Dennis Wood and Another v Tui Travel Plc T/A First Choice
| Jurisdiction | England & Wales |
| Judge | Lord Justice Burnett,Lord Justice McFarlane,Sir Brian Leveson, P |
| Judgment Date | 16 January 2017 |
| Neutral Citation | [2017] EWCA Civ 11 |
| Docket Number | Case No: B3/2015/0927 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 January 2017 |
[2017] EWCA Civ 11
THE PRESIDENT OF THE QUEEN'S BENCH DIVISION
( Sir Brian Leveson)
Lord Justice McFarlane
and
Lord Justice Burnett
Case No: B3/2015/0927
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BIRMINGHAM COUNTY COURT
HHJ WORSTER
3YJ60681
Royal Courts of Justice
Strand, London, WC2A 2LL
Grahame Aldous QC and Philip Jones (instructed by Mackrell Turner & Garrett) for the Appellant
Robert Weir QC and Andrew Young (instructed by Irwin Mitchell LLP) for the Respondent
Hearing date: 22nd November 2016
Approved Judgment
The issue in this appeal is whether Mr and Mrs Wood can recover damages, pursuant to the implied condition in section 4(2) of the Supply of Goods and Services Act 1982 ("the 1982 Act"), for acute gastroenteritis suffered whilst staying at the Gran Bahia Principe Hotel in the Dominican Republic in 2011 on an all-inclusive holiday contracted with TUI Travel Plc trading as First Choice ("First Choice"). The implied condition provides that where property in goods is transferred pursuant to a contract in the course of business, the goods must be of "satisfactory quality". His Honour Judge Worster concluded that the supply of food and drink to Mr and Mrs Wood constituted the supply of goods for the purpose of the 1982 Act. He decided that their illness was caused by contaminated food or drink that they were given in the hotel. It was not of "satisfactory quality" for the purposes of section 4(2) because it was contaminated. Mr Wood was awarded damages which included £16,500 for pain, suffering and loss of amenity and Mrs Wood £7,500. It is unnecessary to expand upon the detail of the medical problems they suffered as a result of the gastroenteritis but the levels of damages (which are not the subject of challenge) are sufficient to show that the consequences were serious and not transitory.
First Choice appeal against the finding of liability under the 1982 Act on the basis that the contract did not contemplate that property in the food and drink would be transferred to Mr and Mrs Wood. They suggest that the consumption of food and drink provided at the hotel involved no transfer of property in that food or drink.
The 1982 Act, as its title suggests, is concerned with contracts for the supply of goods and also with contracts for the supply of services. Part I of the Act applies to "Supply of Goods" and Part II to "Supply of Services". At the relevant time, Section 1 provided:
"1 The contracts concerned
(1) In this Act … a "contract for the transfer of goods" means a contract under which one person transfers or agrees to transfer to another the property in goods, other than an excepted contract.
(2) For the purposes of this section an excepted contract means any of the following:-
(a) a contract for the sale of goods; …
(3) For the purposes of this Act … a contract is a contract for the transfer of goods whether or not services are also provided or to be provided under the contract, and (subject to subsection (2) above) whatever the nature of the consideration for the transfer or agreement to transfer."
Section 4 provided:
"4 Implied terms about quality or fitness
(1) Except as provided by this section and section 5 below and subject to the provisions of any other enactment, there is no implied condition or warranty about the quality or fitness for any particular purpose of goods supplied under a contract for the transfer of goods.
(2) Where under such a contract, the transferor transfers the property in goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality.
…"
The implied condition that the goods be of satisfactory quality is the same as is implied by section 14(2) of the Sale of Goods Act 1979 ("the 1979 Act").
The parallel provisions in the 1982 Act relating to the supply of services are sections 12 and 13. As material they provided:
"12 The contracts concerned
(1) In this Act a "contract for the supply of services" means, subject to subsection (2) below, a contract under which a person ("the supplier") agrees to carry out a service.
(2) For the purposes of this Act, a contract of service or apprenticeship is not a contract for the supply of a service.
