Occupier of retail shop not liable for the actions of a “suspected fraudster”

On the 8th of February 2013, the New South Wales Court of Appeal handed down its Decision in an appeal by a store owner against a finding it was liable to compensate one of its customers who was injured by suspected fraudsters.

The facts of this case as generally set out in the Decision were as follows.

At about 11.35am on 17 September 2008 Mr Gonzalez approached the automatic sliding doors at the entrance to the Harvey Norman store in Blacktown. As they opened, two young men rushed out, one of whom knocked Mr G over, causing him significant injuries. The men had attempted to obtain electrical goods with false identification papers, but when they realised that their fraud may have been discovered, they had turned and fled, knocking over Mr G in the process.

If those were the only facts, it would not be correct to hold the store owner liable in negligence for the injury to Mr Gonzalez.

Mr G relied upon two additional circumstances to justify a claim for damages against the store owner in these unpromising circumstances. The first was that a member of staff in the electrical department, where the men had sought to buy expensive equipment, suspecting that they were attempting to perpetrate a fraud, activated a mechanism which locked the doors to the store. That occurred as the men were approaching the doors in order to leave, having been told to check the status of their account with their bank. The store manager apparently asked them to return to the counter, which they started to do. Shortly thereafter, Mr G approached the movement-activated sliding door, which did not open to allow him to enter.

The second circumstance was the action of a salesman in the furniture department who, seeing Mr G standing outside the door, and not knowing why it had been locked, released the locking device so that he could enter. It was at that moment that the suspected fraudsters, seeing an opportunity to escape before the police arrived, decamped, knocking Mr G to the ground.

Even in those circumstances the claim for liability brought against the applicant was fraught at a number of levels. First, it was unclear whether the applicant owed Mr G a duty of care in respect of the conduct of third parties, whether criminal or otherwise. Secondly, it was unclear what the applicant should have done, if anything, to avert the risk which materialised. Thirdly, it was unclear that any breach on its part caused the injury in a legally relevant sense.

Despite these difficulties, the trial judge, Charteris DCJ, upheld Mr G’s claim and awarded him damages in an amount of $42,500.

The Court of Appeal held that to prescribe a duty on an occupier of a shop to take specific steps in response to the presence of a suspected fraudster “may be unrealistic, at least in the absence of evidence suggesting an industry practice and testing of the proposed solutions.”

The appeal was upheld and the original decision reversed.

To read the full Decision, click here. http://www.austlii.edu.au/au/cases/nsw/NSWCA/2013/8.html