumed in the above evidence was premised on first, there being an incident that was causing him concern and, secondly, the judgment of the guard whether to intervene.

93 An examination of the CCTV footage during the critical period and immediately after Izzy crossed the road does not reveal any particular concern on the part of Mr Paea until 4:50:38, some 15 seconds before the assault. On the basis of the ERISP, this was probably when, according to Mr Paseka, the respondent "shaped up" to him in what, apparently, was a threatening way.

The primary judge's reasoning with respect to Bowcliff's liability

94 Having rejected the respondent's case that either Bowcliff or Mr Keough were vicariously liable for Mr Paseka's assault upon the respondent, at [208] his Honour expressed the view that "the only viable basis" upon which it could be said that Bowcliff was liable to the respondent was that it permitted Mr Paseka to assault him or that it failed to take any reasonable steps to prevent him doing so. His Honour found that the disturbance between the respondent and Izzy should have alerted the security staff to be vigilant both as to what was occurring and as to who may be getting involved. He then referred to the undertaking given by Mr Keough to the Liquor Licensing Board that security guards were to patrol in the vicinty of the premises to ensure that patrons departed the hotel and the neighbourhood in a quiet and orderly manner and to ensure that they did not disturb the neighbourhood. Notwithstanding that little was known of the disturbance between the respondent and Izzy, his Honour concluded, as I have noted at [90] above, that it was such as to amount to a disturbance of the neighbourhood. With respect, I have difficulty in accepting this finding based on the paucity of evidence and, in particular, the location where the alleged disturbance was taking place.

95 At [209] his Honour found that Bowcliff's employees had the authority, as well as the ability, to control Mr Paseka's movements and to prevent him from becoming involved in the disturbance between the respondent and Izzy. This was because Mr Paseka was working or "on-duty" as a "glassy" at the time he crossed Wellington Street having relived Izzy of a bottle of alcohol. Had he been a patron or an off-duty employee as distinct from an on-duty employee then there may have been significant doubt as to whether Bowcliff's employees, including their security guards, had authority to prevent him intervening in any disturbance between the respondent and Izzy given where it allegedly occurred. But accepting that authority, the question is whether it could in the circumstances have been exercised by an appropriately qualified employee of the hotel, relevantly, Mr Lokotui. I confine this aspect of the matter to Mr Lokotui as it was common ground that Mr Paea was employed by DSSS and not by Bowcliff so that as a consequence of the recent decision of this Court in Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250 at [23] - [26], [31] and [33] per Leeming JA with whom Meagher and Emmett JJA agreed, the latter could not be vicariously liable for the negligence of Mr Paea. However, this concession became subject to the respondents' argument based on McDonald v The Commonwealth: see [153] - [158] below.

96 His Honour continued at [209] by finding that the very fact that Mr Paseka left the hotel side of Wellington Street in response to the disturbance should of itself have alerted Bowcliff's employees to the prospect that an incident would or might escalate if Mr Paseka intervened. In his Honour's opinion, Bowcliff breached its duty by failing either to take steps to intervene in the disturbance in the first place or to prevent Mr Paseka from doing so. The timely presence of Bowcliff's security staff on the other side of Wellington Street when the disturbance erupted would have meant that they would have been on the scene before Mr Paseka arrived in time to quell the disturbance or would otherwise have acted as a deterrent to him joining it at all. The element of control, in this case specifically the ability to control Mr Paseka's movements, was the foundation of the duty of care with which Bowcliff failed to comply.

97 I would make the following comments with respect to the primary judge's findings at [209]. In the first place, his Honour does not identify the Bowcliff employees who should have been alerted to the fact that Mr Paseka had left the hotel side of Wellington Street presumably in response to the disturbance. However, at [211] he found that either Mr Lokotui or Mr Paea should have been alert or sufficiently vigilant to anticipate the general likelihood that the events that occurred might occur and that they should have taken active steps to prevent those events by intervening to prevent Mr Paseka being involved.

98 The difficulty with this finding is threefold. First, Mr Paea was not an employee of Bowcliff although Mr Lokotui was. Secondly, no employees of the hotel were or could have been aware of, let alone anticipated, Mr Paseka suddenly proceeding across Wellington Street without warning. Mr Lokotui, the only relevant employee of Bowcliff who could have intervened, was then inside the hotel (see [42] above). Thirdly, although it was suggested that Mr Paseka could have been prevented from intervening in the disturbance between the respondent and Izzy, his Honour's finding seems to be that the hotel security staff should have proceeded to the other side of Wellington Street when the disturbance first erupted and, therefore, prior to Mr Paseka commencing to cross Wellington Street. If one accepts Mr Paseka's responses given in the ERISP, then the only knowledge, if any, that Mr Paea or Mr Lokotui (had he been present) would have had of the disturbance was that it appeared the respondent and Izzy were having an argument over a girl and that in so doing they were speaking loudly. On the evidence, that is putting the "disturbance" at its highest.

99 At [210] his Honour held that the "whole incident" was foreseeable. In particular, it was foreseeable that Mr Paseka's "interest" in the interplay between the respondent and Izzy was likely to lead to an escalation of the disturbance rather than to its reduction. This was because Mr Paseka was not trained as a security guard. The basis of this finding was the evidence of Mr Keough and Mr Lokotui in cross-examination that an untrained person intervening in an alcohol charged dispute between patrons may overreact and thereby escalate the disturbance rather than quell it.

100 Returning to [211] of his Honour's reasons, having stated that either Mr Lokotui or Mr Paea "should have been alert or sufficiently vigilant to anticipate the general likelihood" that Mr Paseka might assault either the respondent or Izzy, he remarked that the evidence was that

"they remained stationary and unmoved on the hotel side of Wellington Street, no more than mildly inquisitive and generally uninterested, observing but not intervening, in a disturbance that they should have prevented. If the disturbance was sufficient to attract Mr Paseka to cross Wellington Street, it was sufficient in a legal sense to have required the hotel security staff to do likewise."

101 With respect this is hindsight reasoning. According to his Honour (at [207]) the action of Mr Paseka crossing Wellington Street was borne of some unknown and unexplained personal animosity towards, or resentment of, the respondent, a finding not challenged by the respondent. This being so, it does not follow that because Mr Paseka decided to proceed across Wellington Street to speak to the respondent and Izzy, that Mr Paea should have followed suit. As I have already noted, his Honour wrongly presumed that Mr Lokotui should have averted to what might occur as a consequence of Mr Paseka proceeding across Wellington Street. However he was not present and even if Mr Paea should have proceeded to intervene, a matter to which I shall return, there was no basis on which his Honour could properly find that there was any failure on the part of any qualified employee of Bowcliff to anticipate Mr Paseka's actions or, for that matter, to have been aware of the disturbance on the other side of Wellington Street.

