Cruise Ship Operators, Their Passengers, Australian Consumer Law and State Civil Liability Acts - Part 1

Author:Kate Lewins
Position:Associate Professor, School of Law, Murdoch University; Academic Fellow, Centre for Maritime Law, University of Singapore
(2015) 29 ANZ Mar LJ
Kate Lewins*
Australians are besotted by cruising. The number of Australians embarking on a cruise has risen by an average
20% per year over the period 2002 2013. A record one million Australians embarked on a cruise in 2014.1
Over the 2014/2015 summer 38 cruise ships are scheduled to visit Australian ports, and they will make more
than 800 port visits. In that time there will be 330 roundtrip cruises from Australian ports. That number does
not include Australia’s own specialist cruise operators, nor does it take into account those Australians who fly
overseas to join a cruise elsewhere in the world. The most popular fly-cruise option for Australians is Europe. In
2013, 77,000 Australians took a cruise in Europe, an increase of 34% over 2012 and a tripling over the previous
4 years.2 Clearly, the cruise business is booming, and Australians have enthusiastically embraced this form of
leisure travel.
An Australian who decides to book a cruise holiday will not have in the forefront of his or her mind the prospect
that the holiday m ay be s poilt by personal injury. Of course, the vast majority of passengers will enjoy their
cruise unsullied by such an event. But where an A ustralian is injured during the course of the holiday, both the
passenger and the cruise operator will look to establish the legal position. The lawyers for both parties will be
confronted with a perplexing and tangled set of State and federal statutes applicable to claims for breach of
contract resulting in personal injury. These statutes are awkward companions. One set aims to ‘protect’
consumers, while the other seeks to retract common law rules of liability for claims arising from negligence.
Both classes of statutes purport to deal with liability for recr eational services, but with conflicting effect. The
fact that the State based statutes are not uniform across Australia and their application to events and places
outside Australia is uncertain adds yet another layer of complexity.
This paper canvasses these two sets of statutes in the context of a passenger claim brought in Australia against a
cruise ship operator as a result of personal injuries sustained during the v oyage.3 It seeks to outline how the
federal and State statutes4 operate in the context of such a claim. The paper does not seek to explain or outline
the common law of contract or torts, nor the specific principles governing the determination and assessment of
personal injury claims on a State by State basis. There are many books available on those topics. Nor does it
attempt to deal with the problems posed by conflicts of law, or managing multiple passenger claims arising out
of large scale disasters.5
The paper is in two parts. Part One contains a general overview of the common law and the relevant statutory
interventions at federal and State levels. It will then concentrate on the statutory guarantee imposed on service
providers to render contracted services with due care and skill under the Australian Consumer Law. That
statutory guarantee is the favoured basis for claimants to bring their claims. Part Two will consider h ow the
consumer protection and civil liability laws interact. It considers the messy ‘recreational services’ provisions
and explains the lessons to be learnt from recent case law about the effectiveness of waivers and exclusion
clauses seeking to restrict liability for injuries sustained during the contractual provision of recreational services.
It reveals the considerable lack of clarity and uncertainty invo lved in determining a passenger claim for personal
injuries in Australian courts. It also outlines other difficulties that compound the complexity further but fall
outside the ambit of the two papers. They are further illustration of the labyrinthine laws applicable to what may
well be a simple accident. The conclusion suggests that the Athens Convention 2002 would represent an
advance on the current state of the law, both for passengers and ship operators.
* Associate Professor, School of Law, Murdoch University; Academic Fellow, Centre for Maritime Law, University of Singapore.
1 Cruise Lines International Association, ‘State of the Cruise Industry Outlook’ (Media Release, 2 December 2015)>. Worldwide, 22 million people took a cruise in
2 Ibid.
3 An assumption is made that the law of a state or territory in Australia is applicable to that claim, either because the parties have expressly
or impliedly chosen that law, or that a court would find it applicable. If, on careful consideration, a lawyer forms the view that it is possible
to argue that the carriage is caught by another system of law (particularly if the Athens Convention Relating to the Carriage of Passengers
and their Luggage by Sea 2002 (Athens 2002) would be recognised as applicable in that place) the n it is imperative to weigh up the
advantages and disadvantages of pursuing the claim in another jurisdiction.
4 The expression ‘Australian law’, although problematic, is used here as a shorthand for the mix of statute law (both federal and State) and
common law that applies in any particular state in Australia.
5 Which would include matters such as class actions, shipowner’s limitation of liability, and the varying entitlements of passengers on board
to different damages awards, particularly for those passengers who may have booked an Australian cruise in Europe such that the 2002
Athens Convention applied.
