Contract law – consumer law – representative proceedings – private international law…

…incorporation of terms into contract of passage – whether exclusive jurisdiction or class action waiver clauses are unfair terms under the ACL or contrary to public policy

Carnival plc v Karpik (The Ruby Princess) [2022] FCAFC 149 (2 September 2022) concerned an appeal in the context of class action proceedings brought against Carnival plc (Carnival) and its subsidiary, Princess Cruise Lines Ltd (Princess).

This was in respect of loss or damage allegedly suffered by passengers and relatives of passengers who were aboard the vessel ‘Ruby Princess’ during a COVID-19 outbreak.

The case raises significant issues regarding the ability of businesses to require consumers to waive their rights to participate in class actions under Part IVA of the Federal Court of Australia Act (Pt IVA).

A passenger, Mr Ho, contacted a travel agency (CruiseShipCenters) based in Canada on 25 September 2018, booked tickets and paid a deposit. CruiseShipCenters had a sales agreement with Princess by which CruiseShipCenters was entitled to use Princess’ direct online booking system, with any sales made governed by Princess’ then current terms of sale.

Mr Ho’s booking was made by an employee of CruiseShipCenters (Rosanna) using Princess’ direct online booking system. On 30 October 2018, Mr Ho received an email from Rosanna attaching an invoice, which contained a disclaimer stating that CruiseShipCenters acts as intermediary and agent for suppliers in selling services.

Shortly after, Mr Ho received a booking confirmation from Princess, with further terms. At the end of the booking confirmation was a notice containing a link to terms of the passage contract, along with the statement: “Please read all sections carefully as they affect the passenger’s legal rights”.


Mr Ho did not access the website until July 2019. When he did so, he viewed a copy of the terms of the passage contract, which included what became known as the ‘US Terms and Conditions’ (terms and conditions), and clicked a button that said ‘Agree’. The terms and conditions included an exclusive jurisdiction clause in favour of the United States and a class action waiver clause, pursuant to which it was argued that Mr Ho waived any entitlement to participate in any class action.

The lead applicant of the class action (Karpik) and Mr Ho denied that the terms and conditions formed part of Mr Ho’s passage contract. Alternatively, they submitted that the terms were unenforceable or ought not be given effect.

At first instance, the primary judge determined that the terms of the passage contract did not include the terms and conditions. The primary judge considered that Rosanna did not act as Mr Ho’s agent. He assessed that offer and acceptance had occurred on 25 September.

The consequence was that the terms and conditions, of which Mr Ho was notified on 30 October 2018, came too late. His Honour considered that the subsequent acceptance of the terms on the Princess website in July 2019 was incapable of altering the terms of the previously concluded agreement.

Alternatively, his Honour held that, if the terms and conditions were part of the passage contract, the exclusive jurisdiction clause and the class action waiver were either unenforceable or would not be given effect. Carnival and Princess appealed the decision.

Delivering separate judgments, Allsop CJ, Rares and Derrington JJ each determined that the terms of carriage between Carnival/Princess and Mr Ho were governed by the terms and conditions. However, Rares J delivered a dissenting judgment on the basis that he did not consider the terms and conditions were enforceable.


Derrington J delivered the lead judgment. On the issue of the construction of the contract of passage, Derrington J considered determinative the relationship between Mr Ho, CruiseShipCenters and Princess. Contrary to the finding of the primary judge, his Honour concluded that Rosanna acted as agent for Mr Ho.

Derrington J considered that Rosanna, as agent for Mr Ho, utilised CruiseShipCenters’ contractual entitlement to access Princess’ online booking system, with such access being subject to Princess’ terms of sale. When Rosanna effected the booking, she thereby created a contractual arrangement between Princess and Mr Ho on the terms and conditions offered (at [159]).

Derrington J considered it irrelevant whether Rosanna or Mr Ho were aware of the terms of the passage contract (at [159]), as Mr Ho had engaged Rosanna to generate his booking regardless of the terms and conditions to which that exercise was subject. However, even if knowledge of the terms of the passage contract was required, Derrington J considered that was satisfied by the knowledge held by CruiseShipCenters and/or Rosanna (at [161]-[164]).

Derrington J also undertook a comprehensive review of the “ticket cases” (at [165]-[206]) and conducted an alternative analysis on the basis of the principles drawn from the ticket cases. His Honour accepted the reasoning submitted by Princess (at [207]) that, on the conventional analysis arising from the ticket cases, the booking confirmation email of 30 October 2018 constituted an offer by Princess on those terms, which Mr Ho accepted through his conduct of neither rejecting it nor seeking the return of his deposit.

Alternatively, Mr Ho accepted the offer after logging into the Princess website in July 2019 and expressly accepting the terms and conditions by clicking on the word, ‘Accept’.

A third basis on which Derrington J considered the terms and conditions were incorporated into the passage contract, was that the contract was a signed or executed agreement (at [233]). Pursuant to this analysis, the agreement was formed when, in July 2019, Mr Ho entered his details into the relevant page on Princess’ website and signified his acceptance of the terms of the passage contract.


