High Court of Australia · [2023] HCA 39
The High Court held that the Australian Consumer Law applied to an overseas-made cruise contract because the supplier carried on business...
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The Ruby Princess left Sydney on 8 March 2020. A COVID-19 outbreak occurred during the voyage, which was cut short. Ms Karpik later brought a Federal Court class action alleging negligence and Australian Consumer Law claims for passengers and relatives.
The immediate High Court dispute concerned Mr Ho, one member of the passenger group. His booking was made outside Australia under US terms that selected California courts and said passengers waived the right to participate in a class action.
The cruise companies argued that the US booking sat outside the Australian unfair-terms regime. The High Court disagreed. Princess carried on business in Australia selling and marketing cruises, and the Competition and Consumer Act expressly extended the relevant rule to conduct outside Australia by a body corporate carrying on business here.
No extra territorial connection was required. The statutory extension supplied the connection, so section 23 of the Australian Consumer Law applied to Mr Ho's standard-form contract.
| Term | Court's treatment |
|---|---|
| Class action waiver | Unfair under section 23 of the Australian Consumer Law and void. |
| California jurisdiction clause | Considered separately; the Court refused to stay the Australian claim. |
| US contractual arrangements | Did not prevent the statutory Australian unfair-terms rule from applying. |
The waiver created a significant imbalance by removing the passenger's ability to participate in a class action. That could cause real detriment where an individual claim may be difficult or uneconomic to bring alone.
Once the waiver was void, it could not support moving Mr Ho's claim out of the Australian proceeding. The Court also recognised his practical advantage in remaining with the group and the inefficiency of splitting closely related claims.
Key points
Map where the business operates
Record where customers are targeted, contracts are formed, services are delivered and the supplier carries on business.
Separate the legal questions
Test governing law, jurisdiction, arbitration, waiver and limitation clauses individually.
Identify customer detriment
Ask what a customer loses in practice and whether the business has a proportionate reason for that result.
Localise deliberately
Use market-specific consumer protections and dispute wording where one global clause would overreach.
Keep the checkout evidence
Retain the version accepted, the customer journey and the notice given for important terms.
Yes, depending on the statutory connection and the company's Australian activities. Here, the suppliers carried on business in Australia selling and marketing cruises, and the Act extended the unfair-terms rule to the relevant overseas conduct.
No. The Court considered the class action waiver and the California jurisdiction clause separately. Enforcement depends on the contract, governing law and circumstances of the dispute.
No. The practical lesson applies to online platforms and cross-border suppliers using global standard terms with Australian customers or while carrying on business in Australia.