Louise Cantrill, Partner and Enoch Hui, Lawyer

The long-awaited High Court decision has confirmed that the caps and thresholds for personal injury claims contained in the Civil Liability Act 2002 (NSW) (CLA) apply to personal injury claims brought under the Australian Consumer Law (ACL). This is the case even if the injury occurred overseas, as long as there is otherwise sufficient nexus to the jurisdiction. However, the High Court found that the “disappointment and distress” injuries claimed by Mr Moore were not by nature a personal injury claim. As such, the provisions of the CLA did not apply to limit the damages recoverable.

Key Issues

There are 3 key issues arising from this matter:

1. Whether Section 275 of the Australian Consumer Law applies the provisions of the Civil Liability Act 2002 (NSW);
2. Whether the Civil Liability Act 2002 (NSW) has jurisdiction for matters which occur outside of Australia;
3. Whether Section 16 of the Civil Liability Act 2002 (NSW) precludes damages arising from disappointment and distress which are not consequential upon physical or psychiatric injury.

Factual Summary

Mr Moore and his wife signed up for a European river cruise with Scenic Tours (Scenic), which was promoted as “a once in a lifetime cruise along the grand waters of Europe”.

The tour started off in Paris on 31 May 2013, with the cruise scheduled to depart from Amsterdam on 3 June 2013 and to conclude in Budapest on 17 June 2013. However, due to severe weather conditions along the Rhine and Main Rivers, the cruise sailed for only three days instead of ten, there were at least two changes of ship during the tour, and a large portion of the journey was spent on a bus.

Key Legislation

The key legislation in this matter involved:

1. Section 275 of the Australian Consumer Law (ACL), which states that if “there is a failure to comply with a guarantee that applies to a supply of services” and “the law of a State or a Territory is the proper law of the contract”, then “that law applies to limit or preclude liability for the failure, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of any liability, for a breach of a term of the contract for the supply of the services.”
2. Section 16 of the Civil Liability Act 2002 NSW (CLA), which does not award damages unless “the severity of the non-economic loss is equal to or greater than 15% of a most extreme case”.

It was accepted that Mr Moore did not satisfy the threshold pursuant to Section 16 of the CLA.

Supreme Court of NSW Proceedings [2017] NSWSC 733

Mr Moore commenced proceedings in the Supreme Court of NSW on behalf of himself and around 1,500 other passengers (tourists) on board the river cruise, alleging that Scenic breached:

1. Section 60 of the ACL by failing to exercise due care and skill in the supply of the tours;
2. Section 61(1) of the ACL as the disrupted river cruises rendered the tour services unfit for the purpose for the tourists who acquired them;
3. Section 61(2) of the ACL as the tour services were not of a nature and quality as could reasonably be expected to achieve the result that the tourists wished the tour services to achieve.

Justice Garling determined that Section 275 of the ACL applies the provisions of the CLA, and that Mr Moore’s claim for damages for disappointment and distress related to personal injury. However, Justice Garling deemed that Mr Moore was not precluded from claiming damages given that his disappointment and distress had occurred outside of Australia, therefore rendering it beyond the jurisdiction of the CLA.

Justice Garling ruled in favour of Mr Moore and awarded him $16,539.85 (inclusive of interest) and $2,000 for disappointment and distress pursuant to section 267(4) of the ACL.

NSW Court of Appeal [2018] NSWCA 238

Scenic appealed on the basis that Mr Moore was precluded from claiming damages relating to disappointment and distress pursuant to Section 275 of the ACL when read together with Section 16 of the CLA.

Whilst the Court of Appeal upheld the Primary Judge’s ruling that Section 275 of the ACL applies the provisions of the CLA, the Court of Appeal also concluded that the CLA was applicable in this case as Mr Moore’s claim was commenced in a NSW court, despite the claim arising from conduct which occurred outside of Australia.

The Court of Appeal proceeded to set aside the damages awarded by the Primary Judge for Mr Moore’s disappointment and distress.

High Court of Australia [2020] HCA 17

Mr Moore appealed to the High Court on the following primary grounds:

1. Section 275 of the ACL does not pick up and apply to the provisions of the CLA.
2. CLA provisions relate exclusively to claims for personal injury damages, whilst his claim for damages arising from disappointment and distress is not a personal injury claim.

On the first ground, the High Court upheld the Primary Judge and the Court of Appeal’s rulings that Section 275 of the ACL applies the provisions of the CLA.

However on the second ground, the High Court unanimously concluded that Section 16 of the CLA exclusively applies to damages arising from personal injury loss, therefore the restrictions of the CLA did not apply given that Mr Moore’s loss arising from disappointment and distress for breach of a contract did not relate to personal injury. The High Court held that ‘non-economic loss’ within Part 2 of the CLA is a head of damage associated with personal injury as ‘pain and suffering’; and that at common law, ‘pain and suffering’ referred to “actual physical hurt occasioned by the accident or its aftermath” with damages for emotional harm only recoverable where psychiatric injury was suffered. Given that Mr Moore had not alleged any physical injury or psychiatric illness, his ‘disappointment and distress’ was not classified as ‘non-economic loss’ under the CLA.

Accordingly, the High Court allowed Mr Moore’s appeal, and reinstated the damages for disappointment and distress awarded by the Primary Judge.

Implications

Defendants and insurers are likely to be relieved with the decision that the caps and thresholds on personal injury claims contained in the CLA can apply to claims brought under the consumer guarantee provisions of the ACL. However, claims for ‘disappointment and distress’ remain available and sit outside of the CLA.

It will be interesting to see whether consumers who undergo disappointing and distressing experiences will rely on this precedent in an attempt to recover damages. As a result of this High Court decision, one would expect the tourism industry to be ‘Moore’ on guard to deliver on its promotional material.