Milner & Anor v Carnival Plc (t/a Cunard)

Damages for a ruined holiday may include diminution in value, consequential financial loss, physical inconvenience, and distress and disappointment. Diminution in value is a pecuniary comparison between the promised and supplied service. It must not duplicate compensation for the customer’s feelings.

Assessment of distress and disappointment is fact-sensitive. A unique and long-awaited holiday may justify an exceptional award, but the award must remain restrained and proportionate. The price of the holiday is not a benchmark for such damages. The court should assess all heads together and consider the total award in the round.

The claimants booked an expensive 106-day maiden world cruise. Serious noise and vibration in their selected cabin caused sleeplessness, repeated moves between cabins, uncertainty and distress. They disembarked in Honolulu after 28 days and later travelled back to Southampton on another ship at their own expense.

At Bradford County Court, the judge awarded each claimant damages for diminution in value and distress and disappointment, awarded Mrs Milner a further sum for unused formal gowns, and rejected a claim for the cost of the return voyage under the Package Travel, Package Holidays and Package Tours Regulations 1992. Carnival appealed the damages award. The central issue was the proper measure of damages for a ruined holiday.

1. Appeal allowed unanimously. The judge’s total award of £22,000 was excessive and disproportionate. It was varied to £12,000: £3,500 for diminution in value, £4,000 for Mr Milner’s inconvenience and distress, and £4,500 for Mrs Milner’s inconvenience and distress.

2. The ordinary compensatory principle required comparison of the contractual holiday with that actually supplied. Holiday damages may be analysed under separate heads: diminution in value; consequential pecuniary loss; physical inconvenience and discomfort; and mental distress, disappointment and loss of enjoyment. In a holiday contract, the latter losses are recoverable: Jarvis v Swans Tours Ltd [1973] 1 Q.B. 233.

3. Diminution in value is a pecuniary assessment. It excludes the customer’s emotional response, which belongs under the separate distress head. The relevant starting point was what the claimants actually paid after the accepted refund, not the brochure price. Looking at the disrupted accommodation and the services nevertheless enjoyed, the value of the 28-day cruise was diminished by about one third.

4. Damages for inconvenience and distress depend on the expectations reasonably created and the reality experienced. The court accepted that this was an exceptional, once-in-a-lifetime holiday which had been ruined. Comparable awards may assist as a cross-check, but different holidays cannot be used to impose a tariff. Awards must also remain consistent with the restrained and modest approach endorsed in Farley v Skinner [2001] UKHL 49.

5. The claimants could not recover for the lost pleasures of the remaining cruise because the package had been cancelled by agreement, rather than following an accepted repudiation. Mrs Milner could not separately recover the cost of her gowns: their non-use was not caused by the breach alone and was instead relevant to her distress. The court stood back and assessed the total award in the round.

• Court of Appeal (Civil Division) — allowed Carnival’s appeal and varied the damages award: [2010] EWCA Civ 389.
• Bradford County Court — on 14 May 2009, His Honour Judge Shaun Spencer QC awarded £22,000 in damages and rejected the claim for the return voyage. No citation for that decision was stated.