IN THE HIGH COURT OF JUSTICE
ON APPEAL FROM BRADFORD COUNTY COURT
HIS HONOUR JUDGE SHAUN SPENCER QC
8SP00557
Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
LORD JUSTICE WARD
LORD JUSTICE RICHARDS
and
LORD JUSTICE GOLDRING
Between :
(1) Terence Milner (2) Cynthia Mary Milner | Respondents |
- and - | |
Carnival PLC (trading as Cunard) | Appellants |
(Transcript of the Handed Down Judgment of
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Christopher Lundie and Hayley McLorinan (instructed by Lester Aldridge LLP) for the appellant
Sarah Prager (instructed byTravlaw LLP) for therespondent
Hearing date: 3rd December 2009
Judgment
Lord Justice Ward:
The issue
The issue, said to be of importance for the travel industry, is this: what is the correct measure of damages for a ruined holiday?
The appeal
On 14th May 2009 His Honour Judge Shaun Spencer Q.C. sitting in the Bradford County Court, awarded the claimants, Mr and Mrs Terence Milner, £22,000 made up as to £2,500 each for the diminution in the value of their cruise on the luxury liner, Queen Victoria, and £7,500 each for their distress and disappointment when the cruise did not match their expectations, so £10,000 each. He also awarded Mrs Cynthia Milner £2,000 for her wasted expenditure on her wardrobe of formal dining gowns. The defendant, Carnival Plc, which trades as Cunard, appeals with permission granted by Sir Simon Tuckey who said “This case may provide the opportunity to give authoritative guidance on the appropriate measure of damages in “holiday” cases.”
The facts
It is necessary to set out the facts in some detail. On 19th June 2006, almost eighteen months in advance of her sailing, Mr and Mrs Milner booked their passages on the maiden world cruise of the Queen Victoria. This cruise was to depart from Southampton on 6th January 2008 for New York, thence to Los Angeles via the Panama Canal, on to Honolulu, bound for Australasia, Hong Kong, around south-east Asia, India, through the Suez Canal and the Mediterranean, returning to Southampton 106 days later.
The cost of their passage was £65,558, discounted by 10% to £59,052.20. This may seem a lot of money and a very expensive holiday but, as the appellant points out, the price breaks down to £557 per day, £3,900 per week, to cover travel, accommodation, food and entertainment of the highest standard for fifteen weeks.
Cunard’s brochure lavishly presented the glamour of the voyage.
“When Samuel Cunard set out to deliver mail across the Atlantic 167 years ago, he little realised he was taking the first step towards a new standard of luxury travel. Since then, Cunard has become a byword for comfort, style, and the ultimate in effortless exploration generation after generation. Today, the legendary Cunard Experience continues to exceed your expectations - with all its accomplished hallmarks - from the very first moment you step aboard.”
Setting out the “Cunard Grills Experience our most lavish expression of elegance”, the brochure proclaimed:
“Wouldn’t you love to savour the star treatment like screen idols and noble royals of yesteryear? Don’t you deserve a taste of the high life? Welcome, then, to some of the most spacious and sumptuous suites at sea.”
Queen Victoria was to make “her regal debut”, and “three Queens [Queen Victoria, Queen Mary 2 and Queen Elizabeth 2] will uphold our finest traditions of quality and service together, an unprecedented event in Cunard’s long and illustrious history”. Of the Queen Victoria the brochure said:
“Step aboard this classic Cunarder steeped in unmistakable Cunard heritage and with all the grace and glamour of her esteemed sisters. Queen Victoria debuts with an exciting flourish. In January 2008 she sets off to greet the globe on her Maiden World Cruise, writing the next exciting chapter of the Cunard legend over 106 unforgettable nights.”
The “latest classic Cunarder” was described in these terms:
“Sleek, contemporary Queen Victoria embraces the most advanced technology and a host of luxurious innovations.”
As the judge pertinently said in his judgment,
“The nature of the description in the brochure as to what the cruise was going to be like is such as reasonably to give to the Milners and to anyone else who was embarking on the cruise, the feeling that they were in for the experience of a lifetime.”
Then he added laconically:
“It is the Milner’s case that that is what they got, but not in the way they had bargained for.”
The respondents had deliberately booked that far in advance in order to secure a cabin of their choice. They were, it seems, seasoned voyagers. They were determined to be placed mid-ships where they believed they would be least affected by the movement of the ship in poor weather. They booked a Princess grade cabin number 7083 mid-ships on the starboard side on deck 7.
On leaving Southampton on 6th January 2008, they soon steamed into stormy conditions in the Bay of Biscay. The wind was blowing at force 7, 8 and 9 and the waves into which they were sailing were 5-6 metres high. There was perpendicular pitching with the ship going up and down the oncoming waves with resultant flexing mid-ships. The effect in their cabin was that the floor plates flexed and vibrated and loud noise reverberated throughout the cabin. As the judge found:
“15. It seems to be the case, and it is – as I understand his evidence – accepted by Captain Hall, and I accept it myself that the difficulty with the noise was not simply plates flexing with the effects of the swell and turbulence of the sea. The fact is that some of the plates were bowed upwards, so as to be convex, and when the flexion caused the plates to move from convex to concave, this produced noise. Mr Milner was asked by myself in the witness box if he could do for me the noise, and it is difficult to put into words, but I am quite satisfied that what he was referring to was a loud bang which came out of the blue, and then there were bangs which were sequential and intermittent; the sort of bang that once you have heard it, you cannot really settle down after it because you never know whether another one will be coming afterwards.”
