'Disappointing' Scenic Tours cruise sails for High Court - Legalwise Seminars

Barrister Laina Chan discusses the interaction between the Australian Consumer Law and the Civil Liability Act and asks: Are damages for disappointment and distress personal injury damages? She refers to Scenic Tours v Moore and the parties’ special leave applications in the High Court last week.

In Scenic Tours v Moore (2018) 361 ALR 45, [2018] NSWCA 238, the respondents had sued Scenic Tours for breach of the consumer guarantees for services because they had not received what they had bargained for, namely, ‘a luxury five-star experience of a [European] river cruise, in accordance with the selected itinerary which would include highlighted events and destinations’ because of inclement weather which prevented the cruises from operating.  The Court of Appeal had inter alia found that:

1. Scenic Tours had breached its consumer guarantee to exercise due care and skill in the provision of the services;
2. S 275 of the Australian Consumer Law operated to pick up the Civil Liability Act as a surrogate Federal law; and
3. Damages for disappointment and distress constituted personal injury; and
4. S 16 of the Civil Liability Act applied so that Moore was unable to recover damages for disappointment and distress as he did not meet the minimum 15% threshold.

On 17 May 2019, special leave applications for both Scenic Tours and Moore were listed for hearing.  The issues before the High Court were:

1. Did the Civil Liability Act apply to the assessment of damages for disappointment and distress?
2. Did the Civil Liability Act have extra territorial application?
3. What was the scope of the services that Scenic Tours had agreed to provide the plaintiffs?

Keane and Gageler JJ were minded to grant special leave in relation to the first issue but not in relation to the others.  A decision was however not ultimately reached because the application was adjourned to allow Moore to amend his grounds of appeal. The attitude of the High Court in relation to the first issue was however a welcome one.

In Baltic Shipping Co v Dillon (1993) 176 CLR 344, the High Court found that damages for disappointment and distress are recoverable for breach of contract if the object of the contract is to provide enjoyment, relaxation or freedom from molestation. Dillon had suffered physical injuries, emotional trauma as well as disappointment and distress because she had not received her happy holiday experience. There was a clear distinction between emotional trauma and damages for disappointment and distress.  Emotional trauma was treated as personal injury whereas disappointment and distress was not. This is clear from the heads of damages that the High Court said were recoverable. Disappointment and distress damages was a distinct head of damage to damages for personal injury.

The Court of Appeal in Scenic Tours v Moore accepted the concession of the parties that damages for disappointment and distress constituted personal injury damages. The concession appears to have arisen from a misapprehension of the decision of the Court of Appeal in Insight Vacations v Young (2010) 78 NSWLR 641. Young had been injured during an overseas holiday and had sought damages for physical injury as well as damages for distress and disappointment consequent upon the physical injury. The Court of Appeal treated damages for disappointment and distress as personal injury damages. The Court of Appeal had not found that disappointment and distress always constituted personal injury.

Barrister Laina Chan is based at 2 Selborne Chambers and is the co-author of Carter and Chan, Contract and the Australian Consumer Law, Federation Press, 2019. She is recognised as the leading expert in Australia on the interplay between construction and insurance law and has been at the bar since 2004. Laina specialises in property law and complex commercial disputes. Contact Laina at laina.chan@selbornechambers.com.au or connect via LinkedIn or Twitter .