Royal Caribbean Cruises Ltd v Reed

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FEDERAL COURT OF AUSTRALIA

Royal Caribbean Cruises Ltd v Reed [2021] FCA 51

File number: NSD 1359 of 2020
Judgment of: STEWART J
Date of judgment: 1 February 2021
Date of publication of reasons: 2 February 2021
Catchwords: PRACTICE AND PROCEDURE – application to serve originating process on a person in a foreign country pursuant to r 10.43(2) of the Federal Court Rules 2011 (Cth) – whether the Court has jurisdiction by reason of the claim arising out of an agreement that relates to the carriage of persons by a ship within the meaning of s 4(3)(f) of the Admiralty Act 1988 (Cth) – whether the requirement that the proceeding is of a kind mentioned in r 10.42 is satisfied – whether a prima facie case for relief is made out – leave granted
Legislation:

Admiralty Act 1988 (Cth) ss 4(1), 4(3)(f), 9(1)

Federal Court Rules 2011 (Cth) rr 10.42, 10.43

Cases cited:

Century Insurance Ltd (in prov liq) v New Zealand Guardian Trust Ltd [1996] FCA 376

Heilbrunn v Lightwood plc [2007] FCA 1518; 164 FCR 1

Ho v Akai Pty Ltd (in liq) [2006] FCAFC 159; 247 FCR 205

Neville’s Bus Service Pty Ltd v Pitcher Partners Consulting Pty Ltd [2016] FCA 859

Sino Iron Pty Ltd v Mineralogy Pty Ltd [2019] FCA 675

Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102
Division: General Division
Registry: New South Wales
National Practice Area: Admiralty and Maritime
Number of paragraphs: 25
Date of hearing: 29 January 2021
Counsel for the Applicants: C O Gleeson
Solicitor for the Applicants: HFW Australia
Counsel for the Respondents: The respondents did not appear

ORDERS

NSD 1359 of 2020
BETWEEN:

ROYAL CARIBBEAN CRUISES LTD

First Applicant

RCL CRUISES T/AS ROYAL CARIBBEAN CRUISES ABN 54 150 263 086

Second Applicant
AND:

PAUL REED

First Respondent

IVY REED

Second Respondent

ORDER MADE BY:

STEWART J

DATE OF ORDER:

1 FEBRUARY 2021

THE COURT ORDERS THAT:

1.Pursuant to the slip rule, the orders made on 29 January 2021 are vacated.

2.The applicants be granted leave to file an amended originating process in the form annexed to these orders.

3.The applicants be granted leave pursuant to rule 10.43(2) of the Federal Court Rules 2011 (Cth) to serve the first and second respondents with the amended originating process and the amended statement of claim in accordance with the requirements for service under the laws of the United States of America.

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


REASONS FOR JUDGMENT

STEWART J:

Introduction

  1. The applicants apply for leave under r 10.43 of the Federal Court Rules 2011 (Cth) to serve the amended originating process and amended statement of claim on the respondents in the State of Maryland, USA, where they reside. In order to qualify for such leave, r 10.43(4) requires that the applicants satisfy the court that:

    (a)the court has jurisdiction in the proceeding;

    (b)the proceeding is of a kind referred to…

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Details
Case
[2021] FCA 51
Decision Date

CaseChat Overview and Summary

The case of Royal Caribbean Cruises Ltd v Reed involves an application by Royal Caribbean Cruises Ltd (RCCL) and RCL Cruises Ltd (RCL) to serve originating process on the respondents in Maryland, USA. The respondents were injured during a shore excursion on White Island in New Zealand, and they have commenced proceedings against RCCL in the United States District Court, District of Florida. RCCL and RCL seek to bring the matter in Australia, relying on an exclusive jurisdiction clause in the cruise tickets, which they argue mandates that any disputes be resolved in the courts of New South Wales. The primary legal issues before the court were whether the Federal Court had jurisdiction over the matter, whether the claim arose out of an agreement related to the carriage of persons by a ship within the meaning of the Admiralty Act 1988, and whether the requirements of the Federal Court Rules 2011 for serving originating process in a foreign country were satisfied.

The court examined the exclusive jurisdiction clause and concluded that it was arguable that the clause included the Federal Court in New South Wales. The court found that the matter related to the carriage of persons by a ship and that the proceeding was of a kind mentioned in the relevant rule. The court also found that the applicants had made out a prima facie case for relief. Consequently, the court granted leave for the applicants to serve the originating process on the respondents in Maryland, USA, in accordance with the methods permitted by the applicable laws. The court vacated the previous orders and allowed the applicants to file an amended originating process and statement of claim.

In summary, the court granted the applicants leave to serve the originating process on the respondents in Maryland, USA, and allowed the filing of an amended originating process and statement of claim. This decision ensures that the applicants can pursue their claim in the appropriate jurisdiction, in line with the exclusive jurisdiction clause in the cruise tickets.

Orders

Orders of the court

1. Pursuant to the slip rule, the orders made on 29 January 2021 are vacated.

2. The applicants be granted leave to file an amended originating process in the form annexed to these orders.

3. The applicants be granted leave pursuant to rule 10.43(2) of the Federal Court Rules 2011 (Cth) to serve the first and second respondents with the amended originating process and the amended statement of claim in accordance with the requirements for service under the laws of the United States of America.