Even with earplugs provided by the purser, sleep was impossible for two nights. The purser’s own internal “focus reports” made contemporaneously recorded on 8th January that:
“Mr Milner feels he is at the centre of this technical issue which starts in the bathroom area and travels all the way to the balcony side of the state room. The issue is getting worse as recently the sitting area is included in the vibration as this was not the case the first day and a half. Obviously, a structure problem, which needs to be addressed with the yard as per Mr Milner, he can no longer deal with the noise and vibration, having missed two nights of rest. He mentioned that his level of tolerance has come to an end. He will sleep in public areas if necessary. The lack of sleep is affecting Mrs Milner’s chest problems and asthmatic episodes due to stress. Mr Milner almost called an emergency [doctor] last night, as he saw his wife getting worse, while the inhalers were no longer doing what was expected from them. Mr Milner feels really short-changed and demands a solution, or will go home in NYC.”
The disturbance was so serious that the Milners were offered cabin 6083, an inside room with no natural light on the lower deck 6. This was a cabin designed for the disabled and lacked some of the amenities of their chosen quarters. Their clothes were left in 7083 and they walked downstairs and through the corridors in their dressing gowns to sleep in 6083, returning to their own cabin during the day. They put up with those arrangements for the remaining four days of the voyage to New York.
Mr Milner had begun to keep a diary recording his complaints. Two entries during that period tell a story. His entry for 12th January said:
“Same routine as yesterday. Getting very tired of the situation. Cindy getting more distressed by the day.”
On the other hand his entry for the following day was:
“Got up at 4.30 am to witness sail into New York. Fantastic memorable day. Sail away of the three Queens truly fantastic.”
For the voyage from New York to Los Angeles which was to last 17 days, the Milners were provided with suite 8090. Although he described the accommodation as “excellent” Mr Milner did record in his diary that “We feel like gypsies moving about. Only in for 2 or 3 days so we cannot empty our cases until we have a permanent home.”
On 15th January he wrote: “Broken sleep, not due to current suite or any noise but because of uncertainty of the ongoing situation. We need our minds putting to rest.”
The problem was that they had been offered that suite for only 2 or 3 days although eventually it was made available to them for the rest of the journey to Los Angeles. The reason for this was that it had been reserved for other passengers who had missed the boat at Southampton, hoped to join at Fort Lauderdale in Florida and eventually planned to come aboard in Los Angeles. Confirmation that they could stay there came as a relief.
But it did not wholly resolve their difficulties. Mr Milner wrote to the hotel director on board, Mr Howie, on 15th January saying:
“Thank you for the temporary move to suite 8090. Our days and nights have greatly improved. We appreciate the situation given to our problems with suite 7083 by Ruude Janssen [the purser] and yourself and it is essential, if we are to be moved back into that room, that we are given written assurances from you that the plate problem, which has affected our voyage so far, has been resolved and the nature of the work done to achieve this result. I am a technical person and understand the detailed aspects of such a process.”
There was no response to that letter and so Mr Milner wrote the next day:
“Having only unpacked 50% of our belongings on the first night of embarkation at Southampton, and transferring that status to suite 8090 we remain in that semi-packed chaos from New York to Fort Lauderdale as Ruude said we were only in the suite temporarily for 2-3 nights. Not hearing to the contrary, we have assumed we can remain here at least until Los Angeles and have, therefore, fully unpacked for the first time on board this vessel.”
Once it was clear they could stay there, Mr Milner wrote:
“This has had quite a settling effect on my wife, who continued to be quite distressed for long periods, not knowing how long we were staying.”
The letter concluded:
“After nearly two weeks, life on board is beginning to get pleasurable. We are looking forward to enjoying what is a beautiful ship in the way we had hoped. Staff and food are excellent. I am not sure I can persuade my wife to go back to 7083 in view of the horrific experience we suffered with noise. The specific section could be as bad, or even worse, than the Atlantic for sea swell and we need the situation clarifying before we get to Los Angeles.”
The position was not resolved. Mr Milner was making regular visits to 7083 and found it was still noisy. He was offered cabin 7030 and rejected this because it was in a very forward location, not mid-ship. It lacked a bath, had limited hanging space for ladies clothes and was set out for a disabled person in a wheelchair. As Mr Milner wrote: “It was strange and uncomfortable for us to spend 2 and a half months in.”
The Milners had to leave their preferred suite 8090. They had little option but to return to 7083. Mr Milner wrote:
“We were reluctantly moved back to 7083 on 30th January. I have only done this to try to salvage some kind of holiday, but should the problem return, we will get off at the next convenient port.”
So they sailed from Los Angeles but misfortune struck again as the Queen Victoria encountered heavy seas on the first night. The next day, 31st January Mr Milner wrote:
“A The banging and floor plate flexing re-occurred last night in the three areas I have previously identified and were not repaired. It kept us awake from 2 am and was witnessed by Elle, the person on night duty.
B We have no confidence in this room and refuse to consider it for any further part of our trip.
C Thank you for the move to 8080, which we have been told is temporary until Hawaii.
D Yourepeated that your letter had set out the only options for us and unless we accepted 7030 we would have to disembark in Hawaii. I set out my reasons for rejecting this suite which still stands, so you leave us no alternative but to get off in Hawaii and try to salvage some kind of Holiday.”
Queen Victoria arrived in Hawaii four days later on 4th February and the Milners disembarked. Their voyage had lasted twenty-eight days and they missed seventy-eight days of the World Cruise. Mr Milner said in his witness statement:
“At the point of disembarkation we were exhausted, suffering again from sleep deprivation and were both unwell. We could not believe the way in which we had been treated.”
They spent six aimless weeks in Honolulu at their own expense and then joined the Queen Elizabeth for her return voyage back to Southampton at a cost to them of £13,440.