102 For the foregoing reasons in my view his Honour was in error in finding that Bowcliff was in breach of any duty of care to the respondent based on the inaction of its employees. This assumes that it had a duty of care towards him once he reached the other side of Wellington Street; in other words, that it had a duty to exercise reasonable care to avoid a foreseeable risk of injury to patrons, including the respondent: Roads & Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 234 CLR 330 at [18] per Gummow J (Heydon J agreeing); Leighton Contractors Pty Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1 at [49].

103 Although Bowcliff had such a general duty of care, in the present case there was no breach of it. A dispute between patrons on the opposite side of Wellington Street, if the circumstances warranted, might call for intervention or a response in accordance with the hotel security guidelines. In the present case that would depend upon whether it could be said that the particular dispute between the respondent and Izzy was, or ought to have been, judged by Mr Paea as relevantly disturbing the neighbourhood. Given the particular location of the altercation at the corner of Victoria Road and Wellington Street outside the service station in the presence of traffic, I would have some doubt, given the acknowledged paucity of evidence as to precisely what took place between the respondent and Izzy, that they were in fact disturbing the neighbourhood in any relevant sense.

The primary judge's reasoning with respect to DSSS's liability

104 At [216] the primary judge accepted the respondent's submission that, for the purposes of s 5B of the Civil Liability Act 2002 (NSW), the risk of harm and the duty owed by DSSS was co-extensive with that of Bowcliff. In particular, there was a foreseeable risk, which was not insignificant, that if Mr Paseka became involved in the disturbance between the respondent and Izzy on the other side of Wellington Street, then it could escalate to the point where the respondent could be injured.

105 At [217], after noting that Mr Paea was a trained and qualified security guard, his Honour observed that he had more than an ample opportunity to intervene in the dispute between the respondent and Izzy before Mr Paseka became involved but failed to do so. As a trained security guard he could and should have intervened either to prevent Mr Paseka becoming involved and/or before it escalated to the point of Mr Paseka's attack upon the respondent. It was insufficient for him simply to observe what was happening and to take what his Honour referred to as "an expectant, and unnecessarily optimistic, approach to what might occur". The "developing situation" called for action by him and he had sufficient time within which to act had he been vigilant and alert. It was therefore a breach of duty for him to do nothing.

106 In so finding the primary judge (at [218]) rejected QBE's submission that the earliest evidence of anything occurring which could possibly require intervention was the CCTV footage recorded at 4:50:10 when Mr Paea is depicted looking across Wellington Street. On the assumption that Mr Paea saw something that caught his attention as a professional licensed security guard operating within the hotel security system, it was, according to his Honour, sufficient to put him on notice that something was occurring which made the risk of physical injury to a patron foreseeable and not insignificant. The evidence went at least as far as to establish that the respondent and Izzy were engaged in some form of altercation "that was quarrelsome and disorderly and potentially violent".

107 There are a number of difficulties in accepting the foregoing findings. They include the following. First, they make the assumption that Mr Paea did see something that caught his professional eye to the point where he ought to have exercised his judgment to intervene. However, that assumption was never proven. What was occurring was on the other side of Wellington Street some 15 metres from where Mr Paea was standing. Secondly, Mr Paea's duties not only extended, if they extended at all, to what was occurring on the other side of Wellington Street but also to what was occurring in his immediate vicinity on the footpath outside the Wellington Street entry to the hotel where patrons exiting the premises, and generally in an intoxicated state at that time of the morning, were milling around.

108 Thirdly, Mr Paea had no knowledge as to whether the respondent and Izzy were intoxicated. As it happens the respondent was not. Izzy may have been, though the extent of Mr Paea's knowledge of that is disputable. Even if the evidence of Mr Paseka in the ERISP that the respondent and Izzy were arguing over a girl is accepted, there is no evidence that Mr Paea was aware of the nature of their argument even if Mr Paseka was. As the ERISP was not admitted against QBE, the position is a fortiori.

109 Fourthly, the only evidence relevant to the case against QBE that Mr Paea took as an "unnecessarily optimistic" approach to what might occur is that he did appear to look on some occasions in the direction of where the respondent was standing. But without more, in my view that evidence is insufficient to support a finding that Mr Paea's judgment in doing no more than, in effect, keeping the situation under observation was negligent. Similarly, there was in my view no probative evidence of a "developing situation" (whatever his Honour intended by that expression) or at least one of which Mr Paea ought to have been both aware and concerned such as to mandate his intervention. I elaborate on this issue below.

110 For the foregoing reasons, I am of the view that his Honour erred in finding DSSS was in breach of any duty of care it owed to the respondent based on the inaction of Mr Paea. While, as I have said, DSSS, like Bowcliff, did have a general duty to exercise reasonable care to avoid a foreseeable risk of injury to patrons, including the respondent, there was no breach of that duty. As noted at [103], the location of the altercation on the corner of Victoria Road and Wellington Street, and in the presence of traffic, and given the dearth of other evidence, there are significant doubts as to what was happening between Izzy and the respondent, and whether it was disturbing the neighbourhood. There was insufficient evidence to conclude that Mr Paea did or ought to have known what was occurring across the street.

111 I turn now to the submissions of the parties on the appeal. As I am of the view that the appeal should be allowed, it is convenient to confine any recitation of those submissions to those of the respondent.

The Respondent's Submissions on the Appeal

Duty of care - Bowcliff and DSSS

112 The respondent submitted that in regard to both Bowcliff and DSSS, the relevant risk of harm for the purposes of s 5B of the Civil Liability Act 2002 (NSW) was that an untrained, unqualified employee in security matters might intervene in a dispute between patrons and overreact in such a way as to use unreasonable force; specifically, that Mr Paseka might overreact to some comment made by the respondent by throwing an otherwise unprovoked but devastating punch. That risk, it was submitted, was not only a matter of common sense, but was widely recognised in the hotel industry as Mr Keough and Mr Lokotui acknowledged. It was "not insignificant" as the security guards' training specifically in relation to it demonstrated.

113 It was submitted that Bowcliff and Mr Keough could not be "pigeonholed" as, respectively, "an occupier of licensed premises" and a "licensee" for the purposes of determining whether the duty of care contended for arose at all or, alternatively, was limited to conduct on the premises. The relevant circumstances included the fact that the assailant, Mr Paseka, was an employee who was working at the time of the assault; the appellants' assumption of responsibility for controlling behaviour in the vicinity of the hotel by patrons leaving the premises; "house policies" requiring all staff to observe and take steps to control the behaviour of patrons; and the nature of the risk of harm which eventuated. The true basis of liability in this case was the nature of the business carried on by Bowcliff and Mr Keough.

114 The respondent contended that there were three bases on which Bowcliff owed a duty of care to him on the facts and circumstances of the case. The first was that the general duty of care formulated in Adeels Palace at [26] (a duty to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons) extended to a duty to take reasonable care in the conduct of activities in the vicinity of the licensed premises. The duty, which arose from the nature of the business being conducted, did not depend on prior actual or constructive knowledge of intoxication or the propensity for violence of a particular individual. What was reasonably required in terms of 'control' in particular circumstances was a matter for consideration on the issue of breach, rather than being determinative of the existence of a duty of care.

