There could not be a single person right now who has not heard of Coronavirus, and its rampage around the globe.
The media has been reporting everything from Aged Care Facilities going into lockdown, right up to people stockpiling a year’s worth of toilet paper for the apocalypse. Among these reports were the events on a certain cruise ship, anchored off the coast of Japan. It has been reported that almost one fifth of the passengers on the cruise ship contracted Coronavirus. Quite a few of those passengers on board were Australian.
This sparked an interesting discussion about whether those Australians might have some cause of action against the cruise ship for their loss of enjoyment of that cruise, and any loss suffered because of containment on that cruise ship.
These cruise ships often advertise that there are many activities to engage in during the cruise, ranging from food and dining, gaming, playgrounds and pools, music and entertainment, and relaxation. The Coronavirus would have removed those options for the passengers, which potentially is in breach of the contract agreed upon between the passengers and the cruise ship.
A contract breaker is not in general liable for any distress, frustration, anxiety, displeasure, vexation, tension or aggravation which the breach of contract may cause to the innocent party. However, where the very object of a contract is to provide pleasure, relaxation, peace of mind or freedom, damages could be awarded if the fruit of the contract is not provided or if the contrary result is procured instead. In cases not falling within any exception, damages might be recoverable for physical inconvenience and discomfort caused by the breach and mental suffering directly related to that inconvenience and discomfort.
In 1993 there was an interesting case on this issue known as Baltic Shipping v Dillion (1993) 176 CLR 144. In this case Mrs Dillon was a passenger on a cruise ship. The cruise was meant to go for 14 days, but sank after only 9 days at sea (similar to who those passengers hopes and dreams of an enjoyable cruise sank after Coronavirus arrived).
Mrs Dillon sued the operators for breach of contract and a total lack of consideration. She also sued for distress.
The issues to be determined by the Court where whether there was a total lack of consideration by Baltic Shipping Company and whether Mrs Dillon could recover damages for distress?
The Court held that Mrs Dillon could not recover her fare (the breach of contract claim) because there was not a total failure of consideration by Baltic.
However, the Court did find that damages for disappointment and distress could be recovered only if they result from physical inconvenience caused by the breach or if the object of the contract is to provide enjoyment or relaxation or to prevent ‘molestation’.
Mrs Dillon was ultimately successful and received an award of $51,396.00, which might be around $110,000.00 at today’s rates.
So, how does this apply to the passengers affected by the Coronavirus outbreak? Following from the Baltic Shipping matter, there might be two causes of action:-
- Breach of contract for a total lack of consideration; and
The first cause of action, breach of contract, can occur when there is:
- A failure to perform on time (or at all);
- A failure to perform to an agreed standard or specification; or
- A refusal or inability to perform before the time for performance has arisen.
Of these, the most obvious cause would be a failure to perform to an agreed standard or specification. The key to success will then be whether there was a total failure by the cruise ship to perform.
The findings in Baltic Shipping on this point were that although the plaintiff had received eight days of the cruise, it was an entire contract and the ‘respondent did not contract with the appellant for an eight-day cruise, still less for an eight-day cruise interrupted by the disaster … What she contracted for was a relaxing holiday experience. It is this that she failed to secure. The contract of carriage was properly categorised as an entire contract.
As I understand the cruise, the cruise was for a two week period, and it was the final night that the Coronavirus impacted the passengers. For that reason, the passengers would likely have no claim for breach of contract as there may not have been a total failure to perform.
The second cause of action, distress, requires some element of negligence. That is, there was a duty of care owed by the cruise ship to the passengers, that duty was breached, and some damage or injury occurred because of the breach.
Here, the passengers were promised a holiday cruise, arguably as an interlude to relax the mind and refresh the spirits. Or, at the least, the cruise ship promised to exercise all reasonable care to provide such a cruise. In breach of the contract, the Coronavirus event might have provoked some severe tension of mind or depression of spirit.
The damage might be said to have been inevitably and directly consequent on the breach of the implied promise to carry the passengers safely (or to use all reasonable care to carry the passengers safely). To prove such an argument, it must be proved that there was an exposure of the passengers to danger and an infliction of mental distress.
In my opinion the cruise ship can in no way be found negligent for the contraction of Coronavirus on board the cruise ship. This was not within its control. However, the management of the Coronavirus after contraction might have contributed to passengers exposure to danger and an infliction of mental distress.
With that said, there may be some potential claim for the passengers to make against the cruise ship for distress, however each case turns on its own facts, and significantly more information would be needed to form an opinion on liability for distress.
In the meantime, wash your hands regularly, avoid coughing on people and perhaps adopt the foot tap instead of the handshake.