They brought a claim for a refund of £65,558, compensation for the stress, anxiety, distress, disappointment and loss of enjoyment, for their out of pocket expenses and wasted expenditure to include the cost of accommodation, food and entertainment and other activities whilst in the Hawaii area, the cost of travelling to Southampton to collect their luggage, and wasted expenditure on clothing and visas. They were then offered and accepted a refund of £48,270 so the net cost of their “holiday” was £10,812. The claim was refined and reduced by the time of the trial. There they claimed £8,500 for the diminution in value, £50,000 for distress and disappointment, £4,300 for the wasted expenditure on dresses and £13,440 for the cost of the return voyage.
The judgment under appeal
The judge made these findings:
“39. Mr Mason [who appeared for the claimants] takes the position that the amount which is appropriate for diminution in value is a figure of £8,500. That would be £4,250 each. His way of presenting this appears at paragraph 14 of his skeleton argument, which obviously represented his position in closing submissions also. He said this:
‘The first 28 days of the cruise, which is what they got, on per diem calculation would be £17,317 …’,
and in as much as a good part of cabin space indicates somewhere you can sleep, it is his submission that a 50% refund would be appropriate. The defendants submit that I really ought to keep this in proportion. There were, in reality, about 3 bad nights, namely the 2 nights coming out of Southampton before they were given 6083 as a sleeping cabin and that is 3 bad nights out of 28 nights.
40. So far as that is concerned, I think the claim for diminution is value is pitched too high and I think there is something in the point made by the defendants. And so, to reflect diminution in value, I award £2,500 each.
41. I now turn to the next aspect which is distress and disappointment. This is something which obviously caused stress to the parties. We have sleepless nights and we have various moves about the ship and there were some stress induced somatic effects as I have been told and as I am prepared to accept. If I refer, for example, to the diary and the bottom of page 170, the 23rd January:
‘My bottom lip has broken out in ulcers. Never had this happened before. Not feeling good today. Cindy bad with chest breathing.’
and if I look at page 171:
‘Lip now in a terrible state with ulcers; very swollen.’
And he went to see the doctor and the position is that the doctor thought this was a stress-related eruption.
42. I think I have stated enough of the various moves and events to set out what the experience was which was undergone by the Milners. So far as the Defence are concerned, they would say again that this is a matter which has to be kept in proportion. The defendants refer to the references which are made by the claimants to the excellence of the food, to the quality of the staff and to the fact that in relation to the journey from New York to Los Angeles, and from Los Angeles to Honolulu, what they got – namely deck 8 cabins, represents an upgrade to what is known as ‘Queen Class’ in the cruise hierarchy.
43. The claimants put the case on the basis that the damages for distress and disappointment ought to be getting on for the full cost of the cruise and Mr Mason suggests an appropriate figure would be £50,000. That would be £25,000 each. I think the £50,000 is really far too high and I am disposed to award the claimants £7,500 each. Let me say that I regard that as a high figure and I take the view that it is about the ceiling of what I could award. But the fact is that where one is advertising a platinum quality product, then there have to be platinum quality damages if there are shortcomings.
44. So far as the wasted expenditure is concerned – I am now dealing with the gowns – Mrs Milner accepted in evidence, I think, that there is a question of fairness which arises. If the gowns cost £4,300 and she wants £4,300 and she has got the gowns, she did see – as a reasonable person – that that was scarcely a right state of affairs because she was getting the gowns for nothing. She did make a response to it, however, which I regarded as a fair one. She said that the gowns she bought, she bought so that she could wear them. She would wear them because she had an opportunity to wear them. How many times in Leeds, Harrogate, Weatherby or York would she be having an opportunity to get her formal gowns on? Certainly nothing like three evenings a week which would be the case on the cruise. And, to that extent, I think she makes a fair point and, in the light of her reasoning, I think there ought to be some award under this head and I award £2,000.”
Then the judge went on to deal with the claim for the cost of the return journey. This claim was brought under the Package Travel, Package Holidays and Package Tours Regulations 1992 by regulation 14 of which terms are implied into the contract that where, after departure, a significant proportion of the services contracted for is not provided, the organiser must make suitable alternative arrangements and if those are not accepted by the consumer for good reasons, the organiser must provide the consumer with equivalent transport back to the place of departure. The judge was satisfied that given the noise in their cabin, a significant proportion of the service contracted for was not provided. He held that suitable alternative accommodation was provided until the arrival in Honolulu and was accepted by the consumer. The issue was whether the forward cabin 7030 was a suitable alternative provision. The judge held it was. He said:
“The cabin in 7030 is more commodious. The fact that there is a shower, rather than a bath is something which I think most people could easily live with. The fact that the cabin was slightly forward of the mid-ships I would regard as something not to cavil at and the fact that the room was, in some respects, with the hand holding bars in the bathroom for instance, clearly designed for the use of disabled people is not something which I again I would have thought one could cavil at. It must be borne in mind that anything which is put in there for a disabled person is a bolt-on and does not diminish the comfort of the premises for those who are not disabled.”
He then asked whether that alternative accommodation was rejected for good reason. In deciding that, the judge said:
“I should factor in something of the subjective element and this involves the attitude of Mr and Mrs Milner to what was on offer. I do agree that being mid-ship was important to them at the time they booked. Since the mid-ship area seemed to be the one most in the frame for the flexing, whether it would be so by the time one got to Honolulu is a question. So far as the space for gowns is concerned, I am sure that with good will, which I have no doubt would have been forthcoming, that could have been accommodated. So far as the shower, not a bath, is concerned, I do not see that even factoring in a subjective element that could be a big problem and the fact that the room was suitable for disabled occupancy, I do not see again – even factoring in subjective elements – being a good reason for turning it down. I take the view that suitable alternative arrangements were provided and I do not regard Mr and Mrs Milner’s reasons for not accepting them as being good reasons.”
