The travel industry, and in particular cruise ship operators, have been strongly affected by the Covid-19 pandemic and the associated bad publicity.
Whilst not related to the pandemic, a recent High Court decision ruled that passengers could recover damages from Scenic Tours (“Scenic”) for disappointment and distress resulting from the disruption of their cruising holiday, is of interest: Moore v Scenic Tours Pty Ltd (2020) HCA 17.
Mr Moore and his wife had booked a two week European river cruise with Scenic. Mr Moore relied upon Scenic’s brochure which described the river cruise as a “once in a lifetime cruise along the grand waterways of Europe”, with guests on-board the Scenic vessel treated to “all-inclusive luxury”. The cruise, which commenced in May 2013, was severely disrupted by adverse weather and as a result, Mr Moore and his wife only spent 3 days cruising (on three different ships) with the remainder of the trip spent travelling by bus.
Proceedings were commenced in the Supreme Court of NSW against Scenic by Mr Moore, on his behalf and 1,500 other passengers of 13 Scenic cruises that were scheduled to depart between May and June 2013.
In the proceedings, it was alleged that Scenic breached the consumer guarantees in the Australian Consumer Law (“the ACL”) by failing to exercise due care and skill in supplying the tour (in breach of section 60 of the ACL); that the disruptions rendered the tour unfit for the purpose for which it was acquired (section 61(1) of the ACL); and the tour was not of a nature and quality that could reasonably be expected (section 61(2) of the ACL).
Mr Moore’s case was that Scenic knew or should have known about the weather disruptions that were likely to occur to each scheduled itinerary, and it chose not to cancel the cruises or inform the passengers in a timely manner to give them the opportunity to cancel their bookings.
In the Supreme Court proceedings, the primary Judge found that Scenic had breached the consumer guarantees, and damages for disappointment and distress were awarded.
Scenic appealed, and the NSW Court of Appeal upheld the finding that Scenic had breached the consumer guarantees. However, the Court of Appeal held that section 16 of the Civil Liability Act 2002 (NSW) (“the CLA”) applied to limit Scenic’s liability under the ACL.
Mr Moore appealed to the High Court.
The issue for consideration in the High Court was whether the ACL permits a Court to award damages for disappointment and distress, or whether section 16 of the CLA precludes such a claim.
The High Court found that the CLA did not prevent the award of damages. The finding was the CLA only limits damages for personal injury. Disappointment or distress resulting from breach of a contract to provide recreation and relaxation is not a personal injury. Damages were available because the contract was a contract for recreation and relaxation.
The High Court therefore overruled the Court of Appeal and remitted the issue of the sum of damages to Mr Moore and the other cruise passengers to the Supreme Court for rehearing.
This decision may have potential implications for class actions arising from Covid-19 travel disruptions and decisions made by cruise ship operators.