England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
HHJ McKenna (sitting as a Judge of the High Court)
[2016] EWHC 3090 (QB)

		Royal Courts of Justice Strand, London, WC2A 2LL
		26/04/2018

Lord Justice Longmore :

Introduction

1. On 8^th July 2010 Mr and Mrs X arrived in Sri Lanka for a 15 day package holiday booked through Kuoni Travel Ltd ("Kuoni"). They stayed at the Club Bentota Hotel ("the Hotel"). In the early hours of 18^th July, Mrs X was sexually assaulted by an electrician employed by the hotel. She has sued Kuoni for "improper performance" of the contract she made with Kuoni who organised and sold the package holiday to her. She bases her claim both on her contract with Kuoni and on regulation 15 of the Package Travel, Package Holidays and Package Tours Regulations 1992 ("the regulations") which themselves derive from Directive 90/314/EEC, the European Directive on package travel, package holidays and package tours ("the Directive"). His Honour Judge McKenna, sitting in Birmingham, has held that there was no improper performance or breach of contract; for good measure he also held that, if there was a breach of the regulations, Kuoni had a defence because the sexual assault was an event which the Hotel could not "with all due care foresee or forestall". He also held that if the Hotel had been sued (which it was not) it was not vicariously liable for the sexual assault committed by its employee. He therefore dismissed Mrs X's claim but, had it succeeded, he would have awarded her the (now) agreed sum of £29,000 by way of damages. She now appeals to this court.

The circumstances of the attack

2. After dinner on 17^th July Mr and Mrs X had some drinks in the hotel bar with another couple on the same holiday. When the bar closed at 2.00 a.m. they made their way back to their room. While Mr X sat outside the room, a uniformed hotel employee (now known to be a Mr Nannayakkara to whom I will refer as "N") approached him and asked for a drink and a cigarette which Mr X was happy enough to provide. N told Mr X that he had been deported from Dubai. Mrs X then joined them and, after N had left, Mrs X told her husband she wanted to move rooms because the occupants of a neighbouring room were making a lot of noise. He suggested they should wait until the morning but Mrs X, wanting to move at once, packed a suitcase so she could go to reception and request a change of room.
3. As she was going to the reception, she was approached by N. She told him she was going to reception and he indicated there was a faster route through the grounds of the hotel than the one she was taking and that she should follow him which she did. (She said she trusted him because she "knew" (wrongly as it turned out) that he was a security guard). He led her through a door which he said was a short cut but was in fact the engineering room where, as the judge found, he physically assaulted her and raped her. On leaving the engineering room they bumped into Mr X who had come looking for his wife. She told him what had happened and he reported it to the hotel management, who reported it to the police. A criminal investigation was begun and a police report filed on 21^st July 2010 but nobody appears to know if N was brought to trial or, if so, with what result. It turns out that N was actually an electrician in the employment of the Hotel.

The Contract and the Regulations

4. Mr and Mrs X had a contract with Kuoni. Clause 5.10(b), under the heading "OUR COMMITMENT TO YOU FOR YOUR HOLIDAY ARRANGEMENTS", provided:-

"… we will accept responsibility if due to fault on our part, or that of our agents or suppliers, any part of your holiday arrangements booked before your departure from the UK is not as described in the brochure, or not of a reasonable standard, or if you or any member of your party is killed or injured as a result of an activity forming part of those holiday arrangements. We do not accept responsibility if and to the extent that any failure of your holiday arrangements, or death or injury is not caused by any fault of ours, or our agents or suppliers; is caused by you; … or is due to unforeseen circumstances which, even with all due care, we or our agents or suppliers could not have anticipated or avoided."

5. By reason of regulation 15(5) the contract has to be interpreted in accordance with the regulations which relevantly provide:-

"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.

(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 –

i) the failures which occur in the performance of the contract are attributable to the consumer;

ii) such failures are attributable to a third party unconnected with the provision of the services contracted for, and are unforeseeable or unavoidable; or

iii) such failures are due to

(a) 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 due care had been exercised; or

(b) an event which the other party to the contract or the supplier of services, even with all due care, could not foresee or forestall.

…

(5) Without prejudice to paragraph (3) and paragraph (4) above, liability under paragraphs (1) and (2) above cannot be excluded by any contractual term."