He went on to find that Mr Milner was “a man of principle who … wants what he paid for.” He concluded:
“It is also clear to me that he is a good negotiator and I think that what happened is he took the view that if he stood his ground as they approached Los Angeles, Mr Howie would blink first and come up with something which was acceptable to Mr and Mrs Milner. I think if occupancy levels had been adequate, Mr Howie would indeed have blinked first and come up with something, but as it happened, the occupancy levels were such that he had nothing to offer them apart from 7030 and I regard the objections which were put to that as being too exacting, even factoring the subjective element, and there were no good reasons for not accepting. In the circumstances I do not allow the cost of the journey on the Queen Elizabeth.”
Discussion
The measure of damages
It is trite law that the measure of damages is such compensation as will place the claimants, so far as money can do so, in the same position as they would have been in had the contact been properly performed. The task is to compare and contrast what was promised and what was received, acknowledging that money cannot truly compensate for this deficit. As Lord Morris of Borth-y-Gest observed in Parry v Cleaver [1970] A.C. 1, 22,
“But a money award is all that is possible. It is the best that can be done.”
Doing the best one can is hardly the most enlightening guidance for those who have to perform the task, but I am not sure I can improve upon it.
It is always useful to bear in mind the observations of Lord Hoffmann in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] A.C. 191, 211A:
“Before one can consider the principle on which one should calculate the damages to which a plaintiff is entitled to compensation for loss, it is necessary to decide for what kind of loss he is entitled to compensation.”
In a case like this the following aspects command attention. Firstly, compensation for pecuniary loss – the diminution in value: the loss here is the monetary difference between what was bought and what was supplied. The task is to assess the amount by which the advertised holiday turned out to be less in money terms than the customer had paid for it.
Secondly, compensation for consequential pecuniary loss: this would cover out of pocket expenses such as the cost of alternative accommodation, the cost of alternative travel arrangements and so forth.
Thirdly, compensation for physical inconvenience and discomfort: it has long been established that damages for personal inconvenience “where it is sufficiently serious” is recoverable: see Hobbs v London and South Western Railway Company (1875) L.R. 10 Q.B. 111, 117 per Sir Alexander Cockburn C.J. There Mellor J. said at p. 122:
“… for the mere inconvenience, such as annoyance and loss of temper, or vexation, or for being disappointed in a particular thing which you have set your mind upon, without real physical inconvenience resulting, you cannot recover damages. That is purely sentimental and not a case where the word inconvenience as I here use it would apply.”
This principle was applied in Stedman v Swan’s Tours (1951) 95 Sol Jo 727 where instead of enjoying superior rooms with a sea view in a first class hotel, the holiday party found that the rooms reserved for them were very inferior and had no sea view. They were unable to obtain accommodation elsewhere, and in the result the whole holiday was completely spoilt. Singleton L.J. said that:
“Damages could be recovered for appreciable inconvenience and discomfort caused by a breach of contract. It might be difficult to assess the amount to be awarded, but it was no more difficult than to assess the amount to be given for pain and suffering in a case of personal injury.”
In Farley v Skinner [2001] UKHL 49 [2002] 2 AC 732, the plaintiff was entitled to damages assessed at £10,000 for the significant interference with the enjoyment of his property cause by noise from aircraft flying over his land.
Fourthly, compensation for mental distress: the early view espoused by Mellor J. in Hobbs no longer holds sway. In Jarvis v Swans Tours Ltd [1973] 1 Q.B. 233 the court thought that those limitations were “out of date”. That was a case of a skiing holiday which cost £64.45 but which “was pretty well ruined”. Lord Denning held at p. 237/238:
“In a proper case damages for mental distress can be recovered in contract, just as damages for shock can be recovered in tort. One such case is a contract for a holiday or any other contract to provide entertainment and enjoyment. If the contracting party breaks his contract, damages can be given for the disappointment, the distress, the upset and frustration caused by the breach. I know that it is difficult to assess in terms of money, but it is no more difficult than the assessment which the courts have to make every day in personal injury cases for loss of amenity. Take the present case. Mr Jarvis has only a fortnight’s holiday in the year. He books it far ahead and looks forward to it all that time. He ought to be compensated for the loss of it. …
Here Mr Jarvis’s fortnight’s winter holiday has been a grave disappointment. It is true that he was conveyed to Switzerland and had meals and bed in the hotel. But that is not what he went for. He went to enjoy himself with all the facilities which the defendant said he would have. He is entitled to damages for the lack of those facilities and for his loss of enjoyment.”
Edmund Davies L.J. said at p. 239:
“The court is entitled, and indeed bound, to contrast the overall quality of the holiday so enticingly promised with that which the defendant in fact provided. …
When a man has paid for and properly expects an invigorating and amusing holiday and, through no fault of his, returns home dejected because his expectations have been largely unfulfilled in my judgment it would be quite wrong to say his disappointment must find no reflection in the damages to be awarded.”
That was a holiday which cost £63.45. The Court of Appeal increased his damages from £31.72 (one half of the cost of the holiday) to £125.
The next important case for present purposes is Jackson v Horizon Holidays Ltd [1975] 1 W.L.R. 1468. This was a four week holiday costing £1200. The accommodation and services provided were by any standard pretty ghastly. The county court judge awarded £1100 without saying how he arrived at that figure. It was upheld by the Court of Appeal. The case established that the claimant could recover not only for his own inconvenience and stress but for those members of the family who were taking the holiday with him. Here Lord Denning said at p. 1472:
“In Jarvis … it was held by this Court that damages for the loss of a holiday may include not only the difference in value between what was promised and what was obtained but also damages for mental distress, inconvenience, upset, disappointment and frustration caused by the loss of the holiday.”
At p. 1473, he said:
“People look forward to a holiday. They expect the promises to be fulfilled. When it fails, they are greatly disappointed and upset. It is difficult to assess in terms of money; but it is the task of the judges to do the best they can. I see no reason to interfere with the total award of £1100.”
