Lawyer Tyrone Barugh fails bid to claim $5000 from Jetstar in booking loophole

Tyrone Barugh, a director of a law firm Spilt Milk in Wellington, argued Jetstar owes him thousands of dollars in fees. Photo / Supplied

A lawyer has failed to sue an airline company after finding a loophole in its booking system and attempting to collect a $5000 windfall for himself from it.

Tyrone Barugh, director of Wellington law firm Spilt Milk Law, attempted to take Jetstar through the Disputes Tribunal after spotting the loophole in one of its promotions.

The company’s “return for free” promotion meant if people booked a $285 flight to Australia from New Zealand, they didn’t have to pay a return fare.

So, Barugh booked and then cancelled a flight from Auckland to Sydney and requested he receive the $285 refund as a voucher.

Barugh then used the credit to make a second booking, and repeated the process 58 more times, each time booking from credit earned by cancelling the paid leg from the previous booking. In each instance, Jetstar was charged a $60 Passenger Movement Charge by the Australian Government for the return leg.

Because Barugh did not travel on any of his 59 return flights he wanted Jetstar to refund him each of the $60 charges and said the airline’s conditions supported that.

He cited section 9 of the Passenger Movement Charge Collection Act which says a person is “entitled to a refund of charge paid by the person if the departure in respect of which the charge was paid does not take place”.

However, Jetstar didn’t see it that way and wouldn’t pay up so Barugh took the company to the Disputes Tribunal in the hope of recouping the money, despite him not having actually paid it in the first place as he just made the bookings with the refund voucher.

In a ruling released this week, the tribunal said while it may be that Barugh’s claim was “legally correct” it wouldn’t be in accordance with justice to award him the money.

“In this case, [Barugh] booked 59 flights to take advantage of what he saw as a loophole, to claim money from [Jetstar] which he had not paid to them,” tribunal referee Michael Wilson said in his ruling.

“It may be (as unlikely as that may seem on its face) that the supposed loophole is legally correct in Australia, by the application in that jurisdiction of the Australian statute, but I find it is not so in New Zealand.

“I also find it would not accord with justice, in my view, for [Barugh] to be able to receive such payment in these circumstances.”

Wilson said that the terms of Jetstar’s contract were clear and that fees and charges for cancelled flights could only be refunded if actually paid for by the customer.

“No other contractual grounds exist for the claimed payments,” he said.

Wilson dismissed Barugh’s claim entirely.

Barugh told NZME he thought there was a good chance he would have won his claim, but ultimately respected the tribunal’s decision.

“Even if the tribunal had fully agreed with my interpretation of the Australian legislation and the Jetstar conditions of carriage, the decision says that it would have dismissed the claim to achieve a just result,” he said.

“Unlike in a regular court, this is something that the Disputes Tribunal Act 1988 allows the tribunal to do.”

Barugh said while he lost on the day he hoped the media interest encouraged more people to utilise the Disputes Tribunal to resolve their own disputes with large corporate companies.

“And although I never took any of my 59 free flights, I remain a loyal Jetstar customer and look forward to travelling on one of their all day, every day low fares later this month,” he said.

Jetstar declined to comment.

Jeremy Wilkinson is an Open Justice reporter based in Manawatū covering courts and justice issues with an interest in tribunals. He has been a journalist for nearly a decade and has worked for NZME since 2022.