115 It was on a similar basis that the respondent submitted that DSSS owed a duty of care to patrons. The duty was said to be owed on the basis of a "recognised relationship" (see Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361), that is, the relationship of security guard and patron. This duty was said to be "co-extensive with" although not "identical to" that duty formulated in Adeels Palace, extended to the vicinity of the licensed premises, and applying to Bowcliff. It extends to taking "reasonable care to prevent injury from the violent, quarrelsome or disorderly conduct of other persons on and in the vicinity of the licensed premises."

116 This formulation was considered appropriate because it was the fulfilment of such a function that was one of the purposes of retaining the expert services of DSSS's trained, qualified and licensed personnel. There were no relevant restraints upon them in performing that function, and in particular, in bringing their own skill and judgment to bear in fulfilling DSSS's duty of care. Furthermore, that duty did not depend upon the relevant security guard having knowledge of a background risk highlighted by clearly violent or unruly behaviour between identified persons.

117 The second basis upon which Bowcliff was said to owe a duty of care to the respondent was that all employers owe a duty to take reasonable care to avoid foreseeable harm caused by the conduct of an employee. In this case the foreseeable risk of harm involved the conduct of untrained employees of Bowcliff, a risk analogous in principle to an unsafe system of work. The breach contended for by the respondent was one where the scope or content of the duty involved the failure of one employee to 'control' another employee in implementing the system of work. It was a direct and not a vicarious liability as it did not involve a casual act of negligence by the relevant employee.

118 The third basis upon which Bowcliff was said to owe a duty of care to the respondent involved a 'salient features' analysis (cf Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; (2009) 75 NSWLR 649 at [103] per Allsop P). The salient features supporting the existence of a duty of care in the instant case included the high degree of probability of a disturbance occurring between patrons and an untrained employee overreacting; the undoubted existence of a duty of care on the premises; the nature of the activity undertaken by Bowcliff and Mr Keough, in particular, the undertakings attached to the licence of the premises; their assumption of control in fact in the vicinity of the premises through the actual performance of security functions; their capacity to take precautions against the risk of harm by giving appropriate instructions to employees; and the respondent's vulnerability. There was no question of any potential indeterminacy of liability, even if the duty was owed to anyone in the vicinity of the hotel; but if the duty was only owed to patrons leaving the hotel, the class of persons to which it was owed would be no greater than those to which the duty recognised in Adeels Palace was already owed.

119 The respondent's complaint against Bowcliff on the issue of direct liability was not concerned with the actual punch thrown by Mr Paseka. This was foreclosed to the respondent by his Honour's findings at [207]. The breach contended for by the respondent is one where the scope or the content of the duty involves the failure of one employee to "control" another employee in implementing a system of work. I pause to observe that as formulated, such a failure has all the hallmarks of a casual act (or in this case, omission) of negligence on the part of the first employee.

120 In the present case Bowcliff had the capacity to "control" Mr Paseka, not only by the virtue of the licensing legislation, but by virtue of the authority and practical control and direction exercised by an employer over an employee at any location, including by instructing him to stay where he was or to return to inside the premises. In the particular circumstances of the present case, Bowcliff owed a duty of care to the respondent extending beyond the general duty formulated in Adeels Palace because of the salient features referred to above.

121 Lest it be suggested that the duty contended for was "novel" in terms of its formulation so that it may be too broadly stated given Adeels Palace, the respondent submitted that the duty might be more precisely formulated as one to take reasonable care to avoid the foreseeable risk of harm from an untrained, unqualified employee overreacting when intervening in an altercation between patrons. In other words, the precise complaint in the present case is that an employee (Mr Paseka) with no training or qualification was permitted by Bowcliff to attempt to do the job of a trained, dedicated security guard, or at least, to approach patrons engaged in an altercation. The risk of harm which was not insignificant was that such an untrained employee might overreact. That risk was foreseeable whenever there was an intervention by an untrained employee in a private disturbance which could be expected in the vicinity of licensed premises.

122 It was then submitted that the point at which intervention was called for was when Mr Paseka commenced to move across the footpath towards the kerb on the hotel side of Wellington Street with the apparent intention of intervening in whatever was occurring between the respondent and Izzy only moments after he had engaged in another activity related to his employment, namely, collecting a bottle from a patron (Izzy).

Breach of duty - Bowcliff

123 So far as the question of breach was concerned it was submitted that the ERISP was a sufficient basis for a finding that there was something happening between the respondent and Izzy which not only attracted Mr Paea's attention for sometime but also caused Mr Paseka, in Mr Paea's presence, to start to cross the road. The ERISP was said to establish that Mr Paseka did so in order to intervene in an altercation between two men who had just left the hotel (presumably to his knowledge). The evidence of Ms Williams that there were loud voices which she could hear from the service station was also consistent with the inference that an altercation was occurring which justified the intervention of Mr Paea. This was also relevant to DSSS's breach of duty.

124 The respondent accepted that his Honour (at [211]) made a factual error in finding that Mr Lokotui should have been alert or sufficiently vigilant to anticipate the general likelihood that the events that did occur might occur unless active steps were taken to prevent them. It was therefore submitted that the respondent's primary case against Bowcliff was that Mr Paea was under the direction and control of Mr Lokotui, Mr Keough and Mr Davies in a manner which subsumed him into the hotel security system so that he was, in effect, in the same position as an employee: North Sydney Leagues Club Limited v Berecry [2002] NSWCA 154; (2002) Aust Torts Reports 81-657 at [11]-[15], [21]-[22].

125 However, the respondent also contended that Mr Lokotui should not have let Mr Paseka out on the street which was a place only for trained security staff to work as Mr Keough had pointed out in his evidence. It would not appear that this last contention was accepted by the primary judge; nor should it have been. At least it was not an action that his Honour appeared to contemplate on the part of Mr Lokotui.

126 As to the relevant risk, it was submitted that it was not that the respondent and Izzy might engage in a violent confrontation or even that there might be a mutually violent confrontation between Mr Paseka and the respondent. The relevant risk, which came home, was that Mr Paseka might overreact to some comment made by the respondent by throwing an otherwise unprovoked but devastating punch. It was thus not a question of divining Mr Paseka's thought processes. It was a question of Mr Paea watching a mere glass collector, who moments before had collected a glass bottle from a patron and was therefore apparently working, then crossing the street towards two patrons who had been doing something which had clearly and continuously attracted Mr Paea's attention for some time. For reasons already indicated, I would not accept that the CCTV footage supports this last submission.

127 It follows from the foregoing that the respondent's argument may be summarised as follows. First, that Bowcliff and Mr Keough as the occupier and licensee of licensed premises owed a duty to take reasonable care to avoid the foreseeable risk of harm from an untrained, unqualified employee overreacting when intervening in an altercation between patrons whether inside or outside of the licensed premises. Secondly, that that duty was breached when Mr Paea, who was under the direction and control of Mr Lokotui, Mr Keough and Mr Davies, failed to prevent, and therefore permitted, Mr Paseka, as an untrained, unqualified employee, from intervening in what appeared to be an altercation between patrons. Thirdly, and alternatively, that Mr Paseka had, as an employee, no place to be present on the footpath outside the Wellington Street entrance to the hotel as a consequence whereof Mr Lokotui was in breach of his duty of care by failing to require Mr Paseka to re-enter the hotel in order to avoid the possibility that as an untrained and unqualified employee, he might intervene in an altercation between patrons of the hotel within the vicinity of the licensed premises.

