HIS HONOUR: These proceedings are a representative action under Pt 10 of the Civil Procedure Act 2005 (NSW) ("CPA"). The representative party, Lucretia De Jong, sues the defendant Carnival PLC trading as Carnival Cruise Line ("Carnival") in her own right and on behalf of all other persons who booked and paid for a cruise that left Sydney on 10 March 2015 bound for Noumea and New Caledonia but which instead travelled to Melbourne and Hobart.
De Jong v Carnival PLC [2016] NSWSC 1024 | Case summary | Zoe
By notice of motion filed 29 April 2016 Ms De Jong sought an order under subsection 62(2) of the CPA for the determination of a particular question of fact separate from other issues in the proceedings and before the trial. On the hearing of the motion today Ms De Jong filed an amended motion which revised the proposed question as follows:
"REVISED PRELIMINARY QUESTION
i. What information did the defendant have about Cyclone Pam before the ship left Sydney?
ii. Did the defendant decide the ship was not sailing on the advertised itinerary to the Pacific islands before it left Sydney?
iii. If 2 was in the affirmative,
a) When did the defendant make that decision, and
b) When should the defendant have made that decision?
iv. If 2 was in the negative,
a) Should the defendant have made that decision, and
b) If so, when should the decision have been made?"
The principles governing an application under subsection 62(2) of the CPA and an application for the posing of a separate question under r 28.2 of the Uniform Civil Procedure Rules 2005 ("UCPR") were distilled by Hallen AsJ, as his Honour then was, in Southwell v Bennett (2010) NSWSC 1372 at [15] to [17]. I also addressed those principles in Crawley v Vero Insurance Ltd (2012) NSWSC 593 at [16] to [20].
At this point it suffices to state that the power to order the determination of questions separate from the trial of proceedings is to be exercised having regard to the principles stated in s 56 of the CPA; namely, the facilitation of the "just, quick and cheap resolution of the real issues in the proceedings". That said, an interlocutory order for the separate determination of some question of fact or law is an exceptional measure such that the burden of demonstrating its appropriateness rests on the parties seeking it. In Tepko Pty Ltd v Water Board (2001) HCA 19; (2001) 206 CLR 1 at [168] Kirby and Callinan JJ observed that the benefits of an order posing a separate question "are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory". Those principles are equally applicable to representative actions, although consideration must always be given to not just the interests of the represented party and the defendant but group members as well.
In De Jong v Carnival PLC (2016) NSWSC 347 ("De Jong (No 1)") I summarised the effect of the pleadings in these proceedings as follows at [8] to [10]:
"8 In its defence, Carnival admits that it operated a cruise ship, the Carnival Spirit, which departed Sydney on 10 March 2015 and returned on 18 March 2015. The published itinerary for the ship included visits to two locations in New Caledonia. However, late on the evening of 10 March 2015, after the Carnival Spirit left port, the passengers were advised that because of concerns about the path of Cyclone Pam the ship was to be diverted. According to Carnival's defence, on 11 March 2015 the passengers were advised that the new ports of call were the Port of Melbourne and the Port of Hobart.
9 The Statement of Claim identifies the group members as persons who booked and paid for the cruise and "suffered loss and damage" because of Carnival's conduct as pleaded in the balance of the Statement of Claim. It pleads that, before the Carnival Spirit left Sydney, Carnival knew or ought to have known that the ship would not travel to New Caledonia. It also pleads that the failure of Carnival to advise group members of this prior to the ship's departure constituted a breach of a guarantee that the services provided by Carnival would be rendered with due care and skill, be reasonably fit for their purpose and might be reasonably expected to achieve their intended result. These obligations are said to have been imposed on Carnival by the operation of ss 60, 61(1) and 61(2) of the Australian Consumer Law (Cth) respectively. The statement of claim alleges that the failure of Carnival to advise of the itinerary change in a timely manner meant that Ms De Jong and group members lost the opportunity to cancel and obtain a refund. It also pleads that they did not otherwise experience a cruise of the kind that Carnival offered.
10 Leaving aside the basal facts concerning the cruise which I have recounted, Carnival's defence denies all of the substantive allegations against it, relies on various terms of its contract with its passengers and otherwise notes that the on board account for each booking received a credit of $150.00. Carnival also pleads that the plaintiff and each group member received a credit of 50% towards the cost of booking any new cruise on the Carnival Spirit or another ship, the Carnival Legend, sailing to or from Australia and departing prior to 31 March 2016. Ms De Jong's written submissions dated 24 February 2016 contend that, in its defence, Carnival "admit[s] [it] knew the ship was not going to the ports advertised an hour before departure", but did not advise the passengers of the change until after the ship sailed. This is incorrect. Carnival admits that at 4.30pm on 10 March 2015 it became aware that there was a "change in the track of Cyclone Pam towards the south". However, on its face, that does not constitute an admission of a necessity to change the itinerary prior to the ship's departure."
The judgment in De Jong (No 1) concerned an application by Carnival for an order that Ms De Jong provide security for costs, failing which the proceedings would be stayed.
In De Jong (No 1) I found that Carnival had made out a "reasonably strong case" for an order of security but determined that I could not fully consider the application until group members were given the opportunity to indicate their willingness and capacity to make some contribution to any such order. This was so because, until that matter was known, the Court could not determine whether or not ordering security would have the effect of stifling the proceedings (see De Jong (No 1) at [6] to [7]). In the end result, that notice of motion seeking security has been stood over until today and only for directions.