6. Regulation 15 transposes Article 5 of the Directive which provides:-

"1. Member States shall take the necessary steps to ensure that the organizer and/or retailer party to the contract is liable to the consumer for the proper performance of the obligations arising from the contract, irrespective of whether such obligations are to be performed by that organizer and/or retailer or by other suppliers of services without prejudice to the right of the organizer and/or retailer to pursue those other suppliers of services.

2. 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:

- the failures which occur in the performance of the contract are attributable to the consumer,

- such failures are attributable to a third party unconnected with the provision of the services contracted for, and are unforeseeable or unavoidable,

- such failures are due to a case of force majeure such as that defined in Article 4(6), second subparagraph (ii), or to an event which the organizer and/or retailer or the supplier of services, even with all due care, could not foresee or forestall."

Article 4(6) has a definition of force majeure in the context of holiday cancellation.

Mrs X's case

7. Mrs X asserts that Kuoni agreed that services provided pursuant to the package holiday contract were to be properly performed namely that the services would be provided with reasonable care and skill. This was irrespective of whether the services were to be rendered by Kuoni or other suppliers of services. N was providing a service pursuant to the holiday contract namely guiding Mrs X to reception, a service which he (obviously) did not provide with reasonable care and skill. Equally obviously, N as the supplier of that service could easily foresee that his sexual attack was not a proper performance of his services.
8. The judge held that N's actions were not part of the services which Kuoni agreed to provide. He said (referring to N as "the Employee"):-

"The Employee was not the Defendant's supplier, that was the Hotel, and the Employee, when he lured the Claimant into the engineering room, was not discharging any of the duties he was employed to do. The services of an electrician who happened to be employed by the Hotel were not services which the Defendant agreed to provide to the Claimant under the contract. It was not a term of the contract between the Claimant and the Defendant that an electrician would be employed by the Hotel. The highest it can be put is that the Defendant agreed that the Hotel would supply electricity and would, in so doing, take reasonable care and skill. It was no part of the contract between the Claimant and the Defendant that any electrician employed by the Hotel for that particular purpose would also provide the Claimant with general assistance such as showing her a short cut to reception."

Kuoni's obligations

9. Mr Robert Weir QC for Mrs X put his case primarily on breach of contract but also, if necessary, on regulation 15. The regulations do not specify what obligations the contract must contain but merely say that "the other party to the contract is liable to the consumer for the proper performance of the obligations under the contract" whatever they may be. One has therefore to look to the contract with Kuoni to discover what the contractual obligations are, always being aware that the contract is a contract for a package holiday, with package being defined in regulation 2(1) of the regulations as

"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:-

a) transport;

b) accommodation;

c) other tourist services not ancillary to transport or accommodation and accounting for a significant proportion of the package …"

10. The contract contained a description of Club Bentota as a four-star hotel and says the holiday is "ALL INCLUSIVE". It begins

"Where the river meets the sea, Club Bentota meets them both. In tropical palm-fringed gardens on a sandy peninsula, this individual property is great value with lively activities and a leisurely mood.

LOCATION ► Between the Bentota River and the ocean. Approx. three hours drive from the airport followed by short river crossing by boat to the hotel. FEATURES ► Lush gardens lead to the wide expanse of Bentota Beach. Dining options include the Garden restaurant and open-air terrace bar. There's a swimming pool, children's play area, sports facilities including daytime tennis, table tennis, volleyball, billiard room and a selection of watersports, a small boutique and jewellery shop. Regular evening entertainment includes a weekly cultural show, live bands and theme nights. ACCOMMODATION ► 150 rooms, each with airconditioning, twin beds, telephone, television, mini-fridge, shower and balcony or terrace. Standard rooms are small bungalows overlooking the gardens. Deluxe rooms are slightly larger, ground or first floor, with small sitting area, and view of garden or ocean, Suites as Deluxe, more spacious, available on request."

It also says that the holiday includes all porterage, taxes and service charges. The booking conditions are in much smaller print and contain clause 5.10(b) which I have already set out.

