CONSUMER, TRADER AND TENANCY TRIBUNAL
General Division
APPLICATION NO:
GEN 07/44282
APPLICANT:
Colin Stephenson
RESPONDENTS:
Flight Centre Ltd. and
Club Mediterranee (Australasia) Pty Ltd
APPLICATION:
Application in General Division for compensation in
the sum of $25,000.00 for damages arising from
alleged breach of contract and alleged misleading
and deceptive conduct:
HEARING:
13 December 2007
APPEARANCES:
The applicant was represented by Mr Bernard Sharp
of Counsel instructed by Ms Sally Webber of Cordato
Partners.
The first respondent, Flight Centre Ltd, was
represented by Mr John Whateley.
The second respondent, Club Mediterranee
(Australasia) Pty Ltd was represented by Mr Cliff
Savala, solicitor, of Moray & Agnew.
ISSUES:
LEGISLATION:
Whether first and/or second respondent in breach
of contractual obligations in respect of the services
provided to the applicant and his travelling
companions, whether the first andlor second
respondent engaged in misleading or deceptive
conduct in regard to representations made to the
applicant, whether the applicant is entitled to
recover damages on behalf of his travelling
companions, not being parties to the application.
Fair Trading Act 1987, s.42,68
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ORDERS
On the evidence available to me I order the first respondent, Flight Centre Ltd, to
pay to the applicant, Colin Stephenson, the sum of $500.00 immediately.
I further order that the second respondent, Club Mediterranee (Australasia)
Pty Ltd, pay to the applicant, Colin Stephenson, the sum of $4,000.00
immediately.
The parties shall pay their own costs.
REASONS FOR DECISION
APPLICATION
This application was filed in the Tribunal on 29 August 2007. On the application
the applicant sought orders for a sum of money "between $10,000.00 and
$25,000.00" arising from a holiday taken in December 2005.
The matter came before Member Williams on 4 October 2007. At that time all
parties were present. Leave was granted to the parties to be legally
represented and directions were made for exchange of documents. The parties
were directed to file written submissions on jurisdiction and other legal issues.
The matter was next listed before Deputy Registrar Isaac on 11 December
2007 for return of summons and was listed for hearing before me on 13
December 2007.
At the hearing, the parties were represented as noted above. Pursuant to the
provisions of the Consumer, Trader and Tenancy Tribunal Act 2001, s.54, the
parties were encouraged to resolve the dispute by conciliation. However, as
those efforts were unsuccessful the matter proceeded to a hearing. At the
conclusion of the hearing the matter was adjourned for a reserved decision.
This is my decision and the reasons for it.
JURISDICTION
It was submitted on behalf of the first respondent that the contract sum was
partly paid by Mr Bondi, a resident of Western Australia. To that extent it was
argued the contract was partly formed in another state for services supplied
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outside of New South Wales and the Tribunal therefore has no jurisdiction to hear
and determine that part of the claim relating to services provided to Mr Bondi.
The applicant's response to that submission was that it was only the applicant
who had contracted with the first respondent. The contract was entered into in
relation to services to be provided for the applicant and his three travelling
companions. The services were invoiced to the applicant. The fact that Mr Bondi
paid for some of the services was irrelevant to the issue of with whom the
respondent had contracted.
In the alternative, it was argued that should the Tribunal determine,that part of the
contract was formed outside of New South Wales, the applicant was entitled to
commence proceedings and recover damages for his whole party, not just for
himself. The applicant relied on the authority of Jackson v Horizon Holidays Ltd
[1975] WLR 1468, per Lord Denning MR in support of this proposition.
APPLICANT'S SUBMISSIONS
It was the applicant's submission that he had entered into two separate contracts
with the first respondent. The first was a. contract in which the first respondent
was to provide advice in regard to the proposed holiday: The second was for
provision of various travel services from several suppliers, including the second
respondent.
The first respondent had provided advice that the hotel in question was luxury
standard as requested, and that a honeymoon suite was not available but that the
next best room was booked. The advice given, it was submitted, was in breach of
the implied warranties under s.40S(1) and (2) of the Fair Trading Act 1987. In
addition the advice was misleading and deceptive, contrary to the provisions of
the Fair Trading Act 1987, s.42.
