Interim judgment handed down by Supreme Court in X v Kuoni Travel Ltd (ABTA intervening) [2019] UKSC 37

JUSTICES: Lord Kerr, Lord Hodge, Lord Lloyd-Jones, Lady Arden, Lord Kitchin

The Supreme Court has today handed down an interim judgment in X v Kuoni Travel Ltd (ABTA intervening).

The effect of the judgment is to make a preliminary reference to the Court of Justice of the European Union (CJEU) requesting clarification of principles of EU law.

The response of the CJEU will determine the approach that is appropriate to package travel cases brought under the 1992 Regulations concerning criminal acts by employees of hotels and other suppliers of holiday services.

William Audland QC, Nina Ross and Achas Burin of 12 King’s Bench Walk appear in the case on behalf of the Respondent upon instructions from Gary Tweddle at MB Law.

The interim judegment can be found here: https://www.supremecourt.uk/cases/docs/uksc-2018-0102-judgment.pdf

The Supreme Court press release can be found here: https://www.supremecourt.uk/cases/docs/uksc-2018-0102-press-summary.pdf

Facts

This is a package travel claim against the Respondent tour operator for breach of contract at common law and the Package Travel, Package Holidays and Package Tours Regulations (SI 1992/3288) (‘the 1992 Regulations’).

The Appellant and her husband were on a package holiday in Sri Lanka between 8 and 23 July 2010. The package was booked through the Respondent tour operator, Kuoni. In the early hours of 17 July 2010, the Appellant was making her way through the grounds of the Hotel. She came across an employee ‘N’. He was employed as an electrician and was known to the Appellant as a member of the maintenance staff. N was on duty and wearing his Hotel uniform. He offered to show her a shortcut to reception. In fact, he took her via the engineering department where he raped and assaulted her.

The Appellant brought a claim for breach of contract and under the 1992 Regulations. The claim was dismissed at first instance and by the Court of Appeal. Upon appeal to the Supreme Court, the Association of British Travel Agents made submissions as an intervener.

Although the 1992 Regulations have ceased to affect package travel claims since they were replaced in 2018, they continue to apply to this case (which was brought prior to the repeal). The Regulations implement Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (‘the Directive’).

Issues

The issues in the case, upon appeal to the Supreme Court, were as follows:

  1. Did the index assault constitute improper performance of the obligations under the holiday contract?
  2. If so, did the Respondent have a defence under the law of contract and/or Article 5(2), third alinea of the Directive?

This reads as follows: “With regard to the damage resulting for the consumer from the failure to perform or the improper performance of the contract, member states shall take the necessary steps to ensure that the organizer and/or retailer is/are liable unless such failure to perform or improper performance is attributable neither to any fault of theirs nor to that of another supplier of services, because: … such failures are due to … an event which the organizer and/or retailer or the supplier of services, even with all due care, could not foresee or forestall.”

Preliminary Reference to the CJEU

The CJEU is asked to provide clarification on a matter of EU law. As the judgment makes clear at paragraph 16 the clarification is relevant only to the second of the two issues in the case, namely the proper interpretation of the statutory defence in Article 5 of the Directive. Judgment on the first issue is reserved pending the outcome of the reference.

For the purposes of this reference, the CJEU is asked to assume that guidance by a member of the hotel’s staff of the Appellant to the reception was a service within the “holiday arrangements” which Kuoni had contracted to provide and that the rape and assault constituted improper performance of the contract. In other words, the CJEU is asked to proceed on the assumption that primary liability is made out under issue 1.

The following questions are referred to the CJEU:

  1. Where there has been a failure to perform or an improper performance of the obligations arising under the contract of an organizer or retailer with a consumer to provide a package holiday to which Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours applies, and that failure to perform or improper performance is the result of the actions of an employee of a hotel company which is a provider of services to which that contract relates:
    1. is there scope for the application of the defence set out in the second part of the third alinea to article 5(2); and, if so,
    2. by which criteria is the national court to assess whether that defence applies?
  2. Where an organizer or retailer enters into a contract with a consumer to provide a package holiday to which Council Directive 90/314/EEC applies, and where a hotel company provides services to which that contract relates, is an employee of that hotel company himself to be considered a “supplier of services” for the purposes of the defence under article 5(2), third alinea of the Directive?