A package-tour organiser had promised more than flights and a hotel room. The issue was whether its promise also covered ordinary assistance by hotel staff, and whether it could rely on an unforeseeable-event defence when a guest was assaulted during that assistance.
The contract and the assault
X bought a package holiday from Kuoni which included hotel accommodation. Kuoni accepted responsibility under its booking conditions for improper performance of the holiday arrangements, subject to exceptions reflecting the 1992 Package Travel Regulations.
While X was on her way to reception, an on-duty hotel employee offered to guide her there. She accepted and he raped and assaulted her. Her claim against Kuoni depended on what the employee had undertaken to do for her as a guest.
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Earlier decisions
Judge McKenna held that “holiday arrangements” did not include a maintenance employee conducting a guest to reception. Although not necessary to his decision, he held that the statutory defence would have applied and that the hotel would not have been vicariously liable under Sri Lankan law, agreed to be the same as English law. The Court of Appeal dismissed the appeal by a majority. Sir Terence Etherton MR and Asplin LJ held that this conduct was no part of the employee’s functions and that N was not a “supplier”; the hotel was. Longmore LJ dissented. He considered the offer of guidance to be a service for which Kuoni had accepted responsibility. On the defence, he thought that if only the hotel was the supplier the defence succeeded, but that if N was a supplier he could foresee his own crime.
The issues and the Court of Justice
The Supreme Court considered whether the rape was improper performance of Kuoni’s obligations and, if so, whether the booking conditions or regulation 15(2)(c) excluded liability. The parties agreed that the contractual defence replicated the regulation, which implemented article 5 of the Directive, that the defences were coextensive, and that liability under the regulation cannot be excluded by contract.
In its 2019 judgment referring the case to the Court of Justice, the Supreme Court asked the Court of Justice to assume improper performance and to rule on the defence. The Court of Justice held that an employee of a supplier of services is not himself a “supplier of services” for the exemption in the third indent of article 5(2). It also held that an organiser cannot use that exemption where non-performance or improper performance results from the acts of such an employee. Those acts fall within the supplier’s sphere of control and are not events which cannot be foreseen or forestalled.
Improper performance of the holiday arrangements
Lord Lloyd-Jones, with whom Lord Hodge, Lady Arden and Lord Kitchin agreed, held that the assault was improper performance. Because a holiday is meant to be enjoyable, the services contracted for should be interpreted broadly. They include not only transport, accommodation and meals but ancillary services needed for a holiday of a reasonable standard, including courteous assistance with ordinary matters at the hotel. Guidance by staff from one part of the hotel to another fell within the holiday arrangements Kuoni had undertaken to provide. That question depended on Kuoni’s contract with Mr and Mrs X, not on the duties for which the hotel employed N. N could assault Mrs X only by purporting to guide her, and the assault was a failure to guide with due care. Its egregious character did not take it outside the contract. The Court of Justice’s reasoning supported this broad approach, including an organiser’s liability for acts of a supplier’s employees.
The defence
Applying the Court of Justice’s answer in these proceedings, the Supreme Court held that Kuoni could not rely on the statutory or corresponding contractual defence. Its liability flowed from the improper performance of the services it had promised. X did not also have to prove that the hotel would have been vicariously liable under the law governing its employee.
Verdict: The Supreme Court allowed X’s appeal. Kuoni was liable under the package holiday contract and the 1992 Regulations. The Court did not need to determine whether the hotel was vicariously liable for its employee.
