Karpik v Carnival plc (The Ruby Princess) (Stay Application)

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FEDERAL COURT OF AUSTRALIA

Karpik v Carnival plc (The Ruby Princess) (Stay Application) [2021] FCA 1082  

File number: NSD 806 of 2020
Judgment of: STEWART J
Date of judgment: 10 September 2021
Catchwords:

PRIVATE INTERNATIONAL LAW – application for stay of sub-group members’ claims in representative proceeding alleging contraventions of Australian Consumer Law (ACL) ss 18, 29, 60 and 61 – where exclusive jurisdiction clause requires claims to be brought in the US District Courts for the Central District of California in Los Angeles – whether there are “strong reasons” to refuse the grant of stay – where proceedings commenced as a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (FCA Act) – where not all members of class subject to exclusive jurisdiction clause – where clause appears in consumer contract of adhesion – whether US District Courts have and would exercise jurisdiction over ACL claims – if the exclusive jurisdiction clause does not apply, whether the Federal Court is a clearly inappropriate forum

CONTRACTS – incorporation of terms – whether carrier’s terms and conditions were incorporated into contract of carriage – where link provided in booking email to webpage that displayed multiple different sets of terms – where booking email received over one month after booking was concluded – whether there was reasonable notice of unusual terms

CONSUMER LAW – unfair terms – whether exclusive jurisdiction clause and class action waiver clause in a consumer contract of adhesion are unfair terms – whether reliance on class action waiver clause is unconscionable

PRACTICE AND PROCEDURE – representative proceedings – application for stay of proceedings on basis of class action waiver clause – whether unenforceable by reason of being contrary to Pt IVA of the FCA Act – consideration of whether a stay would be an appropriate remedy

PRACTICE AND PROCEDURE – representative proceedings – whether interlocutory application raises common questions

SHIPPING AND NAVIGATION – consideration of applicable law for torts occurring on the high seas

STATUTORY INTERPRETATION – whether s 138 of the Competition and Consumer Act 2010 (Cth) requires the Federal Court to exercise jurisdiction properly invoked in respect of ACL claims
Legislation:

Carriage of Goods by Sea Act 1991 (Cth) ss 8, 11, 20, Sch 1A Art 3 r 8

Competition and Consumer Act 2010 (Cth) Pt IV, ss 4, 5, 86, 138, 138A, 138B, 138E ; Sch 2 (Australian Consumer Law) ss 18, 21, 23, 24, 25, 29, 60, 61, 67, 236, 237

Corporations Act 2001 (Cth) ss 58AA, 232, 233, 1317H

Evidence Act 1995 (Cth) s 75

Federal Court of Australia Act 1976 (Cth) ss 23, 33C, 33E, 33H, 33J, 33K, 33L, 33M, 33N, 33P, 33Q, 33R, 33S, 33ZB, 33ZF, Pt IVA

Federal Court Rules 2011 (Cth) rr 9.34, 30.01

Insurance Contracts Act 1984 (Cth) ss 8, 52, 54

Sea-Carriage of Goods Act 1924 (Cth) (repealed) s 9(2)

Trade Practices Act 1974 (Cth) (repealed) ss 51AC, 52, 67, 68, 86, 87

Trans-Tasman Proceedings Act 2010 (Cth) s 19

Contracts Review Act

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Details
Case
[2021] FCA 1082
Decision Date

CaseChat Overview and Summary

The case involved an application by Carnival plc (the respondents) to stay the claims of a sub-group of passengers who had booked their voyages on the Ruby Princess cruise ship. The passengers, represented by Mr Ho and Mrs Wright, alleged contraventions of the Australian Consumer Law (ACL) sections 18, 29, 60, and 61. The respondents sought to stay the sub-group members' claims on the basis of an exclusive jurisdiction clause and a class action waiver clause found in their US terms and conditions. The dispute required the court to determine whether the exclusive jurisdiction clause was valid and applicable, and if not, whether the Federal Court was an inappropriate forum for the ACL claims.

