Court disallows last minute application to amend defence in Ruby Princess case

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This decision, delivered ex tempore, concerned an application by the respondents to amend their defence, which was filed three days before the commencement of the trial.

The class action pleads common law negligence and various claims under the Australian Consumer Law (ACL) against the respondents in relation to the Ruby Princess cruise ship, which saw hundreds of passengers contract COVID-19, with a number of passengers dying as a result of the virus.

Justice Stewart disallowed the respondents’ proposed amendments (save for one minor amendment) on a number of grounds.

The respondents’ application concerned two of the applicant’s ACL claims, being an alleged breach of the consumer guarantee that services are reasonably fit for a particular purpose (purpose guarantee) and an alleged breach of the consumer guarantee that services will achieve the desired result (result guarantee). The respondents contended that two provisions of the ACL, ss 61(3) and 267(1)(c), were relevant to these ACL claims but that the applicants had failed to plead them. Section 61(3) provides that the purpose and result guarantees do not apply if the consumer did not rely on, or it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. Section 267(1)(c) provides that a consumer may take action against a supplier for breach of the purpose or result guarantees if the failure to comply with the guarantee did not occur only because of certain events, such as an act of a person other than the supplier.

The respondents’ primary argument was that the applicant’s failure to plead ss 61(3) and 267(1)(c) meant her purpose and result guarantee claims must fail. His Honour rejected this on the basis that if the respondents were correct (which it was likely they were not based on current case law and commentary), the respondents should have raised the issue at a much earlier time (at [13]).

The respondents also sought to amend their defence in two sections.

First, in relation to s 61(3), the respondents sought to plead that the applicant and class members did not rely on, or it was unreasonable for them to rely on, the skill or judgment of the respondents to do a number of things, for example to take a number of specific precautions. His Honour held that the respondents’ proposed amendments did not address s 61(3) at the appropriate level, meaning the respondents had sought to plead matters that a cruise passenger would likely never have turned their mind to prior to boarding, which the purpose and result guarantees do not require. Accordingly, his Honour held that “the proposed pleading is non-responsive to the applicant’s pleading and offers no reasonable defence to the pleaded case. It should be refused on that basis alone.” (at [28]).

Second, in relation to s 267(1)(c), the respondents sought to plead that any failure to comply with the purpose and result guarantees occurred only because of acts of a person other than the respondents (for example due to the Australian government closing the borders to cruise ships) or occurred only because of causes independent of human control that occurred after the services were supplied. His Honour disallowed the majority of these proposed amendments, for example because they involved complex factual issues that would be highly disruptive of the trial and would likely require an adjournment. However, his Honour did allow the proposed amendment that any failure to comply with the guarantees occurred only because of the Australian government’s border closures to cruise ships, because it was a single factual matter and did not raise any prejudice for the applicant (at [35]). The applicant was given leave to file any reply to that amendment.

Finally, his Honour noted that the respondents’ application involved discretionary considerations, and that to allow the disallowed amendments would have put undue burden on the applicant, created prejudice for the applicant, caused a disruption to the orderly conduct of the trial, and would have been prejudicial to the administration of justice and other cases in the Court (at [38]). At [39], his Honour cited Mortimer J in Kaplan v Victoria (No 2) [2022] FCA 679 at [19], who held that “[t]he Court should only permit a very late amendment invoking an exception such as this when there is an adequately and full-expressed proposed pleading”, with his Honour reinforcing that the respondents’ proposed amendments were inadequately pleaded.

Karpik v Carnival plc (The Ruby Princess) (Amendment Application) [2022] FCA 1232

Federal Court of Australia, Stewart J,
14 October 2022

Applicant’s Solicitors: Shine Lawyers
Respondents’ Solicitors: Clyde & Co
Applicant’s Funder: Balance Legal Capital

Austlii Link: Available here

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