The Civil Aviation Authority v Travel Republic Ltd

This is an appeal by way of case stated against the decision of District Judge Evans sitting in the City of Westminster Magistrates’ Court when he acquitted the respondent, Travel Republic Limited (“TRL”), of certain offences under regulations 3(1A) and 15(2) of the Civil Aviation (Air Travel Organisers’ Licensing) Regulations 1995 (as amended) (“the Regulations”).

In total some 20 informations were laid against TRL by the appellant, the Civil Aviation Authority (“the CAA”). There were also 20 informations against one of its directors, Mr Pirie. The CAA is not appealing against the acquittals in his case. However, it is pursuing the appeal against TRL because the CAA sees it as a test case which will clarify an important issue that has arisen with respect to the scope of the Regulations.

Regulation 3(1A) has its origins in the European Council Directive 90/314/EC of 13 June 1990 (“the Directive”) which is a Directive on “package travel, package holidays and package tours”. The Directive seeks to establish a common legal framework throughout the EU with respect to the provision of package holidays and tours so as to ensure proper competition, and also to provide consumer protection to those buying package holidays.

The Package Travel, Package Holidays and Package Tours Regulations 1992 were made so as to give effect to the Directive. For example they stipulate what information has to be made available to consumers; they prohibit upward price revision unless certain conditions are met; and they confer certain rights on the consumer if the holiday organiser cancels the package for any reason other than the fault of the consumer.

The Civil Aviation (Air Travel Organisers’ Licensing) Regulations 1995 (as amended) (“the Regulations”) have since 2003 addressed a particular aspect of the protection intended to be afforded by the Directive in respect of package holidays which have an air travel element. The aim is to provide financial protection to consumers who purchase in the United Kingdom flight inclusive holidays in circumstances where for one reason or another, such as a supplier becoming insolvent, they are not provided with the holiday offered.

Regulation 3(1) provides that only restricted categories of persons may make available “flight accommodation” in the United Kingdom. These persons include the holders of a licence, known as an air travel organiser’s licence or “ATOL”, authorising them to make available flight accommodation, as well as any person who is an agent of an ATOL licence holder.

Licences are given by the CAA to those who are considered fit to hold them. In order to be considered a fit licensee, the licence holder must have sufficient financial resources to meet its actual and potential financial obligations.

The significance of holding an ATOL licence is that the CAA operates a protection scheme for customers who deal with ATOL licence holders or their agents to indemnify the customers from losses which result when, for reasons for which the customer is not responsible, the holiday cannot be taken or for other reasons falls short of expectations. These losses are not limited to cancellations of flights but extend to all the services which when combined constitute the holiday.

Regulation 3(1A) is designed to achieve that objective. It does so by seeking to ensure that whenever a package holiday is provided, all the elements come from someone who is an ATOL licence holder. That is achieved by requiring that all the services are provided by the single ATOL supplier who provides the flight:

“A person shall not make available flight accommodation which constitutes a component of a package in the capacity of an agent for a licence holder except where all the components of the package are made available under a single contract between the licence holder and the customer.”

By regulation 15(2), a breach of regulation 3(1A) is a criminal offence.

The effect of regulation 3(1A) is that where the sale of a package is concerned, it is not lawful to provide different elements of the package under different contracts with different suppliers. The ATOL licence holder must provide all the relevant services in a single contract and is accordingly liable for any failing with respect to any of the services provided.

The ATOL indemnity scheme protects the consumer if the ATOL licence holder itself becomes insolvent. That scheme is industry-wide and self-financing. It is funded by a charge upon the licence holder in respect of each relevant passenger to whom the licence holder makes available a flight. The current charge is £2.50 per customer. However, it is vital that all services come from an ATOL licence holder or their agent; if parts of the package are bought from a third party, the customer will not be protected save with respect to the flight accommodation supplied by the ATOL licence holder.

The disadvantage to consumers of not having ATOL protection is demonstrated by the failure in 2008 of two companies, Pure Flights Limited and Freedom Flights Limited. All the customers named in the informations in this case, except for one, were booked onto flights provided by one of those companies. As might be expected, once the airlines failed, for many people flights were lost and holiday arrangements could not be fulfilled. Although all the customers were covered by the ATOL scheme as far as their flights were concerned, they were not entitled to a refund of the accommodation or other costs in circumstances where these had been separately supplied by a different supplier. Arrangements were made so that in fact most customers did not lose out financially from these flight failures, or only lost relatively small sums. However, their protection was not guaranteed, and also some did lose significant sums.

The definition of “package” is central to this appeal since it is only where a package as defined is provided by the agent that the duty to purchase services from a single ATOL licence holder applies. “Package” is defined in regulation 1(2) as follows:

“… the pre-arranged combination of at least two of the following components when sold or offered for sale at an inclusive price and when the service covers a period of more than twenty-four hours or includes overnight accommodation:-

(a)

transport;

(b)

accommodation;

(c)

other tourist services not ancillary to transport or accommodation and accounting for a significant proportion of a package, and

(i)

the submission of separate accounts for different components shall not cause the arrangements to be other than a package;

(ii)

the fact that a combination is arranged at the request of the consumer and in accordance with specific instructions (whether modified or not) shall not of itself cause it to be treated as other than pre-arranged.”