We were also referred to Adcock v Blue Sky Holidays Ltd, an unreported decision of the Court of Appeal dated 13th May 1980. There the cost of the holiday for five people was £98 per person. The county court judge allowed damages separately for the five holiday makers, having regard to how the breaches of contract affected each of them. He felt inhibited by Jarvis and Jackson and “would have approached the damages on a higher scale than [was] revealed by [those cases] “as appropriate”. The Court of Appeal disagreed: as Bridge L.J. put it:
“I wholly fail to understand how the learned judge was able to extract anything from either of those case which prevented him from awarding the higher scale of damages which he said he was minded to award.”
As Cumming-Bruce L.J. said:
“Contracts for holidays vary on their facts very greatly. The facilities offered by the tour company vary enormously from case to case. It would be a grave mistake to look at the facts in, for example, the Jackson case or the Jarvis case and compare those facts with the facts in another case as a means of establishing the measure of damages.”
Those words of wisdom falling from Cumming-Bruce L.J. are salutary. I praise the industry of counsel and those instructing them in producing up to fifty-six “comparable” cases, practically every one of them reported only in the Current Law Journal and being no more than a précis of the proceedings in the county court. One of the few judgments of the High Court is Kepple-Palmer v Exus Travel [2003] EWHC 3529 (QB). Gage J. (as he then was) held:
“44. In my opinion the claimant is entitled to a sum representing diminution in value of the holiday. In assessing this sum I take into account that this was on any view a very expensive holiday. As such, the claimant and her party were entitled to expect very high standards. As I have found, what she was provided with fell well below these high standards. Doing the best I can, and taking into account what was provided, the location and the time of year, I assess damages under this head in the sum of £22,000 as will be obvious, I calculate this on the basis of a deduction of some 25% from the contract price.
45. In my opinion she is entitled to a sum representing loss of enjoyment. In this respect, I take into account that this was designed to be a very luxurious holiday, coming after her, and her family’s, difficult year. This is, however, not the case of a family unused to holidays. To be able to afford the cost of such a holiday indicates a degree of financial resources from which I infer that that the claimant and her family are used to some of the more expensive things in life, including regular holidays. For that reason, in my judgment, the sum for the loss of the enjoyment must be modest; I assess it in the sum of £3,000.”
I am not sure that the loss of enjoyment must necessarily always be more modest for the wealthy than the poor: the level of distress is surely measured by the extent of the failure to meet reasonable expectations and a luxury holiday of a lifetime for the rich can be as spoilt for him as the more modest holiday of a lifetime for the poor, unless of course the poor man will never be able to afford another whilst the rich man can ameliorate his disappointment by immediately booking another jaunt to make up for his loss. It is a question of fact and degree in each case.
Assessing the quantum of damages for inconvenience and distress
This is undoubtedly a difficult exercise where precision is impossible and where no yardstick exists for measuring in money the right amount of compensation to be awarded. As Lord Diplock explained in Wright v British Railways Board [1983] 2 A.C. 773 at 777:
“Non-economic loss … is not susceptible of measurement in money. Any figure at which the assessor of damages arrives cannot be other than artificial and, if the aim is that justice meted out to all litigants should be even-handed instead of depending on idiosyncrasies of the assessor, whether jury or judge, the figure must be ‘a conventional figure derived from experience and from awards in comparable cases’.”
In the area of conventional awards, comparability matters. Where, therefore, does one find the comparables?
One place to look is to trace the awards given in holiday cases. As I have already pointed out at [35] above, this is not a particularly fruitful exercise because the facts of one case will be infinitely different from the facts of the next. For what it is worth, counsel’s diligent analyses tend on the whole to show rather low awards. One of the highest for a ruined honeymoon was only £4,406, adjusted for inflation. The award in Jarvis is worth £1885 today and in Jackson £4101 for the family of five and in Keppel-Palmer £3499 for the party of six adults. Factors which will have a bearing on the amount of damages awarded in individual cases include the type of holiday so that a special occasion, such as a honeymoon, is likely to attract more damages than for an ordinary annual package holiday. Mr Christopher Lundie, for the appellant, gathered the known holiday cases in categories which show that the highest awards (£4406 to £4360) were to couples whose plans to marry abroad were wrecked; the disappointed honeymooners received from £321 to £1890; for other special holidays the range was £264 to £1161 and the run of the mill ruined holiday attracted between £83 and £1876. The nature of the breach will matter: the sports fanatic denied his sporting facilities will suffer more disappointment than his wife who is perfectly happy on a sunbed by the side of a pool. Thus the features of the holiday which were regarded as the primary features will make a difference.
The search for comparability must extend beyond comparing one holiday with another. There must be some consistency with the level of damages awarded in other fields. The obvious comparison to make is the assessment of general damages in personal injury cases and the awards when psychiatric injury has been suffered. The Judicial Studies Board gives this guidance:
“The factors to be taken into account in valuing claims of this nature are as follows:
(i) the injured person’s ability to cope with life and work;
(ii) the effect on the injured person’s relationships with family, friends and those with whom he or she comes into contact;
(iii) the extent to which treatment would be successful for future vulnerability.”
Awards are divided into cases where the problems associated with those factors are severe, moderately severe, moderate and minor. The moderately severe category covers cases of work-related stress resulting in a permanent or long-standing disability preventing a return to comparable employment and the bracket there is between £12,250 and £35,000. In the moderate category, whilst there may have been the sort of problems associated with factors (i) to (iv) above, there will have been a marked improvement by trial and the prognosis will be good. The range of award there is from £3,750 to £12,250. Minor awards will take into consideration the length of the period of disability and the extent to which daily activities and sleep were affected. The bracket there is £1,000 to £3,750. If the victim has suffered post-traumatic stress which can cause intense fear, helplessness and horror affecting basic bodily functions, temper, concentration and sleeping, a severe case merits £40,000 to £64,250, the moderately severe £14,825 to £37,000, the moderate case, where the injured person will have largely recovered and any continuing ill-effects will not be grossly disabling, commands £5,250 to £14,825 and for minor cases, where a virtually full recovery will have been made within one to two years with only minor symptoms persisting over a longer period, the conventional award is £2,500 to £5,250.
