The Federal Court’s recent Ruby Princess ruling is damning of the decision in of Appeal has handed down its decision regarding the initial trial of the Ruby Princess Covid Cruise in favour of Carnival Cruises, dealing another setback in the efforts of passengers to recover compensation from the cruise line for the horrific experience.

The Federal Court’s recent Ruby Princess ruling is damning of the decision in of Appeal has handed down its decision regarding the initial trial of the Ruby Princess Covid Cruise in favour of Carnival Cruises, dealing another setback in the efforts of passengers to recover compensation from the cruise line for the horrific experience.

Mrs Karpik was the ‘test case’ for the group members who will not be receiving any further amount of compensation for distress and disappointment damages, despite what her suffering onboard the cruise and her ongoing mental illness that has been as a result of her cruise experience.

Justice Stewart acknowledged the legitimacy of the distress and disappointment felt by Mrs Karpik, amongst other passengers, onboard the Ruby Princess, but opted, after what was an intense and meticulous 200-page analysis of the circumstances, to not award damages for non-economic loss, including distress and disappointment.

What does this analysis tell us is the way forward regarding an ability to claim damages for non-economic loss?

How does the Court distinguish between damages (such as distress) that stem from personal injury as opposed to those that arise out of contractual obligations owed to passengers from the cruise line?

Justice Stewart remarked that the assessment of damages for distress and disappointment in all circumstances is a “very fact-rich and individual assessment”, but if it is not in the contract, doesn’t this have a very large and resounding impact on a major claim for damages for the entirety of the class?

Justice Stewart explained the distinction by relying on recent rulings by the Court in Baltic Shipping Co v Dillon and the established legal precedent of the High Court in Scenic HCA. In both cases, the High Court explained and established that disappointment at a breach of a promise to provide recreation, relaxation and peace of mind is not an “impairment” of the mind or a “deterioration” or “injurious or lessening or weakening” of the mind.

The critical distinction appears to lie in identifying the source and nature of the distress experienced by the claimant.

Mrs Karpik relied on section 61 of the Australian Consumer Law by which she said that Carnival Cruises guaranteed the services that were to be provided to her and other passengers would be reasonably fit for the intended purpose of a safe, relaxing and pleasurable holiday. Further, the passengers would return feeling refreshed and reinvigorated. To the extent that the services were provided, Carnival Cruises failed in achieving this purpose because of the outbreak of Covid-19 on the cruise, passengers spending time in isolation, some passengers dying etc.

In the absence of a failure to achieve the purpose unconnected with the services, there were deficiencies on the part of Carnival Cruises in the supply of the services such that Carnival Cruises was negligent. They ought to have simply cancelled the cruise, or pre-screened passengers, checked health declarations, or even undertaken temperature checks amongst other things to protect passengers onboard.

Mrs Karpik also contended that Carnival Cruises also contravened the prohibition of misleading and deceptive conduct in section 18 of the ACL because of their promotional and marketing material which advertised that passengers would “come back new”.

It was also submitted that passengers would suffer distress by being aware of being in close contact with a person who contract COVID-19. This part of the case was not pressed at trial.

Whilst Justice Stewart found that Mrs Karpik’s claimed loss and damage arising from her COVID-19 infection were “because of” Carnival cruises’ failure to comply with the purpose they wanted to achieve (purpose guarantee), and the result they promised to achieve (result guarantee), the failure to comply with the purpose and result guarantee, did not give rise to additional damages for distress and disappointment. These are also referred to as ‘consumer guarantees’.

Mrs Karpik claimed personal injury damages in relation to infection from COVID-19, suffering from long COVID and an adjustment disorder with mixed anxiety and depressed mood. In addition to the personal injury damages, she claimed damages for distress and disappointment on the basis of the consumer guarantee claims but not on the cause of action of negligence.

There was no dispute that Mrs Karpik contract COVID-19 on board the Ship, and that she suffered from an adjustment disorder. It was not found that she suffered from long COVID.

As a general proposition, the distress and disappointment occurs during the cruise and then continues after the cruise has ended for varying periods depending on the individual, and the impact that the breach of the consumer guarantees has had on that person. Mrs Karpik submitted she should be awarded damages in the range of $50,000 to $60,000 on th e basis of distress and disappointment, as distinct from personal injuries she suffered, because of her anxiety, dealing with Mr Karpik and her sense of loss for the relaxing and pleasurable holiday she expected to enjoy.

On the evidence, Mrs Karpik and her companions participated in a range of activities on board the Cruise before becoming ill, the precautions did not prevent her from spending time with her friends as planned, despite her stated concern about wearing face masks. The distress that Mrs Karpik experienced upon her husband became ill was found to be tied up in her adjustment disorder, and contributed to the cause of it and was compensable as personal injury damages, but not as another head of damage.

On balance, Justice Stewart found that Mrs Karpik essentially enjoyed a part of the cruise, and the refund would be an appropriate amount of Dillon damages. A disappointing result for Mrs Karpik who felt she had, to a substantial extent, lost the benefit of the cruise, and was left with worry, distress and disappointment.

This Judgment, if anything, is a warning to passengers to consider the extent to which they obtained a benefit of the cruise, whether the refund of the cruise amount is an appropriate representation of their damages for distress and disappointment, and to draw a distinction between damages pursuant to contract and those that are linked to personal injury.