In Karpik v Carnival plc [2023] HCA 39 the High Court considered whether the Unfair Contract Terms (“UCT”) provisions of the Australian Consumer Law would apply to a contract made outside of Australia, and if so, whether a contractual clause purporting to waive an ability to participate in class actions would be rendered void as an UCT. The High Court unanimously answered ‘yes’ to those questions. Further, the High Court unanimously declined to enforce a contractual clause which purported to give exclusive jurisdiction to certain Californian courts, finding that there were strong reasons not to enforce such a clause in this case – including for reasons of access to justice, and to avoid the fracturing of proceedings.

Background

In March 2020, the cruise ship Ruby Princess departed Sydney. During the voyage there was an outbreak of COVID-19, causing the cruise to be cut short, and resulting in the deaths of some passengers. [1]. The appellant, Ms Karpik, commenced representative proceedings against the cruise providers (Carnival plc, and its subsidiary Princess Cruise Lines Ltd), seeking remedies on account of alleged torts and breaches of the Australian Consumer Law (“ACL”). [2].

This appealed concerned an interlocutory application made by Princess, seeking a stay of the claims in the representative proceedings insofar as they related to a Mr Ho – a Canadian passenger on the cruise, whose contract was made outside Australia. [3]. Princess sought the stay on the basis that: (1) there was a “class action waiver clause” in Mr Ho’s contract; and (2) there was an “exclusive jurisdiction clause” in Mr Ho’s contract, which provided for claims to be made only in California, in the United States. [4].

Related to the application for a stay, there were essentially three issues in dispute in the courts below, and on this further appeal to the High Court:

1. whether the ‘Unfair Contract Terms’ (“UCT”) provisions of the ACL applied extraterritorially to Mr Ho’s contract (which was made outside of Australia);
2. if the UCT provisions did apply to Mr Ho’s contract, whether they operated to render void the “class action waiver clause” relied on my Princess in support of its application for a stay; and
3. whether the “exclusive jurisdiction clause” should be enforced, so that Mr Ho could only seek redress in Californian courts.

At first instance, a single judge of the Federal Court held that the UCT provisions applied to Mr Ho’s contract and would render void the class action waiver clause. Further, that the exclusive jurisdiction clause should not be enforced. [7]. On appeal, the Full Federal Court did not decide on the extraterritorial application of the UCT provisions, but held that the class action waiver clause was not in any event an ‘unfair contract term’. Further, that the exclusive jurisdiction clause should be enforced. [8].

In this further appeal, the High Court unanimously held in favour of the appellant in relation to each of the three issues outlined above – endorsing the primary judge’s conclusions and consequent rejection of Princess’ stay application. [9].

Why the UCT provisions applied extraterritorially

The High Court noted that whether the UCT provisions (in Part 2-3 of Ch 2 of the ACL) applied to Mr Ho’s contract, being a contract made outside of Australia, involved a question of statutory construction. [18]. Although there is a common law ‘presumption’ against extraterritoriality, it is an interpretive principle only, and a statute may expressly or impliedly rebut it. [19].

In this case, the critical provision was s 5 of the Competition and Consumer Act 2010 (Cth), which extends the ACL (including its UCT provisions) to “engaging in conduct outside Australia by … bodies corporate incorporated or carrying on business within Australia”. [36]. As the High Court said, “[i]f a corporation carries on business in Australia, then a price of doing so” is being subject to the ACL’s protections for consumers. [38]. There was no basis for any “additional territorial” limits governing the application of the UCT provisions, as Princess had alleged. [44]-[45], [49].

For the purposes of the appeal, there was “no dispute that Princess was carrying on business in Australia selling and marketing cruises”, including the Ruby Princess voyage the subject of the proceedings. [42]. Accordingly, the UCT provisions applied to Mr Ho’s contract.

Why the UCT provisions rendered the class action waiver clause void

The High Court held that the Full Federal Court had erred in concluding that the class action waiver clause was not void as an unfair contract term (as defined by s 23 of the ACL). [51].

