Sherman & Anor. v Reader Officers Ltd

On an appeal by way of review, an appellate court may interfere only where the lower court was wrong in law, made an unsupported finding, or reached an evaluative decision outside the permissible range.

Under the Package Travel, Package Holidays and Package Tour Regulations 1992, the provider must ensure that the contractual package contains the relevant Schedule 2 information. For a cruise centred on a particular route, an itinerary identifying the route and significant stopping places may be an essential contractual term, even if subject to change.

A significant alteration is assessed contextually. A provider is constrained to alter a term when, in practical circumstances, it must adopt a materially different plan. A force majeure exemption requires proof that the relevant circumstances were unforeseeable. Inherently unpredictable Arctic sea ice may nevertheless be a foreseeable risk.

The claimants booked an Antarctic cruise through the respondent and later booked a polar cruise marketed as Northwest Passage – in the Wake of the Great Explorers. The detailed itinerary was supplied after the initial booking and included a route through the Canadian Northwest Passage and visits to historically significant locations.

Ice conditions prevented the planned embarkation at Cambridge Bay and led to substantial changes to the itinerary. The County Court found that the detailed itinerary was not contractual, that no significant pre-departure alteration had occurred, and that the respondent was protected from liability for the failure to provide a significant proportion of the services by the exemption in regulation 15(2)(c)(i).

The claimants appealed on the construction of regulation 9, the effect of the pre-departure changes, the application of regulations 14 and 15, and the contractual exclusion clauses.

1. The appeal was allowed. The High Court reviewed the County Court’s decision under CPR 52.21 and did not disturb its primary findings of fact.

2. Regulation 9 was not a mechanism for determining when a contract was formed or for inserting Schedule 2 details into an otherwise formed contract. It imposed an implied condition requiring the provider to ensure that the relevant contractual elements were included and communicated before the contract was made. On the facts, the initial booking material did not satisfy that condition because it did not provide a meaningful cruise itinerary or identify the relevant visits and excursions. The detailed itinerary supplied on 22 January 2018 was therefore contractual.

3. The itinerary was an essential term because it formed part of the definition of the package. A term could remain essential even though the contract permitted changes. Under regulation 12 and the corresponding contractual provisions, changes beyond the order and timing of the itinerary could amount to a major change. The omission of about half of the distinctive Northwest Passage stage was a significant alteration.

4. The respondent was constrained before departure to adopt the materially reduced Plan C itinerary. Regulation 12 required notification as quickly as possible so that consumers could make appropriate decisions, including withdrawing without penalty. The failure to communicate the scale of Plan C until the eve of departure breached the term implied by regulation 12 and the equivalent express contractual obligation.

5. The County Court had correctly found a breach of regulation 14 because a significant proportion of the contracted services was not provided and suitable alternative arrangements were not made. However, regulation 15(2)(c)(i) did not provide a defence. The relevant question was whether the failure was due to unforeseeable circumstances beyond the provider’s control. It was not enough that the provider had acted professionally, reasonably, and without fault. The evidence showed that closure of the Northwest Passage by sea ice was an inherent, substantial and continuously recognised risk. It was therefore not unforeseeable.

6. The contractual force majeure provisions did not exclude liability for the failure to notify the claimants of Plan C, since that failure resulted from an avoidable administrative oversight. The case concerned primary liability only; remedy was left for consequential agreement or further determination.

• High Court (King’s Bench Division): appeal from the County Court, Winchester, allowed.
• County Court, Winchester: Recorder Bowes QC dismissed the claimants’ claims and entered judgment for the defendant by order dated 3 May 2022.