Both Allsop CJ and Rares J agreed with Derrington J that the passsage contract incorporated the terms and conditions. However, their Honours were divided on the effect of s23 of the Australian Consumer Law (ACL), which provides that a term of a consumer contract is void if the term is unfair and the contract is a standard form contract.

Derrington J concluded that the class action waiver was not an “unfair term” within the meaning of s23 (at [245]). In so concluding, his Honour noted that limitations on the right to sue are not prima facie “unfair” (at [252]). He found that the class action waiver does not impede Mr Ho’s substantive right to bring proceedings against Princess in relation to any damages suffered, and therefore did not significantly imbalance the parties’ rights (at [253]-[254]).

He rejected the finding of the primary judge that the class action waiver would impose a significant imbalance in the parties’ rights and obligations. His Honour considered there was no evidence to support the primary judge’s finding that the class action waiver made it economically unviable for Mr Ho to bring proceedings against Princess in California in respect of his claim, and this thereby removed his access to justice (at [255]).

Further, he considered that Princess had a legitimate interest, as an international corporation engaged in business across multiple jurisdictions, in requiring actions brought against it to be conducted in the jurisdiction from which it carried on its business, and that the actions be brought on an individual rather than a group basis (at [262]). Derrington J considered: “There is no basis on which it could be concluded that the class action waiver was ‘unfair’ within the meaning of ss23 and 24 of the ACL” (at [272]).

Following a detailed analysis of the potential extra-territorial effect of s23 (at [279]-[323]), Derrington J also rejected the submission that the ACL is a mandatory law of the forum from which parties cannot displace by contract (at [324]-[325] and [344]).

His Honour also concluded that the class action waiver clause was not contrary to Pt IVA (at [353]) and was not contrary to public policy. He found that the clause would be enforceable under US general maritime law, being the law of the contract (at [371- [373]), and considered there were no grounds on which to exercise the discretion not to enforce the exclusive jurisdiction clause (at [394]).


In respect of the application of s23 of the ACL, Allsop CJ delivered a judgment concurring with Derrington J on different grounds, but also expressing reservations about some of Derrington J’s observations. Allsop CJ reasoned that if it were accepted – as it was by the primary judge – that the exclusive jurisdiction clause was not an unfair term, then it was difficult to sustain that the class action waiver clause would cause any significant imbalance.

His Honour noted that the loss of a capacity to participate in an Australian class action does not cause imbalance if, by reason of the exclusive jurisdiction clause, the claim would be stayed anyway (at [6]). He also noted that the choice of law was not contrived given Mr Ho was not an Australian consumer and there was no apparent attempt to circumvent the operation of Pt IVA.

He considered that it was difficult to see why the contractual obligation on Mr Ho regarding his participation in an Australian class action is in any way unfair to him (at [8]). However, his Honour noted that this would not necessarily be the case in another contract with an Australian consumer (at [9]).

Allsop CJ did not consider that there was any policy or purpose of Pt IVA infringed by a party freely and fairly agreeing, in advance of receipt of the notice from the court, setting the date by which the opt-out is to occur as part of a contractual relationship (at [12]). His Honour noted, however, that “in many cases of Australian consumer contracts it would be unfair and unjust for standard form contracts . . . to seek to impose a waiver of the operation of Pt IVA or any other statute of a State or Territory of similar character” (at [13]).

On the issue of the extra-territorial application of s23 of the ACL, Allsop CJ reserved any final view. However, his Honour sounded a note of caution in a construction that would limit the operation of s23 in circumstances applicable to Australian consumers. He stated “such a construction has the potential to create a significant carve-out from the applicability of s23, which ought not to be lightly adopted, particularly in beneficial legislation where other legitimate constructional choices are available”, and expressed reservations as to Derrington J’s observations in this regard (at [21]).

In a dissenting judgment, Rares J considered that the class action waiver clause is unfair by Australian law and unenforceable. His Honour considered that Princess could not seek to contract out of Pt IVA of the Federal Court Act (at [50]). Rares J stated that a construction of Pt IVA that allowed persons to contract out of its provisions would undermine Parliament’s choice of an opt-out, rather than opt-in, model for representative proceedings under Pt IVA (at [70]).


He observed, “[i]t is not difficult to envisage that, if persons can contract out of representative proceedings, businesses in Australia that would otherwise be amenable to being sued in such a proceeding will seize on that opportunity to include a class action waiver clause in standard form contracts” (at [71]). The effect would be to neuter the jurisdiction that the Parliament intended to confer on the court in Pt IVA.

He concluded that it would be against the public policy of Pt IVA for this court to stay that claim or to order him not to pursue it. Rares J also approved of the primary judge’s finding that there were strong reasons for not enforcing the exclusive jurisdiction clause [at [87]). In particular, he considered that it would cause a multiplicity of proceedings, contrary to public policy.

The court declared the passage contract was subject to the terms of the terms and conditions, and stayed the proceedings in respect of Mr Ho.

Shanta Martin is a barrister at the Victorian Bar, ph 03 9225 7222 or email The full version of these judgments can be found at Numbers in square brackets refer to a paragraph number in the judgment.

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