11. The critical wording is "we will accept responsibility if … any part of your holiday arrangement is … not of a reasonable standard". Kuoni undertake therefore to provide a holiday of a reasonable standard which itself must be judged against the description of the Hotel as a four star hotel offering the facilities described. Mr William Audland QC for Kuoni submitted that there was no contractual obligation on the hotel (or its staff) to guide guests to the reception. I am not sure about that since ancillary services are expressly referred to in the definition of the package element of a package holiday and the contract provides that "service charges" are included; but I am sure that, if a member of the hotel staff offers to guide a guest to reception that is a service for which Kuoni accept responsibility for that service being done to a reasonable standard. If it is not done to a reasonable standard Kuoni must accept responsibility for that.
12. Mr Audland sought to say that N was not providing a service at all, let alone the service of guiding Mrs X to reception. He relied on the judge's description of N luring Mrs X to the engineering room as a conclusory finding of fact that N was not providing any service at all. But Mrs X thought he was providing a service and had every reason to suppose that he was indeed providing such a service. N's motive in providing the service is nothing to the point.
13. I cannot therefore agree with the implication behind the judge's view that it was no part of the contract between Kuoni and Mrs X that any electrician employed by the Hotel for that particular purpose would also provide Mrs X with general assistance such as showing her a short cut to reception. Formally the judge is no doubt correct in the sense that there was no express term to that effect. But that is not the end of the matter, because Kuoni accepts that the holiday arrangements at the four star hotel which they have selected are to be of a reasonable standard. For such a holiday to be a reasonable standard, hotel staff must be helpful to guests when asked for assistance; all the more must a member of staff, who actually offers assistance, assist the guest in a reasonable way. On no view did N assist Mrs X in a reasonable way when he guided her to the engineering room.
14. I would therefore conclude that the holiday arrangements for Mrs X were not of a reasonable standard and constituted improper performance within regulation 15(2). Kuoni must, subject to any available defences, take responsibility for that. So far, the identity of the supplier of the services is not critical. The Hotel supplies the service of assisting its guests and performs that service by means of its employees. But the question whether N was also supplying the service is critical when it comes to a consideration of the defences. If, as the judge held, it was the Hotel and only the Hotel which was the supplier, Kuoni has a good defence since the improper performance was due neither to Kuoni nor the Hotel because, on the findings of the judge, the failure of proper performance was due to an event which neither Kuoni nor the Hotel, even with all due care, could foresee or forestall. The Hotel did not fail to take up references for N and had no reason to suppose, from past history or any other reason, that he would rape one of the guests. If, however, N was a supplier of the service of assisting, rather than or as well as, the Hotel, then he (as that supplier) could foresee or forestall his own criminal activity.

N as "supplier" of the service

15. Two preliminary points arise on the contract and the regulations. Mr Audland pointed to the word "our" before the word "suppliers" as it appears three times in clause 5.10(b) of the contract and submitted that it appeared to indicate suppliers to Kuoni, which covered the Hotel but not N. The word "our" does not, of course, appear in regulation 15 or Article 5 of the Directive and if the result of construing the words "our suppliers" gives a meaning different from the regulation or the Directive such a meaning would be impermissible. In my view, the word "our" cannot be decisive.
16. Secondly, Mr Audland pointed to the word "or" in regulation 15(2)(c)(ii) which would appear to give Kuoni a defence if the event giving rise to the failure of performance could not be foreseen or forestalled by either the party to the contract (Kuoni) or the supplier whoever that supplier may be. He recognised, however, that such a construction would fly in the face of the overriding requirement of regulation 15(2) and Article 5(2) of the Directive that the improper performance must be due "neither to any fault of that other party nor to that of another supplier of services". Accordingly he submitted that the word "or" in regulation 15(2)(c)(ii) had to be read in a conjunctive sense and effectively had to mean "and" or be understood with the phrase "as the case may be".
17. Mr Weir submitted that the Hotel, while being the supplier of the relevant service of assisting guests in a corporate sense, could only act through its employees or agents or independent contractors. To the extent therefore that the Hotel supplied the service by means of its employee (or any agent or independent contractor), that employee (or agent or independent contractor) was also a supplier of the service.
18. Mr Audland submitted that this was overcomplicated; while there might in theory be more than one supplier, it was the Hotel which on the facts of this case was a supplier and, if the Hotel could not foresee or forestall the rape by N of Mrs X, Kuoni had a defence under both the regulation and the Directive. Otherwise, he submitted, the defence could never work. True cases of force majeure such as a hurricane or an earthquake were catered for by regulation 15(2)(c)(i) and the first limb of the third indent of Article 5(2) of the Directive; if any member of staff was held to be a supplier of the service under Article 15(2), there would never be any scope for the defence under regulation 15(2)(c)(ii).
19. This was denied by Mr Weir who pointed out that there would be plenty of scope for the defence in other cases of failure of performance; the chef or sous-chef who poisoned the guests could rely on (c)(ii) if he or she had no idea and no reason to suspect where the toxic element had come from. Even in cases of deliberate injury, there would be some instances of cases in which the assailant was not performing a service at all and it could only be the Hotel which was the supplier. If, for example, N had lain in wait behind some bushes and then raped Mrs X, he would not be supplying a service and the Hotel could rely on the (c)(ii) defence.
20. These arguments are finely balanced. We were not referred to any relevant authority of the Court of Justice of the European Community. It is necessary to determine the issue as a matter of principle.
21. The principle is that a person who undertakes a contractual liability will often perform his side of the bargain through other persons but the liability remains that of the person assuming the contractual obligation. Any person assuming such liability can always protect his position by insurance or requiring an indemnity (Kuoni did in this case have a contractual indemnity from the Hotel). The principle is well-known to any system of law dealing with contractual obligations; the maxim qui facit per alium facit per se, if Latin may be excused as a pithier expression of principle than English can afford, is familiar to civil as well as common lawyers. As Lord Diplock put it in Photo Production Ltd v Securicor Transport Ltd [1980] AC 827, 848:-