Breach of duty - DSSS

128 The respondent's primary case against DSSS was that it was an act or omission of Mr Paea, who was under the direction and control of Mr Lokotui, Mr Keough and Mr Davies in a manner which subsumed him into the hotel security system, which constituted the breach of duty of both Bowcliff and DSSS. It was submitted that the evidence was sufficient, particularly when regard was had to the CCTV footage, to establish on the balance of probabilities the facts supporting such a breach. Furthermore, it was submitted that the ERISP (see [123] above), taken with the CCTV footage, allowed an inference that an altercation between Izzy and the respondent was occurring which warranted Mr Paea's response, and drew Mr Paskea across Wellington Street to intervene.

129 It was contended that the CCTV footage on its own established that Mr Paea was content to watch Mr Paseka cross the street towards Izzy and the respondent. It was at this point that DSSS's breach of duty occurred. Intervention by way of verbal instruction by Mr Paea was called for at the moment when Mr Paseka commenced to move across the footpath towards the kerb on the hotel side of the street with the apparent intention of intervening in a dispute which was none of his business. Alternatively, Mr Paea should have intervened by way of a verbal instruction once he realised that Mr Paseka had crossed the road to where Izzy and the respondent were standing and was intervening in the altercation between them. In the further alternative, at any point within the following 2 and a half minutes during which Mr Paseka was (apparently) talking to the respondent and Izzy, Mr Paea should have crossed the road and himself intervened by requesting Mr Paseka to retreat back to the hotel.

130 In his written submissions, the respondent contended that Mr Paea knew Mr Paseka to be a glass collector and entirely untrained in security matters. That Mr Paea was so aware was consistent not only with the fact that Mr Paseka had moments before taken a bottle out of Izzy's hands, but also with Mr Paea's failure to remonstrate with Mr Paseka following the assault and his permitting Mr Paseka to re-enter the hotel. Such conduct, it was submitted, indicated that Mr Paea appreciated that Mr Paseka had crossed the street in his capacity as an employee of the hotel for reasons associated with that employment. For the reasons set out at [29] - [30] above, I would reject this submission.

131 In oral argument, it was initially submitted that it did not matter whether Mr Paea knew that Mr Paseka was an employee, as opposed to a friend or stranger. If Mr Paseka crossed the road to intervene in an altercation, he should have been stopped unless he was a trained security guard. This proposition was said to be supported by the statements of Mr Keough and Mr Lokotui in cross-examination. This was not the way in which the case was pleaded. Nevertheless, the respondent contended that it could be inferred that the primary judge made a finding that Mr Paea knew that Mr Paseka was an employee, and that such a finding was clearly open given that Mr Paea had worked at the hotel on at least two prior occasions, that the hotel employed a small number of persons, and that Mr Paea acted as described above following the incident. For reasons already articulated, in my view the inference relied upon was not open to his Honour on the evidence.

132 However, the respondent accepted that his case, at least in regard to the first point at which it was contended that Mr Paea should have intervened, turned on whether he ought to have drawn the inference himself that Mr Paseka was crossing the road to intervene in whatever was occurring, as opposed to being one of many who crossed the road around the same time. It was submitted that the reason that Mr Paea ought to have drawn that inference was that Mr Paseka was an employee and was working at the time (as was evident from his having taken a bottle from a patron and put it in a bin immediately before crossing the road). Thus the respondent's primary case still depended on whether Mr Paea knew Mr Paseka to be an employee, a proposition which I have rejected.

QBE's appeal should be allowed

133 QBE's appeal must be determined upon the basis that there was no evidence as to what caused Mr Paseka to cross Wellington Street. In particular, there is no evidence as to what either Mr Paseka or Mr Paea heard or observed with respect to either the respondent or Izzy. This is because it was common ground that the ERISP was not admitted against QBE.

134 Accordingly, the only evidence from which any inference can be drawn adverse to Mr Paea is that of Ms Williams and the CCTV footage. So far as the former is concerned she gave different versions of the events which cast some doubt upon the reliability of her recall. Nevertheless, the primary judge, at least implicitly, rejected her version of events in favour of that of Mr Paseka as related in the ERISP. On one view of the matter, if one ignores the ERISP, one is left with the evidence of Ms Williams untainted by the evidence of Mr Paseka as provided by him in the police interview. On this basis, her evidence was that she observed Mr Paseka yelling at the respondent when he was standing at the entrance of the Wellington Street door to the hotel within a metre of a security guard. However, that evidence cannot be accepted as it is inconsistent with what is depicted on the CCTV footage.

135 Even so, the thrust of Ms Williams' evidence is that Mr Paseka was yelling something across the road to the respondent whereupon he came straight across the road and immediately punched the respondent in the head. Again that evidence is inconsistent with the CCTV footage. In these circumstances, in my view Ms Williams' evidence does not provide a sound foundation for drawing any adverse inferences against Mr Paea. In any event, as the respondent's complaint is that Mr Paea failed to prevent Mr Paseka crossing the road, on the basis of Ms Williams' version of events, he had no opportunity to do so let alone to prevent him assaulting the respondent.

136 Accordingly, that leaves only the CCTV footage. The difficulty with any analysis of that footage is that, putting the respondent's case against DSSS/QBE at its highest, after Mr Paseka crossed Wellington Street, the attention of Mr Paea appeared to be intermittently attracted to what was occurring between the respondent and Izzy and even attracted the attention of some patrons. However, whatever was occurring was not such as to cause any alarm on the part of Mr Paea and was not such as to attract the attention of some patrons on other than an intermittent basis.

137 In particular, once the evidence of Ms Williams is put aside, although the CCTV footage depicts Mr Paea observing the scene around him and in so doing occasionally appearing to look across Wellington Street, nevertheless there is nothing in that footage which would indicate that he was observing a verbal altercation between the respondent and Izzy or that he heard what was being said. In my view there was nothing represented in the CCTV footage that would have been visible to Mr Paea which would have indicated to him that there was some verbal altercation between the respondent and Izzy on the corner of Victoria Road and Wellington Street that required his attention; nor was there evidence that could support a finding that Mr Paea was or ought to have been aware of the nature of that altercation.

