Ferry breakdown: Interislander passenger wins compensation for cancelled sailing

By Nick James of RNZ

An Interislander passenger has won compensation over a ferry breakdown last year, with the Disputes Tribunal finding the service was “not fit for purpose”.

The tribunal found KiwiRail must pay the cost of three flights the passenger was forced to take due to the breakdown.

The Kaitaki was sailing into Wellington Harbour on January 28, 2023, when it lost propulsion with more than 880 people on board - resulting in a mayday call.

The ship regained limited power and made its way to port, where its passengers were able to disembark.

The tribunal decision said the passenger had rebooked two senior tickets and a car to go on the service on the afternoon of February 23 last year, but at that time the Kaitaki was only carrying freight due to Maritime New Zealand restrictions.

Interislander notified the passenger and said that they have no space to move their booking and that they could only offer a full refund.

The cancellation resulted in the passenger having to buy three airfare tickets - one for himself, another for his sister he was travelling with and another in April back to the city he had left his car in for safe storage.

The tribunal found that KiwiRail under its ticket terms and conditions can cancel a ticket where it was necessary, such as bad weather that could affect customer safety.

But it was not covered to do so in this case.

The tribunal also found the Interislander service was “not fit for purpose”.

This was due to when the service allowed the passenger to change his booking from February 17 to February 23, it did not know if Maritime New Zealand restrictions would be lifted at that time.

“By altering [the passenger’s] booking to a time when it could not be sure the service was available it took a calculated risk.

“This was not a situation that was unforeseeable or outside its control.”

The ferry service said that when it needed to reschedule passengers it blocked new bookings for a period to prioritise existing passengers, but due to the customer’s ticket being cancelled, he was in the same position as other customers making a new booking.

It said if the customer contacted their call centre and told them about his situation, they would have been able to see his records - but their cancellation email did not advise him to do so.

The passenger said he could not see any available booking for the next 2-3 weeks.

KiwiRail was ordered to pay $1200 to cover airfare costs and provide a contribution towards storage or parking costs.

Interislander operations general manager Duncan Roy told RNZ tribunal cases were confidential in nature and it was not appropriate for them to comment on individual cases.

Consumer NZ chief executive Jon Duffy told RNZ it was great that a consumer was able to go to the Disputes Tribunal and take on a transport provider like Interislander and get compensation.

“This is a great example of consumers exercising their rights and coming out on top.”

Duffy said they would love to hear from any passengers who were going through a hearing or have got a result.

Consumer NZ has told RNZ it was aware of three similar cases going to the tribunal following last year’s ferry breakdowns - two of the passengers have won compensation.

The Commerce Commission is investigating both Interislander and Bluebridge after months of cancelled and delayed sailings last year.

The watchdog is considering whether consumers have been accurately informed of their rights to a refund or getting costs covered under the Consumer Guarantees Act when ferry sailings were disrupted, and people were forced to make other arrangements.