X v Kuoni Travel Ltd

Under a package holiday contract, the operator’s primary obligation is limited to the holiday arrangements objectively promised to the consumer. The Package Travel, Package Holidays and Package Tours Regulations 1992 impose liability for proper performance of those contractual obligations, whether performed by the operator or a supplier. They do not extend liability to deliberate wrongdoing by an employee of a supplier acting outside the employee’s functions. An employee is not ordinarily the supplier where the operator’s direct contractual relationship is with the employing hotel. The unforeseen-event defence applied because neither the operator nor the hotel was at fault and the event could not have been foreseen or forestalled with due care.

During a package holiday in Sri Lanka, X was raped by an electrician employed by the hotel after he offered to guide her to reception. She claimed damages from Kuoni for breach of contract and under regulation 15 of the Package Travel, Package Holidays and Package Tours Regulations 1992. The High Court held that the conduct was outside the holiday arrangements, that the hotel alone was the supplier, that Kuoni had the unforeseen-event defence, and that the hotel would not have been vicariously liable. The claim was dismissed: [2016] EWHC 3090 (QB). The appeal concerned the scope of the promised arrangements, the meaning of supplier, and the statutory defence.

1. Appeal dismissed. Sir Terence Etherton MR and Asplin LJ formed the majority. Longmore LJ dissented.
2. Contractual scope. Clause 5.10(b) imposed a primary and personal obligation on Kuoni in respect of the holiday arrangements booked by X. The expression was to be interpreted objectively, having regard to the contract as a whole and to what reasonable parties would have understood at the time of contracting. It did not include an electrician employed in the hotel’s maintenance team guiding a guest to reception, where that activity was outside his employment functions. Wong Mee Wan v Kwan Kin Travel Services Ltd [1996] 1 WLR 38 supported the characterisation of the operator’s obligation as primary and personal.
3. Regulatory framework. Regulation 15 formed part of the contractual background and provided consumer protection, but it did not enlarge the obligations undertaken under the contract. The natural meaning of supplier was the person with a direct contractual or promissory obligation to provide the relevant services. On that basis, the hotel, not its employee, was the supplier.
4. Defence. The exclusion in regulation 15(2)(c)(ii) applied where the failure was caused by an event which neither Kuoni nor the hotel could, even with due care, have foreseen or forestalled. The findings established no fault by Kuoni or the hotel and no reason to anticipate X’s attacker’s conduct. The court therefore did not need to determine the hotel’s vicarious liability. The contractual exclusion reflected both limbs of regulation 15(2)(c).
5. Dissent. Longmore LJ considered that assisting a hotel guest was a service forming part of a reasonable-standard holiday arrangement. He regarded the employee’s motive as irrelevant and considered that an employee could be a supplier depending on the circumstances. On that approach, the employee could foresee or forestall his own criminal conduct and Kuoni had no defence.

• Court of Appeal (Civil Division): Appeal dismissed by Sir Terence Etherton MR and Asplin LJ, with Longmore LJ dissenting; [2018] EWCA Civ 938.
• High Court, Queen’s Bench Division: HHJ McKenna dismissed the claim; [2016] EWHC 3090 (QB).