RBG Lawyers / News / October 16,2015

RBG has recently acted for a travel insurer on behalf of nine individuals who each purchased a 2 week cruise holiday in the Federal Circuit Court case of Ferme & Ors v Kimberley Discovery Cruises Pty Ltd [2015] FCCA 2384. Before they embarked on their cruise it was cancelled due to adverse weather conditions, with the cruise operator refusing to refund any part of their fares in accordance with the terms of the cruise contract.

Proceedings were commenced in 2013 alleging the term in each individual contract which allowed fares to be forfeited in circumstances where a cruise was cancelled due to a force majeure event was ‘unfair’ within the meaning of that term as defined in schedule 2 of the Competition and Consumer Act (2010).

On 2 September 2015 Jarrett J handed down his decision and found that each passenger was entitled to recover their full fare plus interest and costs on the basis that:

  • their contracts were ‘consumer contracts’;
  • their contracts were ‘standard form contracts’;
  • the unfairness test from the Act was satisfied, namely that the terms: (1) caused a significant imbalance between the parties’ rights and obligations, (2) were not reasonably necessary to protect the legitimate business interests of the Defendant and (3) would cause financial or other detriment to each Plaintiff if they were able to be relied upon by the Defendant.
  • as the cancellation terms were unfair, they were void and unenforceable;
  • each Plaintiff was entitled to a full refund of their fare due to the total failure of consideration by the Defendant.

The decision should provide confidence to passengers and their travel insurers to challenge the forfeiture of fares in circumstances where the travel arrangements are cancelled without a partial or total refund.

Please contact Steven Muller should you require any further details.