In regard to the second respondent it was argued that the applicant had
contracted with the second respondent through its agent the first respondent. The
contract was to provide luxury standard accommodation and' that a honeymoon
suite or next best room was required as the applicant was intending to marry on
the holiday. In entering into this contract the applicant had relied on
representations made by the second respondent on its website as well as those
of its agent, the first respondent.
The standard of accommodation provided was not "luxury" as contracted.
The applicant claimed for damages against both respondents, jointly and
severally, for breach of contract, including for distress and disappointment and for
damages pursuant to the Fair Trading Act, s.68.
The following witnesses gave evidence on affirmation in support of the
application and were cross examined on their evidence:
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Mr Colin Stephenson, Mrs. Palmina Stephenson.
The applicant relied on the following relevant documentary evidence:
• Statements of Colin Stephenson dated 16 October 2007 and 6 December
2007.
+ Statement of Palmina Stephenson dated 23 October 2007.
• Statement of Brian Bondi dated 23 October 2007.
• Statement of Lilliana Merendino dated 23 October 2007.
• Printed copy of relevant Club Med Website.
• Correspondence between Flight Centre and the applicant confirming details
for all four travellers.
• Tax invoice/statement issued by Flight Centre to applicant for all four
travellers in the sum of $25,876.32.
• Vouchers for accommodation.
• Correspondence between the parties.
• Written submissions.
The applicant relied on the following cases in support of the application;
• Keppel-Palmer v Exsus Travel Ltd. and anor. [2003] All ER (D) 183 Jun.
• Jackson v Horizon Holidays Ltd.[1974]EWCA Civ 12 per Lord Denning MR
• Beveridge v Great Southern Railway Travel Pty Ltd. [2003] NSWCTTT 194.
FIRST RESPONDENTS SUBMISSIONS
Mr Whateley, on behalf of Hight Centre Ltd ("Flight Centre"), made relevant
submissions to the following effect.
Flight Centre acts only as an agent of the various service providers from
which the public purchase travel services. That fact is specifically made clear to
the public in Flight Centre's booking terms and conditions.
In the present case, it was argued that no representations were made by Flight
Centre employees regarding the standard of luxury of the Club Med Resort but
rather the applicant was encouraged to make his own enquiries. Furthermore,
the amount paid by the applicant was $11,899.86 including $6,423.28 for
services unrelated to the accommodation charges at Club Med. The first
respondent called Ms Carolyn Clark who gave evidence on
affirmation and was cross-examined on her evidence. In addition, the
applicant relied on the following:
• Tax invoice statement issued to the applicant (including statement of
booking terms and conditions);
• Itinerary for all four travellers;
• Evidence of payment of $13,775.06 by Mr Brian Bondi for services
provided for. himself and Ms Merendino;
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Statement of Carolyn Clark (undated and unsigned);
Written submissions.
SECOND RESPONDENT'S SUBMISSIONS
Mr Cliff Savala,.solicitor for Club Mediterranee (Australasia) Pty Ltd ("Club
Med"), made relevant submissions to the following effect.
"Club Med" is not the owner of the subject resort at St. Moritz and therefore
any claim made against the second respondent must be in its capacity as .
agent.
The agreement between the applicant and Club Med was made subject to the
terms and conditions in the current Club Med brochure. No contact was made
between the applicant and Club Med except through the Website. Accordingly
Club Med was unaware of the applicant's requirements. The services provided
were in accordance with the descriptions set out on the Website. The "four
trident" rating for the resort was an internal Club Med
rating system which was intended to establish the resort was at the highest
level of accommodation provided by Club Med.
There was no misrepresentation by the second respondent. In regard to the
description of bedding it was available on the Internet and was normal for
European resorts. The applicant received the best accommodation available.
The description as "luxury" was mere puffery and not intended to mislead the
applicant in any way.
Ms Kristie Green provided an affidavit in support of the second respondent.
