Opinion
US White Island lawsuit: Royal Caribbean Cruises Ltd v Browitt
5th Aug 2021
In the Federal Court decision of Royal Caribbean Cruises Ltd v Browitt [2021] FCA 653, two Melbourne victims of the White Island volcano disaster defeated legal action brought by Royal Caribbean Cruises Ltd (Royal Caribbean) to stop the victims from proceeding with their claims in Florida.
Factual background
On 9 December 2019, the volcano on Whakaari, also known as White Island, erupted. At the time of the eruption, cruise passengers from Royal Caribbean’s Ovation of the Seas were participating in a Royal Caribbean shore excursion on the Island. Twenty-two passengers died and 25 were injured.
Among the victims were the Browitt family. Father and daughter, Paul and Krystal, died in the tragedy. Krystal’s sister Stephanie suffered life-changing burns and associated complications. Mother Marie, who booked the cruise at a local Flight Centre, had not gone on the tour however she suffered the indescribable loss of her husband and daughter and is now her surviving daughter’s carer.
Royal Caribbean is incorporated in Liberia but its head office is in Miami, where it conducts most of its business operations. Royal Caribbean operates internationally through a variety of subsidiaries. The subsidiary operating in Australia is RCL Cruises Ltd t/as Royal Caribbean.
Lawyers commence US lawsuit
The lawyers acting for Marie and Stephanie commenced lawsuits in Florida against Royal Caribbean. The claims included the wrongful deaths of Paul and Krystal, as well as Marie and Stephanie’s physical and psychological injuries.
The Browitts chose to sue in Florida for a number of reasons, including that Florida is the location of Royal Caribbean’s head office and the Global Tour Operations department which developed, operated and set the policy for shore excursions. This department also approved the onboard promotion and sale of the White Island excursion to the Ovation of the Seas passengers.
Additionally, Florida had procedural advantages such as deposition of witnesses and trial by jury. It also offered potentially greater damages compared to Australia.
On 18 December 2020, Royal Caribbean commenced an action in the Federal Court to stop the Browitts from proceeding with the US claim. Royal Caribbean relied on an exclusive jurisdiction clause in its terms and conditions which stated that only courts in NSW could resolve disputes about the cruise holiday.
Legal issues in dispute
Was Flight Centre an agent for the passengers as well as Royal Caribbean?
Stewart J found that according to Flight Centre’s contract with the Browitts, it was authorised to make the cruise booking subject to Royal Caribbean’s terms and conditions.
Additionally, he found that Flight Centre acted as agent for both the Browitts and Royal Caribbean. This was an unusual situation because as well as making a contract between its principal (Royal Caribbean) and third party (the Browitts), Flight Centre had its own contract with both. Nevertheless, Flight Centre was found to be the Browitts’ agent with the limited scope of making travel bookings subject to Royal Caribbean’s terms and conditions.
Mrs Browitt had not read Royal Caribbean’s terms and conditions, including the exclusive jurisdiction clause. However, as agent of the passengers, Flight Centre’s knowledge of the Australian terms and conditions was attributed to the Browitts.
Were Royal Caribbean’s Australian terms and conditions incorporated into the contract?
The Federal Court noted that it is well established that an exclusion of liability clause can be valid when a passenger signs but does not read it (Oceanic Sun Line Special Shipping Company Inc v Fay [1988] HCA 32).
Further, where a party authorises an agent to contract on their behalf, that party is bound by the terms and conditions on which the agent contracts. In this instance, Mrs Browitt signed her Flight Centre invoice and acknowledged that she understood and agreed to the terms and conditions.
Contracts between passengers and Flight Centre were subject to terms and conditions. These included the authority for Flight Centre to bind passengers to relevant service providers’ terms and conditions. The booking was therefore found to be subject to Royal Caribbean’s Australian terms and conditions, including the exclusive jurisdiction clause.
Stewart J also found that Royal Caribbean gave passengers reasonable notice of its terms and conditions, for example in its brochure.
Construction of Royal Caribbean’s Australian terms and conditions
The basis of Royal Caribbean’s claim was that the Browitts should be held to the exclusive jurisdiction clause in favour of the courts of NSW in their Australian terms and conditions.
The Browitts successfully argued that the exclusive jurisdiction clause did not apply to the US lawsuit.
This was because, as a matter of construction, the Australian terms and conditions were between the Browitts and one Royal Caribbean entity. That entity was found to be RCL Ltd (the Royal Caribbean subsidiary operating in Australia). However, the US lawsuit was against the parent company Royal Caribbean. The exclusive jurisdiction clause was not worded sufficiently broadly for Royal Caribbean to benefit from it. Despite being incorporated into the contract, the exclusive jurisdiction clause therefore had no application to the US lawsuit. Due to the way that the terms and conditions were constructed, Royal Caribbean was not entitled to an anti-suit injunction. As such, the US proceedings were not in breach of the exclusive jurisdiction clause.
Was the claim in Florida vexatious or oppressive?
Stewart J concluded that the US proceedings were not vexatious or oppressive. The claim was against Royal Caribbean which is based in Florida where the lawsuit was commenced. Further, the US claim did not involve unconscionable conduct or unconscientious exercise of a legal right. It was held that the Browitts had legitimate reason for bringing the claim in Florida.
Outcome
Consequently, the proceedings brought by Royal Caribbean were dismissed and it was ordered to pay the Browitts’ costs.
Analysis
This case highlights a number of relevant points for cruise ship accident lawyers.
Firstly, the judgment sheds some light on the complex contractual relationships between the various parties (often across multiple jurisdictions) involved in a cruise booking: the parent cruise line, the local subsidiary cruise company, the ship operator, the ship owner, the travel agent and the passenger.
Secondly, the judgment shows that incorporation and construction of contractual terms and conditions is key when representing injured cruise passengers. Expertise in personal injury law alone is insufficient to get the best results for clients.
Finally, the decision shows the importance of considering potential causes of action in different jurisdictions in appropriate cases. Cruise ships that operate in Australia are generally run by cruise lines headquartered in the US, UK or Europe. Quantum will not always make it appropriate to investigate causes of action in other jurisdictions, especially when a claim under Australian law is available. However, in some instances a claim in a foreign jurisdiction could be materially advantageous to the injured passenger. In those cases, it is important to work with fellow cruise ship accident lawyers who are experienced in this complex area of law.
This is an edited version of an article first published here.
Victoria Roy is principal solicitor at Victory Travel & Cruise Lawyers, a boutique law firm specialising in bringing compensation claims for Australians injured overseas, in aircraft accidents and in cruise ship accidents. She is also Secretary of the NSW Branch of the ALA and Chair of the ALA’s Travel Law Special Interest Group.
The views and opinions expressed in these articles are the authors' and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).
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