Dancing triggers ceiling collapse - causation considered after breach of duty established

Judgment date: 21 December 2011

Turjman v Stonewall Hotel Pty Limited, Butler v Stonewall Hotel Pty Limited, McKenzie v Stonewall Hotel Pty Limited, Tati v Stonewall Hotel Pty Limited [2011] NSWCA 392

New South Wales Court of Appeal1

In Brief

In determining factual causation pursuant to s 5D of the Civil Liability Act (CLA), a plaintiff must establish that the occupier's breach of duty, in this case failure to properly inform a structural engineer in relation to all aspects of the premises, led to the collapse of a ceiling at the hotel premises. The steps required to be taken by a hypothetical engineer acting in accordance with proper engineering practice must be considered in light of the retainer given to the engineer. It will only be in special circumstances that a party will be granted leave to argue a different case on appeal to that argued in the lower court. Background

In the lower court, Mr Thakee Khdeyer Al Mousawy (Al Mousawy) was the lead of 8 plaintiffs in proceedings commenced against JA Byatt Pty Limited (Byatt), Stonewall Hotel Pty Limited (Stonewall), Presdate Pty Limited (Presdate) and Australian Town Planning Consultants Pty Limited (ATPC) in respect of injuries sustained by those 8 plaintiffs following the collapse of a ceiling on the first level of the Stonewall Hotel on 24 November 2002 at approximately 5.20 am. The plaintiffs brought proceedings against the defendants alleging negligence and breaches of the Trade Practices Act 1974 (TPA).

Byatt, a structural engineering company, was sued on the basis that a report it prepared dated 12 August 2002 had failed to identify defects in the ceiling on the first level of the Stonewall Hotel and that the report was misleading and deceptive.

Stonewall was the occupier and lessee of the premises trading as the Stonewall Hotel at the relevant time. Presdate was the lessor/owner of the premises. The plaintiffs sued Stonewall and Presdate on the basis that: they did not properly investigate complaints received from patrons concerning the dance floor on the second level; they failed to properly instruct Byatt about complaints in relation to the floor; the nature of the enquiries required for renewal of its place of public entertainment certification was not disclosed; and, they provided information which was false and misleading. ATPC was sued on the same basis.

It was agreed that Al Mousawy would be the lead case and would proceed to judgment in the Supreme Court of New South Wales and that the judgment as to liability would determine liability in the remaining 7 matters.

The Stonewall Hotel comprises 3 levels. On 1 July 1993, a lease was entered into between Presdate and the company now known as Stonewall in relation to the occupation of premises which trade as the Stonewall Hotel. The premises were renovated at that time. Part of the renovations included the supply and installation of fire rated suspended ceilings by AB & S Wall Linings Pty Limited.

ATPC provided town planning consultancy services to Stonewall. Mr Ross Creighton was the sole director and shareholder of ATPC. Between 1993 and 2002, Mr Creighton, either directly or using ATPC letterhead, negotiated with the City of South Sydney Council (Council) to obtain approval for the development and ongoing authorisation for the Stonewall Hotel to operate as a Place of Public Entertainment (POPE). Mr Creighton was also a director of the company which was the largest shareholder of Stonewall.

On 11 June 2002, a Mr Mark Harper forwarded an email to the Mayor of the Council and to Stonewall in relation to the flexing or bouncing movement of the floorboards on the top-level dance floor at the Stonewall Hotel when 200-plus people were jumping and dancing on the floor. Mr Harper queried whether a structural engineer had certified the loading for the purpose of a nightclub, whether the age of the building and the deterioration of the construction materials had been considered, and the potential for the floor to...