Another field where damages have to be awarded for an affront to one’s feelings is in the field of sexual and racial discrimination. There the leading case is Vento v West Yorkshire Police [2003] I.C.R. 318. Mrs Vento was the victim of sex discrimination in her career as a police officer. As a result she suffered clinical depression for which she was prescribed medication. She suffered suicidal impulses and all of this affected her ability to form relationships. The Employment Tribunal awarded her £65,000 for injury to feelings, including £15,000 aggravated damages, and a further £9,000 for psychiatric damage. The latter award was upheld but her claim for damages for the injury to her feelings was reduced to £18,000. This Court identified three broad bands of compensation for injury to feelings, as distinct from compensation for psychiatric or similar personal injury. The top award was between £15,000 and £25,000 for the most serious cases where there had been a lengthy campaign of discriminatory harassment, of which the Vento case was one. The middle band between £5,000 and £15,000 was for serious cases which did not merit an award in the highest band. Awards of between £500 and £5,000 were appropriate for less serious cases where the act of discrimination was isolated or a one-off occurrence.
Perhaps the most acute form of distress is that which is suffered by a parent who has lost a child. Here damages are limited by statute and the present figure is no more than £10,000.
If that figure may be thought by many to be derisory, it is all part and parcel of the same policy considerations dominating damages for distress. Lord Steyn said it all in Farley v Skinner:
“28. … I have to say that the size of the award [£10,000] appears to be at the very top end of what could possibly be regarded as appropriate damages. Like Bingham LJ in Watts v Morrow [1991] 1 WLR 1421, 1445H, I consider that awards in this area should be restrained and modest. It is important that logical and beneficial developments in this corner of the law should not contribute to the creation of a society bent on litigation.”
The application of these principles to the facts of this case
In approaching the task of assessing damages, I accept that it is permissible to make the assessment under two heads, first the diminution in value and then the distress and disappointment. I do, however, stress that judges should always be alert to ensure that there is no duplication of damages and so it is always salutary to stand back and look at the sum of the two elements in the round before arriving at the figure to award.
As for the diminution in value of this holiday, the essence of the task, hypothetical though it may be, is to try to assess the difference between what the supplier contracted to provide and what was actually provided. It is essentially an assessment of a pecuniary loss. It is essential to exclude from this consideration how the client felt about the diminution in the service supplied, for therein lies the risk of a duplication of damages.
In this case, Mr Christopher Lundie submits on Cunard’s behalf that an arithmetical calculation produces the right answer. Having received their refund, Mr and Mrs Milner actually paid £10,812 for the twenty-eight days they were at sea which is £386 per day. Accepting for this purpose that they lost the whole benefit of their first two nights and even the second and third days (even though they did have meals and the use of the facilities during the day), their loss is 2 x £386 = £772. For the next four days from 9th to 12th January, they were in lesser accommodation which, according to the prices shown in the brochure, was 38% cheaper than their chosen cabin. So he would allow 4 x £368 x 62% = £957, and again he generously ignores in their favour the fact that they had full use of all the other facilities including the right to dine in the Queen’s Grill which would not ordinarily have been allowed to the lesser mortals on deck 6. For the first night on leaving Los Angeles he allows one half of £386 = £193. In round figures this is £2,000.
Miss Sarah Prager, for Mr and Mrs Milner, submitted, as was submitted below by her instructing solicitor, Mr Mason, that the correct starting point was to take the price of the holiday as advertised at £65,558 or £618 a day. She submits that is the right figure because it was on that basis that Cunard calculated the refund and, it having been accepted for that purpose, it should apply for this. If, on the other hand, the price paid on booking the holiday is to be the yardstick, the daily cost of the cruise is £557 which, multiplied by the length of the stay on board, produces a figure of £15,596. Either way, she submits that the judge’s allowing in the region of 30-33% of those figures is well within the generous margin within which there is room for disagreement that this Court should not interfere with that award. She would assess the level of diminution in the bracket between 33% and 50%.
Like the judge, I do not wholly accept either submission. Mr Lundie focuses too narrowly on the three sleepless nights and ignores the general disruption, inconvenience and uncertainty, in so far as it impacts on the quality of the service that was being provided. His figures are to that extent too low. On the other hand, if one is comparing what they got with what they should have received, one cannot ignore that on the New York to Los Angeles leg, they were relatively secure in upgraded cabin, subject only to the uncertainty of their accommodation thereafter. Mr Lundie’s calculations are a useful cross-check but looking at the matter in the round, as I believe is appropriate, I conclude that the value of the cruise was diminished by about one third when regard is had overall to that which was not provided balanced against that which was enjoyed. That may not be very different from the judge’s assessment but where I disagree with him is in his seeming to accept that the cost was the advertised cost, not the discounted cost. What they actually paid is what matters for this purpose. That was £10,812. So I would allow the appeal under this head and award Mr and Mrs Milner £3,500 under this head.
