Wood & Anor v TUI Travel Plc (t/a First Choice)

A contract may provide for both services and the transfer of goods. Unless the parties agree otherwise, property in a meal or drink passes to a customer when it is served or, in a buffet, when the customer helps himself or herself.

The statutory condition that transferred goods must be of satisfactory quality therefore applies to food and drink supplied as part of a package holiday. Contaminated food causing serious illness will ordinarily fail that condition. The claimant must nevertheless prove both contamination and causation. Illness alone does not justify an inference that supplied food was unsatisfactory, particularly where other possible causes remain.

The respondents contracted with the appellant tour operator for an all-inclusive holiday in the Dominican Republic. Both suffered serious gastroenteritis. The county court found that contaminated food or drink supplied by the hotel caused their illnesses, although the hotel had not been shown to be at fault.

The judge held that the contract included a transfer of property in the food and drink. The statutory condition of satisfactory quality under section 4(2) of the Supply of Goods and Services Act 1982 therefore applied, and damages were awarded.

The tour operator appealed, contending that customers were merely licensed to consume the hotel’s food and drink and never acquired property in it. The central issue was whether serving food and drink under an all-inclusive holiday contract involved a transfer of goods.

1. Appeal dismissed unanimously. The contract was both a contract for the supply of services and a contract for the transfer of goods. Sections 1(3) and 12(3) of the Supply of Goods and Services Act 1982 expressly establish that those categories are compatible.

2. In the absence of an express agreement to the contrary, property in a meal or drink passes to the customer when it is served. Where food or drink is provided at a buffet, property passes when the customer helps himself or herself. This rule applies whether the transaction concerns a meal alone or forms part of a wider contract for accommodation or other services.

3. The reasoning in PST Energy 7 Shipping LLC v OW Bunker Malta Ltd [2016] UKSC 23 did not establish a broader rule that property cannot pass in goods intended for consumption. That decision depended on the particular interaction between a retention-of-title clause and an express liberty to consume fuel before payment. The holiday contract contained no comparable provision.

4. The food and drink were therefore goods in which the parties had agreed that property would be transferred. The implied condition in section 4(2) of the Supply of Goods and Services Act 1982 applied. The contaminated food which caused serious illness was not of satisfactory quality, so its provision breached that condition.

5. The decision did not make tour operators liable merely because a customer became ill. A claimant must prove that supplied food or drink caused the illness and was not of satisfactory quality. Sickness alone is insufficient. Evidence of other affected consumers may be important, and alternative causes such as personal hygiene, swimming water, viruses, unfamiliar food or different water must be considered. Demonstrated compliance with high hygiene standards may also warrant caution before contamination is inferred.

6. The trial judge had been entitled to find contamination and causation on the evidence, including the medical and expert evidence. Those factual findings were not challenged. It was unnecessary to decide whether an equivalent condition arose at common law.

1. Court of Appeal (Civil Division): The tour operator’s appeal was dismissed unanimously. The county court had correctly treated the contract as involving both services and a transfer of goods and had correctly applied section 4(2) of the Supply of Goods and Services Act 1982.

2. Birmingham County Court: HHJ Worster found that contaminated food or drink supplied at the hotel caused the respondents’ illnesses. He held that the food and drink were transferred goods which were not of satisfactory quality and awarded damages.