ON APPEAL FROM DARTFORD COUNTY COURT
District Judge Glover
Strand, London, WC2A 2LL
B e f o r e :
LADY JUSTICE BLACK
LORD JUSTICE TOMLINSON
| Sean Titshall
|- and -
|Qwerty Travel Limited
Mr Dan Saxby (instructed by Plexus Law) for the Respondent
Hearing date : 29 November 2011
Crown Copyright ©
Lord Justice Tomlinson :
"Whereas the Secretary of State is a Minister designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to measures relating to consumer protection as regards package travel, package holidays and package tours;
. . .
2....1) In these Regulations -
"brochure" means any brochure in which packages are offered for sale;
"contract" means the agreement linking the consumer to the organiser or to the retailer, or to both, as the case may be;
"the Directive" means Council Directive 90/314/EEC on package travel, package holidays and package tours;
"offer" includes an invitation to treat whether by means of advertising or otherwise, and cognate expressions shall be construed accordingly;
"organiser" means the person who, otherwise than occasionally, organises packages and sells or offers them for sale, whether directly or through a retailer;
"the other party to the contract" means the party, other than the consumer, to the contract, that is, the organiser or the retailer, or both, as the case may be;
"package" means the pre-arranged combination of at least two of the following components when sold or offered for sale at an inclusive price and when the service covers a period of more than twenty-four hours or includes overnight accommodation:-
(c) other tourist services not ancillary to transport or accommodation and accounting for a significant proportion of the package,
(i) the submission of separate accounts for different components shall not cause the arrangements to be other than a package;
(ii) the fact that a combination is arranged at the request of the consumer and in accordance with his specific instructions (whether modified or not) shall not of itself cause it to be treated as other than pre-arranged;
"retailer" means the person who sells or offers for sale the package put together by the organiser.
(2) In the definition of "contract" in paragraph (1) above, "consumer" means the person who takes or agrees to take the package ("the principal contractor") and elsewhere in these Regulations "consumer" means, as the context requires, the principal contractor, any person on whose behalf the principal contractor agrees to purchase the package ("the other beneficiaries") or any person to whom the principal contractor or any of the other beneficiaries transfers the package ("the transferee").
Application of Regulations
3.(1) These Regulations apply to packages sold or offered for sale in the territory of the United Kingdom.
. . .
Liability of other party to the contract for proper performance of obligations under contract
15.(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."
"Whereas the national laws of Member States concerning package travel, package holidays and package tours, hereinafter referred to as 'packages', show many disparities and national practices in this field are markedly different, which gives rise to obstacles to the freedom to provide services in respect of packages and distortions of competition amongst operators established in different Member States;
Whereas the establishment of common rules on packages will contribute to the elimination of those obstacles and thereby to the achievement of a common market in services, thus enabling operators established in one Member State to offer their services in other Member States and Community consumers to benefit from comparable conditions when buying a package in any Member State;
. . .
Whereas disparities in the rules protecting consumers in different Member States are a disincentive to consumers in one Member State from buying packages in another Member State;
Whereas this disincentive is particularly effective in deterring consumers from buying packages outside their own Member State, and more effective than it would be in relation to the acquisition of other services, having regard to the special nature of the services supplied in a package which generally involve the expenditure of substantial amounts of money in advance and the supply of services in a State other than that in which the consumer is resident;
Whereas the consumer should have the benefit of the protection introduced by this directive irrespective of whether he is a direct contracting party, a transferee or a member of a group on whose behalf another person has concluded a contract in respect of a package;
. . .
Whereas if, after the customer has departed, there occurs a significant failure of performance of the services for which he has contracted or the organizer perceives that he will be unable to procure a significant part of the services to be provided; the organizer should have certain obligations towards the consumer;
. . .
Whereas both the consumer and the package travel industry would benefit if organizers and/or retailers were placed under an obligation to provide sufficient evidence of security in the event of insolvency;"
"Our company is Qwerty travel limited. We act only as agents for third party suppliers. On this occasion your suppliers are …………and you are subject to their terms and conditions. You should note in particular that charges will apply if you amend or cancel your booking. Can I confirm that all passengers travelling are UK citizens and that they all hold a full UK 10 year passport, with a minimum of 6 months validity by the date of return."
"11. The brief background circumstances are that Mr Titshall, who was then an amateur boxer, was preparing for an important fight. He wanted to have a break. While watching television at his girlfriend's mother's home, they were looking through Teletext advertisements of last minute holidays. They saw an advertisement placed by this Defendant on Teletext on Sunday, 24th September 2006. The Teletext advertisements are, it would seem ephemeral. They changed from one day to another, as prices are changed, as holidays are purchased and as new offers become available. And so there is no copy of that advertisement to hand. I can, I think, safely find on the balance of what is more likely, that it would have advertised a last-minute get away to Corfu at an inclusive price.
12. What it would probably not have said is that this was a package within the 1992 Regulations, or that it was not a package within those Regulations.
