Thomas Cook Tour Operations Ltd & Anor v Louis Hotels S.A

For summary judgment, a defendant has no real prospect of defending contractual liability where the contract imposes an absolute obligation to provide safe accommodation and the admitted facts establish that the accommodation was dangerous. Responsibility remains with the contracting party even if a subcontractor caused the defect.

An indemnity covering losses arising directly or indirectly from any breach is not excluded merely because the claimant may have been negligent, where that negligence is unsupported or could not have caused the loss. A technical defect in a summary-judgment application should be cured where possible and should not produce disproportionate duplication of proceedings.

The claimants sought summary judgment on contractual liability arising from the deaths of two children caused by carbon monoxide escaping from a boiler at a hotel in Corfu. They relied on clauses requiring the defendant to provide safe arrangements and to indemnify losses arising from breach. The defendant disputed the contractual scope of the arrangements, alleged possible negligence by the claimants, challenged assignment and notice, and raised procedural objections.

The court also considered jurisdiction under Council Regulation (EC) No 44/2001 and the claimants’ application for an interim payment. Issues of tortious liability, causation and quantum were left for later determination.

1. Jurisdiction. The court was required to determine jurisdiction at the outset. Article 25 of Council Regulation (EC) No 44/2001 required the court to act of its own motion if the claim principally concerned a matter within Article 22. The claim concerned construction and breach of a commercial contract for hotel rooms and services. It was not a claim whose object was a tenancy of immovable property or rights in rem. Article 22 therefore did not confer exclusive jurisdiction on the Greek courts, and the contractual choice of non-exclusive English jurisdiction was effective under Article 23.
2. Procedural compliance. The initial failure to state expressly that the claimants held the relevant belief was technical and was cured by further evidence. The requirements of 24PD 2(3) did not require identification of the particular company representative who supplied the belief. In any event, CPR 3.10 permitted the defect to be remedied because dismissal would have caused disproportionate cost and delay.
3. Contractual liability. The room provided was plainly unsafe because of the carbon monoxide leak. Clause 14 imposed an absolute obligation to provide safe arrangements. The defendant remained responsible under the contract even if independent contractors had caused the defect. The water-heating unit would also have been part of the arrangements and unsafe, if that issue had required determination. The arrangements additionally failed to comply with the applicable Technical Regulation.
4. Indemnity. Clause 36 required indemnification for losses incurred directly or indirectly as a result of any breach. The evidence did not establish a real prospect that the second claimant had been negligent, and any alleged inspection failure could not have caused the leak or dangerous condition. Canada Steamship Lines v The King therefore did not apply.
5. Assignment and summary disposal. The sale-of-business agreement transferred the second claimant’s existing contractual rights and liabilities to the first claimant. The continuing indemnity obligation meant that the holiday contract remained partly unperformed and assignable. Although the written notice of assignment was arguably invalid, an effective equitable assignment existed. Summary judgment was granted on breach of Clauses 14 and 36. Causation and quantum were reserved for assessment. An interim payment of £1 million was ordered.