Written by Shine Lawyers Special Counsel Vicky Antzoulatos, and Law Clerk Carol Yan.
Key findingsThe Supreme Court of NSW has recently upheld protections for consumers of travel services who had their booked itineraries substantially altered.
In Moore v Scenic Tours, the Court found that a defendant cannot use the terms and conditions of a contract to prohibit or limit the operation of consumer protections afforded under the Australian Consumer Law (ACL).
The effect of the case is that travel service providers will be held accountable for promises and enticements made through advertising and promotional activities. The judgment also represents a major step forward for class actions in the travel services domain.
Summary of the facts & allegationsMr Moore and other persons booked a luxury river cruise with Scenic Tours (‘Scenic’) and in doing so, they expected to receive services of the kind they were promised in the brochure and other promotional materials. Scenic advertised that their cruises would provide a luxurious, five star all-inclusive European experience.
Europe was subject to very heavy rainfall and flooding in April and May 2013. As a result of the flooding Mr Moore’s cruise itinerary was heavily disrupted; he was shuffled around Europe largely by coach and changed ships on two occasions. By the end of the cruise Mr Moore had experienced three different Scenic cruise ships.
Mr Moore alleged that it must have been obvious to Scenic that the condition of the European rivers was such that the luxury river cruises were not going to take place at all or, and if they did, it would be in circumstances of substantial disruption. Mr Moore sued on the basis of a breach of the consumer guarantees provided in the ACL relating to fitness for purpose and due care and skill as the cruise he was provided with did not match the promises made.
Scenic contended that the services provided were defined by the contract and its terms and conditions- not by the ACL. Scenic claimed that the services it was contracted to provide were:
- A tour at a particular time, which included a river cruise to the extent that river conditions allowed it
- To use reasonable endeavours to provide the tour booked in accordance with the itinerary, and
- To use reasonable efforts to substitute where required, a motor coach for a vessel, for example.
Supreme Court’s findingsThe Court found that Scenic had obligations outside of the contract. Section 64 of the ACL prohibits Scenic from imposing any terms or conditions of any contract which has the effect of excluding, restricting or modifying the consumer guarantees.
Accordingly Scenic had an obligation to:
- Render services with due care and skill under s 60
- Provide services in a way which was reasonably fit for the particular purpose made known by the consumer under s 61(1), and
- Provide services of such a nature and quality as might reasonably be expected to achieve the result desired by the consumer under s 61(2) of the ACL.
The Court also found that Scenic ought to have contacted passengers, informed them of the circumstances and facilitated cancellation of the cruise. Instead Scenic failed to provide information of the circumstances to passengers and failed to offer refunds, cancel or delay tours, therefore breaching the s60 guarantee.
The Court also found that the services provided were unfit for their intended purpose as Scenic’s substitution of a “land alternative” to replace the luxury all-inclusive cruising experience was not reasonable or appropriate. The use of different forms of transport to replace the cruise ignored the significant divergence in the expectations of passengers between relaxing in private lodgings in a cabin, to travelling on a coach in a fixed seat.
The Court ordered in favour of Mr Moore and awarded $10,990 to for the breach of the consumer protections under the ACL (comprising of the refund of the travel services) and $2,000 for disappointment and distress suffered as a result of the breaches.
Lesson learntThe judgment is a win for consumers of travel services who have had their holiday itineraries substantially altered by travel providers, without any opportunity to obtain refunds or cancel their plans. It is also a further demonstration of the manner in which the class action mechanism can be used to correct mass wrongs, this time in the air of travel services.
Written by Shine Lawyers on September 11, 2017. Last modified: September 6, 2018.