Section 23 of the ACL operates to render void a term of a ‘consumer contract’ or ‘small business contract’ if the term is ‘unfair’, and the contract is a ‘standard form contract’. Here, the contract was relevantly a ‘consumer contract’(because it was a contract for the supply of services to an individual, per s 23(4)), and a ‘standard form contract’ (as defined by s 27).

Section 24 of the ACL provides that a term will be ‘unfair’ in circumstances which may be summarised as where:

1. the term would cause a “significant imbalance in the parties’ rights and obligations” under the contract;
2. it is “not reasonably necessary in order to protect the legitimate interests” of the party advantaged by the term, and;
3. it would “cause detriment (financial or otherwise) to a party” if it were applied or relied on. [27].

A court must also take into account whether the term is “transparent” (i.e. expressed in plain language and presented clearly and readily, per s 24(3)). [28].

Applying those considerations, the High Court concluded that the class action waiver clause was relevantly ‘unfair’, and rendered void  by s 23 of the ACL. [51]. In particular, that was because it:

(a) “imposes limitations on passengers but in no way restricts the operations of the carrier”;

(b) would have the effect of “preventing or discouraging passengers from vindicating their legal rights”;

(c) Princess had not explained or provided any evidence as to why the clause was reasonably necessary to protect its legitimate interests; and

(d) it would cause detriment if relied on, in that “Mr Ho would be denied the benefits” of the representative proceedings. [53]-[57].

Why the exclusive jurisdiction clause was not enforced

The High Court observed that courts retain a “discretion whether to stay a proceeding the subject of a foreign exclusive jurisdiction clause” (citing Akai (1996) 188 CLR 418). [66]. Generally, absent strong countervailing reasons, the existence of such a clause will warrant a stay of proceedings not within the exclusive jurisdiction. [66].

However, in this case the High Court considered that there were strong countervailing reasons for not granting a stay. These were essentially that:

1. there was a “strong juridical advantage” for Mr Ho in remaining part of the class action. Enforcement of the exclusive jurisdiction clause may deny him (and others in his position) “access to justice as well as the associated benefits of a class action”. [68]; and
2. enforcement of the exclusive jurisdiction clause would “fracture the litigation”, forcing Mr Ho (and others in his position) to “commence individual proceedings in the United States when essentially identical claims for the vast majority of passengers will be heard in the class action in the Federal Court [of Australia]” – which would waste parties’ resources and run the risk of conflicting decisions which could bring the administration of justice into disrepute. [69].

In the result, because the class action waiver clause was void as an UCT, and because the exclusive jurisdiction clause would not be enforced, “Mr Ho’s claims against Princess in the Federal Court of Australia should not be stayed”. In other words, the interlocutory relief sought by Princess was denied. [70].

Note: This is an amended version of a case note which first appeared in the Queensland Law Reporter.

This appeal considered whether the New South Wales Court of Appeal had erred in ordering a permanent stay of proceedings seeking damages for personal injuries arising out of alleged sexual assault in 1968. The Court of Appeal granted the stay on the basis that there could not be a fair trial given the delay. The majority of the High Court disagreed, considering that legislative amendments removing time limits on such proceedings entailed a “fundamental change to the legal context” in which an assessment of unfairness had to be made – and that the respondent had not proved there would be unfairness on the facts of this case.

Kiefel CJ, Gageler, Steward, Gleeson and Jagot JJ1 November 2023

Background

The appellant, GLJ, commenced proceedings in the Supreme Court of New South Wales in 2020 against the respondent Diocese of Lismore. [5]. In those proceedings GLJ alleges that, in 1968, when she was 14 years old, she was sexually assaulted by a Catholic priest in the Diocese, Father Anderson. [5]. She alleges that she continues to suffer from PTSD and other injuries because of the assault, and that the Diocese is liable for those injuries. [5].