(3) Subject to subsection (2) above a contract is a contract for the supply of a service for the purposes of this Act whether not goods are also –
(a) transferred or to be transferred, or
(b) bailed or to be bailed by way of hire,
under the contract and whatever the nature of the consideration for which the service is to be carried out.
13 Implied term about care and skill
In a contact for the supply of a service, where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill."
There is no dispute that food is capable of being "goods" for the purposes of the 1982 Act, a term with a wide definition in section 18.
The Facts
First Choice is a substantial package holiday provider. Mr and Mrs Wood booked a two week holiday, to celebrate their fortieth wedding anniversary, departing from Gatwick Airport on 30 March 2011 and returning a fortnight later. The price was paid in advance. First Choice agreed to provide or arrange return flights to the Dominican Republic, transfers to the hotel, accommodation together with the board element described as "all inclusive". That meant that all food and drink would be provided by the hotel without Mr and Mrs Wood being responsible for paying anything for it locally. Unsurprisingly, there were no terms or conditions in the contract which concerned themselves with the question of property in the food and drink provided, and when (or whether) it passed to the customers, any more than there are in the terms or conditions upon which customers purchase a meal in a restaurant or bed and breakfast in an hotel.
The judge accepted that Mr and Mrs Wood consumed only food and drink provided by the hotel. Prior to suffering gastroenteritis they ate consistently from the buffet save for one meal which they ordered from a menu. Mr Wood developed symptoms on the evening of 2 April 2011. He was admitted to hospital three days later and discharged on 9 April. He had suffered a bacterial infection of some sort. Mrs Wood became ill on 11 April 2011. The judge concluded that both suffered the illness as a result of eating or drinking contaminated fare at the hotel.
The Proceedings
The claim was advanced principally under the Package Travel, Package Holidays and Package Tours Regulations 1992 No. 3288 ("the 1992 Regulations"). Those regulations were introduced to implement Council Directive 90/314/EEC on package travel, package holidays and package tours. They govern the circumstances in which a representation in a brochure is binding on a tour operator and requirements of information that must be provided to a customer. They allow a customer to transfer the benefit of the contract to another, void contractual terms allowing the operator to increase prices after the contract has been entered into save for closely defined reasons and limit the scope for altering significant terms. Regulations 14 and 15 govern liability of the tour operator when things go wrong. Regulation 14 is concerned with the position when a "significant proportion of services are not provided". Regulation 15 is concerned with proper performance of the contract:
(1) The other party to the contract is liable to the consumer for the proper performance of the obligations under the contract, irrespective of whether such obligations are to be performed by that other party or by other suppliers of services but this shall not affect any remedy or right of action which that other party may have against those other suppliers of services.
(2) The other party to the contract is liable to the consumer for any damage caused to him by the failure to perform the contract or the improper performance of the contract unless the failure or the improper performance is due neither to any fault of that other party nor to that of another supplier of services, because—
(a) the failures which occur in the performance of the contract are attributable to the consumer;
(b) such failures are attributable to a third party unconnected with the provision of the services contracted for, and are unforeseeable or unavoidable; or
(c) such failures are due to—
(i) unusual and unforeseeable circumstances beyond the control of the party by whom this exception is pleaded, the consequences of which could not have been avoided even if all due care had been exercised; or
(ii) an event which the other party to the contract or the supplier of services, even with all due care, could not foresee or forestall.
(3) In the case of damage arising from the non-performance or improper performance of the services involved in the package, the contract may provide for compensation to be limited in accordance with the international conventions which govern such services.
(4) In the case of damage other than personal injury resulting from the non-performance or improper performance of the services involved in the package, the contract may include a term limiting the amount of compensation which will be paid to the consumer, provided that the limitation is not unreasonable.
(5) Without prejudice to paragraph (3) and paragraph (4) above, liability under paragraphs (1) and (2) above cannot be excluded by any contractual term.
…"
The term "services" is not defined in the 1992 Regulations but has a broad meaning which includes transport, accommodation and ancillary services which would include food and drink provided by an hotel.
The 1992 Regulations provide a wide range of...
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