The finding represents the first successful cruise ship class action in the world and the company involved is being urged to settle with other passengers rather than proceeding with lengthy litigation.
Susan Karpik, a passenger from the ill-fated Ruby Princess cruise that left 28 people dead from COVID-19 in the early days of the pandemic, was the lead plaintiff in a class action against Australian charter company Carnival.
Susan Karpik was the lead plaintiff in the class action.
Carnival trades under the Princess Cruises name and is the operator of the Ruby Princess, a Bermuda-registered vessel.
Ms Karpik sought damages for personal injuries, distress and disappointment to the value of more than $360,000.
Her individual claim revolved around the stress and disappointment caused by the illness of her husband Henry, who had to be placed in an induced four-week coma after contracting the virus, and his ongoing care.
In total, 663 positive cases were reported among the 2641 passengers, including 1679 Australians on board. Twenty-eight people died during the outbreak.
The Ruby Princess sailed from Sydney for New Zealand on a 13-day round trip, but returned 11 days later when Australia's borders were shut in the early days of the pandemic in March 2020.
Justice Angus Stewart found the cruise company knew or ought to have known about the heightened risk of COVID-19 infection on the vessel.
He said the company owed Ms Karpik a duty to take reasonable care for her health and safety, including the risk of harm from the virus.
"To proceed with the cruise carried a significant risk of a coronavirus outbreak, with possible disastrous consequences, yet they proceeded regardless," he said on Wednesday.
"To cancel the cruise would not have been unduly burdensome (and) a reasonable person in (the company's) position would have cancelled the cruise.
"The respondents were therefore negligent and in breach of their duty of care."
Twenty-eight people on the Ruby Princess died during the outbreak.
However, Justice Stewart found Ms Karpik did not suffer from long COVID and as a result did not meet the non-economic loss threshold required to recover personal damages.
She was successful on a claim for out-of-pocket medical expenses totalling $4,423 plus interest.
Justice Stewart found Ms Karpik was entitled to disappointment damages to compensate for the fact that the cruise was not a "happy and relaxing holiday" as promised.
However, as Carnival had already refunded all passengers the cost of the cruise, the judge found the company had already satisfied that claim.
Ms Karpik said she was pleased with the court's finding and hoped it would bring some comfort for other passengers.
"For me and other passengers, we've been through the mill and back, it's been a long journey," she told reporters.
"I do hope (the company) will take the time to read the information we've given them about our experiences and take better care of their customers."
The former nurse added she was not disappointed the court had not awarded her damages.
Shine Lawyers joint head of class actions Vicky Antzoulatos said the findings were "a long time coming" and a comprehensive victory for passengers.
"This is the first successful cruise ship class action in the world, so other companies will be paying attention to this case," she said.
Other passengers would still need to prove their individual damages, unless Carnival settled all of the claims.
Given the comprehensive legal findings against the operator, Ms Antzoulatos urged the company to resolve all compensation claims without further court action.
AAP has contacted Carnival for comment.
