Contract—Breach—Damages—Consideration—Total failure—Pleasure cruise—Sinking of during cruise—Injury to passenger—Fare paid in advance—Right to recover—Damages for disappointment and distress.
Decisions
MASON C.J. This is an appeal by the owner and operator of a cruise vessel, the "Mikhail Lermontov", which, on 16 February 1986, struck a shoal off Cape Jackson, on the north-eastern tip of the South Island of New Zealand, was holed and sank. The cruise commenced in Sydney on the evening of 7 February 1986 and was scheduled to end on the vessel's return to Sydney on the morning of 21 February 1986. The respondent was a passenger on the vessel. She lost possessions and suffered certain injuries as a result of the sinking. Together with 122 other passengers, she commenced proceedings in the Admiralty Division of the Supreme Court of New South Wales against the appellant and its agent, Charter Travel Company Limited. The latter was not a party to this appeal. For the purpose of determining the issue of liability, all proceedings were consolidated in a single action in the name of the respondent. The trial judge (Carruthers J.) ordered a separate trial on the issue of liability. The appellant at first contested liability but, at a late stage, made certain admissions of negligence. The trial judge then proceeded to determine the extent of the appellant's liability, if any, to pay damages to the respondent and entered judgment in favour of the respondent. Included in the award of damages were amounts of $1,417 described as "Restitution of fare" and $5,000 described as "Compensation for disappointment and distress at the loss of entertainment (and facilities for enjoyment which had been promised)".
2. The appellant appealed by leave to the Court of Appeal. The appeal was dismissed by a majority of the Court ((1) Baltic Shipping Co. v. Dillon (1991) 22 NSWLR 1 (Gleeson C.J., Kirby P; Mahoney J.A dissenting)). So far as it is relevant to this appeal, the judgments of the majority decided four questions. First, that the respondent was entitled, by reason of the operation of the Contracts Review Act 1980 (N.S.W.), to relief from a deed of release she had signed. Secondly, that certain exclusion clauses contained in the printed ticket received by the respondent were not incorporated in the contract under which she was carried on the vessel. Thirdly, that the award of restitution of the fare was properly made. Fourthly, that the award of compensation for disappointment and distress was properly made.
3. In its appeal to this Court, the appellant challenged each of these conclusions. During the hearing of the appeal, special leave to appeal on the first two questions was rescinded with reasons given at the time. There is no occasion to repeat those reasons here.
4. It is necessary therefore to consider only the other two questions. THE CLAIM FOR RESTITUTION OF THE FARE Basis…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Baltic Shipping Co v Dillon [1993] HCA 4
Case
[1993] HCA 4
Decision Date
CaseChat Overview and Summary
In *Baltic Shipping Co v Dillon*, the High Court of Australia considered a dispute arising from a pleasure cruise that was terminated prematurely when the vessel sank. The respondent, a passenger, suffered injury and loss as a result of the incident. The core of the dispute concerned the respondent's entitlement to damages for disappointment and distress, notwithstanding the payment of the cruise fare in advance.
The legal issues before the High Court included whether there had been a total failure of consideration for the contract of carriage, and if so, whether damages for disappointment and distress were recoverable in such circumstances. The Court was required to determine the principles governing the award of damages for breach of contract, particularly in cases involving non-pecuniary loss.
The High Court, by majority, held that the sinking of the vessel did not constitute a total failure of consideration. While the passenger did not receive the full benefit of the cruise, the contract was not entirely unperformed. The Court affirmed the general principle that damages for disappointment and distress are not ordinarily recoverable for breach of contract, unless the contract itself has as its object the provision of pleasure, relaxation, or enjoyment, or where such damages are a foreseeable consequence of the breach. In this instance, the Court found that the contract for a pleasure cruise was of the former kind. The Court ultimately allowed the appeal in part, setting aside the original award of damages and directing a reconsideration of the sum payable to the respondent.
Orders
Orders of the court
1. Appeal allowed
2. Order that the appellant pay 75 per cent of the respondent's costs of the appeal.
3. Set aside the order of the Court of Appeal of New South Wales in so far as it dismissed the appeal to that Court.
4. In lieu of that part of the order of the Court of Appeal so set aside, make the following orders:
(1) Appeal allowed (2) Set aside so much of the judgment of Carruthers, J. as ordered the defendant (the appellant in this court) pay to the plaintiff (the respondent in this court) the sum of $51,396.
(3) Direct the parties to bring in, within twenty-one days, minutes of order as to the sum to be paid by the defendant to the plaintiff in accordance with the judgment of this Court.
(4) In lieu of so much of the judgment of Carmthers J.