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When the Ruby Princess steamed out of Circular Quay on 8 March 2020, it carried 2,600-odd passengers, 1,100 crew and a viral stowaway that would turn the ship into a national symbol of pandemic mismanagement. Among the passengers were Susan and Henry Karpik, regular cruisers who had sailed with Princess nine times and expected another lazy loop around New Zealand.
Instead, Henry nearly died, Susan fell ill, and the couple became the face of a class action that would test the reach of the Australian Consumer Law and the limits of damages applicable to cruise ship and tourism activities.
The primary judge – Justice Angus Stewart – divided Mrs Karpik’s claim into two categories: personal injury damages (for her infection and psychiatric injury) and “distress and disappointment” damages – Dillon damages – reflecting the ruined holiday.
He catalogued a litany of failures: no temperature screening pre-embarkation, minimal health questioning, no meaningful physical distancing on board, inadequate isolation of symptomatic passengers, and no timely warning of the heightened COVID-19 risk on this particular voyage compared with cruise ships generally, especially in light of the notorious Diamond Princess outbreak just weeks earlier.
He held that Carnival owed Mrs Karpik a duty to take reasonable care for her health and safety in relation to the risk of coronavirus infection, and a concurrent duty to avoid causing her a recognised psychiatric injury flowing from her husband’s infection and critical illness. Both duties were breached.
He accepted that she contracted COVID-19 on board, but that her physical symptoms were short-lived and mild.
Her real injury was psychiatric: an adjustment disorder triggered by watching her husband whisked off the ship, ventilated, placed into an induced coma and then hovering between life and death for weeks, while she was ordered into isolation and told he had a 10 per cent chance of survival.
The judge assessed her non-economic loss at only 8 per cent of a “most extreme case”, below the 15 per cent threshold for general damages that applied to her ACL statutory guarantee claim by operation of the NSW Civil Liability Act that was picked up and applied.
Result: no general damages at all.
Her “distress and disappointment” damages also went nowhere. Crucially, he reasoned that most of her ongoing distress and disappointment was “tied up” in her adjustment disorder, and so belonged conceptually in the personal injury bucket, not the Dillon bucket.
The judge concluded that the appropriate figure for loss of enjoyment of the holiday was about the cost of the cruise, which Carnival had already refunded.
Her entire award amounted to out-of-pocket medical expenses of about $4,400 plus interest.
She appealed, arguing that the primary judge had mischaracterised and undervalued her injuries.
The appeal judges were though “acutely conscious” of the trial judge’s advantage in seeing and hearing Mrs Karpik, noting his reservations about inconsistencies and embellishments in her evidence.
They could not detect any appellable error in his calibration of the holiday-loss component and endorsed his temporal cut-off: damages for disappointment & distress up to 21 March 2020 could sound in Dillon damages; distress thereafter, when the adjustment disorder took clinical shape, belonged in the personal injury analysis.
The appeal court also ruled against the contention that the refund should not have been treated as an automatic set-off against Dillon damages. There was no failure of consideration because the cruise had in fact been conducted.
Both sides walked away from their appeals empty-handed.
Damages for each of the passengers will vary depending on the expenses they actually incurred.
Categories: Cruise ship injury