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

• Author: Kate Lewins
• Position: Sincere thanks Paul Myburgh for his comments and suggestions on a draft of this paper. Any errors are of course my own
• Pages: 12-27

(2016) 30 ANZ Mar LJ

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CRUISE SHIP OPERATORS, THEIR PASSENGERS, AUSTRALIAN CONSUMER

LAW AND CIVIL LIABILITY ACTS

PART TWO

Ka te Le wins1

This paper is the second of two papers. Part One2 outlined t he common law duty to exercise reasonable car e for

passenger safety. It set out the basic pr ovisions and history of the Trade Practices Act (‘TPA’)/Australian

Consumer Law and the Civil Liability Act (‘CLA’) reforms insofar as they relate to personal injury claims arising

out of breach of contract. In particular, Part One considered the extent to which the TPA/Consumer law ‘picks up

and applies’ the state laws ‘as surrogate federal law’. Of particular interest to ship operators, it also considered

the extraterritorial application of Australian law.

Much of Part One lays the groundwork for the discussion that will take place in Part Two. I t is here that the

particular issues faced in dealing with a passenger’s claim for personal injury in Australia will be canvassed. The

purpose of Part Two is to consider the potential interaction of the various statutes by considering questions likely

to be posed by the lawyers for either the passenger or the cruise ship operator in assessing a claim. Therefore this

part will deal with the following questions:

 Will the CLA quantum limits apply to statutory guarantee claims?

 Will the CLA changes to tests of liability apply to statutory guarantee claims?

 Will the CLA provisions on risk warnings apply to statutory guarantee claims?

 Can the CLA provisions allowing exclusion of liability for recreational activities be relied upon to excuse

liability in statutory guarantee claims?

 When can a corporation rely upon a contractual exclusion/limitation cla use to exclude liability arising

under a statutory guarantee?

The interplay between the Commonwealth and State provisions is a key issue here. It is important to bear in mind

some key points that were covered in Part One; namely that:

 Corporations will be caught by the Commonwealth laws if contracting in Australia or in circumstances

where chosen governing law or the objective prop er law is that of an Australian State or territory, no

matter where the cruise takes place.

 There may be territorial restrictio ns on the operation of the CLAs. Insight Vacations3 tells us that the

NSW CLA provisions dealing with recreational services do not apply to services provided wholly outside

NSW because the Act contains no expression of extraterritorial application. The courts are yet to

determine whether the remainder of the CLA, or indeed the CLAs of other States, are similarly afflicted.

 The CLAs differ in wording State by State, which means that a decision of a court in one State concerning

a wording from a different State’s CLA must be treated with caution.

 The wording of s 275 (formerly s 74(2A)) is extremely important in determining which of the State CLA

provisions – or indeed any of their laws generally - will be regarded as ‘surrogate federal law.’ This is

not yet settled.

 It is at least arguable that a State law not falling within the narrow wording of CCA s 275 can be

applicable by reason of the Judiciary Act 1903 (Cth) ss 79 or 80; but only if it is not inconsistent with

Commonwealth law. Further, there may be difficulties in applying the State CLAs to harm occasioned

outside Australia.

For the purposes of this discussion, we will assume that the cruise operator is a corporation and that the proper

law of the contract is that of an Australian State or territory. By reason of s 131 CCA, that corporation is therefore

caught by the Commonwealth iteration of the Consumer Law found as a schedule to the CCA. That, in turn, means

that s 275 Consumer Law applies.

1 Sincere thanks Paul Myburgh for his comments and suggestions on a draft of this paper. Any errors are of course my own.

2 (2015) 29 ANZ Mar LJ 93.

3 Insight Vacations Pty Ltd v Young [2011] HCA 16.

(2016) 30 ANZ Mar LJ

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1 If a passenge r establishes a corporation has bre ac hed the sta tutory guara ntee

leading to personal injury, will the a pplica ble State CLA reform award quantum

limits a pply?