138 The CCTV footage does not constitute evidence as to what, if anything, Mr Paea heard being said or what he observed in relation to the altercation. That is so because of the paucity of evidence relating to the nature of the altercation, and the primary judge's uncertainty regarding its nature (see [169]). Nor was there any other evidence which in my view would have alerted him to the fact that any altercation between the respondent and Izzy was such as to give rise to a risk that it had the potential to escalate into violence. At the end of the day, his Honour could put it no higher than a trading of verbal insults. Although not relevant to the liability of DSSS, even the ERISP does not indicate that the respondent and Izzy were throwing their arms about or otherwise gesticulating with each other. The highest that evidence goes is that they were doing no more than just talking or arguing "a bit" loudly. Without knowing what was being said between the respondent, Mr Paseka and possibly Izzy, in my view no inference can be drawn that Mr Paea ought to have been alerted to the possibility that whatever was being said between them had the potential to escalate to the point of violence erupting on the part of one or other of them.

139 Accepting that Mr Paea owed a duty of care to take reasonable steps to prevent harm to patrons of the hotel in his vicinity, then any response by Mr Paea to a risk that a patron intervening in an altercation may himself overreact must depend upon the circumstances including those referred to in s 5B(2) of the Civil Liability Act 2002 (NSW). Of course, the matters referred to in that provision are not exhaustive. In the case of a security guard there can be no doubt that a significant element of judgment on his part is involved before a decision is taken to intervene which may make matters worse rather than better. In the present case, in my view the circumstances of which Mr Paea was aware, were not such as to require him to exercise his judgment to intervene between three persons in circumstances where he was unaware of what they were talking about, which may have been quite benign, and where there was no sign, as even the ERISP demonstrated, of any potential for violence or, for that matter, of any evaluation of what may have been a heated discussion.

140 For present purposes I am prepared to accept that at its highest Mr Paea was monitoring the situation. As submitted by QBE, when he appears to have formed the view as a matter of judgment that things looked as though they might be getting out of hand, Mr Paea immediately reported to the security guard inside the hotel entry in accordance with the hotel's security protocol. This was probably when the respondent decided to shape up to Mr Paseka. As it turned out, that was too late as the assault took place without warning. Thus, a conclusion that his failure to intervene at any earlier point of time constituted a breach of duty could only be made with the benefit of hindsight.

141 As the inquiry as to whether there is a breach of duty is prospective and not retrospective, there must be facts which Mr Paea knew or ought to have known that gave rise to a risk that unless he intervened there was a real potential for violence to occur. As already noted, the respondent's case against Mr Paea/DSSS, and for that matter against Bowcliff, was that Mr Paseka, whether or not an employee of Bowcliff, but with no apparent training or qualifications, was permitted by Mr Paea to attempt to do the job of a trained, dedicated security guard, or, to at least approach patrons engaged in an altercation. In these circumstances intervention by Mr Paea was called for when Mr Paseka commenced to move across the footpath towards the kerb of the hotel side of Wellington Street with the apparent intention of intervening only moments after he had engaged in another activity related to his employment, namely, collecting a bottle off a patron. Alternatively, once Mr Paseka had crossed the road, it behoved Mr Paea to call upon Mr Paseka to desist from intervening in whatever was occurring between the respondent and Izzy.

142 The difficulty with these propositions may be enunciated as follows. First, there is no evidence that Mr Paea was aware of the status of Mr Paseka let alone his qualifications, if any. In particular, the isolated incident relating to Mr Paseka relieving Izzy of a bottle of alcohol, if observed by Mr Paea (as to which the primary judge made no finding - see [30] above), was insufficient to alert him that Mr Paseka was an employee of the hotel. To all intents and purposes he appeared to Mr Paea as just another patron. He certainly acted like one as the CCTV footage reveals. Secondly, the respondent's propositions proceed on the basis that the respondent and Izzy were engaged in an altercation. For reasons I have indicated, in my view in the case of DSSS, there is insufficient evidence from which to draw an inference that Mr Paea was or ought to have been aware of an altercation or the nature of it.

143 Thirdly, Mr Paea was not aware and could not be aware of Mr Paseka's intention when he commenced to cross the road. A number of patrons had crossed the road before Mr Paseka and there was no reason for Mr Paea to appreciate that Mr Paseka's intention was to intervene in whatever was occurring between the respondent and Izzy. Fourthly, although Mr Paea may have been aware that Mr Paseka was speaking to the respondent and Izzy after he crossed the road to where they were standing, there was still nothing to indicate that Mr Paseka was intervening in a dispute or altercation which required Mr Paea to leave his post and to proceed across the road to request (he could not require) Mr Paseka to leave the respondent and Mr Izzy to their own devices. Fifthly, whatever might be the position, as noted at [139] above, an element of judgment was required on the part of Mr Paea. His primary job was to remain at his post to control the activities of a large number of intoxicated patrons who were exiting the hotel in the early hours of the morning and who were then milling about on the Wellington Street footpath outside the hotel entry. Those people were Mr Paea's prime concern. As a matter of judgment, what was occurring on the corner outside the service station was only of secondary importance if it was important at all.

144 Accordingly, in my view, to find that Mr Paea was in breach of his duty of care to the respondent in the circumstances to which I have referred places a far higher burden upon him than was reasonable in the circumstances. It is well accepted that even where there is a foreseeable risk of harm which is not insignificant, nevertheless the circumstances may be such that the person under the duty need not respond. The present is such a case. In my view, even if Mr Paea owed a duty of care to the respondent, that duty was not breached. There was accordingly no act or omission on his part for which DSSS was vicariously liable. It follows that the appeal of QBE should be allowed and the judgment against it set aside.

Bowcliff's appeal should be allowed

145 The facts and matters relating to the QBE appeal are also relied upon by the respondent with respect to its case against Bowcliff. The only relevant difference is the addition of Mr Paseka's ERISP. With respect to that interview, and as I have already noted, it was submitted by Bowcliff that to a large degree it contained a self serving statement made by Mr Paseka in an attempt to mitigate the undoubted fact that he had assaulted the respondent. He maintained in the ERISP that he crossed the road as he heard the respondent and Izzy "talking a bit loud" and "arguing" about a girl. However, there is an apparent inconsistency between his Honour's acceptance of the ERISP evidence on the one hand, and, on the other, his finding at [207] that the actions of Mr Paseka were borne of some unknown and unexplained personal animosity towards, or resentment of, the respondent, a finding which was not the subject of challenge. In other words, although his Honour found that there was an incident between the respondent and Izzy that involved them trading verbal abuse, of itself that does not explain why Mr Paseka apparently decided to intervene unless he had a personal reason for doing so concerning his relationship with the respondent as his Honour found.

146 Once one puts aside his Honour's finding that Mr Lokotui was outside the hotel when Mr Paseka crossed Wellington Street (because it is inconsistent with the CCTV footage: see [38] - [39], [42], [98]), then the only issue is whether Mr Paea's duty of care to the respondent as a person who was, in effect, Bowcliff's employee (see [118]) required him to cross the road and request Mr Paseka to retreat. He could not have prevented him from commencing to cross the road as the CCTV footage appears to indicate that it happened spontaneously.

