News & Insights

A recent High Court decision, which found a tourism operator liable for a customer’s “disappointment and distress” about a holiday that didn’t go to plan, is set to have significant ramifications for the Australian tourism industry.

the case

In Moore v Scenic Tours Pty Ltd [2020] HCA 17, the Moores booked a European holiday with Australian-based tour operator Scenic Tours (Scenic). The holiday was said to include a “once in a lifetime cruise along the grand waterways of Europe”, whereby guests on board would experience “all-inclusive luxury”.

The Moores deliberately booked a river cruise to avoid sitting for long periods at a time, as Mr Moore had a spinal injury and they didn’t want to unpack their belongings more than once. However, the cruise only proceeded for three of the 10 scheduled days due to adverse weather. The Moores had to change ships at least twice, and spent other days travelling on buses.

Mr Moore brought proceedings against Scenic for breach of the statutory consumer guarantees as set out in the Australian Consumer Law, including:

• That Scenic failed to exercise due care and skill in supplying the travel services, and
• That Scenic failed to provide services that were fit for a known purpose.

Mr Moore argued that Scenic knew, or should have known, about the weather disruptions that were likely to occur, and failed to inform passengers or give them the opportunity to cancel their booking. As a result, Mr Moore claimed damages for the difference in value between the service he paid for and the service received, and damages for his disappointment and distress.

The High Court found that section 16 of the Civil Liability Act 2002 (NSW) (CLA), which regulates the award of damages for non-economic loss, was applicable under the Australian Consumer Law to Mr Moore’s claim. The High Court further found that Mr Moore was not prevented from recovering damages from Scenic for “disappointment and distress”.

what this means for your travel business

This decision sends a clear message that travel operators must comply with their obligations under the Australian Consumer Law, or risk being held liable if a consumer brings a claim.

By providing consumers with a service that does not fit the agreed or stated purpose, a travel operator risks breaching the consumer guarantees.

This is daunting, as travel operators regularly sell travel packages that are dependent on a variety of factors (including weather, time of year and other seasonal factors). As such, it is near-impossible to ensure that a customer will receive the exact service that it has purchased.

Disclaimers of liability will not always provide water-tight defences to consumer claims.

Nevertheless, there are certain steps your business can take to maximise its protection:

1. up-to-date terms and conditions

Ensure that your Terms and Conditions (T+Cs) are updated regularly to ensure currency with law changes, and to adapt as case law, your business and economic conditions also develop.

It is important for your T+Cs to acknowledge the statutory guarantees under the Australian Consumer Law, and contain provisions that seek to exclude or limit your liability with respect to unforeseeable events or events beyond your reasonable control, to the maximum extent allowable at law.

2. be aware of information/events/factors that may impact the delivered service

Having an up-to-date set of T+Cs will not automatically excuse your business from liability in the event that a consumer brings a claim for “disappointment and distress” or other psychological suffering.

While Scenic’s standard T+Cs did contain terms that excluded liability in the event of unforeseen circumstances, it had knowledge of the adverse weather conditions for some time. As such, it was unable to rely on these provisions in the T+Cs to avoid liability.

If your business becomes aware of anything that may hinder the provision of a service, consider whether the service should go ahead, arrange for the provision of a service that equals or exceeds that purchased by the customer, or offer a refund or the opportunity to reschedule (where appropriate).

Our Trade Team is happy to undertake a free review of your Terms and Conditions to comment on whether they are in good shape. Alternatively, if your business wants to know more about how it can meet its obligations under the Australian Consumer Law, please get in touch.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.