13. Mr Titshall then went to his partner's aunt's home and telephoned the number that he had received from the Teletext advertisement. He spoke with the sales representative at the Defendant. It seems to be the case that he spoke with Mr Adams.
14. Mr Titshall was, of course, minded to make some enquiry about the advertisement and to proceed with the booking. This would involve him and his partner flying to Corfu the following morning, I gather at about 8.30 am, so it was very much at the last minute. On the other hand, Mr Adams had an office procedure which he was required, by his duties as the Defendant's employee, to go through.
15. In my view, the only reliable evidence in the light of the Claimant's understandably limited memory, and in the absence of any contemporaneous written documents, is that provided by the Defendant's systems at the relevant time. I consider it more likely than not that Mr Adams would have had available to him a computer screen to which he was able to input the reference of the holiday in which Mr Titshall was interested. I also consider it more likely than not that the screen would show the items which were being offered for sale to make up the combination which Mr Titshall found attractive, that is to say, the flight and the accommodation. Obviously, in the light of my findings regarding the document at pages 43 and 44, that information would be as to different specific amounts of money.
16. On the balance of what is more likely, I find that Mr Adams gave to Mr Titshall an elementary and simple breakdown of the flight, accommodation and service costs arriving at the bottom line, which was all that interested Mr Titshall. He may well have done so at different points during the telephone conversation. For example, having given an indication for the prices of these elements of the combination, he may then have referred to the charge made by the airline on the return journey and of course, as we may all have experienced, additional charges arising from the use of a credit card.
17. With reference to Mr Adams' witness statement, I do find and accept as a generalised comment that he was personally aware of the importance of dealing with matters of this nature in the way in which his Company required, as not to do so could result in a legal gloss to the arrangements concluded which would not suit the company which employed him.
18. For those same reasons, arising from the lack of contemporaneous documentation and the existence of a system within the Defendant's office, I also find on the balance of what is more likely that Mr Adams went through a short script, along the lines of that which appears at page 41 of the bundle."
"23. In a case such as this, it seems clear that the advertisement to which Mr Titshall responded is an invitation to treat, which does not necessarily form any part of the contractual arrangements concluded between the parties and that, in this case, the offer is made by the telesales operator who offers to sell the combination of contracts to the caller in return for a certain amount of money, and is available for acceptance by the consumer, (Mr Titshall) if he finds the amount of money and the arrangements acceptable.
24. Accordingly, I find that the offer was made on the terms contained in the script, and that offer was accepted by Mr Titshall on those terms. It seems to me that Mr Titshall, therefore, purchased two services at the same time but, as a question of fact, did so separately.
25. In the light of those findings of fact I can turn to the issue as to whether or not there was a sale of a package within paragraph 2 of the 1992 regulations. As Mr Jones so rightly says, there was a pre-arranged combination in the sense clarified by the European Court in the Club Tour case, which I have not read and which has not been presented to me, but which I have seen set out in the ABTA v CAA case, to which I have already referred.
26. Further there were two qualifying components – the flight and the holiday.
27. Thirdly, the arrangements were to prevail for a period of more than 24 hours.
28. Fourthly, there was undoubtedly, on the balance of probabilities, a composite billing which, as Chadwick LJ explains at paragraph 30 of the ABTA case, might be evidence that the services had been sold as a package.
29. However, reverting to my findings of fact as to the nature of the contracts concluded on 24th September, the composite price was not an inclusive price but, rather an aggregate price. In my judgment, no package was sold.
30. It seems to me therefore, with some regret, that the claim must be dismissed."
"The requirement that the components of the package must be sold or offered for sale as a "pre-arranged combination" is met not only where the components are put together by the organiser without input from the customer (typically, the brochure holiday) but also where the components are put together by the organiser in accordance with the specifications of the individual customer (or consumer) or group of customers (typically, the 'customised' holiday) – Club-Tour, Viagrens e Turismo SA v Alberto Carlos Lobo Gonçalves Garrido (Case C-400/00)  ECR I-4051. And the requirement is satisfied not only in cases where the components have been put together and offered for sale by the organiser in advance of any contact with the individual customer but also in cases "where the combination of tourist services is the result of the wishes expressed by the customer up to the moment when the parties reach an agreement and conclude the contract" – ibid, paragraph . It can be seen, of course, that the principle is expressly stated, as proviso (ii), in the definition of "package" in both the Package Travel Regulations and the ATOL Regulations (as amended in 2003). That proviso did not appear in the Directive, which was the text which the Court of Justice was required to consider in the Garrido case."
" . . . the words 'inclusive price' should be given their ordinary and natural meaning. The ordinary and natural meaning of the word 'inclusive' connotes more than a mere arithmetical total of the component parts of a price. If the substance of a transaction is the sale by the travel agent of separate and discrete components of (for example) a holiday, with no one part being connected with or dependent upon any other part (other than that they are sold together), to call the resulting price 'inclusive' is in my view to stretch the ordinary and natural meaning of that word. It is in reality no more an 'inclusive price' than is the total price of goods at the check out of a supermarket. For the sale of a package at an inclusive price the relationship between the component parts of that package must be such as to mean that the consumer is buying and paying for them as a whole: that the sale or offer for sale of one component part is in some way connected with or dependent on the sale or offer for sale of the others."