On this application counsel for Ms De Jong, Mr Rowe, stated that the motivation for seeking to pose separate questions was as a means of avoiding an order for security or minimising the amount so ordered. In my view, the application could only achieve that aim if it could be realistically said that the posing of separate questions was likely to lead to a reduction in the cost of the proceedings. As I will explain, in this case posing the separate questions sought will not have that effect.
In his written submissions Mr Rowe contended that the answer to the proposed revised questions "will determine whether Carnival was in breach of ss 18, 60 and 61 of [Schedule 2 to] the Competition and Consumer Act 2010 (Cth)" (the "Australian Consumer Law"). Consistent with this, the written submissions contend that an adverse answer to the proposed revised questions will defeat Ms De Jong's claim but that a positive answer would establish her claim at least to the extent of establishing a breach of the Australian Consumer Law. Mr Rowe confirmed this position orally.
In his written submissions counsel for Carnival, Mr Hogan Doran, took issue with the form of the questions, their relevance to the pleaded issues and their capacity to lead to any substantial avoidance of costs. Amongst other matters, he contended that the form of the questions was inconsistent with the pleaded and particularised case, which he asserted confined the relevant time that Carnival was said to have knowledge as to whether the weather events required a change in itinerary to 9 March 2015.
Mr Hogan Doran also contended that any answers to the question posed would not determine whether or not Carnival was in breach of the Australian Consumer Law in the manner pleaded. In particular, Mr Hogan Doran referred to those parts of the defence which pointed to the terms and conditions of the contract entered into by the plaintiff concerning the cruise, which he said informed the type of "services" that Carnival contracted to provide and were otherwise of significance to any determination of whether Carnival breached its obligations under ss 18, 60 and 61 of the Australian Consumer Law.
It is not appropriate or necessary to resolve all of these matters on this application. However, these matters illustrate the logical flaw in the amended notice of motion, in that the only way the questions posed can have the effect contended for by the plaintiff is if they embrace or assume all issues raised on the pleadings, leaving aside causation and damage. However, as I will explain, if that be the case, then they do not lead to any significant reduction in the likely costs that will be incurred in litigating them.
This is best illustrated by considering proposed questions iii(b) and iv(b). Those questions assume that there was an obligation on Carnival to make a decision that the ship would not sail on the advertised itinerary, and assume that there was some standard by which that decision should have been made. Those matters only beg the questions as to whether there was such an obligation, what was its source and what was its content. The answer to those issues is presumably to be found by considering the issues that are raised by the pleadings. The questions posed either assume the answers to those questions are in Ms De Jong's favour, or at least assume that in determining those questions, all the other issues raised by the pleadings will be resolved. The end result is that the proposed questions can only achieve the result that Ms De Jong intends, if they, by one means or another, seek a determination of all issues of liability, apart from causation and damage. In the end, Mr Rowe accepted that. For my part, I doubt that they had that effect, but even if they did, the question then becomes, what benefit will result?
In De Jong (No 1) at [11], I recorded the effect of an affidavit sworn by Carnival's solicitor as to the likely costs to be incurred up to the hearing of the proceedings. The solicitor's estimate was based upon a number of substantial interlocutory applications, the necessity for a significant amount of preparation, and a five-day hearing. Assuming that the questions posed achieve the objective that Mr Rowe contends they do, the only cost that would be saved from hearing the matters posed by those questions would be the costs involved in the preparation of hearing Ms De Jong's own evidence specifically about what steps she would have taken had she been notified of a change in the itinerary prior to the time of the ship's departure and her disappointment as to the form of holiday she in fact undertook (see Jarvis v Swans Tours Limited [1973] 1 All ER 71).
I do not expect that these aspects of her evidence would occupy much hearing time or require that much preparation, at least from Carnival's perspective. It follows that to exclude that material from the hearing would only achieve a marginal reduction in the costs likely to be incurred when compared with a hearing of all the issues raised by her claim. This likely slight reduction is far too minimal a benefit to possibly justify an order being made under UCPR 28.2. Certainly, if it was made, it would not advance Ms De Jong's prospects of resisting any order for security of costs one iota.
This position only becomes worse if the questions do not, in fact, achieve the effect contended for by Mr Rowe. In that circumstance, then at best, they will only be a partial determination of Ms De Jong's claim, and at worst, they will yield answers that are irrelevant to her claim. Either way, no benefit in terms of the reduction of costs will be achieved by granting the application, and again, to do so would not advance Ms De Jong's prospects of resisting an order for security one iota.
It follows from these matters that the plaintiff's notice of motion, filed 29 April 2016, and its amended notice of motion filed 22 July 2016, will be dismissed. I so order.
[Parties addressed on costs and the adjourned date for motion.]
[2]
Orders
Accordingly, the Court orders:
The Plaintiff's Notice of Motion filed 29 April 2016 and the Amended Notice of Motion filed 22 July 2016 be dismissed.
The balance of the Defendant's Notice of Motion filed 29 January 2016 is stood over to 2.00 pm on Friday, 2 September 2016.
The Plaintiff to pay the Defendant's costs of the Notice of Motion filed 29 April 2016 and the Amended Notice of Motion filed 22 July 2016.
[3]
Amendments
26 July 2016 - slip rule - [1] - 'Carnival Australia' amended to 'Carnival Cruise Line'
[18] - order 2 - 'Plaintiff's Notice of Motion' amended to 'Defendant's Notice of Motion'.
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Decision last updated: 26 July 2016