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

Background

Background to the litigation

I will return to each of these requirements, but first it is convenient to identify some relevant background.Background The respondents suffered injuries while on a shore excursion to Whakaari (White Island) in New Zealand on 9 December 2019 when the volcano on the island erupted. The respondents say that the eruption and resulting emissions of volcanic gas, rock and ash heated to between 200° and 390°C caused them immediate fear for their lives, severe, life-threatening burns over large portions of their bodies, permanent and disfiguring scarring, reduced use of their limbs and extremities, and immediate, ongoing and future needs for medical and psychological treatment, ongoing pain and suffering and emotional distress. At the time of suffering their injuries, the respondents were passengers on a cruise that departed from Sydney, called and was due to call at a number of ports in New Zealand, and which was scheduled to end back in Sydney. The cruise was on the motor vessel Ovation of the Seas which, on the evidence before me at this stage, was bareboat chartered and operated by the second applicant, RCL Cruises Ltd (RCL). RCL is incorporated in the United Kingdom and registered as a foreign company in Australia with a registered office in New South Wales. The respondents commenced a proceeding in the United States District Court, District of Florida, Miami Division, on 7 December 2020 by way of a “Complaint and Demand for Jury Trial” dated 4 December 2020. The proceeding is against the first applicant in the proceeding before me, Royal Caribbean Cruises Ltd (RCCL), a corporation incorporated in Liberia with its principal place of business in Florida. Material allegations in the complaint include the following:(1)RCCL does business under the name Royal Caribbean International (RCI) under which it operates numerous cruise vessels in its fleet. RCCL and RCI are collectively referred to as the defendants – this is notwithstanding that (in Australian law, at least) they are not separate entities. (2)RCCL, personally or through an agent, operated, conducted, engaged in or carried on a business venture in Florida and operated vessels in the waters of the State of Florida, and was engaged in the business of providing to the public and to the respondents, for compensation, vacation cruises aboard its vessels. (3)RCCL organised the excursion to Whakaari, the island on which the respondents suffered injuries, for passengers on the ship Ovation of the Seas which is registered to RCI.(4)The respondents purchased tickets from RCCL during the cruise of the ship for the shore excursion to Whakaari.(5)In respect of a cause of action described as “negligence/failure to warn”:(a)United States federal maritime law applies to actions arising from alleged torts committed aboard a vessel sailing in navigable waters. (b)As the owner of a vessel in navigable waters, RCCL and its apparent agents owed to all who were on board the ship, including the respondents, the duty of exercising reasonable care under the circumstances in all matters related to the incident at Whakaari. (c)The duty owed to passengers by RCCL extends to advising about potential dangers beyond the point of debarkation, specifically including excursions beyond the point of debarkation in places where passengers are invited or reasonably expected to visit, such as the shore excursion to Whakaari. (d)RCCL breached its duty to warn the respondents of the risks and dangers associated with the Whakaari shore excursion. (6)In respect of a cause of action described as “negligence based upon apparent agency”, a relationship of apparent agency existed between RCCL as principal and White Island Tours, which conducted the excursion to Whakaari, and RCCL is liable for the negligence of White Island Tours. (7)In respect of a cause of action described as “negligent misrepresentation”, RCCL never qualified its representations about the excursion, which included that it would be the “adventure of a lifetime” and an “unforgettable” opportunity to see one of New Zealand’s “epic” adventures, by noting any risk of serious and disfiguring injuries. (8)In respect of a cause of action described as “negligent selection of tour operator”, RCCL owes a duty to its passengers to select its excursion operators with due care for its passengers and their safety, which it breached by failing to enquire as to the fitness of White Island Tours to conduct the excursion to Whakaari.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

One issue remains, which is whether the wording of the exclusive jurisdiction clause is in favour of a proceeding in this court, which is to say a proceeding issued in the NSW District Registry of the Federal Court. It will be recalled that the relevant wording is “the court of that state”, the latter being NSW. There is no single court of the State of New South Wales, so which court is, or which courts are, being referred to? There are a number of authorities which have dealt with the question whether similar wording, such as “the Courts of Victoria” and “a Victorian Court”, includes the Federal Court in the relevant state. There is discussion of these authorities by Gleeson J in Neville’s Bus Service Pty Ltd v Pitcher Partners Consulting Pty Ltd [2016] FCA 859 at [17]-[20] and Banks-Smith J in Sino Iron Pty Ltd v Mineralogy Pty Ltd [2019] FCA 675 at [95]. It is sufficient for present purposes to acknowledge that there are a number of cases in which such wording has been interpreted so as to include proceedings in the Federal Court in the relevant state. It is certainly eminently arguable that that is also the case in respect of the clause in question in this proceeding such that the prima facie standard is satisfied.Conclusion For the above reasons, I am satisfied that the applicants should have leave to serve the originating papers on the respondents in the State of Maryland in accordance with a method of service permitted by the law applicable there, as contemplated by r 10.43(3)(c)(iii) of the Rules.

Ratio Decidendi

Legal Principle Established

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