"25. In many cases – indeed, I suspect, in the majority of cases – the price of the combination will not be the aggregate of the prices for which the components within the combination would have been sold or offered for sale if each component had been sold or offered for sale as a separate service outside the combination. That may be because some of the components (for example, the services of the organiser's local representative) would not be available as a separate service outside the combination. Or it may be because some of the components can be provided more cheaply if provided in conjunction with other components - the hotel may provide a courtesy airport transfer service. Or it may be that, in order to sell the package, the organiser will price attractively: the organiser will offer the package of services at a price which is below the aggregate of the prices which would be charged if the components had been sold separately. In those cases there is unlikely to be difficulty in reaching the conclusion, on the facts, that the components (including flight accommodation) are being sold as a pre-arranged combination and at an inclusive price. The same could be said of cases – which, I suspect, are likely to be rare indeed – in which the price of the combination exceeds the aggregate of the prices for which the components would have been sold or offered for sale separately.
26. The more difficult cases are those in which the price for the whole is equal to the aggregate of the prices for which the components would have been sold or offered for sale separately. The principle is, perhaps, easier to state than to apply in practice. If the components are offered for sale as a pre-arranged combination – albeit that the components are not combined (and, perhaps, not all identified) until "the moment when the parties reach an agreement and conclude the contract" (to adopt the language of the Court of Justice in the Garrido case) – then the price for the combination will be "an inclusive price" notwithstanding that it may have been calculated, arithmetically, by aggregating the prices of the components: that is to say, notwithstanding that the price for the combination is the aggregate of the prices for which each component would have been sold or offered for sale if it had been sold or offered for sale as a separate service outside the combination. The factual question to be resolved – on a case by case basis – is whether the services are being sold or offered for sale as components of a combination; or whether they are being sold or offered for sale separately, but at the same time.
27. The point may be illustrated by examples. Suppose a customer, in London, who wishes to spend a week at a named hotel in, say, Rome. He asks his travel agent what the trip will cost him. The agent ascertains that the cost of the return flight will be £X, the cost of accommodation will be £Y and the cost of the airport transfers will be £Z. Without disclosing the individual cost of each service, the agent offers the customer flights, accommodation and transfers at a price of £(X+Y+Z). The customer accepts without further inquiry. In that case there would be little doubt – as it seems to me – that the services were sold as a pre-arranged combination and at an inclusive price.
28. Now suppose that the agent has informed the customer that the cost of flights will be £X, the cost of accommodation will be £Y and the cost of transfers will be £Z; and has explained to the customer that he can purchase any one or more of those services, as he chooses, without any need to purchase the others. He has explained, in effect, that the customer can choose to purchase the other services elsewhere; or to make other arrangements. In that case – as it seems to me – there would be little doubt that the services are not offered for sale as a pre-arranged combination and at an inclusive price.
29. What, then, if the customer chooses, and contracts for, one of those services. It is plain that that service would not be sold as a pre-arranged combination: it is not sold in combination with any other service. And it is plain that that position would not alter, if having paid for one of those services, the customer subsequently decides to take, and contracts for, another of the services. Nor would the position alter if, after paying for the second service, the customer later decides to take, and contracts for, the third service. And it would make no difference if, having entered into three separate contracts and received three separate invoices, the customer were to pay the three invoices with a single cheque. The position would be the same. There would have been no sale of a pre-arranged combination of components at a single inclusive price. Rather, there would have been three separate sales of independent services, the aggregate of the prices payable for the three separate services being satisfied by a single payment.
30. Nothing in the preceding paragraph is inconsistent with proviso (i) to the definition of "package" in the Package Travel Regulations or the ATOL Regulations ("the submission of separate accounts for different components shall not cause the arrangements to be other than a package") or with the proviso to the definition in the Directive ("The separate billing of various components of the same package shall not absolve the organiser or retailer from the obligations under this Directive"). As the judge explained at paragraph  of his judgment, if the arrangements would otherwise be a "package" – because the services are sold or offered for sale as components of a pre-arranged combination and at an inclusive price – the substance of the arrangements is not altered by invoicing the components separately. But, if the arrangements would not otherwise be a "package" – because the services are, in fact, sold or offered for sale separately – separate billing merely reflects the substance of the arrangements. The most that could be said is that composite billing might be evidence (in the particular case) that the services had been sold as a package.
31. Returning to the second of the examples which I have set out, difficult questions of fact are likely to arise if the customer chooses and contracts for two or more of the services on the same occasion. The principle is not in doubt. If the services are sold or offered for sale as components of a combination, there is a package: if they are sold or offered for sale separately but at the same time, there is no package. The question whether they are sold as components of a combination - or separately but at the same time - is a question of fact. That question may not be easy to resolve in the particular case."
Lady Justice Black:
Lord Justice Longmore: