Baltic Shipping Company v Dillon

The applicant, Baltic Shipping Company, sought special leave to appeal to the High Court of Australia from a majority judgment of the Court of Appeal. The respondent, Mrs Dillon, was a passenger on the applicant's vessel which sank off the coast of New Zealand in February 1986. Mrs Dillon was awarded damages by the trial judge, Mr Justice Carruthers, sitting in Admiralty, which included restitution of her fare and compensation for disappointment and distress. The applicant admitted negligence.

The legal issues before the High Court concerned the applicability of terms contained within the passenger ticket, specifically a limitation clause, and the validity and effect of a release signed by Mrs Dillon. The court was also required to determine whether a passenger is entitled to restitution of the full fare when a cruise is terminated prematurely due to an accidental event, and whether, as a matter of Australian law, damages for disappointment and distress are recoverable in an action for breach of contract.

The High Court considered the principles governing the incorporation of terms into a contract of carriage through passenger tickets, particularly in the context of cruise liners. It also examined the legal effect of a release signed by a passenger in settlement of claims arising from the incident. The court's reasoning addressed the entitlement to restitution of fare for a partially performed contract and the established position in Australian law regarding the recovery of damages for disappointment and distress in contract claims, referencing previous High Court pronouncements on the matter.