Jackson v Horizon Holidays Ltd

Where one person contracts for the benefit and enjoyment of a group, and the other members cannot sue because they are not parties to the contract, the contracting party may recover the loss which they would have recovered had they contracted themselves. This may include their expense, discomfort, vexation and disappointment caused by the breach.

In a holiday contract, damages may compensate both the reduced value of the holiday and the mental distress, inconvenience and frustration caused by its failure.

The claimant booked a four-week family holiday in Ceylon with the defendant tour operator. The promised accommodation and facilities were materially deficient. The defendants admitted liability, and His Honour Judge Fay, sitting as an additional judge of the Queen's Bench Division, awarded £1,100 damages on 15 June 1973.

Before the appeal, the defendants sought to adduce evidence from two further witnesses or obtain a new trial. The Court refused that application. The defendants then appealed against the amount of the award. The central issue was whether damages recovered by the contracting father could reflect the distress and disappointment suffered by his wife and children as well as his own.

1. The appeal was dismissed. The Court also dismissed the defendants' preliminary application to adduce fresh evidence or for a new trial. The proposed witnesses could have been obtained for trial by reasonable diligence. The defendants had not properly pursued the courier's availability or made inquiries of other members of the holiday party. They therefore failed the relevant condition in Ladd v Marshall (1954) 1 WLR 1489.
2. On the appeal, the Master of the Rolls, with Orr LJ agreeing, held that the contract was made by the father for a family holiday. It was unrealistic to treat the wife and very young children as contracting principals, or to characterise the arrangement as a trust.
3. Although only the contracting party could sue, he could recover the loss suffered by the persons for whose benefit he contracted. Applying the principle stated in Lloyd's v Harper (1880) 16 Ch D, the claimant could recover what his wife and children could have recovered had they themselves contracted. That extended to expenditure and to the discomfort, vexation and upset caused by the breach. The Master of the Rolls noted that the principle had also received approval in Beswick v Beswick (1968) AC.
4. The Court applied Jarvis v Swans Tours Ltd (1972) 3 WLR 934, under which damages for a spoiled holiday may include diminished value and mental distress, inconvenience, disappointment and frustration. The £1,100 award would have been excessive for the claimant alone, but was not excessive when it reflected the family’s loss. The separate concurring judgment likewise accepted that the booking was for a family holiday and that the award was proper.
5. The appeal was dismissed with costs. Leave to appeal to the House of Lords was refused.

• Court of Appeal: dismissed the defendants' appeal against quantum and refused their application to adduce fresh evidence or obtain a new trial.
• Queen's Bench Division: His Honour Judge Fay, sitting as an additional judge, awarded the claimant £1,100 damages on 15 June 1973 after liability was admitted.