FEATURE ARTICLE -
Advocacy, Issue 94: Dec 2023
On 25 October 2023, Justice Stewart of the Federal Court of Australia – in Karpik v Carnival plc (The Ruby Princess) (Initial Trial) [2023] FCA 1280 – made findings of liability in favour of the lead applicant (Mrs Karpik) in representative proceedings in negligence and under the Australian Consumer Law – arising from the coronavarius that she and her husband were infected with whilst passengers on a return holiday cruse from Sydney to New Zealand in March 2020.
The findings were summarised by his Honour as follows:
L. SUMMARY AND CONCLUSION
1047 For ease of reference, it is worth taking stock of what I have decided, noting that I do not intend by the summary that follows to say anything different from what I have recorded as having decided above. Also, the summary mostly omits various findings that I have made in the respondents’ favour, focussing instead on the respects in which Mrs Karpik’s claims succeed.
1048 On the critical factual issues, I have found that Mr Karpik most likely contracted COVID-19 on board the Ruby Princess (at [294]), and that Mrs Karpik contracted COVID-19 from Mr Karpik on the voyage (at [397]). Mrs Karpik suffered a recognised psychiatric illness in the form of an adjustment disorder as a consequence of Mr Karpik’s illness and hospitalisation (at [938]), but she did not suffer from Long COVID (at [984]).
1049 With regard to the application of the CLA to Mrs Karpik’s various claims, I have held as follows:
(1) It is common ground that the various provisions of the CLA to which the parties refer (and which are identified in the following sub-paragraphs) all apply to the negligence claim (at [399]), save for CLA s 5D(3)(b) which deals with the admissibility of a statement by an injured person of what they would have done had the negligence not occurred (at [782]).
(2) CLA s 16, which limits liability for damages for non-economic loss for personal injuries unless the severity of the non-economic loss is at least 15% of a most extreme case, and which sets a maximum amount of such liability and an indexed sliding scale for its determination, applies to and limits the consumer guarantee claims (ie, ACL ss 60, 61(1) and 61(2)) (at [419]).
(3) CLA s 5R and s 9(1) of the LRMP Act, which provide for the reduction of recoverable damages to the extent of the claimant’s contributory negligence, apply to the consumer guarantee claims (at [420]).
(4) CLA s 5H, which provides that a person does not owe a duty to another person to warn of an obvious risk, is not picked up and applied to the consumer guarantee claims (at [430]).
(5) CLA s 5I, which provides that a person is not liable in negligence for harm suffered by another person as a result of the materialisation of an inherent risk, is not picked up and applied to the consumer guarantee claims (at [438]).
(6) CLA s 32(1), which applies a standard of “normal fortitude” to claims for mental harm, does not apply to the consumer guarantee claims (at [443]).
(7) It is not contended by either side of the case that any of the CLA provisions apply to the ACL s 18 claim for misleading and deceptive conduct.
1050 With regard to Mrs Karpik’s ACL ss 61(1) and 61(2) claims, the purpose and result consumer guarantees, I have found as follows:
(1) Mrs Karpik made known to the respondents that her purpose in booking the cruise, and the result that she wished the cruise to achieve, was that she would have a safe, relaxing and pleasurable cruise holiday substantially in accordance with the advertised and booked itinerary (at [469]).
(2) The effect of s 61(1) is therefore that the respondents guaranteed that the cruise services to be supplied by them would be reasonably fit for that purpose, and the effect of s 61(2) is that the respondents guaranteed that the cruise services to be supplied by them would be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result.
(3) As a result of Mr and Mrs Karpik contracting COVID-19 on the cruise, Mrs Karpik did not have a safe, relaxing and pleasurable cruise holiday. The particular purpose for which the services were acquired and the result that was desired to be achieved accordingly failed. The reason for that failure was because the services were not reasonably fit to achieve that purpose and they were not of such a nature and quality that they might reasonably have been expected to achieve that result.
(4) The purpose and result guarantees were accordingly not complied with.
(See section E.6 above.)
1051 With regard to Mrs Karpik’s negligence and ACL s 60 claims, I have found as follows:
(1) The respondents owed Mrs Karpik a duty to take reasonable care for her health and safety, including with regard to the risk of harm caused by coronavirus infection (at [546]).
(2) The respondents also owed Mrs Karpik a duty of care with respect to a recognised psychiatric illness arising from Mr Karpik contracting COVID-19 on the voyage. In respect of the claim in negligence, the “normal fortitude” test or requirement in CLA s 32(1) is satisfied (at [579]).
(3) The respondents breached their duty of care in various respects, namely by failing to:
(a) cancel the cruise (at [609]);
(b) warn of the heightened risk of the virus being on board RU2007 compared to cruise ships generally (at [625]), but not the heightened risk of infection from the virus on a cruise ship compared to the community generally because that was an obvious risk (at [618]);
(c) implement better pre-embarkation screening, namely temperature screening for passengers and crew and requiring all passengers and crew to record whether they were suffering from any symptoms of COVID-19 and to deny them boarding if they were (at [649]);
(d) implement a system of physical distancing on board (ie, in accordance with the 1.5m rule) (at [665]);
(e) from 11 March 2020, isolate passengers who presented with ARI and ILI on the cruise and failing to provide roommates of those passengers with face masks, alcohol hand rub and information on how they could protect themselves from disease (at [681]).
1052 With regard to Mrs Karpik’s ACL s 18 misleading and deceptive conduct claim, the respondents made the following misleading representations:
(1) A Safe to Board Representation, namely that it was reasonably safe for passengers to embark on the cruise (at [738]);
(2) A Reasonable Care Representation, namely that the respondents would take reasonable care for the safety of passengers during the cruise (at [742]);
(3) A Best Practices Representation, namely that the respondents had implemented, and would continue to implement, increased monitoring, screening and sanitation protocols to protect the health of passengers which measures were designed to be flexible to adapt to changing conditions and recommended best practice (at [752]); and
(4) A Pleasurable Cruise Representation, namely that the respondents would supply the promised cruising services as set out in their advertising brochures and passenger contracts and in doing so would do all things reasonably within their ability to enable the passengers to have a safe, relaxing and pleasurable cruise (at [765]).
1053 I have found that causation and loss is established on each of the causes of action (at [772], [837] and [846]-[847]).
1054 I have found that Mrs Karpik’s COVID-19 infection gave rise to very mild symptoms, and did not result in Long COVID, with the result that it contributes very little to any non-economic loss (at [893]). The non-economic loss for the adjustment disorder is assessed at 8% of a most extreme case (at [1007]), and if Mrs Karpik had Long COVID that would be assessed at 4% of a most extreme case (at [1008]). In the result, no personal injury damages are awarded on the ACL ss 60, 61(1) and 61(2) claims or the negligence claim as the non-economic loss is less than the threshold of 15%.
1055 Out of pocket expenses on the personal injury damages are recoverable on the ACL ss 60, 61(1) and 61(2) and the negligence claim in the sum of $4,423.48 plus interest (at [1042]).
1056 Distress and disappointment damages, which would be available on all the causes of action, do not exceed the sum of the refund paid to Mrs Karpik with the result that no such damages are payable (at [1028]-[1029]).
1057 I have not found it a fruitful exercise to calculate the pre-judgment interest that Mrs Karpik is entitled to on her out of pocket expenses. I expect the parties to agree that.
1058 It is also going to be necessary to make final decisions on the common questions.
1059 I will therefore list the matter for further case management, and direct the parties to bring in agreed or competing orders to give effect to these reasons and for the determination of the common questions.
The FCA link to the decision is here.