In November 2020, the Diocese filed a motion in which it sought orders that the proceedings be permanently stayed pursuant to s 67 of the Civil Procedure Act 2005 (NSW) (which provides that the court may stay any proceedings before it, either permanently or until a specified day), or dismissed pursuant to r 13.4(1)(c) of the Uniform Civil Procedure Rules 2005 (NSW) as an abuse of process. [8]. The Diocese submitted that such an order was appropriate because Father Anderson was long deceased, and in those circumstances (in which it could not ask him about the allegations, or call him as a witness), “there could not be a fair trial”. [9].

At first instance the Diocese’s notice of motion was dismissed. [10]. However, the Court of Appeal allowed an appeal, concluding that a fair trial could not be held and that an order permanently staying the proceedings should be granted. [12]. The Court of Appeal placed some emphasis on the death of Father Anderson, considering that: “[d]eprived of the ability to obtain any instructions from Anderson by his death, the [Diocese] has no means for investigating the facts” (per Brereton JA); and that “Father Anderson … is a critical witness … and there is no other material that sheds light on his putative response to GLJ’s claims” (per Mitchelmore JA). [13].

The High Court granted special leave to GLJ to appeal from the Court of Appeal’s orders. In the result, the majority (Kiefel CJ, Gageler and Jagot JJ) allowed the appeal, concluding that no permanent stay was justified and that GLJ’s proceedings should go to trial. [4]. Justices Steward and Gleeson each dissented. [160], [192].

A change in the legal landscape

The majority of the High Court placed considerable emphasis on legislative reforms enacted in 2016, by which time limits for bringing proceedings for death or injuries resulting from child abuse were removed (in Queensland, see Limitations of Actions Act 1974 (Qld) s 11A, there being equivalent provisions in each other State and Territory). [34]. The Court noted that the amendments responded to recommendations by the Royal Commission into Institutional Responses to Child Sexual Abuse, and that in introducing the Limitation Amendment (Child Abuse) Bill 2016 (NSW), the Attorney-General of NSW had observed that:

“It is now widely understood that, due to the injuries inflicted on them by their abusers, survivors of sexual and other child abuse often take decades to understand and act on the harm arising from the abuse.” [29].

The majority considered that the removal of any limitation period for proceedings for death or injury resulting from child abuse involved “a fundamental change to the legal context in which the power in s 67 of the Civil Procedure Act (and equivalent inherent jurisdiction of a court) [to grant a permanent stay] is to be exercised”. [34]. The majority said that “the effect of the passing of time on the trial fall to be evaluated” in the “radically new context” brought about by the amendments. [41], [43].

In particular, in determining whether there are “exceptional circumstances” justifying a stay, the Court considered that the new context brought about by the amendments meant that the “mere effluxion of time and the inevitable impoverishment of the evidence which the passing of time engenders cannot attract the quality of exceptionality which is required”. [52].

Why the appeal was allowed in this case, and the permanent stay removed

The majority concluded that the Diocese had not proved that there could be no fair trial. [15]. Notably, the Diocese alleged this was the case only on the basis of the death of Father Anderson, before any allegation relating to GLJ could be put to him, and in circumstances where he would have been a “critical witness”. [66].

The majority rejected the submission that the Diocese was “utterly in the dark” about whether Father Anderson sexually assaulted GLJ, noting that there was still a number of pieces of circumstantial evidence which it had access to, including knowledge about: the parishes Father Anderson had been attached to (and the dates); the nature of work a priest in his position would have performed; complaints made about Father Anderson and alleged sexual offending against young boys; the fact Father Anderson had been referred to a psychiatrist for treatment of his “problem” (namely, alleged sexual interest in young boys); and his response to those allegations of sexual misconduct. [67].

