Damages payable to cruise passenger for disappointment and distress

30 April 2020

The High Court has now delivered judgement in a high profile class action arising out of European river cruise holidays in 2013, dealing with the damages claimed for disappointment and distress.

The class action arose when a group of Australian passengers sued Scenic Tours claiming it had failed to deliver the luxury European river cruise experiences they had purchased. The cruises were severely disrupted by adverse weather, which resulted in passengers having to change vessels, and spend many hours of many days travelling by bus and staying in hotels. There was no issue in the High Court that Scenic’s attempts to perform its contractual obligations amounted to breaches of consumer guarantees contained in the Australian Consumer Law.

The question before the High Court was whether the lead plaintiff, Mr Moore, was entitled to damages for disappointment and distress.

At first instance, Mr Moore was awarded the sum of A$2,000 for his disappointment and distress under Section 267(4) of the Australian Consumer Law.

On appeal to the Court of Appeal of the Supreme Court of New South Wales, that award was set aside due to the application of section 16 of the Civil Liability Act 2005 (NSW).

Section 16 of the Civil Liability Act¬†prohibits an award of damages for non-economic loss unless the threshold requirement of 15 per cent of a ‘most extreme case’ is met.

In Flight Centre v Janice Louw [2011] NSWSC 132, the Supreme Court of NSW determined that a claim for damages for inconvenience, distress and disappointment constituted a claim for personal injury damages, thereby attracting the provisions of Civil Liability Act. The High Court has now found that Flight Centre v Louw was incorrectly decided in this regard.

On appeal to the High Court, Mr Moore contended that section 16 of the Civil Liability Act did not preclude his claim for disappointment and distress as section 16 was concerned exclusively with claims for damages for personal injury, and his claim was not a claim for personal injury.

The High Court unanimously allowed Mr Moore’s the appeal, and held that section 16(1) of the Civil Liability Act did not apply so as to preclude the recovery of damages for disappointment and distress that were not consequential upon physical or psychiatric injury.

The High Court reinstated the primary judge’s order for damages for disappointment and distress, with interest.

The High Court also remitted the matter to the primary judge on the question of whether other group members may recover damages for disappointment and distress.

It is worth noting that the award of $2,000 was the full amount Mr Moore claimed as damages for disappointment and distress. The primary judge considered that amount to be “modest” and indicated that he would have assessed damages at a higher amount had Mr Moore not limited his claim to $2,000.

As a consequence of this High Court decision, passengers who experience a less than enjoyable holiday as a result of a breach of the Australian Consumer Law, will likely be entitled to damages for distress and disappointment, over and above any refund. We anticipate that future claimants will seek more significant awards for distress and disappointment, given the comments of the primary judge.

This decision will likely have ramifications for the wider holiday provider industry, and claimants’ potential damages awards are likely to increase in New South Wales.

This article was written by Simon Liddy, Partner & Kristin Hibbard, Senior Associate.


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