"Where what is promised will be done involves the doing of a physical act, performance of the promise necessitates procuring a natural person to do it; but the legal relationship between the promisor and natural person by whom the act is done, whether it is that of master and servant, or principal and agent, or of parties to an independent subcontract, is generally irrelevant. If that person fails to do it in the manner in which the promisor has promised to procure it to be done, as, for instance, with reasonable care and skill, the promisor has failed to fulfil his own primary obligation."

22. It must, moreover, be remembered that the whole point of the Directive and the regulation which implemented the Directive is that the holiday-maker whose holiday has been ruined should have a remedy against his contractual opposite and that it should be left to the tour operator to sort out the consequences of the ruined holiday with those with whom it has itself contracted who can then sort things out further down the line whether with their own employees or their independent contractor.
23. If this was a case of an independent contractor rather than an employee, it would not be just or fair to conclude that the concept of "supplier" should stop with the Hotel. It should be just the same with an employee. There can be little doubt that some employees should be regarded as suppliers. The captain of a cruise ship, for example, supplies the important service of navigating the ship without exposing it to danger; the fact that he is the employee of the shipping line makes little difference to the holiday makers on board and the travel operators should not be able to deny responsibility, even if the shipping line had taken reasonable steps to procure the services of an experienced captain.
24. This does no more than show that the concept of a supplier may be a question of degree. Neither party showed any enthusiasm for a reference to the Court of Justice of European Community and, although there is good authority for this court to make a reference of its own motion if a reference is in due course inevitable (see O2 Holdings Ltd v Hutchison 3G Ltd [2006] EWCA Civ 1656) it does not seem to me that any such reference would be inevitable in this case.
25. I would, therefore, with great respect to majority judgment be for allowing this appeal. I would only add that, although we agree vicarious liability on the part of the Hotel for N's activities cannot be decisive, I would be far from certain that the Hotel would not be vicariously liable as a matter of English law, for rape by an employee whom the Hotel clothed in its uniform and represented to the world in general was a reliable employee.

Sir Terence Etherton MR and Lady Justice Asplin :

26. Mr Robert Weir QC, for the appellant, put the appellant's case primarily as one of liability for breach of contract on the basis of the express terms of clause 5.10. He advanced a secondary and alternative argument based on regulation 15 of the regulations.
27. It is common ground that the contract was intended to give effect to the regulations. The regulations are, for example, expressly mentioned in clause 2.2 of the contract. They provide for irreducible obligations, which cannot be excluded by contract: regulation 15(5). The regulations, therefore, form part of the background to the contract and are relevant to its interpretation.
28. There are three principal issues which arise on this appeal under the contract: (1) whether the conduct of N formed part of "the holiday arrangements" in clause 5.10(b) for which Kuoni accepted responsibility under the first part of that clause; and (2) if so, whether (a) N or the hotel is to be treated as the "supplier" of that part of the holiday arrangements; and (b) Kuoni avoided liability to the appellant because of the exclusion of liability under the final part of clause 5.10(b) where any failure of the holiday arrangements or injury resulting from the holiday arrangements was due to "unforeseen circumstances which, even with all due care, [Kuoni] or [its] agents or suppliers could not have anticipated or avoided".