The majority considered that all that had been lost to the Diocese by the death of Father Anderson was the opportunity of asking him if he had sexually assaulted GLJ, and the possibility of calling him as a witness. [75]. That, however, “does not make a trial of GLJ’s claims unfair”. [65]. The absence of unfairness was fortified by the following circumstances adverted to by the majority:

1. Father Anderson is not a defendant to the proceedings. The Diocese might have obtained other evidence if he had been alive, but it did not need to take his “instructions”. [76].
2. There was evidence from which it could be inferred that, were he alive, Father Anderson would have denied the allegations in any event. [77].
3. The Diocese had had an opportunity to make further inquiries about whether Father Anderson had sexually abused children during his laicisation process, following its knowledge of his “obvious sexual interest in boys”, but had chosen not to do so. [79].
4. The death of Father Anderson had not prevented the Diocese from “subsequently finding to its own satisfaction that complaints of sexual abuse by him while a priest had been substantiated”. [80].
5. There is a considerable body of documentary evidence of arguable relevance to the proceedings. [81].

In summary, the Court of Appeal had erred in concluding there could not be a fair trial of the proceedings. [82].  Accordingly, the High Court ordered that the appeal be allowed, and the permanent stay set aside. [82]-[83].

The dissenting judgments

In dissent, Steward J considered that the Court of Appeal had been right to order a permanent stay, including because the delay had led to a “critical loss of an ‘opportunity’ by the Diocese to defend the claim” (by knowing what Father Anderson might have said, and by having an opportunity to speak to others who might have had interactions with him when he was a priest). Further, because any trial would effectively proceed “without any proper contradictor” in circumstances where the Church “does not know, one way or the other, whether Mr Anderson committed the sexual assault”. [150].

Similarly, Gleeson J considered that the Diocese had “lost every realistic opportunity that previously existed to inform itself of the true facts”, and that it was “manifestly unfair” to require to Diocese to respond to the appellant’s uncorroborated claim in those circumstances. [187].

The standard of appellate review

Finally, it is worth noting that the High Court unanimously held that the decision to refuse, or grant, a permanent stay of proceedings on the grounds that any trial will be necessarily unfair, or so unfair and unjustifiably oppressive as to be an abuse of process, is an “evaluative but not a discretionary decision”. [15]. In the words of the majority, proceedings “either are or are not capable of being the subject of a fair trial or are or are not so unfairly and unjustifiably oppressive as to constitute an abuse of process”. [15].

That had the consequence that the applicable standard of appellate review is the “correctness standard” explained in Warren v Coombs (1979) 149 CLR 531, and not that specified for discretionary decisions in House v The King (1936) 55 CLR 499. [15].

The 20th and 21st of July this year saw the release of two highly anticipated movies: Barbie, and Oppenheimer.

In many respects the movies stand in stark contrast: one is upbeat and funny, relating to the life of a plastic doll forced to enter the ‘real world’; and the other is about the development (and use) of the atomic bomb, and the troubled life of one of its creators.

However, what the movies have in common is this: they both concern creations which made a significant mark on history, and about which many people have conflicting feelings. More importantly, they are also both thoroughly enjoyable movies to watch, each in their own way.

A review of the Barbie movie

Watch the trailer here.

It’s unlikely you escaped the hype about Barbie. According to some reports, more was spent on advertising the movie than actually making it. It’s certainly paid off commercially, generating in excess of US$1 billion at the box office so far.

Barbie is centred on the life of the eponymous plastic doll, who lives in ‘Barbie Land’. Barbie Land is a feminine utopia, dyed with the colour pink, where it’s the “’‘best day ever’ every day, from now until forever”.

In these early moments in the movie, viewers will be entranced by the visual feast, and infected with the high spirits of Barbie and her pals. But it’s not all sunshine and Dream Houses forever – unfortunately, things start going awry, including because Barbie develops cellulite and flat feet. To get to the bottom of what’s gone wrong, and to put it right, Barbie has to venture into the ‘real world’.

It’s from this point in the movie that another figure takes centre stage – Ken – Barbie’s masculine, albeit largely useless, sidekick. Ken accompanies Barbie to the ‘real world’ and discovers a lot to like, at least from his perspective: most notably, ‘the patriarchy’, and horses. Ken decides he’d like to import these ideas back into Barbie Land. Hilarity ensues.

I won’t give away the rest of the plot, other than to say that Barbie shows us that, despite being as artificial as they come (she is, after all, made of plastic), she can teach us a thing or two about ‘reality’. In particular, it’s the gender plot of Barbie that makes it more than just a fun movie and gives viewers something to think about.