The court needed to decide several legal issues, including whether the exclusive jurisdiction clause was effectively incorporated into the passengers' contracts, whether the US District Courts had jurisdiction over the ACL claims, and if the Federal Court was an appropriate forum for such claims. Additionally, the court had to consider whether the class action waiver clause was unfair and unenforceable, and if a stay was an appropriate remedy. The court also needed to decide whether the interlocutory application raised common questions of law that should be decided in the representative proceeding.

In its reasoning, the court held that the exclusive jurisdiction clause was not effectively incorporated into the contracts because the passengers were not adequately notified of the terms. The court found that the clause did not apply to the passengers, and that the US District Courts would likely not exercise jurisdiction over the ACL claims. The court also found that the Federal Court was not a clearly inappropriate forum for the ACL claims. Regarding the class action waiver clause, the court held that it was an unfair term and unenforceable under the ACL. However, the court noted that a stay might still be an appropriate remedy in the circumstances.

The court ordered the parties to liaise with the associate to arrange a hearing to consider the form of orders to be made on the respondents' amended interlocutory application. The parties were required to confer and agree on the form of orders, and if they could not agree, they were to file and serve their proposed orders and written submissions at least two days before the hearing.

Orders

Orders of the court

1. The parties liaise with the associate to Stewart J to arrange a date for a hearing to consider the form of orders to be made on the respondents’ amended interlocutory application filed on 28 June 2021 to reflect the reasons for judgment published today.

2. The parties confer with a view to agreeing the form of orders to be considered by the Court at the hearing referred to in Order 1.

3. Failing agreement as referred to in Order 2, at least two full days before the hearing referred to in Order 1 the parties file and serve the form of orders they each contend for and written submissions (of no more than three pages) in support of such orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The onus is on the respondents to prove agreement to the contractual terms upon which they rely in the defence and as a basis for their stay application. To the extent that they rely on CruiseShipCenters being the agent of Mr Ho for that purpose, which they do, that is part of the onus that they must discharge. On the evidence before me there is nothing to support the inference that CruiseShipCenters acted as Mr Ho’s agent. CruiseShipCenters appears to have acted as an intermediary, being the agent of neither party between whom the principal contract was concluded, namely Mr Ho, on the one hand, and Princess, on the other. C.6 Analysis and conclusion Mr Ho made a booking for himself and his wife on 25 September 2018 and he paid a deposit. Rosanna made that booking on Princess’s POLAR booking system which caused a booking confirmation email to be generated by Princess and immediately emailed to CruiseShipCenters. Looked at objectively, Princess is to be understood as having considered itself booked for the cruise; aside from anything else, “confirmation” must be understood to mean that the booking was firm and binding. It does not affect the analysis as to the conclusion of the booking that that confirmation was not provided to Mr Ho at that time. There was a firm booking upon which he could undoubtedly have relied in the event that there was subsequently a dispute about it. At that time he was told nothing about the terms and conditions of the booking other than the principal details. I infer that that was the fare, deposit, payment of the balance, date and port of departure, ship, voyage, and cabin – those are details he would have had to have known at that time for Rosanna to make the booking on POLAR. On the facts as I have found them, there does not appear to be any room for the analysis urged by the respondents which has it that the booking confirmation was an offer by the carrier and that it was open to Mr Ho to accept or reject it. By the time Princess sent the booking confirmation to Rosanna, Mr Ho had already paid the deposit; he had accepted the offer of the cruise on the basis of all the material details as conveyed to him by Rosanna. Analysing the contract formation on the basis of offer and acceptance, the offer was made by Princess displaying to Rosanna in POLAR the availability of the cruise with the particular cabin at the particular price. That was then accepted by Rosanna making the booking and causing Mr Ho’s credit card to be debited in favour of Princess. To the same effect, Rosanna can be regarded as having conveyed the offer appearing on her screen to Mr Ho, and he accepted by conveying such acceptance to Rosanna. On that basis, none of the clauses set out in Princess’s US terms and conditions was incorporated. To the extent that he was given notice of those, that came only more than a month later when on 30 October 2018 he was sent Princess’s booking confirmation email. With reference to the principles identified above, that was too late. Since Rosanna did not act as Mr Ho’s agent, any knowledge of hers or notification to her cannot be ascribed to Mr Ho.

