The Mikhail Lermontov

The Mikhail Lermontov, seven years after it sank, after eight days of a 14-day cruise, off the coast of New Zealand, still continues on its course through the courts. The most recent decision concerning this unhappy event is that of the High Court of Australia, which has given judgment on an appeal by the owner and operator of the vessel.1 On two of the issues appealed from the High Court rescinded the leave which it had previously given and thus the decisions of the New South Wales Court of Appeal on those issues2 stands. They were on the issue as to whether or not the plaintiff, who had signed a Deed of Release, was entitled to relief under the (N.S.W.) Contracts Review Act 1980 and whether or not the exclusion clauses contained in the ticket conditions were incorporated into the contract of carriage. Thus, the two issues which remained alive before the High Court were: (1) (which is discussed in this Comment) whether or not Carruthers, J., at first instance, had erred in allowing, as part of the damages payable to the plaintiff, a sum of $5,000 as compensation for disappointment and distress at the loss of entertainment and facilities for enjoyment which had been promised; and (2) (which is discussed in the following Comment3) whether he had properly awarded the restitution of the fare which the plaintiff had paid.

But one might ask why the injured party should be deemed to take the risk of damage of a particular kind when the fundamental principle on which damages are awarded at common law is that the injured party is too be restored to the position (not merely the financial position) in which the party would have been had the actionable wrong not taken place. Add to that the fact that anxiety and injury feelings are recognised as heads of compensable damage, at least outside the realm of the law of contract. Add as well the circumstances that the general rule has been undermined by the exceptions which have been engrafted upon it. We are then left with a rule which rests on flimsy policy foundations and conceptually is at odds