Foiled Holidays on Cruise Ships

 Moore v Scenic Tours Pty Ltd [2020] HCA 17 

Spending more time at home lately, means you have surely watched enough TV to see one of those ‘all-inclusive luxury’ European river cruise advertisements and potentially dreamt of getting on board. Now, imagine spending your life savings on one of these cruises, only for your experience to be nothing like it looks on TV. This was the case of Mr and Mrs Moore. 

In 2012, Mr Moore booked a European river cruise with Scenic Tours, for him and his wife. The cruise was promoted by Scenic as a ‘once in a lifetime cruise along the grand waterways of Europe’ with guests treated to ‘all-inclusive luxury’. Mr Moore booked the cruise as an opportunity for the couple to see different locations in Europe without unpacking more than once, and also to accommodate his inability to sit down for extended periods of time, following spinal surgery. 

Unfortunately for Mr & Mrs Moore, the cruise did not go to plan. The cruise was severely disrupted by adverse weather conditions and high water levels on the Rhine and Main Rivers. Consequently, instead of cruising for ten days as scheduled, Mr & Mrs Moore cruised for only three days and spent many hours travelling by bus. The cruise also commenced on board a different vessel to the as advertised luxurious ‘Scenic Jewel’ and by the time the cruise concluded in Budapest two weeks later, the Moores had changed vessel twice. 

Upon returning home, representative proceedings were commenced in the New South Wales Supreme Court against Scenic, on behalf of Mr Moore and approximately 1500 passengers of 13 other Scenic cruises that were scheduled for the same time. In these proceedings it was alleged that Scenic breached several of the guarantees in the Australian Consumer Law (‘ACL’). This was on the basis that the tours were either unfit for the purpose for which Mr Moore and the guests booked them for, or alternatively they were not of the nature and quality as could reasonably be expected by the guests. Mr Moore argued that Scenic knew or should have known about the weather conditions and failed to inform customers in a timely manner to allow them the opportunity to cancel their booking. 

The primary judge, Garling J, agreed with Mr Moore that Scenic had failed to comply with the consumer guarantees in the ACL and awarded Mr Moore $10, 990 in compensation for loss of value and $2000 in damages for distress and disappointment.1 Garling J applied s16 of the Civil Liability Act 2002 (NSW)(‘CLA’) to s275 of the ACL, holding that a claim for damages for distress and disappointment is a claim for personal injury damages.2 However Garling J rejected Scenic’s argument that the CLA applied to limit Mr Moore’s claim, due to the fact the damage was suffered overseas.3 The Court of Appeal upheld the primary judge’s decision that Scenic had breached the consumer guarantees in ss61(1) and (2) of the ACL, but overturned the decision on s60.4 The Court of Appeal disagreed however with Garling J’s view that s16 of the CLA had no application to loss suffered outside New South Wales and set aside the award of damages for distress and disappointment.5 

1 Moore v Scenic Tours Pty Ltd [No 2] [2016] NSWSC 733, [939], [941], [944], [946(1)]. 

2 Ibid [854], [873]. 

3 Ibid [908]-[911], [943]. 

4 Scenic Tours Pty Ltd v Moore (2018) 361 ALE 465, 552 [396]. 

5 Ibid [389], [391]. 

In its decision, the High Court was tasked with considering whether s275 of the ACL picks up and applies to s16 of the CLA and whether damages for distress and disappointment constitute personal injury damages for non-economic loss. The High Court handed down its decision on 24 April 2020. In relation to the first issue, the court arrived at the conclusion that s275 of the ACL applies to s 16 of the CLA by a means of statutory interpretation.6 However of most interest was the court’s discussion on damages for distress and disappointment. The court agreed that distress and disappointment, resulting from a breach of contract which has been bought and paid for, is no more than a normal and healthy response to disappointment, rather than impairment of the plaintiff’s mental condition, as required for personal injury claims.7 The court confirmed the principle from Baltic Shipping Co v Dillon (‘Baltic Shipping’),8 that damages for distress and disappointment caused by breach of contract, if the object of the contract being pleasure or relaxation, is a compensable head of loss separate from the categories of loss from pain and suffering associated with personal injury.9 The court then confirmed that damages for distress and disappointment does not fall within the parameters of Part 2 of the CLA.10 In confirming Baltic Shipping, the court distinguished the NSW authority of Insight Vacation Pty ltd v Young,11 on the basis that Mr Moore’s distress and disappointment were not occasioned by any physical injury. The court therefore concluded that Mr Moore’s claim for damages for distress and disappointment stands distinct from a claim for damages for distress and disappointment associated with personal injury. 

6 Moore v Scenic Tours Pty Ltd [2020] HCA 17 [32]-[38]. 

7 Ibid [41], [46]. 

8 (1993) 176 CLR 344. 

9 Ibid [43]. 

10 Ibid [47]. 

11 (2010) 78 NSWLR 641 

The High Court unanimously allowed the appeal, overturning the Court of Appeal’s decision, and reinstated the primary judge’s award of damages for distress and disappointment pursuant to s267(4) of the ACL to Mr Moore. 

What does this decision mean? 

In effect the High Court has removed the cap on damages for disappointment and distress arising from breach of contract or statutory guarantees under the ACL. 

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