NSW travel agents not required to refund COVID-impacted holidays

Travel agents are successfully appealing legal victories by their customers, with experts saying the much-vaunted Australian Consumer Law has failed to deliver.

NSW travellers who won refunds from travel agents for trips cancelled due to COVID-19 have had their victories quashed on appeal in what the nation’s leading consumer group calls a “worrying trend”.

The NSW Civil and Administrative Tribunal appeal panel on Friday set aside an earlier order that a Sydney travel agent pay $15,500 to a couple whose March 2020 holiday to South America was kiboshed by corona.

And last month, a differently constituted appeal panel overturned a decision that another travel agent had to refund $2336 after a customer’s return flights to India, scheduled for April 2020, were called off because of the pandemic.

Choice campaigns director Erin Turner said would-be travellers were presently in an “unfair space”.

Choice’s Erin Turner. Source: Twitter

“It is part of a trend we are seeing that is really worrying,” Ms Turner said.

Before COVID-19, under the Australian Consumer Law (ACL), a travel agent had to provide a refund if a flight or tour didn’t go ahead.

“It used to be simple,” Ms Turner said.

But not now. The ACL couldn’t be relied on during a “black swan event,” she said, because governments had imposed the border closures that had led to travel businesses cancelling their offerings.

“Instead it comes down to the terms and conditions, which are written by lawyers for lawyers,” Ms Turner said. “So we are all left in a state of confusion — even now.”

In the case of the South American sojourn, the agent’s Ts&Cs said it “is not itself a transport, tour, event or accommodation provider. It acts only as agent for those service providers.”

The return flights to India were with Malaysia Airlines. Picture: Charles Pertwee/Bloomberg

The appeal panel said that made the application of the ACL “much narrower”.

The agent’s duties were to propose and arrange travel-related services, which it had done.

“That being the case, we do not consider that there is any basis on the available evidence for the respondents to claim or recover against the appellant compensation for a breach of the statutory guarantees under the ACL.”

The panel in that matter went on to cite the February decision over the return flights to India, saying “a similar characterisation of the relationship between a travel agent and its customer” had been made.

The Ts&Cs in that contract “acknowledged that the appellant was acting as agent for the carrier”.

The case of the South American holiday has been “remitted for reconsideration” by NCAT. The couple involved could not be contacted.

The travel agent that booked the flights to and from India issued a refund based on the original tribunal decision and is not seeking that the money be returned. The consumer in that case did not respond to requests for comment.

Consumer Action Law Centre CEO Gerard Brody said he hoped the “Australian Competition and Consumer Commission looks at the decisions closely”.

Consumer Action Law Centre’s Gerard Brody. Picture: Stuart McEvoy for The Australian.

The ACCC said it did not have any comment.

Choice’s Ms Turner said the “ACL hasn’t worked in this scenario.

“We need to think about how our law stands up in these really stressful times,” she said, and reform might be necessary.

Choice is currently analysing 4000 COVID-19 travel dispute case studies.

Ms Turner said a purchaser of travel could not know who actually had their money — the agent or the service operator.

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