Payless Travel Ltd v Baba Krupa Holidays

Under an implied term requiring reasonable care and skill, a travel agent’s responsibility may continue after tickets are issued. If the agent learns that an airline has cancelled a booking, reasonable care requires notice to the client and reasonable steps to clarify or reverse the cancellation. Legal causation is assessed by common sense. The airline’s cancellation may be an effective cause of loss, but it does not displace the agent’s separate breach where the failure to inform or rectify the position also effectively caused the expenditure. The appeal was dismissed.

Payless Travel obtained airline tickets for passengers through its dealings with Baba Krupa Holidays. The airline cancelled the reservations, but Payless failed to alert Baba Krupa or secure reliable withdrawal of the cancellation. The passengers were refused carriage, and Baba Krupa incurred accommodation and replacement-ticket costs. Miss Recorder Macur QC found breach of the implied term under the Supply of Goods and Services Act 1982 and awarded £9,254.98, plus interest. Payless appealed, arguing that the airline’s cancellation, rather than its own breach, caused the loss. The central issue was whether the identified breaches were legally causative despite the airline’s conduct.

Disposition. Rix LJ, with whom Longmore LJ agreed, dismissed the appeal. The only live ground was legal causation. Questions of duty, breach and quantum were not open on the appeal, although the court addressed them briefly.

1. Duty and breach. The implied term under section 13 of the Supply of Goods and Services Act 1982 required reasonable care and skill in procuring the contract of carriage. That duty did not end when the tickets were issued. Once the agent became aware of a cancellation problem, reasonable care required it to inform its client and take reasonable steps to establish whether the cancellation had been withdrawn. The court referred to Reynolds on Agency and applied the approach in London Borough of Bromley v Ellis [1971] 1 Lloyd’s Rep 97 at 99. The recorder was entitled to reject the agent’s evidence and find breaches in failing to warn Baba Krupa and failing to obtain reliable confirmation that the cancellation had been removed.
2. Legal causation. Applying the common-sense approach supported by Galoo v Bright Grahame Murray [1994] 1 WLR 1363 at 1374G–1375A, the breaches were plainly capable of causing the accommodation and replacement-ticket costs. An express causal analysis in the trial judgment was unnecessary where the connection was self-evident.
3. Concurrent and intervening causes. The airline’s cancellation could also be an effective cause of the loss. That did not displace Payless’s responsibility for its separate contractual breaches. The cancellation was not a new intervening cause because the breaches arose out of and followed it.
4. Other points and order. Any argument that cheaper substitute tickets could have been obtained was unpleaded and had not been raised at trial. The appeal was dismissed, with the appellant ordered to pay the appeal costs, subject to detailed assessment.

• Court of Appeal (Civil Division): The court dismissed the appeal in [2004] EWCA Civ 472 and ordered the appellant to pay the appeal costs, subject to detailed assessment.
• Birmingham Civil Justice Centre: Miss Recorder Macur QC found Payless Travel in breach of its implied contractual duty to use reasonable care and skill and awarded Baba Krupa £9,254.98, together with interest totalling £10,259.08.