Cruise Ship Operators, their Passengers, ACL and State CLAs Part 1
(2015) 29 ANZ Mar LJ
These papers have been written with claims against cruise ships in mind. However much of what is set out w ill
also apply to injuries sustained on other passenger ships that do not provide accommodation services, such as
1 Duty to take reasonable care for passenger safety at common law
At common law a carrier will be liable for a breach of contract should the passenger be injured or killed as a
result of ‘fault or neglect’ on the part of the carrier, its servants or agents acting within the scope of their
employment.6 This can also be described as a contractual duty to take reasonable care for the passenger’s
safety.7 Clearly the duty requires competency in the m any aspects of the navigational endeavour but the duty
also extends to non-maritime aspects of the service provided. Therefore the ambit of that duty will reflect the
services offered by the carrier. For a cruise ship operator, this includes the so called ‘hotel risks’. For example,
the duty may manifest as a duty to take reasonable care to provide food free from contamination; to take
reasonable care to implement an outbreak response plan for contagious disease8 to ensure a swimming pool has
been properly chlorinated; to install and maintain a water system that prevents or minimises Legionnaire’s
disease;9 and to ensure maintenance is carried out to minimise trip hazards. It is important to stress that liability
is not strict. The c arrier can repel claims by bringing evidence that establishes it took reasonable care to prevent
the accident.
Where a breach of a contractual duty results in injury, damages will be assessed applying much the same
principles as the equivalent claim in tort.10 At common law the plaintiff may also bring a separate claim for
contractual damages for disappointment and distress if the contract of carriage was intended to provide
relaxation and pleasure and yet failed to do so.11 There may be a claim for the return of part of the fare o n the
basis that the contracted benefit was not forthcoming (In Baltic Shipping v Dillon the High Court held that a
passenger cannot claim damages whilst also recovering the full fare for failure of consideration12).
Where a passenger has been injured during the course of performance of a contract, the paramount remedy is
usually that based in contract but it is not unusual for a tortious remedy to be pursued in the alternative.
Leaving aside the effect of contractual limitations or exclusions,13 at common law the assessment of what
constitutes a breach of the duty to take care, and how damages are assessed for the injury, would be much the
same whether pursued in tort or contract.14
The tort claim by a passenger may take on more significance where the injury was suffered in another
jurisdiction and it is perceived that that the law in that place w ould be more favourable to the passenger.
However an assertion before an Australian court that foreign law applies to the claim in tort will com plicate
matters in at least two respects; first as to whether an Australian court can justify claiming jurisdiction over that
claim, and secondly as regards establishing that the foreign law did apply and what its effect would be.15 This
6 Richard Shaw, 'Carriage of Passengers' in Southampton on Shipping (Informa, 2008) 148.
7 See Mayo J in Wong Mee Wan v Kwan Kin Travel Services Ltd, (Unreported, High Court, Hong Kong, 25 October 1993), cited in Privy
[1995] 4 All ER 745 (PC). In this regard, the Athens Convention Article 3 is said to reflect the common law position.
8 See Nolan v Tui UK Ltd (Unreported, County Court, October 2015)October 2015] in which the court found that the carrier had an adequate
outbreak plan in place and had deployed it correctly. The carrier was therefore not liable for the outbreak virus.
9 See Myhra v Royal Caribbean Cruises Ltd (2012) AMC 2678 (US).
10 N Seddon, R Bigwood and M Ellinghaus, Cheshire & Fifoot Law of Contract 1 (LexisNexis, 10th Aust Ed, 2012) [10.53].
11 For England, see Jarvis v Swan Tours Ltd [1973] 1 QB 233; Jackson v Horizon Holidays Ltd [1975] 3 All ER 92; Watts v Morrow [1991]
1 WLR 1421; for Australia, see Baltic Shipping Company v Dillon (1993) 176 CLR 344. The effect of the CLA reform on claims for
damages for disappointment and distress is still controversial: see Sonia Walker and Kate Lewins, ‘Dashed Expectations? The impact of
Civil Liability Legislation on contractual damages for disappointment and distress’ (2014) Australian Business Law Review 465.
12 (1993) 111 ALR 289 ('Baltic').
13 As well as the question as to their effective incorporation.
14 Where the passenger is on board the vessel gratis, or it is a casual outing on a pleasurecraft, the tort claim may take on more significance
because there would be no basis to sue in contract.
15 For a recent example of an assessment of court jurisdiction over such matters see Thompson v Royal Caribbean Cruises [2013] FCA 1427
(6 December 2013) (Rares J). The plaintiffs applied for leave to serve out of the jurisdiction in relation to an injury sustained on a cruise.
They had boarded the ship in Venice and Mrs Thompson sustained an injury whilst disembarking in Croatia. While claiming under the
contract, the plaintiffs also sued in tort alleging the law of Croatia applied. Justice Rares considered the Federal Court had jurisdiction in
relation to the tort claim because part of the damage sustained had been suffered in Australia (at [11]). This was only an ex parte
interlocutory decision regarding an application for leave to serve out of the jurisdiction, and was still susce ptible to a forum non conveniens
claim, but it is an example of the ‘homeward’ trend. The judge also ruled that the court had jurisdiction because the claim was a maritime
claim under the Admiralty Act 1988 (at [13]) and therefore the action could be pursued in personam (note that at the time of the cruise Italy
had not acceded to the Athens Convention, 1974,1463 UNTS 19; however a few months later, in December 2012, the Athens Convention
2002 came into force by way of an EU Regulation).

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