Ms Green was made available to be cross-examined on her statement, but
was not required to give evidence.
The second respondent relied on the following documents:
Website information about Club Med resorts•generally, a number of
specific resorts and Roi Soleil at St. Moritz;
Correspondence between Club Med and the first respondent and between
Club Med and the applicant;
Description of the "Trident Classification System" used by Club Med;
Concise Oxford dictionary definition of "luxury";
Written submissions.
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FINDINGS
Jurisdiction
I am satisfied on the evidence that the contract for all four travellers was entered
into between the applicant and the first respondent as agent of the second
respondent (and others). The fact that part of the contract sum was paid by Mr
Bondi does not alter that fact. The contract was therefore entered
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into for the supply by the first respondent (as agent on behalf of a number of
suppliers) to the applicant of various travel services.
Consequently, the claim satisfies the definition of a "consumer claim" as that term
is defined in the Consumer Claims Act 1998
consumer claim means:
(a) a claim by a consumer for the payment of a specified sum of money, or
(h) a claim by a consumer for the supply of specified services, or
(c) a claim by a consumer for relief from payment of a specified sum of money, or
(d) a claim by a consumer for the delivery, return or replacement of specified goods
or goods of a specified `description, or
(e) a claim by a consumer for a combination of two or more of the remedies referred
to in paragraphs (a)-(d),
that arises from a supply of goods or services by a supplier to the consumer, whether
under a contract or not, or that arises under a contract that is collateral to a contract
for the supply of goods or services
It is not disputed that the contract with the first respondent (acting as agent of
_others) was entered into within New South Wales and I am therefore satisfied the
Tribunal has jurisdiction to hear and determine the application.
Breach of Contract
Although the "booking terms and conditions" of the first respondent were not
attached to the copy of the "tax invoice/statement" provided in the applicant's
documents, it was not disputed that those terms and conditions were provided to
the applicant as per the first respondent's filed documents. The applicant
was therefore made aware that he was not contracting directly with the first
respondent on its.own behalf.
The application, to the extent that it alleges a breach of contract by the first
respondent must therefore fail.
The second respondent, if I understand its argument correctly, also claims that
there cannot have been a breach of contract with it because the resort was not
owned by it. I do not accept that argument. 'Part of the contract sum -accepted
by the first respondent was paid to the second respondent and a voucher issued
for provision of accommodation services at Roi Soled St. Moritz. The fact that
the second respondent could only meet its obligation by contracting with the
owner of the resort does not alter the fact that there was a direct contract
between the.applicant and the second respondent.
The essence of whether the contract included any terms in regard to the
standard of accommodation or specific requirements for the applicant can be
determined by consideration of the relevant supporting documents and the
agreement made with the second respondent's agent (in this case Ms Clark
employed by the first respondent).
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There is no dispute that the applicant was referred to the second respondent's
Website and that on that Website there was a description of Club Med St. Moritz
Roi Soleil as being rated as "four trident" by Club Med which Club Med
considered to be [one of its] "finest villages, offering luxury of the highest
standard".
There is disputation between the parties as to what was said during the
discussions between Ms Clark and Mr Stephenson. On the whole, I accept the
evidence of Mr Stephenson to be more probably an accurate recollection of what
transpired. I reach that conclusion because of a number of factors including the
importance of the matter to Mr Stephenson at the time (he was arranging a
holiday during which he. intended to .marry his fiancee-and it would accordingly
be- their honeymoon), the very large sum of money paid for the holiday
(admittedly for four persons and including other services in addition to the
accommodation charges) and the fact that Ms Clark dealt with. such enquiries
routinely and had no particular reason to remember the discussion preceding this
transaction until the complaints that were made some considerable time later.
The delay in complaining by the applicant I find entirely understandable in view of
his illness on returning from the trip.
I am satisfied that Ms Clark said nothing to dissuade the applicant from accepting
the description of the resort .as "the height of luxury" that she saw on the second
respondent's Website. I am satisfied therefore that it was a term and condition of
the contract between the applicant and the second respondent that the
accommodation at the St. Moritz resort would be at a standard that could
properly be described as "luxury of the highest standard" and "the height of
luxury".