147 The question which then arises is whether as a consequence of Mr Paseka's evidence as revealed in the ERISP that the respondent and Izzy were trading "verbal abuse" as his Honour found, Mr Paea was or ought to have been aware that there was a disturbance or verbal altercation between the respondent and Izzy and, in particular, whether he should have heard what apparently Mr Paseka heard and which, according to what he told the police, caused him to cross the road. In other words, should it be inferred that because Mr Paseka saw the respondent and Izzy talking or arguing "pretty loud" over some girl, Mr Paea also should have heard the same thing?

148 Mr Paea's post which he did not leave until just before the assault was some metres up Wellington Street from where Mr Paseka commenced to cross that road. There was traffic in Wellington Street visible on the CCTV footage and it would be reasonable to infer, particularly from the frame at 4:48:32 (which was 2 minutes and 21 seconds before the assault), that there were a number of patrons milling about the entry to the hotel and in reasonably close proximity to Mr Paea and who, one can infer, were themselves talking loudly as they were no doubt intoxicated at least to some degree. From the footage they certainly appear to be talking to each other although how loud is not known. Nevertheless, it is clear from the CCTV footage that Mr Paea was watching the patrons congregating close to him even if from time to time he looked towards to where the respondent was standing on the opposite corner. In my view it is not possible to infer that Mr Paea would have heard what Mr Paseka alleged he heard, namely, the respondent and Izzy arguing about a girl in a relatively loud manner.

149 Furthermore, there is no evidence to suggest that whatever the respondent and Izzy were talking about, they were doing anything other than talking: his Honour found (at [169]) that despite the relative paucity of the evidence about what was occurring between the respondent and Izzy, they were "trading verbal abuse". However, what is clear and that is that there was no suggestion by Mr Paseka that whatever they were arguing about, either the respondent or Izzy were exhibiting any signs of potential violence such as gesticulating with their hands or acting in a threatening manner. Nor does Mr Paseka's ERISP evidence suggest that they were yelling at one another. Furthermore, to describe what was occurring based on Mr Paseka's evidence between the respondent and Izzy as "trading verbal abuse", in my view puts the matter somewhat more highly than did Mr Paseka.

150 Accordingly, the evidence is not sufficient to justify the finding by the primary judge (at [169]) that the verbal exchange between the respondent and Izzy was either potentially violent or constituted quarrelsome and disorderly conduct. In these circumstances there was nothing which called for Mr Paea's intervention at or before Mr Paseka crossed the road.

151 Furthermore, for the reasons which I have sought to articulate in relation to the QBE appeal, in my view there was no breach of duty on the part of Mr Paea in failing, after Mr Paseka commenced speaking to the respondent and Izzy, to leave his post, cross the road and intervene in whatever was occurring between the three of them.

152 As the CCTV footage reveals, it was not until 4:50:38 that Mr Paea walks towards the hotel door. The inference that may be drawn from this is that it was at this time (15 seconds before the assault) that Mr Paea's attention was more definitively drawn to what was happening across Wellington Street. The clear inference based upon the evidence of Mr Paseka was that at that point Mr Paea observed the respondent jumping around and putting his hands up as if he was about to throw a punch at Mr Paseka. In other words, it was at that point that the respondent, for reasons unknown, evidenced a clear intention to fight Mr Paseka. That apparently occurred suddenly and Mr Paea promptly responded to it by proceeding to report it. The CCTV footage frames at 4:50:45 and 4:50:49 reveal, as Bowcliff submitted, that Mr Paea then sensed trouble across Wellington Street and proceeded to report the matter to Mr Stegnajaic in accordance with the hotel's security protocol or system which required him not to leave his post unless replaced.

153 Accordingly, in my view the evidence of Mr Paseka which was admissible against Bowcliff ultimately takes the matter no further in terms of any breach of duty on the part of Mr Paea than did that admitted against DSSS. Of course, Mr Paea was not employed by Bowcliff but by DSSS as a consequence whereof only DSSS could be vicariously liable for any breach of duty on Mr Paea's part. Nevertheless, as recorded at [14] above the respondent submitted that as Mr Paea was under the direction and control of Mr Lokotui, Mr Keough and Mr Davies, he had been subsumed into the hotel security system so that Bowcliff was vicariously liable for any breach of duty on the part of Mr Paea.

154 To support this proposition reliance was placed upon the following passages from the judgment of the Court delivered by Jordan CJ in McDonald v The Commonwealth (1945) 46 SR (NSW) 129 at 131-132:

"When an employer agrees with a third party to make the services of one of his employees available to the third party, and the employee, after commencing to perform the stipulated services, injures someone by negligence, the question arises whether the employer, the third party, or only the employee himself is liable to the injured person. ... It has been said that the test is 'in whose employment the man was at the time when the acts complained of were done, in this sense, that by the employer is meant the person who has a right at the moment to control the doing of the act' or 'whether the servant was transferred, or only the use and benefit of his work.' ... The more authoritative modern decisions emphasize the point that, unless of course the act of the employee was outside the scope of the employment of both general and particular employer, the liability of the former or the latter depends upon the nature and the extent of the control transferred to the latter or retained by the former ... and liability is not shifted to the particular employer by the fact that even a considerable degree of control is exercisable by him; but the greater his right to control, the greater the likelihood that it is open to a tribunal of fact to find that his has become the relevant control, and that a shift of liability has occurred. ... But in every case the question is one of degree. From certain facts, if accepted as proved, it would follow as a matter of law that the liability remained with the general employer. From others, that it had shifted to the particular employer. Between the two extremes there is a wide field in which a finding of liability on the part of either by a tribunal of fact would not be disturbed.

... If by the agreement the employer vests in the third party complete, or substantially complete, control of the employee, so that he is entitled not only to direct the employee what he is to do but how he is to do it, and the employee was performing services stipulated for, or authorised by, the third party at the time, the third party is liable: ... If the control vested in the third party is only partial, so that, although the third party is entitled to give directions to the employee as to what he is to do, he is not entitled to direct him how he is to do it, the employer remains liable." (Emphasis added and citations omitted.)

155 The respondent submitted that the present case fell within that part of the Chief Justice's reasons which I have emphasised. However, to succeed with that submission, the evidence would need to establish that there was a substantially complete transfer of control by DSSS to Bowcliff of the services of Mr Paea to the point where he could not only be directed what to do but how to do it.

156 In my view, the evidence does not come close to establishing that level of control. Bowcliff engaged through ACMS trained and licensed security guards (Messrs Paea and Stegnajaic) to supplement its own security personnel such as Mr Lokotui. The latter could no doubt instruct Mr Paea as to where he was to patrol but did not and could not instruct him how to perform the job of a professional security guard. This was unnecessary as the DSSS guards were engaged by Bowcliff because of their expertise as trained and licensed security guards.

157 As noted at [124] above, the respondent also relied in this present context on this Court's decision in North Sydney Leagues Club v Berecry. Relevantly, there appear to have been two issues in that case. The first was whether the Club had delegated its duty of care to the independent contractor who had supplied the security personnel. It was held that it had not. There could be no suggestion in the present case of any such delegation by Bowcliff to DSSS. The second was whether the Club was liable for the negligence of one of the security personnel by failing to intervene to prevent him assaulting a patron inside the Club's premises.