Overall, I’d give Barbie 4/5 stars. It’s fun, breezy (short at 1.5 hours), and provides a unique take on an old icon.

A review of the Oppenheimer movie

Watch the trailer here.

The name ‘Oppenheimer’ is more likely to have escaped you, but the impact of his creation haunts us all. Dr Robert Oppenheimer was an esteemed physicist and Director of the Manhattan Project’s Los Alamos Laboratory during World War Two. He played a key role in the development of the atomic bomb.

As befits its subject matter, Oppenheimer is a decidedly serious movie. However, it’s thankfully not all nuclear physics, death and destruction; the movie also offers a window into the life of Dr Oppenheimer himself, from his development as a homesick student at Cambridge, to his life as a Professor and man.  

A significant part of the movie traces the genesis of the atomic bomb, from the basic idea in theoretical physics, to its actual development during the war. Of course, the first test of the bomb, and its use on Hiroshima and Nagasaki, are pivotal parts of the film. But so too, later on, is Oppenheimer’s moral ambivalence, and then opposition, to use of the weapon.

Another significant strand in the film concerns Dr Oppenheimer’s relationships with Jean Tatlock and Katherine ‘Kitty’ Oppenheimer, both of whom were members of the Communist Party. It’s Oppenheimer’s connections to them, and his leftist sympathies, which ultimately land him in trouble with the authorities in post-war McCarthyite America. This results in a series of hearings probing Oppenheimer, involving plenty of heated cross-examination, which lead to Oppenheimer losing his security clearance. It’s an ignominious ending for the once-vaunted Oppenheimer.

Overall, I’d also give Oppenheimer 4/5 stars. It is a rich movie that brings history to life, offering a revealing portrait of one of history’s intellectual greats. But with a 3-hour run-time, make sure you’re well rested for this one!

A summary of the High Court’s decision in Davis v Minister for Immigration

In April this year the High Court delivered judgment in Davis v Minister for Immigration [2023] HCA 10, which concerned Departmental officers making decisions which the Migration Act 1958 (Cth) reserved for exercise by the Minister personally.

Davis is an important reminder that Departments and other government decision-makers should carefully consider whether some powers may not be exercised by a delegate, and whether there are other statutory limitations on their executive power.

This article briefly outlines the relevant legislative and factual background, before summarising the reasoning of the Court.

Background

Section 351 of the Migration Act 1958 (Cth) (the Act) provides a power for the Minister to “substitute for a decision of the Tribunal … another decision that is more favourable to the applicant”, where “the Minister thinks that it is in the public interest to do so”. However, the provision makes clear that the Minister “does not have a duty to consider whether to exercise the power … in respect of any decision” (sub (7)).

Both Mr Davis and DCM20 are citizens of other countries (the United Kingdom and Fiji, respectively), who had applied for and been refused visas, the refusal of which had been affirmed by a Tribunal (the Administrative Appeals Tribunal and Migration Review Tribunal, respectively). Subsequently, each had requested an exercise of the power under s 351 of the Act.[1]

In purported reliance on Ministerial Instructions issued in 2016, an Assistant Director of the Department of Home Affairs purported to finalise the requests of both Mr Davis and DCM20 without referring them to the Minister.[2] This was on the basis that the Instructions indicated that the Minister only wished to be put into a position to consider making a decision under s 351 “in cases assessed by the Department to have unique or exceptional circumstances” (which were described non-exhaustively) – which the Department considered to not be the case for either Mr Davis or DCM20.[3]

At first instance, both Mr Davis and DCM20 had sought judicial review of the refusal to refer their requests to the Minister on grounds which included legal unreasonableness.[4] Both were unsuccessful.[5] The Full Federal Court dismissed their appeals, which were heard concurrently.[6]

The issue in the High Court

The High Court granted special leave to Mr Davis and DCM20 to argue a ground that was “not fully developed before the Full Court”. The ground was essentially that the 2016 Ministerial Instructions, and the Department decisions made in purported reliance on them, exceeded the executive power of the Commonwealth, in that they involved persons other than the Minister determining whether or not it was in the public interest for the s 351 power to be exercised.[7]

A majority of the High Court upheld that ground of appeal (per a plurality judgment of Kiefel CJ, Gageler and Gleeson JJ; Gordon J, Edelman J and Jagot J each wrote separately in support of the same conclusion). Steward J dissented. The remainder of this article focuses in particular on the reasons of the plurality.