Holiday arrangements

29. The first issue is whether Kuoni was contractually liable under the first part of clause 5.10 (b) because, due to fault on its part or that of its agents or suppliers, any part of the holiday arrangements was not of a reasonable standard or the appellant was injured as a result of an activity forming part of those holiday arrangements. On the hearing of the appeal no reliance was placed by the appellant on that latter alternative (i.e. injury as a result of an activity).
30. The regulations, to which clause 5.10(b) is intended to give effect, and the statutorily implied term that the services would be provided with reasonable care and skill pursuant to section 13 of the Supply of Goods and Services Act 1982 are for the benefit of the consumer. Mr Weir emphasised that, accordingly, in interpreting clause 5.10(b) and applying its provisions to the facts of the present case it must be borne in mind that those provisions are intended to provide protection for the consumer.
31. The appellant's case is, quite simply, that N, when he assaulted her, was undertaking a service under the holiday contract in guiding the appellant within the hotel grounds, and his assault manifestly constituted a failure to provide that service to a reasonable standard or with reasonable care and skill. It is irrelevant, on the appellant's approach, how and by whom services were actually provided: so long as the service in question was one which was to be provided with reasonable care and skill under the contract between Kuoni and the appellant, a failure to provide that service would amount to a breach of the contract. The appellant says that the fundamental error of the Judge, which was (in the words of the appellant's skeleton argument) "illogical and flawed as a matter of law", was to focus on whether N was or was not Kuoni's supplier.
32. The appellant says that, so far as the appellant as a guest of the hotel was concerned, the service provided by N at the relevant time was just one aspect of providing hotel guests with assistance with ordinary matters, which included guiding guests around the hotel premises. In support of that proposition, reliance is placed by the appellant on the services which Kuoni itself purchased from the hotel under the accommodation supply contract, namely "accommodation, facilities, amenities, food and drinks and all kinds of services provided for the benefit of the Clients at the Hotel by the Supplier and/or its agents or subcontractors" and the hotel's "House Rules", which specified that all employees were expected to look after guests courteously and to make them comfortable.
33. We do not agree that the Judge's approach was illogical or flawed. Clause 5.10(b) imposed on Kuoni a primary and personal contractual obligation for the provision by itself, its agents and suppliers of the "holiday arrangements" booked by the appellant to a reasonable standard: cf. Wong Mee Wan v Kwan Kin Travel Services Ltd [1996] 1 WLR 38. The expression "holiday arrangements" must be interpreted, in the usual way, objectively, having regard to the terms of the contract as a whole, and attributing to the relevant words the meaning which reasonable persons in the position of the parties would have understood them to mean.
34. The Judge concluded (at para. [44]) that, on its proper interpretation, the expression "holiday arrangements" in clause 5.10(b) did not include a member of the hotel's maintenance team, known to be such to the hotel guest, conducting the guest to the hotel's reception, which was no part of the functions for which the employee was employed. The Judge found as a fact (at para. [36]) that, contrary to the evidence of the appellant, she was aware at the material time that N, who was wearing blue overalls, was not a member of the hotel's security team but was a member of the maintenance team. We agree with the Judge's conclusion on that interpretation of the expression "holiday arrangements". Reasonable people in the position of Kuoni and the appellant would not have understood at the time the contract was made that Kuoni was promising that such activity would be carried out to a particular standard.
35. That is the correct conclusion whether or not, as a matter of the applicable law, the hotel was vicariously liable directly to the appellant for the conduct of N. The appellant contends that the issue of the hotel's vicarious liability is irrelevant. So far as concerns the proper meaning of "holiday arrangements" in clause 5.10(b), we agree. In searching for the correct interpretation of that expression, however, it is material that, on the appellant's interpretation, Kuoni is liable for the conduct of N in executing the service of offering assistance to the appellant, even if the hotel itself was not liable for N's wrongful conduct because that conduct was insufficiently connected with the acts which N was authorised to do as to be properly regarded as being done in the ordinary course of his employment. We do not consider that, at the time the contract between Kuoni and the appellant was made, reasonable persons in the position of the parties would have understood clause 5.10(b) to bear that meaning, any more than if a member of the hotel staff had conducted a group of hotel guests to a particular location, purporting to do so for their assistance, and then shot them all.
36. There is nothing in the regulations which gives a different colour to the meaning of the expression "holiday arrangements" in clause 5.10(b). Regulation 15(1) provides that a package holiday provider, such as Kuoni, 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 the package holiday operator or by other suppliers of services. In the first place, the regulations do not define the expression "the obligations under the contract" in regulation 15(1). It is necessary to look at the express terms of the contract in order to establish what are the relevant contractual obligations.
37. Secondly, the plain purpose of the regulations was, among other things, to provide additional protection and support for the consumer by giving the consumer direct legal recourse against the package holiday operator for a failure in the provision of the promised arrangements to a reasonable standard and so avoid the need for the consumer to sue one or more of the foreign suppliers of such arrangements. It was not to facilitate a claim against a package tour operator for wrongful conduct by an employee of a supplier even if that conduct was not part of the role in which he was employed and even if the supplier would not have been vicariously liable under either the consumer's domestic law or the foreign law applicable to the supplier. That is demonstrated by the exclusion of liability of the package holiday operator under regulation 15(2)(c)(ii) where the failure to perform the contract or the improper performance of the contract is due to an event which neither the package holiday operator nor the supplier of the services, even with all due care, could have foreseen or forestalled.

