Cruise ship passengers and Australian law: known problems and some new answers

• Author: Kate Lewins
• Position: Professor, School of Law, Murdoch University; Academic Fellow, Centre for Maritime Law, National University of Singapore. A version of this paper was delivered at the Global Shipping Law Forum 2018, hosted by the Marine and Shipping Law Unit at the TC Beirne School of Law, University of Queensland on 4 July 2018. This paper incorporates the...
• Pages: 1-16

(2018) 32 A&NZ Mar LJ 1

CRUISE SHIP PASSENGERS AND AUSTRALIAN LAW:

KNOWN PROBLEMS AND SOME NEW ANSWERS

Kate Lewins

1 Introduction

Australia is considering whether to accede to the Athens Convention relating to the Carria ge of Passengers a nd

their Luggage by Sea 2002 (Athens 2002), an international convention that seeks to standardise the legal regime

applicable to passengers carried by sea.1 This is a welcome development; the author has long advocated for it.2

While Athens 2002 is a compromise, it would benefit Australian consumers in a number of ways.3

This paper outlines the current position of cruise ship p assengers under Australian law, by way of background to

the discussion about Athens 2002 by others at the Global Shipping Forum.4

In Australia, the substantive law applicable to passengers is no lo nger found primarily in common law. T he tale

is really that of two contradictory legislative regimes each protecting their own policy patch, although the common

law still has an occasional part to play. The common law notions of incorporation of terms, and place o f the

contract, proper law, and questions of service out of the jurisdiction will bob up from time to time. Notably, these

questions have diminished importance in countries that have implemented t he Athens Convention.

The two legislative regimes in question are the Australian Con sumer Law, as a schedule t o the Competition and

Consumer Act 2010 (Cth) (CCA) and the State based Civil Liability regimes, which came about after the Review

of the Law of Negligence 2002 (Ipp Report). I have discussed the background, provisions and interactions of these

regimes in earlier issues of this journal.5 Rather than reprise those papers, I propose a mere summar y, followed

by a summary of some new developments. As we shall see, there are still plenty of re maining questions.

The Australian law applicable to passengers carried by sea is labyrinthine6 and complex. Recent cases provide

some welcome clarity on a few points, but there is still uncertainty. Some of that uncertainty is because we do not

know whether the High Court will affirm t he sometimes controversial views of the lower courts. A High Court

ruling would be welcome in a number of areas, although the reality is that it is extremely rare for passenger claims

to be heard in the High Court. Most passenger claims are for modest amounts and passengers are often of modest

means. This ensures t hat litigation is a last resort. Claims usually fizzle out or settle before a court can co nsider

these questions. 7

 Professor, School of Law, Murdoch University; Academic Fellow, Centre for Maritime Law, National University of Singapore. A version

of this paper was delivered at the Global Shipping Law Forum 2018, hosted by the Marine and Shipping Law Unit at the TC Beirne School

of Law, University of Queensland on 4 July 2018. This paper incorporates the very recent judgment of the NSWCA in Scenic Tours v

Moore [2018] NSWCA 238.

1 Department of Infrastructure, Regional Development and Cities, Discussion Paper: Carr iage of Passengers and their Luggage by Sea,

November 2017. Information about the consultation, and submissions, can be found here:

https://infrastructure.gov.au/maritime/business/liability/damage_luggage.aspx .

2 Carr iage of Passengers by Sea (Sweet & Maxwell, 2016); ‘Cruise Ship Operators, their Passengers, Australian Consumer Law and State

Civil Liability Acts – Part 1’ (2015) 29 ANZ Maritime Law Journal 93 – 110; ‘Cruise Ship Operators, their Passengers, Australian Consumer

Law and State Civil Liability Acts – Part 2’ (2016) 30 ANZ Maritime Law Journa l 12- 27. ‘Australian Cruise Passengers travel in legal

equivalent of steerage – considering the merits of a passenger liability regime for Australia’ (2010) 38 Australian Business Law Review 127

– 142; 27.

3 See above, n1.

4 It seeks to avoid duplicating topics that have been allocated to others at the Global Shipping Forum 2018. For example, it does not cover

formation of contracts, or incorporation or interpretation of terms; nor the specific provisions of the Athens Convention, nor conflict of law

issues. Due to space constraints this paper avoids repeating matters raised in the published works cited in fn 2 above; rather it takes those

papers as a springboard to consider recent developments and remaining issues.

5 Ibid.

6 Justice Steven Rares used this term to describe modern Commonwealth legislation, including the Australian Consumer Law: Stephen

Rares, Striking the Modern Balance Between Freedom of Contract and Consumer Rights 14th International Association of Consumer Law

Conference, Sydney, 2 July 2013.