Why the appeal was successful / how executive power had been exceeded

The plurality observed that, ordinarily, Parliament will be taken to contemplate that a Minister can task a Department with “sorting the wheat from the chaff”, so as to bring to the Minister’s attention only those requests for the exercise of discretionary statutory powers which “warrant the Minister’s personal consideration”.[8]

However, the “availability of such an inference must ultimately depend on the precise statutory scheme”,[9] and it is conditioned by the principle outlined Brown v West that:[10]

“A valid law of the Commonwealth may so limit or impose conditions on the exercise of the executive power that acts which would otherwise be supported by the executive power fall outside its scope.”

In this case, a valid law of the Commonwealth – namely, s 351(3) of the Act – imposed a limit on the circumstances in which the Minister’s power could be exercised. Its prescription that the power may only be exercised by the Minister personally meant that it was “neither delegable by the Minister … nor exercisable on the Minister’s behalf by any other officer of the Department”.[11] In other words, it would be beyond executive power to “entrust the dispositive evaluation of the public interest” under s 351 to an “executive officer other than the Minister”.[12]

Their Honours considered that the decisions made by Departmental officers in this case, pursuant to the Ministerial Directions, had exceeded executive power as limited by s 351(3) of the Act. In particular, that was because:[13]

“… it is impossible to avoid the conclusion that the concept of unique or exceptional circumstances was used in the 2016 Ministerial Instructions as an approximation of the public interest. By instructing that those cases assessed by the Department not to have unique or exceptional circumstances were to be finalised by the Department without referral, the Minister purported to entrust the dispositive evaluation of the public interest to departmental officers. The Minister thereby exceeded the statutory limit on executive power imposed by s 351(3).”

Consequently, the appeal was allowed, and the Court declared that the decisions made to not refer the requests of Mr Davis and DCM20 to the Minister (for an exercise of the power under s 351) had exceeded the executive power of the Commonwealth.[14]

The dissent of Steward J

In dissent, Steward J considered that each ‘decision’ made here had no legal consequences. Each was only an anterior step that “could have led, but ultimately did not lead, to an exercise of power” by the Minister. The result was that the rights and obligations of Mr Davis and DCM20 remained untouched.[15]

In his Honour’s view, since there had been no exercise of ‘power’ (defined as the “capacity to interfere with or legally alter rights, obligations and legally recognised interests”), there was no warrant for judicial review.[16]

SAVE THE DATE – 25 July 2023, 5:30pm

Australian Institute of Administrative Law SeminarGim Del Villar KC SG on Davis v Minister for Immigration

Inquiries can be directed to the AIAL (Queensland Chapter) Secretary, Mr Matthew Paterson at:  aialqueensland@gmail.com

[1] [2023] HCA 10, [43]-[44], [49]-[51].

[2] Ibid [44]-[45], [52]-[53].

[3] Ibid [34].

[4] Ibid [46], [54].

[5] Ibid.

[6] Ibid [5], [47], [55].

[7] Ibid [8].

[8] Ibid [26].

[9] Ibid [27].

[10] (1990) 169 CLR 195, 202.

[11] [2023] HCA 10, [12].

[12] Ibid [29].

[13] Ibid [38].

[14] Ibid Orders 2, 3.

[15] Ibid [196].

[16] Ibid [234]-[235]. Quoting Brennan J in Quin (1990) 170 CLR 1, 35: “The essential warrant for judicial intervention is the declaration and enforcing of the law affecting the extent and exercise of power: that is the characteristic duty of the judicature as the third branch of government.”