As for damages for physical inconvenience, discomfort and mental distress, it is again part of the task to compare the expectations against the reality. Here the expectations were sky high. This cruise was advertised to be “a legendary experience exceeding expectations”. Mr and Mrs Milner, who had been on cruises before, made certain to book eighteen months early in order to secure their enjoyment of this “unprecedented event in Cunard’s long and illustrious history”. They made sure they could obtain a cabin of their choice in the place of their choice and they were entitled to expect that it would be among the “most spacious and sumptuous suites at sea”. So determined were they to secure a cabin mid-ships that they refused Thomas Cook’s offer to upgrade them to a much better suite but one which was not a mid-ships. They expected no trouble on the “sleek contemporary Queen Victoria [which embraced] the most advanced technology and a host of luxurious innovations”. Mrs Milner had gone to great trouble to choose her wardrobe of twenty-one formal eveningwear gowns, which, as the brochure had stressed, were necessary for the regular formal dining occasions. As she said in her witness statement:
“3. As this was such a special trip for us, a one-off occasion, I had spent a great deal of time selecting these outfits which were to be my formalwear during the four month long cruise we were about to depart on. It was the first time we were to travel Grill Class with Cunard.
4. I had purchased approximately twenty-one dresses – formal evening wear outfits, which were necessary for the large number of formal events we were to attend during the extended cruise. There were going to be approximately four formal evenings per week over a three and half month period. These dresses were purchased at a cost of approximately £4,300 so an awful lot of time and expense had gone into choosing these special outfits and I was really looking forward to wearing them. …
5. They were very formal dresses, the kind which I do not have occasion to wear when I am at home in Leeds, so I was excited to have the opportunity to wear all these dresses on this very special cruise.”
In summary, the Milners were promised and they expected “star treatment” and an altogether infinitely more delightful experience than their previous cruise around the world. It was well summed up by the judge and at the risk of repetition I set out again what he said:
“The nature of the description in the brochure as to what the cruise was going to be like is such as reasonably to give to the Milners … the feeling that they were in for the experience of a lifetime.”
Instead of that what did they receive? That is best illustrated by quoting from Mr Milner’s diaries, the accuracy of which the judge accepted.
“6th January Sail away
Sleep was impossible as the noise reverberated around the cabin and vibrations could be felt in the bed. … By 4 am we were in a terrible state due to this torture and we went to the lido for some coffee and respite from the noise. There we met a young couple who were staying in the cabin above us who had the same nightmare situation of noise and could not sleep.
7th January
Although we were exceptionally tired we went to dinner and had wine also and went to bed late (1 am) in an effort to sleep, which we had not done since we boarded the ship. The sounds were horrendous. We tried to cope but my wife broke down and was crying uncontrollably with exhaustion, I thought I would have to ring for a doctor. … The noise was unbearable and torturous and we were in a terrible state of distress.
When we met Messrs Howie and Jansen I emphasised the fact we had not been able to sleep for two nights and days and that the plate flexing noise was getting worse as the weather deteriorated. I was also very concerned at my wife’s deteriorating health due to sleep deprivation and an asthma type of stress attack she had suffered during the night due to this torturous situation. … My wife became stressed during this discussion and Mr Howie seeing the obvious state she was in asked if she would like to see a doctor which she declined. She carried medication and inhalers with her.
8th January
Had a good night’s sleep in 6083 but the sea was rougher and we could not stop in 7083 during the day for any length of time due to the excess of noise.
11th January
Tried to rest in 7083 in the afternoon but could not for the noise, even in calmer sea at lower speed.
12th January
Same routine as yesterday. Getting very tired of the situation. Cindy getting more distressed by the day.
13th January
We moved into suite 8090. Suite is excellent but we feel like gypsies moving about. Only in for 2-3 days so we cannot empty our cases till we have a permanent home. It is very frustrating when you come to get dressed in the evening finding out where various items are. Had a good night’s sleep.
14th January
Breakfast in our room, slow pleasant start to the day. Problem is you constantly have the uncertainty hanging over you in this situation which tends to restrict your desire to get involved in regular events. … Cindy got upset again and I told her to hang in.
15th January
Broken sleep not due to current suite or any noise but because of uncertainty of the ongoing situation. We need our minds putting to rest.
16th January
Cindy not good today, getting quite depressed, does not want to go out of the room. … We just seem to limp from day to day, worst thing is the uncertainty and we are not being kept in the picture as to what is happening.
17th January
Similar day to yesterday. Cindy much better.
19th January
Good night’s sleep. … I am feeling poorly; I think I have a liver infection.
23rd January
My bottom lip has broken out in ulcers. I have never had this before. Not feeling good today. Cindy bad with chest breathing.
25th January
Lip now in terrible state with ulcers, very swollen, need to see the doctor as it is not responding to the cold sore/ulcer cream I am using.
Doctor visits … His diagnosis was … it must be stress-related.”
[As I have already set out at [24] above the judge accepted that in paragraph 41 of his judgment.]
“30th January
Moved back to 7083. Stayed on board to supervise move. When Cindy returned we agreed to be positive and look upon this as the first day of our cruise. Had a good dinner with wine and retired about 11.30 pm. Cabin creaked much worse than before but not flexing.
31st January
Exactly as I predicted. … the banging, flexing and vibrations reverberated in the areas which had not been strengthened, i.e. under the bed, at the foot of the bed and in the seating area. We were awakened with loud banging around 2 am. … Cindy was distressed and in tears.
1st February
Both feeling pretty miserable as we are now at the end of the road regarding the voyage we have been looking forward to for over 18 months. The time we have had on this ship has been a complete waste of time and has affected our health greatly.
4th February
To say we got off the ship stunned and feeling isolated and in shock is an understatement. We had not realised what the QV experience over the past few weeks had taken out of us.”
He picks up the story of their stay in Hawaii in his witness statement:
“37. Looking back we should not have stayed in Hawaii for that length of time. We did not receive any enjoyment from our stay, we were very depressed and struggling to make decisions or have any clarity of thought. We were in no state to fly and simply began to recuperate in the hotel – we actually did not leave the hotel for approximately 2 weeks when we first arrived in Hawaii. It was hard to decide what to do after we had left the cruise. …
39. The ruined cruise was a terrible, stressful experience, and the ill-effects were felt by both of us long after returning home. It was supposed to be a fantastic experience that we had looked forward to for so long and had spent so much money on. I still cannot believe the way we were treated by Cunard.”