Once Consumer Law sections 275 (a) and (b) are satisfied, the short answer to this question is yes.4 The a ward

quantum provisions5 fall squarely within the ambit of s 275. State laws concerning quantum ‘limit and preclude…

recovery…’. They apply to ‘liability for breach of a term of the contract’ because the laws apply to a wards of

personal injury damages, ‘regardless of whether the claim is brought in tort, contract, under statute or otherwise.’6

The assessment of damages in various cases has proceeded on this basis.7

However there has been little discussion as to whether the CLA should apply to assess damages where the injury

was sustained overseas. In the context of the recreational activities aspects of the CLA, the High Court in Insight

Vacations8 did not need to explicitly deal with whether the quantum provisions of the CLA would have applied

to the assessment of Mrs Young’s claim, because the parties had accepted from the outset that that was the case.9

But the extraterritorial application of the CLA (NSW) was discussed by the court. The High Court considered

whether the recreational activity provisions could apply where the activity occurred outside NSW in any event.

The court pointed out that this required analysis of the particular CLA.10 The CLA (NSW) made no provision for

extraterritorial operation. The joint judgment of the court said:

The Civil Liabil ity Act [NSW] made n o express provision for any extra-territorial operation. It made no provision

which dealt directly with whether the Act’s provisions were to apply to claims for breach of a contract whose proper

law was not the law of New South Wales or to other claims where the application of choice of law rules would result

in the lex causae b eing a law other than that of New South Wales. It may be—it is not possible to be certain—that

the unstated assumption of the provisions was that, because all kinds of claims, however based, were treated as if

they were species of a claim for a tort of negligence, the Act would apply to cases in which New South Wales would

be the lex causae because it was the lex loci delicti. Or it may be that the unstated assumption was that the provisions

would apply to any claim for negligence that was brought in any of the courts of New South Wales. It is neither

possible nor profitable to explore those questions further.11

The definition of ‘recreational activity’ talked of activity at a ‘beach, park or other public open space’. After a

lengthy discussion, the Court decided there was ‘no reason to read those references to place as extending b eyond

places in New South Wales.’12 The High Court was consider ing the extent to which the NSW CLA pro visions

constricted the consumer protection provided for in the Consumer Law. Given the intent of the Consumer Law

and its status as Federal legislation, it therefore makes sense t hat the CLA provisions were not interpreted

expansively. But will the same reasoning apply to different parts of the CLA not so fixated on ‘place’ such as that

dealing with assessment of damages? That is relevant to determine whether an Australian court should apply the

CLA quantum provisions where the incident occurred overseas.

General principles of conflicts law will also come into play. They are generally outside the scope of this paper so

only a brief comment will be made.

For contract claims, the relevant choice of law clause, an implied choice of law or the objective proper law of the

contract, will dictate how t he damages are to be assessed. If the choice of law is a foreign law, but the obj ective

proper law is Australian, it may be overridden by the Consumer Law,13 which in t urn ‘uplifts’ the State CLA

legislation. However, if the objective proper law is not Australian, an Australian court will need to scrutinise the

terms, object and purpose of the CLA to determine if it should apply regardless. The court might co nsider the

4 We are assuming that the accident took place after the enactment of the predecessor of s 275, s 74(2A) TPA, in 2004. See Nair-Smith v

Perisher Blue Pty Ltd [2013] NSWSC 727, [121].

5 See, eg, Civil Liability Act 2002 (WA), Part 2; Civil Liability Act 2002 (NSW), Part 2.

6 See, eg, Civil Liability Act 2002 (NSW), s 11A.

7 Insight Vacations Pty Ltd v Young (2010) 78 NSWLR 641, 643 (Spigelman CJ); Nair-Smith v Perisher Blue Pty Ltd [2013] NSWSC 727,

[121] where the judge held that the CLA did not apply because s 74(2A) was not operational at the time of the accident, but in Nair Smith v

Perisher Blue Pty Ltd (No 2) [2013] NSWSC 1463 the judge otherwise accepted the limitations on damages from the CLA would have

applied: [5].

8 Insight Vacations Pty Ltd v Young [2011] HCA 16.

9 [2009] NSWDC 122, [32].

10 South Australia’s CLA, for example, expressly states that their provisions apply to claims brought in the State, no matter where the harm

was suffered.

11 At [16].

12 At [35].

13 TPA, s 67; Consumer Law, s 67.