Keep Calm and Cruise On – When Disappointment and Distress May Result in an Award of Damages

Danielle Edwards • Jun 08, 2021

With the impacts of COVID-19 continuing to effect our everyday lives, Australia’s tourism industry has been forced to adapt more than most for the foreseeable future. This is particularly the case for those businesses that provide services aimed at entertainment, enjoyment and relaxation. 

Damages for disappointment and distress
At law, a consumer may recover damages against a supplier for any loss or damage suffered by the consumer because of a failure to comply with consumer guarantees if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such failure. 

Last year, the High Court handed down a judgment in Moore v Scenic Tours Pty Ltd [2020] HCA 17 which enabled individuals to successfully seek damages for ‘disappointment and distress’ arising from breaches of consumer guarantees. 
Following this decision, there is an expectation that claims for disappointment and distress suffered as a result of disruptions to travel and tours caused by COVID-19 may dramatically rise. 

Moore v Scenic Tours Pty Ltd

In 2012, Mr Moore booked a cruise through Europe for himself and his wife with Scenic Tours. Scenic Tours promoted the cruise as a luxurious, once in a lifetime cruise, which visited numerous destinations without passengers having to constantly unpack. Unfortunately, a major portion of the cruise (10 days out of the 14 days) were spent on a bus, with the passengers having to change ship twice due to unfavourable weather conditions and flooding. Needless to say, the cruise fell short of what was promoted by Scenic Tours. 

As a result, Mr Moore, together with 1,500 other disgruntled passengers, sued Scenic Tours claiming damages arising from disappointment and distress. The claim against Scenic Tours comprised multiple breaches of the Australian Consumer Law, including that the tour supplied was not fit for purpose and was not of a nature and quality that passengers could reasonably expect. 
Scenic Tours argued that the poor weather and flooding were out of its control and additionally that disappointment fell under a personal mental injury which meant that the Australian Consumer Law was not applicable.
The High Court determined that Mr Moore’s claim for disappointment and distress was not a type of personal injury damages and accordingly the Australian Consumer Law applied and Mr Moore was able to recover damages for the disappointment and distress he had suffered as a result of the failed tour.

Keep calm and cruise on

The Moore v Scenic Tours case demonstrates a tourism operator’s necessity to be well-versed in current legal principles regarding the Australian Consumer Law. By doing so, the operator will have a better chance at avoiding liability through any potential misleading and deceptive conduct.

Under the Australian Consumer Law, damages for losses suffered as a result of a failure to comply with the consumer guarantees are available if they are reasonably foreseeable. Such consumer guarantees include that the service be:
• provided with due care and skill;
• fit for any express or implied specified purpose; and
• provided within a reasonable time (when no time is set).

Although consumer guarantees cannot be contracted out of, suppliers of services should avoid making false statements and misrepresentations regarding the standard, value or quality of the service they are providing in advertising material. 

Furthermore, operators should strive to ensure all clients are aware of potential conditions which may affect the service provided to avoid disappointment, such as ‘out of control’ events like unfavourable weather. 

How we can help

In light of the recent High Court case and the constantly changing nature of COVID-19, tourism operators should be aware of the potential repercussions of failing to review and update their promotional material and terms and conditions.

At Bailiwick Legal, we can assist you by drafting or reviewing and updating your current terms and conditions as well as your contracts and promotional material. 

If you would like further information in relation to how the above matters may affect you, please contact us on (08) 9321 5451 or by email danielle@bailiwicklegal.com.au.
Danielle Edwards (Associate)

For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au/ 

The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.