Supplier

38. In any event, we consider that the Judge was also right to hold that Kuoni is not liable under either the express terms of clause 5.10 (b) or regulation 15 since N was not a "supplier" within the meaning of those provisions. The Judge correctly held (at para. [44]) that the hotel, and not N, was the supplier of any services performed by N.
39. Under clause 5.10(b) Kuoni accepted responsibility for the failure of "our" agents or suppliers. It is not contended that N was an agent of Kuoni. Kuoni had no direct relationship of any kind with N. Its contractual relationship was with the hotel for the provision of hotel accommodation and services. On the face of it, the word "our," which governs the word "supplier" in clause 5.10(b), denotes a direct contractual or promissory relationship between Kuoni and the supplier of the holiday arrangements.
40. Again, there is nothing in regulation 15 to suggest some other meaning of the word "supplier" in clause 5.10(b) or the expression "supplier of services" in regulation 15 itself. The express reservation in regulation 15(1) of "any remedy or right of action which [the package holiday operator] may have against [the] suppliers of services" is consistent with a direct relationship between the operator and the supplier and, indeed, may be said to be indicative of an assumption that there would be such a relationship. In a situation where one contracting party assumes primary and personal liability for the provision of services by agents or suppliers to a reasonable standard to the other contacting party, the natural meaning of supplier is the person who assumes a direct contractual or promissory obligation to provide such services and not an employee of such a person. Indeed, and unsurprisingly, that appears to have been the view of the appellant herself when she commenced these proceedings since her Particulars of Claim identify "the Hotelier" itself and only "the Hotelier" as the "supplier" within the meaning of regulation 15.
41. In circumstances where, as in the present case, there has been deliberate wrongful conduct on the part of an employee, any other interpretation would nullify the exclusion of liability of the package holiday operator under the express provisions of regulation 15(2)(c)(ii). If such an employee is the supplier, regulation 15(2)(c)(ii) - which (as Mr Weir rightly contended) applies only where neither the package holiday operator nor the employer were at fault and, even with all due care, neither of them could have foreseen the event which caused the failure to perform the contract or the improper performance of the contract - cannot apply. Reading the provisions of regulation 15 as a whole, that is highly unlikely to have been the intention of the Secretary of State who made the regulations or of Parliament and is not a reasonable interpretation.
42. There are two related points to be made in that regard, one specific to the facts of the present case and the other more general.
43. The first of those related points concerns the absence of any proven fault on the part of Kuoni or the hotel. In her Particulars of Claim the appellant alleged that Kuoni, its suppliers, sub-contractors, their agents and/employees were negligent and in breach of contract in (1) failing to supervise N adequately or at all, (2) failing to ensure that staff were properly trained, (3) employing a violent/ aggressive member of staff, (4) exposing the appellant to a reasonably foreseeable and easily avoided risk of injury, and (5) failing, in all the circumstances, to ensure that the appellant was reasonably safe in her proper use of the facilities of the hotel. By the time of the trial the appellant did not pursue any of those allegations. The Judge recorded (in para. [17]) that it was accepted by the appellant at the trial that Kuoni did not have any supervisory control over the hotel's employees; that the recruitment of N did not breach any local laws or practice; and that there was no basis for suggesting that he should have been identified as a risk prior to the incident in question. The Judge also said (in para. [45]) that the hotel's employment of N was done with reasonable care; he was a man of good character and there were no previous reports or complaints of a similar nature; and no criticism was made on behalf of the appellant at the trial about N's recruitment or vetting; and so there was nothing to put anyone on notice.
44. The second, and more general, point is that there is an assumption underlying the appellant's case, which was advanced expressly on her behalf by Mr Weir on the hearing of the appeal, that a package holiday operator, such as Kuoni, could always protect itself by obtaining an indemnity from its suppliers. Plainly that is not the case if and insofar as the supplier is the culpable employee, with whom the package holiday operator has no direct relationship and who could not be identified in advance of the wrongdoing.
45. Nor does it seem realistic to suppose that a package holiday operator, such as Kuoni, could obtain an unlimited indemnity from, for example, a hotel in respect of wrongful conduct by an employee of the hotel, however outrageous, and whether or not it was in the ordinary course of the employee's employment or was conduct for which the hotel would have been liable in any direct action by the consumer, and in respect of which the hotel was not itself guilty of any fault and which, even with all due care, could not have been foreseen or forestalled. On any footing, it would be wrong to make any assumption that such an indemnity could in reality be obtained.
46. Furthermore, it would seem unlikely, and certainly no assumption can be made, that a package holiday operator, such as Kuoni, could obtain unlimited insurance cover in respect of the risk of liability for such wrongdoing by such an employee.
47. There is no discernible policy reason for conferring on a package holiday operator a liability for such wrongdoing, and the express exclusion of liability under regulation 15(2)(c) (ii) points clearly to the contrary.
48. Mr Weir referred us to the indemnity in clause 17 of the accommodation contract between Kuoni and the hotel. Under that provision the hotel agreed to indemnify Kuoni if the hotel "fails to fulfil any of its obligations to … clients as set out in this Agreement". It is at best doubtful, however, whether that would cover the wrongdoing of N, for which no doubt the hotel would contend that it was not vicariously liable. Certainly, it seems likely that liability under the indemnity was not envisaged by the hotel as extending to such wrongdoing and would be excluded in future.