158 The facts of that case with respect to the second issue have no parallel with those in the present case. In particular, the trial judge found in Berecry that the security officer had taunted and provoked the plaintiff inside the Club, that he continued to do so as the plaintiff was leaving the premises and that his provocative behaviour was observed by Club personnel who were standing nearby: see at [20]. It was found that the Club had ample and observable warning that the situation would become dangerous but its officials took no action to intervene. The primary judge did not rely on this decision and in my opinion he was correct to ignore it. It does not on the facts of this case assist the respondent.

159 The respondent nevertheless submitted that Bowcliff could not avoid liability by pointing to the fact that Mr Paea was on the street. His failure to act was a failure to give effect to Bowcliff's system. In other words, there was a direct failure by Bowcliff to prevent Mr Paseka, as someone who was not trained as a security guard, from intervening in the disturbance between the respondent and Izzy which its security system required.

160 In my view this submission cannot be sustained once the McDonald approach is rejected and the Berecry approach, where the conduct of the security guard was observable to the Club's officials, is distinguished, it follows that the respondent's case against Bowcliff must fail as having no legal or factual basis.

161 Finally, the respondent noted that at trial he had submitted that Mr Lokotui should not have left Mr Paseka out on the street which was a place where only trained security staff could work as Mr Keough had pointed out. It is not entirely clear whether this submission was repeated on the appeal but if it was, I would reject it. Even if at the relevant time Mr Paseka was on duty as a "glassy", nevertheless no one suggested that he was not entitled to breaks which would permit him to step outside the hotel for the purpose of having a cigarette which is what he did. Of course, the fact that after he finished his cigarette he did not return inside and take up his "glassy" duties would seem to indicate that he did not regard himself as being on duty at that time. In any event, whether he was on duty or not, there could not be a breach Mr Lokotui's duty of care to the respondent to have required Mr Paseka to return inside the hotel as soon as he finished his cigarette irrespective of whether he was on duty or not. In this respect, his relevant superior was the Bar Manager, Mr Davies.

162 Accordingly, for the foregoing reasons in my opinion Bowcliff's appeal succeeds and the judgment against it should also be set aside.

The Issue of apportionment

163 Although this issue and the issue of damages are no longer relevant given my view on the question of liability, against the possibility that that view is wrong, it is appropriate to deal with the remaining issues: Kuru v New South Wales [2008] HCA 26; (2008) 236 CLR 1 at [12].

164 The primary judge dealt with the issue of apportionment at [225]-[226] of his reasons. In his opinion the liability of Bowcliff and Mr Keough was greater than that of DSSS given that the security system within which all security staff at the hotel, including those supplied by DSSS, were required to operate was designed and implemented by Bowcliff and Mr Keough. Accordingly, applying s 5(2) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) his Honour apportioned the respondent's damages as between Bowcliff and Mr Keough on the one hand and QBE on the other at 70 per cent to the former and 30 per cent to the latter.

165 QBE submitted that in determining the question of apportionment his Honour failed to consider the critical fact that the hotel was the holder of a Master Licence under the Security Industries Act 1997 (NSW). His Honour should have found that Mr Keough had devised, instituted, maintained the security system for the discharge of his statutory obligations to prevent the occurrence of violent, quarrelsome or disorderly conduct in or about the hotel premises, so that the role of DSSS was therefore very limited. Its sole function was to provide labour to ACMS who in turn supplied it to the hotel security system. In this respect the primary judge neglected to properly consider the fact that DSSS merely provided labour to work in that system

166 The circumstances in which an appellate court may intervene with respect to the apportionment of liability between joint tort-feasors is governed by the well established principles in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505, and taking into account that the nature of the findings made on an apportionment exercise: Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492 (at 532).

167 As I have indicated the primary submission of QBE is that his Honour had failed to properly consider the fundamental consideration that DSSS's sole function was to provide labour to work in the hotel security system. However, in my view his Honour did consider that very matter at [226] of his reasons. It was in consideration of that factor that his Honour expressed the opinion that the liability of Bowcliff and Mr Keough was greater than that of DSSS for the reason that all security staff were requested to operate within the security system designed and implemented by them.

168 Accordingly, in my view his Honour did not err in the manner contended for as a consequence whereof QBE's challenge to his Honour's apportionment of liability fails.

Damages - Future Economic Loss

169 The primary judge noted the submissions of the respondent on the question of future economic loss at [239]-[240]. It was there submitted that the respondent's future loss of earnings should be calculated at $680 per week for 34.5 years at a multiplier of 870.75 less 15 per cent for vicissitudes producing am amount of $503,293 to which 11 per cent superannuation was to be added.

170 His Honour summarised the submissions of Bowcliff and Mr Keough on this issue at [245]-[247]. QBE adopted those submissions without elaboration.

171 The appellants submitted that the respondent's pre-injury work history was "far from stellar". As the primary judge noted at [246], the respondent had left a job at the Novotel because of low wages, and left another at Asquith because he was required to travel which he was not prepared to do. He agreed with the proposition that most of the jobs he had had prior to the assault were only for few months each. Accordingly, it was submitted that this suggested a certain lack of motivation on his part to pursue employment where it might involve him travelling or if he did not think he was receiving sufficient compensation for his efforts.

172 It was therefore submitted that it was unlikely that his work habits would have changed absent the assault. It was contended that his dizziness was controlled so that his capacity for work should be assessed upon the basis that with the medication prescribed for him he was without any relevant restriction. It was further submitted that the calculation of economic loss was self evidently dependent upon whether his Honour could accept the broad proposition that from a point at least six months before giving evidence, the respondent was free of dizzy spells and should, therefore, have been seeking to obtain employment that was consistent with his cognitive difficulties but which recognised that it was at least probable he would be able to drive a forklift. It was on the basis of that type of employment that he claimed $680 per week.

173 The primary judge dealt with the issue of past and future economic loss at [258]-[269]. On the basis of the medical evidence he concluded at [266] that he did not consider that the respondent would ever be able to return to work as a forklift driver or any similar work. Furthermore, he did not think that the respondent would be able to retain a position in that capacity for very long on the assumption that he could get such a job in the first place. In this respect the medical evidence referred to by his Honour made it clear that the respondent would struggle to obtain employment in the open labour market particularly due to his epilepsy and impaired memory.

174 At [264] his Honour noted that he had the very distinct advantage of observing the respondent in the witness box. He considered that he gave evidence in a straightforward fashion and did not appear to exaggerate in any way that he could discern. His Honour then noted at [265], after citing a passage from the respondent's evidence, that it was an example of his impatience and disinhibition in the face of what was really very little pressure and in circumstances that would not ordinarily seem to be particularly frustrating or troublesome. His reaction in the witness box was, however, consistent with the diagnoses of his condition and indicative of a person who would be very likely to run up against considerable difficutlies in a stressful or pressurised workplace.

