Rocking the boat – High Court rules on interaction of Civil Liability Act 2002 and Australian Consumer Law 2010 Rocking the boat – High Court rules on interaction of Civil Liability Act 2002 and Australian Consumer Law 2010

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Rocking the boat – High Court rules on interaction of Civil Liability Act 2002 and Australian Consumer Law 2010

27 April 2020 | General Insurance

The High Court of Australia finds that NSW legislation limiting damages for pain and suffering will not limit such an award under the statutory consumer guarantees where the claim is not in respect of personal injury. 

In Issue

  • Whether section 16 of the Civil Liability Act 2002 (NSW) (CLA), a provision which imposes a threshold for the obtaining of damages for non-economic loss, applied so as to preclude the plaintiff from recovering “pain and suffering” damages for breach of consumer guarantees under the Australian Consumer Law 2010 (ACL)

The background

In early 2013, Mr Moore booked a European river cruise with Scenic Tours Pty Ltd (Scenic Tours). The cruise was intended to depart from Amsterdam and arrive in Budapest.

Due to high water levels on the Rhine and Main Rivers, Mr Moore and other passengers experienced substantial disruptions to their scheduled itinerary and were required to spend many hours on buses rather than cruising along the river system.

Among other things, Mr Moore claimed that the services supplied by Scenic Tours contravened statutory consumer guarantees in the ACL as they were not fit for the purpose for which Mr Moore acquired them and not of the nature and quality reasonably expected (Consumer Guarantees).

The decision at first instance

The primary judge found in favour of Mr Moore and awarded him damages totalling $16,539.85, which included $2,000 for the disappointment and distress associated with breach of the Consumer Guarantees, pursuant to section 267(4) of the ACL (Pain and Suffering Damages).

The New South Wales Court of Appeal decision

Scenic Tours appealed. While it did not dispute the quantum of damages, it claimed that Mr Moore was precluded from claiming the Pain and Suffering Damages on account of section 275 of the ACL read together with section 16 of the CLA. 

Section 275 of the ACL states that state or territory laws that apply to “limit or preclude” liability for a failure to comply with the Consumer Guarantees (among other provisions), continue to apply. Scenic Tours argued that section 16 of the CLA (which is NSW legislation) therefore had application to the plaintiff’s claim.

Section 16 of the CLA disentitles a person from claiming damages for non-economic loss unless the severity of the loss is at least 15% of a most extreme case. It was common ground that Mr Moore could not satisfy this threshold.

The Court of Appeal agreed with Scenic Tours that section 16 of the CLA applied “as a surrogate federal law to limit or preclude Scenic’s liability to Mr Moore” for the Pain and Suffering Damages. 

While true that Scenic Tours’ breach occurred outside Australia, the Court of Appeal held that the CLA still operated because the claim was made in a New South Wales Court.

The High Court decision

Mr Moore appealed to the High Court of Australia. By unanimous judgment delivered on 24 April 2020, the High Court upheld Mr Moore’s appeal. 

The High Court agreed with Scenic Tours that section 275 of the ACL picked up and applied section 16 of the CLA. However, it also found that section 16 of the CLA only applies to loss suffered as a result of personal injury. In this case, Mr Moore was claiming loss arising from disappointment and distress from a breach of contract, rather than from a physical or psychiatric injury.  As a result, section 16 of the CLA did not apply to limit Scenic Tours’ liability to Mr Moore for the Pain and Suffering Damages.  

Having found that section 16 did not limit damages to which Mr Moore was entitled, it was not necessary for the High Court to consider whether section 16 did not apply because the relevant breach occurred outside of Australia.

Implications for you

While the ACL has been with us for almost ten years, the interaction of damages assessments under the ACL and CLA continues to be a developing area.

The decision of the High Court seems to us to be common sense. However, it remains to be seen whether this will open the door for more consumer guarantee claims pleading pain and suffering in order to maximise the potential damages award.

Moore v Scenic Tours Pty Ltd [2020] HCA 17

Author

Nick Bell

Nick Bell

Special Counsel

Josh Sukkar

Josh Sukkar

Solicitor