In respect of the claim that it was also a term of the contract that the applicant
was to be provided with a honeymoon suite, I am satisfied on the applicant's own
evidence, given during cross-examination, that that was not the case. The
applicant was well aware that a honeymoon suite was not available but agreed
that the next best room (described as "summit view room") would be available.
There may have been some expectations in the mind of the applicant about what
the next best room involved, but I am satisfied there was no breach of contract
by the second respondent in that regard.
Turning to the question of whether what was provided by the second respondent
did reasonably meet the description of "height of luxury". The second respondent
relied on the Concise Oxford dictionary definition of "luxury" which was inter-alia
"choice or costly food, dress, furniture, etc.: thing that one enjoys, thing
desirable for comfort or enjoyment but not indispensable..."
The "height of luxury" or "luxury of the highest standard" is, I am satisfied, simply
an embellishment to indicate one should consider. the upper levels rather than
middle or lower standards of luxury as that being described:, I do not accept Mr
Savala's argument that the term is a mere puff. It is used quite deliberately by the
second respondent to distinguish its "four trident" resorts
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from other less desirable resorts and although it may well be criticised for
being a subjective term was nevertheless intended to persuade prospective
consumers that the quality of the accommodation was very superior.
What did the applicant and his party experience? Was the accommodation
in every way of the superior standard that the applicant contracted for?
The applicant's evidence was that the "summit view. room" provided by the
second respondent was "very basic". The room was very small, "dingy" and
equipped with single beds rather than the Queen or King size bed one would
-expect. It. had one chair, no no, .:facilities, no bath tube or bath robes, no full
length mirror, no iron or laundry service, no facility for making outside calls from
the room. In addition, the other services provided by the resort fell short of
being "luxury of the highest standard". There was no valet parking, a fifteen
minute wait for service at the bar and insufficient seating to accommodate all
guests in the dining room were all experienced. Indeed, , the party of four
found it necessary to have their Christmas dinner off their laps due to lack of
dining room accommodation.
Faced with these problems the applicant made genuine efforts to find alternate
accommodation,, but due to the time of year that was not possible.
One can argue about the subjective nature of the term "luxury" as applied to a
hotel or resort. However, I am satisfied the description given by the applicant, if
accurate, falls far short of any reasonable understanding of "luxury" much less
"luxury at the highest standard". There is no evidence to indicate the
applicant's description was in any way inaccurate.
I am satisfied therefore that the second respondent is in breach of the term of
its contract to provide to the applicant for himself and his party,
accommodation at the highest standard of luxury.
Misrepresentation
The elements of a finding of a breach of the Fair Trading Act 1987 s.42 for
which the applicant is entitled to be compensated under s.68 are:
1. That the respondent made a representation that was inconsistent with the
truth;
2. That the representation 'led the applicant into error or misconception;
3. The applicant relied on the representation in deciding to undertake a
course of action (or to refrain from doing so);
4. The applicant suffered a loss as a result of that action.
In this. case, the second respondent has made a representation on the
Website in regard to the standard of accommodation to be expected at the St.
Moritz resort. Furthermore, lam satisfied the first respondent's representative
made representations to the applicant that reinforced the impression he had
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received from reading the second respondent's Website. Whilst those
representations were not as specific or detailed as the information received from
the Website they nevertheless confirmed for the applicant the impression he had
received already.
The standard of luxury accommodation was, I am satisfied, absolutely critical to
the applicant's choice of destination. This was an important occasion for him and
his fiancee. Relying on the representations made directly by the second
respondent and reinforced by the first respondent the applicant made the choice
to travel to St. Moritz Club Med.
the reasons expressed. above-l am-satisfied••-the:•°resort was not-"luxury of
the highest standard" and that accordingly the applicant was led into error in
relying on the misrepresentations made to him. He is entitled to be compensated
for the loss or damage suffered pursuant to s.68.