175 At [267] his Honour opined that he had no particular reason to be confident that the respondent would return to some form of work, even if only very limited, from time to time even on a sporadic basis. Whatever strengths or personal qualities the respondent possessed, his Honour considered that they would never be enough to overcome the continuing effects of his disabilities. Accordingly, his Honour assessed the respondent's future economic loss in the sum of $503,293, being the amount claimed.

176 The appellants' submissions commenced by noting that their complaint was that notwithstanding that the respondent changed jobs regularly, his Honour had found (at [259]) that he "generally had no difficulty in obtaining work". Reference was made to the respondent's evidence that his longest continuous period of employment since leaving school was eight months and the next longest four months. It was therefore submitted that in the twelve years that the respondent had been in the workforce, he had identified a series of jobs the longest of which lasted eight months and the next longest of which lasted four months. Unwillingness to travel was cited as a reason for leaving two jobs.

177 It was accepted that in assessing damages for future economic loss one aspect of the calculation related to the extent to which the respondent would, in fact, suffer economic loss by reason of the diminution in his earning capacity. It was submitted that his work history over a long period was extraordinarily vague. Reference was then made to the fact that the primary judge accepted the use of a figure of $680 per week with a deduction of 15 per cent for vicissitudes as being the appropriate means of measuring the damages attributed to the respondent's loss of earning capacity. It was submitted that this approach overlooked the respondent's fussy attitude to work. The examples given were those referred to by the primary judge at [246]. It was submitted that such an attitude for an unskilled worker suggested that there were likely to be significant gaps in his employment in the future but for his injuries.

178 It was contended that the primary judge's approach assumed that, but for the injury, the respondent would have remained continuously employed, albeit (presumably) that he might change jobs frequently. This was an unlikely pattern and, in and of itself, suggested that the risk was all on the downside so that at the very least a larger than normal deduction for vicissitudes was called for. The respondent contended below, and repeated on the appeal, that the impairment of his capacity to compete for employment on the open market was that the consequences of his head injury in terms of mental, not physical, disabilities meant that he could not find or keep employment. That submission was supported by the medical evidence to which his Honour had referred.

179 It was submitted there was no question about the extent of the respondent's brain damage. The appellants' submissions appeared to accept the propositions contained in the medical evidence to the effect that the respondent would find it difficult to obtain entry into the workforce. Its complaint was that the dollar figure for pre-injury earning capacity was too high and that the respondent's pre-injury choice to work or not to work from time to time was relevant to any impairment of his capacity to work. This cannot be correct. There is a distinction between the impairment of the respondent's earning capacity due to his injuries and his willingness or lack of motivation to work continuously had he not been injured.

180 The figure of $680 net per week was the amount which the respondent was in fact capable of earning over a four-month period shortly before he was injured. It was submitted that it was not put to the respondent that he was not capable of doing or keeping that job before he chose to leave it. The appellant had tendered a report of a Vocational Expert which identified a number of jobs providing similar, or slightly lower, wages which it asserted the respondent was physically capable of doing even after suffering permanent brain damage. However, that evidence was countered by that of the medical experts to which reference has been made. As far as the respondent's previous attitude to work was concerned it was submitted that that was not a matter which went to the impairment of his earning capacity, as distinct from direct recovery of future lost earnings. In any event by the time of trial the respondent was in his early 30s and had two young children which would reasonably indicate a more settled attitude to employment in the future than he had taken during his 20s.

181 In their written submissions, the appellants did not challenge the figure of $680 net per week which his Honour adopted. Their complaint is that a greater than 15 per cent discount for vicissitudes should have been allowed on the basis that but for the injury, the respondent's work pattern prior to the injury would not have changed as a consequence of which there would have been times when he either left one job in order to pursue another, which might involve a period of unemployment, or even a situation where he would remain unemployed unintentionally, simply due to lack of motivation.

182 In my view there is substance in the respondent's submission that the probabilities were that he would take a more mature and responsible attitude to his work in his 30s and later years particularly when he had two young children to support. However, whether a similar responsible attitude would have been maintained for the whole of his future working life particularly after his children had grown up would be a matter of speculation. On the one hand he might then consider that it was unnecessary for him to work full time: on the other hand by that time he may have matured to the point where he considered that he should maintain a responsible attitude to full time employment.

183 In my view, the primary judge took into account all of the matters which were relied upon the appellants on the issue of the respondent's future economic loss. His Honour came to the view that it was not necessary to increase the normal 15 per cent vicissitudes and in my view his doing so does not disclose error.

184 Accordingly, in my opinion the appellant's challenge to his Honour's assessment of the respondent's future economic loss should be rejected.

Conclusion

185 In both appeals the appellants have in my view succeeded in establishing that even if there was a duty of care, there was no breach of that duty dependent, as it was, upon the conduct of Mr Paea. Obviously, the respondent's case was not assisted by the fact that he had no memory of anything after he exited the hotel onto the Wellington Street footpath and that neither Izzy nor Zoe were called as witnesses for whatever reason. Equally, the primary judge was not assisted by the fact that Mr Paea could not be found and, therefore, did not give evidence and that the only evidence from Mr Paseka was by way of the ERISP which was only admitted against Bowcliff. The evidence of Ms Williams was problematic and the CCTV images were more often than not unclear and of limited assistance.

186 The foregoing factors made it a lot more difficult for the respondent to satisfy, even on the balance of probabilities, the onus which lay upon him to establish liability on the part of the appellant and, in particular, Mr Paea. In my view that onus was not discharged.

187 For the reasons I have attempted to articulate, it follows in my view that none of the appellants were in breach of any duty of care to the respondent. Accordingly, the primary judge's verdict in favour of the respondent should be set aside and judgment should be entered for the appellants.

188 On 2 November 2012 his Honour heard argument on the question of costs. On 23 November 2012 he made a special order for costs in favour of the respondent which resulted in orders for indemnity costs to be paid by the appellants to the respondent: Orcher v Bowcliff Pty Ltd [2012] NSWSC 1429. However, those orders proceeded on the basis that the respondent was entitled to judgment against the appellants. Accordingly, the orders made by the primary judge on 23 November 2012 in relation to costs should also be set aside.

189 I would therefore propose the following orders:

Appeal 2012/310682

1. Appeal allowed.

2. Set aside the orders made by Harrison J on 12 September 2012 and 23 November 2012.

3. Verdict and judgment for the appellant (QBE Insurance (Australia) Limited).

4. The first respondent to pay the appellant's costs of the trial and of the appeal but to have with respect to the latter a certificate under the Suitors' Fund Act 1951, if otherwise qualified.

Appeal 2012/310752

1. Appeal allowed.

2. Set aside the orders made by Harrison J on 12 September 2012 and 23 November 2012.

3. Verdict and judgment for the appellants (Bowcliff Pty Ltd trading as The Bridge Hotel Rozelle and Richard Francis Keough).

4. The first respondent to pay the appellants' costs of the trial and of the appeal but to have with respect to the latter a certificate under the Suitors' Fund Act 1951 (NSW), if otherwise qualified.

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Decision last updated: 08 January 2014