Vicarious liability of the hotel

49. If the hotel was the supplier for the purposes of clause 5.10(b) and regulation 15, and the hotel was vicariously liable for N's wrongdoing, then, subject to any provision excluding its liability, Kuoni would be liable to the appellant under its primary and personal contractual obligation in clause 5.10(b) and pursuant to regulation 15(1).
50. It was common ground before the Judge and on this appeal that the principles of law in Sri Lanka as to vicarious liability are the same as the law of England and Wales. Having referred to Mohamud v Morrison Supermarkets plc [2016] UKSC 11, the Judge held (at para. 48) that, applying those principles of law, the hotel would not be held vicariously liable in any direct claim by the appellant against the hotel since there was no close connection between N's duties and the attack so as to make it just for the hotel to be held liable for the attack.
51. The grounds of appeal, amplified in the appellant's skeleton argument, challenge that finding of the Judge. It is not necessary for this court to decide whether or not the Judge was correct on the issue of the hotel's vicarious liability because, even if he was wrong, Kuoni's liability was excluded by the provision in clause 5.10(b) since the Judge found that failure of the holiday arrangements in respect of N's wrongdoing was, in the words of clause 5.10(b) "due to unforeseen circumstances which, even with all due care, [Kuoni] or its agents or suppliers could not have anticipated or avoided". It is clear that this limitation of liability compressed together and was intended to reflect both limbs of regulation 15(2)(c)(i) and (ii). They were themselves plainly intended to give effect to Article 5.2 of the Directive, namely force majeure and a failure due to an event which neither the package holiday operator nor its supplier, even with all due care, could have foreseen or forestalled.

Conclusion

52. Although we have great sympathy for Mrs X in relation to her ordeal and its consequences, for the reasons set out above, in respectful disagreement with Longmore LJ, we would dismiss this appeal.