7 A recent exception is Moore v Scenic Tours [2017] NSWSC 1555. The matter has recently been the subject of a Court of Appeal judgment

[2018] NSWCA 238 and leave to appeal to the High Court has been sought. This is discussed further below.

Cruise ship passengers under Australian law

(2018) 32 A&NZ Mar LJ 2

2 Part 1 - Known Problems: Strong Consumer Protection Meets Recast Tort Law

At common law, carriers are obliged to exercise due care in the carriage of passengers. Traditionally this duty was

subject to the terms of the contract of carriage. Thankfully, long gone are the days where a carrier could exclude

all liability for injury caused by its negligence.8

Where the Australian Consumer Law (ACL) applies, 9 carriers are bound by a statutory guarantee to exercise due

care and skill in the carriage of their passengers. Under that same law, carriers are also obliged to ensure that the

services should be reasonably expected to achieve the result made known to the s upplier, and the services must

be reasonably fit for purpose. Formerly implied terms and now statutory guarantees,10 these protections are found

in s60 and s61 of the ACL. Any attempt to exclude the guarantees is void pursuant to s 64 ACL.11 This protection

is bolstered by other provisions scattered throughout the ACL: the prohibition on misrepresenting rights under a

contract, and unfair terms provisions, amongst others. Rele vant provisions of the ACL are set out in an appendix

to this paper.

The nature of the obligations imposed on service pro viders under the consumer guarantees are not p articularly

problematic. The duty of due care and skill closely aligns with a carrier’s common law obligation (although there

are some difficulties determining whether and when it might apply to a contract entered or performed outside

Australia. We will come to that shortly.) However, insofar as they involve a duty to take reasonable care to avoid

injury or death, the legal position is not strai ghtforward. That is because of the exceptions, and qualifications

inherent in the ACL, as well as the impact of the apparent ‘uplift’ of State laws12 such as the Civil Liability Acts.13

These render the relatively simple guarantees into something rather more difficult to navigate.

Here, I outline three primary issues with Australian law as would particularl y concern cruise passenger claims.

2.1 Three Known Problems

2.1.1 ‘Recreational Services’

As already discussed, the ACL imposes a statutory guarantee on service providers to exercise due care and skill

in the provision of services in trade and commerce. Ge nerally this guarantee cannot be excluded (s64) but there

is an exception – a ‘carveout’. It is permissible for service providers to exclude liabilities in relation to injuries

sustained during the provision of recreational services. The carveout can be found in the parent Act, the

Competition and Consumer Act 2010 (Cth), s139A.14

The carveout is q uite restricted. First, the definition of ‘recreational services’ in the CCA is fairly narro w.15 For

example, it seems unlikely that an entire cruise could be considered a ‘recreational service’, but that argument has

not yet been ru n. Seco ndly, to trigger s139A, an exclusion clause needs to be carefully crafted to fall within it :

that means excluding only injury or death, not also property damage.16 Thirdly, any such exclusion clause must

be part of the contract, which throws up common law questions of formation and i ncorporation of terms.

Some questions that remains unanswered are: just what will constitute recreational services? It is at least arguable

that liability arising from any activity involving significant physical exertion or risk can be excluded. Does that

8 Although some domestic ferry operators maintain such clauses in their terms and conditions.

9 The application of the ACL is discussed further in Part Two below.

10 In 2010 the Trade Pra ctices Act 1974 (Cth) was replaced by the Competition and Consumer Act 2010 (Cth) (CCA). Most of the consumer

protection provisions moved into the second Schedule (titled the Australian Consumer Law). Many of the provisions are identical or

substantially similar to the TPA provisions. One significant change, though, is that the implied contractual warranties were converted into

statutory guarantees.

11 Subject to the carve-out in s139A CCA, which is discussed under the next heading.

12 Either via s275 ACL, or s79 and 80 of the Judiciary Act 1903 (Cth).

13 A collective name given to the various State Acts that enacted the Ipp Report recommendations. The relevant Statutes are: Civil Law

(Wrongs) Act 2002 (ACT); Civil Liability Act 2002 (NSW); Personal Injuries (Liabilities and Damages) Act 2003 (NT); Civil Liability Act

2003 (Qld); Civil Liability Act 1936 (SA); Civil Liability Act 2002 (Tas.); Wrongs Act 1958 (Vic); Civil Liability Act 2002 (WA).

14 This and other relevant provisions from the CCA and ACL are set out in an appendix to this paper.

15 In contrast to the broader definition found in the CLAs.

16 Motorcycling Events Group Australia P ty Ltd v Kelly (2013) 303 ALR 583; Perisher Blue Pty Ltd v Nair-Smith (2015) 320 ALR 235.