Ratio Decidendi

Legal Principle Established

On whether Mr Ho and Mrs Wright should be appointed sub-group representatives and the other relief identified in [18] above, I will require further submissions from the parties based on the conclusions that I have otherwise reached as reflected in these reasons.C. INCORPORATION OF THE RELEVANT CLAUSES As previously mentioned, the relevant clauses that the respondents contend Mr Ho and the members of the US sub-group are subject to are an exclusive jurisdiction clause and a class action waiver clause, which are found in the US terms and conditions. The exclusive jurisdiction clause is found at cl 15(B)(i) of the US terms and conditions and provides:Claims for Injury, Illness or Death: All claims or disputes involving Emotional Harm, bodily injury, illness to or death of any Guest whatsoever, including without limitation those arising out of or relating to this Passage Contract or Your Cruise, shall be litigated before the United States District Courts for the Central District of California in Los Angeles, or as to those lawsuits over which the Federal Courts of the United States lack subject matter jurisdiction, before a court located in Los Angeles County, California, USA, to the exclusion of the courts of any other country, state, city, municipality, county or locale. You consent to jurisdiction and waive any objection that may be available to any such action being brought in such courts. The class action waiver clause is found at cl 15(C) and provides:WAIVER OF CLASS ACTION: THIS PASSAGE CONTRACT PROVIDES FOR THE EXCLUSIVE RESOLUTION OF DISPUTES THROUGH INDIVIDUAL LEGAL ACTION ON YOUR OWN BEHALF INSTEAD OF THROUGH ANY CLASS OR REPRESENTATIVE ACTION. EVEN IF THE APPLICABLE LAW PROVIDES OTHERWISE, YOU AGREE THAT ANY ARBITRATION OR LAWSUIT AGAINST CARRIER WHATSOEVER SHALL BE LITIGATED BY YOU INDIVIDUALLY AND NOT AS A MEMBER OF ANY CLASS OR AS PART OF A CLASS OR REPRESENTATIVE ACTION, AND YOU EXPRESSLY AGREE TO WAIVE ANY LAW ENTITLING YOU TO PARTICIPATE IN A CLASS ACTION. IF YOUR CLAIM IS SUBJECT TO ARBITRATION UNDER SECTION 15(B)(ii) ABOVE, THE ARBITRATOR SHALL HAVE NO AUTHORITY TO ARBITRATE CLAIMS ON A CLASS ACTION BASIS. YOU AGREE THAT THIS CLASS ACTION WAIVER SHALL NOT BE SEVERABLE UNDER ANY CIRCUMSTANCES FROM THE ARBITRATION CLAUSE SET FORTH IN SECTION 15(B)(ii) ABOVE, AND IF FOR ANY REASON THIS CLASS ACTION WAIVER IS UNENFORCEABLE AS TO ANY PARTICULAR CLAIM, THEN AND ONLY THEN SUCH CLAIM SHALL NOT BE SUBJECT TO ARBITRATION. As will be seen, it is not contended that Mr Ho or any member of the US sub-group signed any contractual terms. The respondents principally rely on the various passengers having been given notice that particular terms and conditions apply to their booking. Cases in which such a method of incorporation of terms and conditions into a contract is employed are generally referred to as “ticket cases”. How it is said that Mr Ho was given notice is dealt with in sections C.2 – C.5 below. In the case of Mrs Wright, it is common ground that her passage contract, and the passage contracts of the other members of the UK sub-group, contained the following clauses:2The Contract shall be between Princess and the Passenger on the basis of these Conditions and the information contained in the brochure or website, and shall be governed by English law and the non-exclusive jurisdiction of the English courts.…51 International Carriage of Passengers and their luggage by sea, including the Cruise, is governed by EU Regulation 392/2009 on the Liability of Carriers of Passengers by Sea in the Event of Accidents … and the Athens Convention 2002 … The Athens Convention 2002 and EU Regulation 392/2009 are expressly incorporated into these Conditions and any liability of Princess for death or personal injury or for loss or damage to luggage arising out of international carriage by sea shall be solely brought and determined in accordance with the Athens Convention 2002 and EU Regulation 392/2009 which limit the carrier’s liability for death or personal injury or loss of or damage to luggage and make special provision for valuables. …