That statement was dated 30th December 2008.
The consequences for Mrs Milner, especially with regard to her wardrobe, were set out in her witness statement:
“7. I have never worn a single one of those dresses or outfits during the time that has passed since the cruise. The emotional toll that the cruise took on me was so great that I find it too hard to be reminded of that time.
8. I have had one formal event to go to in the time that has passed since we left the cruise. I went to look at the dresses that I had purchased to see if any were suitable for the occasion. When I retrieved the dresses from where they had been stored and began to look through them, I broke down in tears. The memories were simply too upsetting. All of this expensive clothing was wasted and I will not have the chance to wear it all again, nor would I want to.”
In my judgment this is an exceptional case. It has nothing to do with the money that was paid for it. It has everything to do with a long awaited special, indeed, exceptional event. There is little in the diaries to speak of anticipated enjoyment except, perhaps, for Mr Milner, seeing, as they left New York at 4.30 am, as Miss Prager put it, “three Queens cruising together”, and that would be a sight for sore eyes at any time and in any circumstances! The indisputable fact is that the holiday of a lifetime was ruined for them.
It is important, however, not to lose sight of the fact that on the findings of the judge which have not been appealed, the rest of the cruise did not take place because the package was cancelled by agreement. It is not a case of a repudiation accepted by Mr and Mrs Milner. They are not, therefore, entitled to damages for the loss of the pleasures of the rest of the cruise around the world. Their disappointment must be measured against the month they were on board.
Even if, as I hold, this is an exceptional category of case where an extra-special holiday can never be repeated and where, certainly in Mrs Milner’s case, nothing similar will ever be repeated because it seems she simply cannot face going on another cruise ever again, nevertheless the judge’s award of damages is out of line with the sums that are regularly awarded in the County Court. As set out at [37] above, the run of the mill award even for the honeymoon cases or other special occasion cases, not to mention ordinary family holidays, may seldom reach £2,000 and the highest awards to which we have been referred are over £4,000 where a planned marriage on holiday was frustrated. I accept, of course, that whilst those awards are interesting, they are not compelling.
I bear Lord Steyn’s strictures in Farley in mind, but I cannot but feel the recitation of misfortune set out above is horrendous enough to justify exceptional awards. In Mr Milner’s case he appears, not surprisingly, to have been more phlegmatic than Mrs Milner, but even he suffered under the stress as the judge found. Mrs Milner’s distress then and now is perhaps a little more acute. Future pleasure from future cruises is now denied. Her unused and now unwanted wardrobe is a painful reminder of what could have been but was not to be.
In addition to general damages for distress the judge awarded Mrs Milner £2,000 under the heading of wasted expenditure for the cost of the formal eveningwear which she lost the opportunity to wear. I am not persuaded of this. Her wardrobe was not enjoyed partly because of the unsettled time whilst actually on board but mainly because the Milners terminated the voyage when they reached Hawaii. The defendant’s breach did not cause the loss. Mr Lundie concedes that Mrs Milner’s disappointment in not being able to wear her carefully chosen gowns is a matter properly to be brought into account when assessing the measure of her distress and I think that is the better way to deal with that part of the case. On this aspect I would reverse the judge accordingly.
I must now stand back and look at the judge’s awards of £7,500 for each of them against the background of comparable awards for psychiatric damage in personal injury cases, for injury to feelings in cases of sex and race discrimination and damages for bereavement as I set them out above.
Damages under these heads are of course not entirely comparable with damages in holiday cases. Physical inconvenience and discomfort is necessarily ephemeral. Disappointment, distress, annoyance and frustration are likewise the feelings one experiences at the time and which last painfully for some time thereafter. But one is not disabled, the psyche is not injured and one gets on with life. Every time one thinks back, one relives the horror but the reliving of it is transitory. There is no medical evidence here to indicate any recognisable psychiatric injury: distress falls into a different and less serious category and does not equate with bereavement.
I warn myself of the need not to interfere with the judge’s award unless I am satisfied that the award truly was excessive. I must not tinker. I must concede to him the inestimable advantage he had of seeing and hearing the witnesses and judging their level of distress, especially as shown by Mrs Milner when giving her evidence. I am, however, satisfied that the judge erred in awarding £7,500 and £9,500 in addition to £2,500 each for the diminution in value. This is excessive and disproportionate. On reading and rereading the judgment several times I am left with a niggling fear that he may have been seduced by the argument no doubt convincingly advanced by Mr Mason as the co-author of a well known textbook in this field, Grant and Mason, The Law relating to Travel and Tourism, that the “damages …ought to be getting on for the full cost of the cruise and … an appropriate figure would be £50,000” (see paragraph 43 of the judgment set out at [24] above). Not only was it wrong to use the price of the holiday as a benchmark for damages but the judge may also have slipped into error by deciding damages on that basis before he made the further important finding that the major part of the cruise was not enjoyed because the Milners voluntarily abandoned ship in Hawaii. One way or another the judge fell into error and I would allow the appeal.
Conclusion
No-one wants this case sent back and so we must do our best. Taking all of the above maters into account, I conclude that the right sums to award for inconvenience and distress are £4,000 for Mr Milner and £4,500 for Mrs Milner. Adding in the £3,500 for the diminution in value and looking at the matter in the round, I am satisfied that a total award of £12,000 is fair and just compensation for the failure of Cunard to meet their guests’ legitimate expectations. I would allow the appeal and vary the judge’s order accordingly.
Lord Justice Richards:
I agree.
Lord Justice Goldring:
I also agree.