For
Damages
Firstly, l should consider the argument put to me by Mr Sharp that the applicant
is not limited to a claim for damages suffered by himself only, but may seek
damages that were suffered by the other members of his party had they been
able to bring the claim.
I have had the benefit of reading Lord Justice Denning's judgement in Jackson v
Horizon Holidays Ltd [1975] WLR 1468 to which i was referred. That decision, at
first reading, seems at odds with the jurisdictional limit arising from the definition
of a "consumer claim" under the Consumer Claims Act 1998. However, the
circumstances of that case and this one are in many respects very similar and I
think the principle expressed by Lord Justice Lush in Lloyd's v Harper [1880] 16
Ch D. at 321 and quoted by Lord Denning should be applied here. That is:
`l consider it to be an established rule of law that where a contract is
made with A for the benefit of B, then A can sue on the contract for the
benefit of B and can recover all that B could have recovered if the
contract had been with B himself'.
In this case the applicant's wife and companions could not bring an action in the
Tribunal under the definition of a "consumer claim" as they were not the
contracting parties. Nevertheless, Mr Stephenson is entitled to recover any
damages that they would have been able to recover had they been able to bring
the action.
What damages then is the applicant entitled to? There is no evidence of any
specific damages arising from the breach of contract. For example, there is no
evidence of the difference in, price between the accommodation that was
received and that for which the applicant had contracted. The damages must
therefore be non-economic in nature.
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In Jarvis v Swan Tours Ltd [1972] 3 WLR 934, it was determined that damages
for the loss of a holiday may include damages for mental distress, inconvenience,
upset, disappointment and frustration caused by loss of the holiday. That
principle was affirmed particularly in contracts made for the purpose of enjoyment
in Baltic Shipping Company v Dillon [1993] CLR 344.
I am satisfied that the disappointment of the applicant and Mrs. Stephenson was
both genuine and substantial. The evidence was that they did all they could to
enjoy themselves rather than allow the holiday to. be ruined. Nevertheless they
did not enjoy the standard of accommodation for which they had contracted and
which had been represented to them. Similarly Mr Bondi and Ms- Merendino
were disappointed, but perhaps not to theiextent of the applicant and Mrs.
Stephenson. It is always difficult to put a figure on these issues, but 1 think the
sum of $800.00 each for Mr Bondi and Ms Merendino is appropriate and the. sum
of $1,200.00 each for Mr and Mrs. Stephenson. In addition, I allow the sum of
$500.00 to the applicant for the stress and embarrassment he suffered as being
the person who had made the arrangements on behalf of the others.
The total compensation is therefore $4,500.00. I have been asked to make a joint
and several order. However, no finding of a breach of contract was made in
regard to the first respondent and the first respondent's misrepresentation was
not direct and deliberate as the second respondent's was, but was more by way
of confirmation of information that the first respondent had no way of knowing
was correct or incorrect and which turned out to be incorrect.
I am satisfied therefore that the first respondent should pay the sum of $500.00
and the balance, being $4,000.00 ' should be paid by the second respondent.
Costs
The applicant's representative requested an order for costs without elaboration
on the merits of that application. Mr Savala for the second respondent submitted
that the parties should pay their own costs as there were no exceptional
circumstances. No submission on costs was made by the first respondent who
was not legally represented.
Whilst it is not necessary in this case for there to be exceptional circumstances
for an award of costs (the parties having been granted leave to be legally
represented), I am not satisfied that a case has been made out for such an
award. The fundamental ethos of the Tribunal is that the process should be
informal and inexpensive. The Consumer Trader and Tenancy Tribunal Act
2001, s.53 provides that the starting position is that parties pay their own costs.
Although the parties were granted leave to be legally represented not all of them
were, and I am satisfied the outcome would have been unlikely to be any
different if the parties had represented themselves. Although the. applicant has
been successful, the outcome is nowhere near the amount sought.
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In all the circumstances l am not satisfied that this is a case in which the
Tribunal should exercise its discretion to make a costs order.
Jeffery Smith
Consumer, Trader and Tenancy Tribunal
15 February 2008
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