05 Mar, 2024
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20 Feb, 2024
The Human Rights Commission may take action against employers who fail to actively eliminate sexual harassment, discrimination and victimisation in the workplace, as part of a positive duty reform. While the reform itself was introduced under the Sex Discrimination Act in 2022, a change was put in place last December - and every employer, including those in the agricultural sector, is affected. This change has provided the commission with new powers to investigate and enforce compliance with positive duty and investigate organisations or businesses where it "reasonably suspects" non-compliance. What does this mean for shearing contractors, sheep producers and other primary producers? Speaking at the WA Shearing Industry Association (WASIA) general meeting last month, Bailiwick Legal solicitor Matilda Lloyd said the enforcement power involved inquiries and investigations similar to WorkSafe. She said a complaint did not have to be made for an inspector from the commission to visit and look over a workplace, and see if there is any kind of sexual harassment occurring. "The commission looks at policies and procedures, and essentially you need to be able to demonstrate that you're compliant with this positive duty. "When you think about it in the context of a shearing shed, it is the safety checklist you have in place for when people enter the shed. "Those are the things you need to consider with sexual harassment as well." Ms Lloyd said the commissioner never had the power to conduct an investigation before and, as such, practically how it was going to work was an unknown. "We don't know whether they're going to be coming out and doing regular inspections, what those inspections are going to look like in terms of time or how thorough they are going to be, " sh e said. "They need to be thought of the same way as a WorkSafe investigation, whereby it could happen at any point whether a complaint is made or not. "Investigators will expect employers to show that they are actively trying to eliminate this form of unlawful conduct." If an inquiry occurs, what will happen? If an employer wasn't taking the correct measures to stop sexual harassment, discrimination and victimisation from occurring, they could be issued a compliance notice. Ms Lloyd said if the notice wasn't adhered to and an inspector returned, they could apply to the Federal Court to have that positive duty enforced. What is positive duty? Ms Lloyd said a positive duty was a legal obligation on an employer or person conducting a business or undertaking to take reasonable and proportionate measures to eliminate unlawful behaviours in the context of work, workplaces and working relationships. In the case of shearing contractors, sheep producers and other primary producers, she said that obligation was on the employer and applied to all staff, workers, contractors, customers and people entering, for example, a shearing shed. She said the obligation was "very broad" and applied right across the board. "Enforcing positive duty is pretty straightforward in terms of the employer, but when we look at the other parties involved it is extensive, " Ms Lloyd said. "When we are talking about sexual harassment in the workplace we are talking in the shed and in a vehicle on the way to work or another shed. "It is also offsite, so if you are having work drinks at the quarters or wherever afterwards - that's also a workplace within the definitions of the act. "The obligation applies across the board in all of these circumstances. "And also applies to visitors, so if you have farmers and they bring their wives, it is anyone coming into that shed or environment." In the context of positive duty, what do contractors need to do? Firstly, employers need to understand what sexual harassment, sex-based harassment, discrimination and victimisation is. Ms Lloyd said employers were responsible for leading their team, so it was important to understand what the laws were and how they affected not only them, but their employees. "When we talk about sexual harassment we talk about unwelcome conduct that is of a sexual nature or requests for sexual favours, touching, requesting dates and so forth," she said. "Whereas sex-based harassment is harassment that is targeted at a particular sex. "This could be making sexist comments about a woman because she's a woman or making sexist comments about a man because he's a man. "Then victimisation is about targeting someone because they've made a complaint." Ms Lloyd said a conversation then needed to be had to educate employees, whether that be face-to-face, by Whatsapp or having it displayed in the shed. She said there were resources and guidelines available through the Human Rights Commission, which helped with this. "Have that conversation - as an employer understand what sexual harassment is but then talk to your employees and be serious about educating your employees, " Ms Lloyd said. "It is about actually having that conversation and then thinking about what material can be given to them. "The whole point is to make it easy, so people understand. "Then it goes into training and support - is there someone in your team people can talk to?" The seven standards The commission has released guidelines for complying with the positive duty under the Sex Discrimination Act 1984. The guidelines are centred around seven standards - leadership, culture, knowledge, risk management, support, reporting and response, and monitoring, evaluation and transparency. Examples of practical actions that organisations or businesses can take to meet each of the standards are set out in the guidelines. Ms Lloyd said, as each business is different, it depended on how big a team was, what was going to be practical and cost-effective in the workplace. She said the commission would look at the different standards if there was an investigation or inquiry. How often do employers need to talk to their team about this? Ms Lloyd said it should be looked at similarly to safety or work related issues, whether that be a toolbox or regular meeting once a week or every couple of days. She said if a contractor was starting a new job or visiting a place they hadn't been to before, it was about having that conversation upon arrival. "When everyone's preparing for their first break, sit down and have a chat about general safety as well, " Ms Lloyd said. "That's the first step, and then follow it up a month later when you start a new shed. "It is about consistently and actively taking measures to create a safe space. "It seems obvious that once you've gone through your checklist you then talk to the people coming into that environment, who are your workers, and alert them to what you have found. "Similarly, with positive duty, a checklist is proof that you are doing the right thing if you are audited." Does insurance cover sexual discrimination cases? Having insurance does not diminish positive duty, it just safeguards employers against potential damage and loss against their business if they are sued. Ms Lloyd said sexual discrimination cases, which travelled through the Federal Court, were not cheap and often have adverse outcomes from an award of damages perspective. "If we talk about Work Health and Safety, as you know, that is a serious issue you have to take onboard and consider, " she said, "And that's the way I think employers need to frame their conduct when talking about and implementing measures to prevent sexual harassment, discrimination and victimisation." Is an employer covered if they have put everything in place, but those rules are still broken? Ms Lloyd said an employer would be protected if they have been able to eliminate as much as they can with the resources available to them. She said it was important to remember sexual harassment and discrimination is unlawful conduct. "In terms of positive duty, by taking all reasonable steps and measures given the resources available to you, you will be able to mount a solid defence against any claim. "If you've done your duty positively and it can be demonstrated that you've exercised your role in appropriate fashion, then that will be solid defence." For more information on the positive duty reform and seven standards, go to humanrights.gov.au
14 Dec, 2023
See what's been happening and current topics of interest in our December 2023 newsletter .
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