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The first step in the process to assess damages for 1,300 European river cruise passenger claims in a class action that was upheld by the High Court in April 2020, has been completed in the NSW Supreme Court.
David Moore – as representative of the class – sued Scenic Tours for “disappointment” resulting from his June 2013 luxury Rhine River cruise being ruined by disruption to the itinerary from severe flooding and record summer rainfall.
Not all thirteen cruises were disrupted to the same extent but typically “cruising” was only possible on one or two days out of a 12-day itinerary. Passengers were instead, bussed – often uncomfortably – over long distances further along the Rhine to meet up with their vessel at night to eat and sleep.They were exhausted rather than rested – unable to relax or enjoy the promised onboard fine dining and ambience – and were sometimes accommodated on very short notice in hotels or on different vessels, necessitating packing and unpacking each day not knowing how that day would unfold.
The cruise operator had – Moore successfully asserted – breached its statutory guarantees in relation to its supply of services mandated by Australian Consumer Law.
Justice Peter Garling – who also conducted the original trial in 2017 – concluded the group members had impliedly made known to Scenic that the purpose for which they acquired the services was to enjoy an all-inclusive five-star luxury river cruise with the features and benefits of the services promised in the tour brochure.
And the results they had made known they wanted to receive from their cruises, were the services promised in that brochure.
Scenic argued though that it should be exculpated from the guarantees because “the inherent risks of travel” implied they would never have expected to “rely on” its “skill and judgment” and it would have been unreasonable for them to have done so.
“On the contrary,” ruled His Honour. “The passengers were enticed by the brochure to do nothing other than to arrive at the port of embarkation and enjoy all that followed on their entirely unforgettable journey of a lifetime”.
“I am well satisfied that each group member was entitled to,” he ruled “and did rely on the skill and judgment of Scenic to provide the services sufficient to achieve the purpose and result guarantees”.
Justice Garling also refused to give weight to a liability exclusion clause because of the small font size of the hard to read clause “buried on a three-column page layout” as compared to the effusive, plain language of promotional statements that were far more prominently displayed.
“In my view, no group member nor any reasonable consumer would have thought to (nor could be expected to) read the Terms and Conditions so as to find out that they could not rely on Scenic’s skill and judgment to provide the services on the Cruise”.
And a clause entitling Scenic to not operate, cancel or delay a cruise “if anything” suggested it would exercise its skill and judgment about when and whether to operate a cruise.
Moore and his fellow pax claimed, “compensation for the reduction in the value of the services below the price paid” pursuant to ACL s 267(3)(b) given the breaches had been a “major failure” of the statutory guarantees within the meaning of s 268.
The court ordered refunds of between 40% – 90% of the price paid by passengers – depending on which cruise each passenger had embarked upon and the extent of disruption to that cruise.
He then turned his mind to the methodology of assessing damages for disappointment.
Disappointment is – noted the judge – a shorthand description of “disappointment, distress, upset and frustration caused by the unfulfilled promise of a happy, joyous, peaceful and contented holiday”.
The fact that passengers had been conveyed along the holiday route was of no value if all the facilities promised were undelivered.
Each passenger was entitled to damages for the absence of the promised facilities and for loss of enjoyment that had been long in anticipation.
Firstly by dreaming – “during which a person thinks about holidays and starts to actively consider where to go, a phase that can take place over many years”.
Secondly by planning – “where a person starts collecting information and seeking recommendations, speaking to people and researching online”.
And thirdly by booking and the heightened anticipation that follows.
“As the holiday approaches, the traveller may undertake more research on their holiday destinations and the closer they get to their holiday, the more their excitement and anticipation increases”.
Scenic endeavoured to persuade the court – by calling evidence from other passengers who were disturbed by all of the disruption – that the disappointment reported by the group members was disproportionate.
Accepting that those witnesses testified honestly, Justice Garling was of the view that “their evidence does not have any ameliorating effect when assessing the damages for distress and disappointment in the case of each claimant”.
He went on to note that damages for distress and disappointment are able to be assessed at large, unconstrained by the NSW CLA and should not be awarded merely in a token or nominal sum.
Rather, damages had to be assessed on a case-by-case basis after evaluating each passenger’s particular circumstances, one feature of which was the extent of each journey’s disruption.
The amounts awarded to the sample of 12 passengers booked on different tours – each with different stories to tell as what they had been looking forward to and how the unfulfilled promises had affected them – ranged from $6,000 to $12,000.
Given that the great bulk of the distress and disappointment occurred – in His Honour’s view – during the voyage and immediately after it finishes, interest was awarded on 90% of the sums allowed from the last day of the cruise until judgement.
Those passengers whose sole or dominant purpose of travelling to Europe to join the cruise were also entitled to 100% recovery of their air travel costs. On the other hand those who spent significant additional time in the region for other purposes, will recover a much smaller proportion of the cost to get from their home city to their embarkation port.
For all 1,300 passengers at an average payout of $8k per pax plus interest for 8 years, the total damages for disappointment only, is likely to be north of $15 mil. Tour price refunds and airfare reimbursement – with interest – will likely exceed that figure yielding total damages in the vicinity of $30 mil.
Moore v Scenic Tours Pty Ltd (No.4) [2022] NSWSC 270 Garling J, 14 April 2022
Categories: Cruise ship injury