This definition mirrors that found in the Directive itself. The major difference lies in the addition of (c)(ii) to the domestic definition which was added in order to reflect the judgment of the ECJ in Club-Tour v Garrido [2002] ECR 1 – 4051. In that case the European Court of Justice was dealing with a situation where the applicant purchased a holiday from Club Tour consisting of air tickets and accommodation for two weeks at a holiday village in Greece. Club Tour purchased the holiday from a travel agency, Club Med. However, there was an infestation of wasps at the holiday village and Club Med was not able to place the customer elsewhere. He refused to pay the price of the holiday and Club Tour sought to enforce payment before the Portuguese courts.

The court was asked to answer two questions relating to the Directive, namely:

The court answered both questions in the affirmative. As to the first question, it said this:

“There is nothing in that definition to suggest that holidays organised at the request and in accordance with the specifications of a consumer or a defined group of consumers cannot be considered as ‘package holidays’ within the meaning of the Directive.”

As to the second question, it observed that there would still be a pre-arranged combination within the meaning of Article 2(1) even where the combination of tourist services is as a result of wishes expressed by the consumer up to the moment when the parties reach an agreement and conclude the contract. The requirement that it must be pre-arranged, therefore, does not mean that it has to be a combination of services fixed by the travel agency which is made available to the consumer on a “take it or leave it” basis.

TRL is a leading and highly respected British travel agent. It markets and sells to consumers air flights, hotel or other accommodation, transfers to and from airports, parking facilities, car hire, insurance and so forth. It usually acts as an agent on behalf of the sellers of these services, although sometimes it is an agent of the customer.

In effect it operates as a web search engine which facilitates a booking of travel related services. It does not have brochures, it does not itself supply any services other than as an agent, and it does not have a stock of products. It takes business both from over the internet and by telephone. Typically, it will be accessed on the internet either directly through its own website or by following up links on a major search engine such as Google.

Once on the website, a customer is offered a choice of flights, hotels and apartments, car hire and other related services. Some web links specifically refer to what are described as “tailor made holidays”. The various components which make up a holiday are ostensibly all sold separately but they can be linked together by a customer to provide all the necessary elements of a holiday, and indeed the system consciously facilitates their ability to do this. The total cost of the combined services will be the same as the aggregate cost of each component priced separately. In other words there is no price discount for booking more than one element of the holiday.

A similar approach is adopted with respect to those who seek to book by telephone. There is a script that TRL has which is supposed to emphasise that TRL acts as agent for the providers of each component; that each component is provided separately; and that TRL does not provide package holidays itself. Not surprisingly, the judge found on the evidence that in practice different telephone operatives dealt with the customer in different ways and the script is not always adopted. However, for the purposes of determining the legality of the arrangements in what is a test case, I think that we, like the judge below, must assume that the criminal liability must be the same whether the internet or telephone routes are adopted.

The key issue in this case is whether by making available the flight accommodation together with some other service or services which the customer chooses to combine with it as part of a holiday, TRL was offering for sale a “pre-arranged combination of … components … at an inclusive price” so as to constitute a package under the Regulations. If TRL was thereby offering a package as described, it was acting unlawfully and in breach of regulation 3(1A) in providing different suppliers for different elements of the package. Save with respect to the flight element, the customers would not have any ATOL protection at all for the other elements of the holiday.

The submissions before the judge were essentially the same as those advanced before us. Putting it very succinctly, the CAA alleged that TRL was making available a package within the meaning of the Regulations; the situation was akin to that envisaged in the Garrido case. The customer is simply putting together a combination made available by the agent; to all intents and purposes the parties are agreeing a package by the time of sale.

Furthermore, the CAA submitted that the construction it relies upon was supported by the decision of the Court of Appeal in The Association of British Travel Agents v The Civil Aviation Authority [2006] EWCA Civ 1356 in a judgment given by Chadwick LJ (with whose judgment Arden LJ and the President of the Family Division agreed). The component elements of the holiday were part of a linked combination for which a single inclusive price was paid.

TRL submitted that the judgment of Chadwick LJ in the ABTA case supported its analysis. It was not offering for sale or selling the various components of the holiday as part of a package, but merely as separate services being offered for sale at the same time. It charged a single price for such services as the customer selected but that was because it would be a pointless formality to require each service to be bought as a separate transaction requiring a separate payment.

The district judge found for TRL. He expressed his conclusion at [48] as follows:

“In my judgment the prosecution has failed to discharge the burden of proving that TRL did anything other than sell or offer to sell components of holidays separately, but at the same time, I am not satisfied, beyond reasonable doubt, that TRL made available to any of the customers named in the charges, flight accommodation which constituted a component of a package holiday.”

He was asked to state a case for this court. There was some discussion as to whether it was better to appeal by the case stated route or by way of judicial review. The former method was adopted. The judge posed two questions for consideration by this court:

“(i)

Whether on the facts found, I was entitled to find that in respect of each of the customers named in each of the Informations, Travel Republic Ltd had not made available flight accommodation which constituted a component of a package as defined in regulation 1 of the Civil Aviation (Air Travel Organisers’ Licensing) Regulations 1995 (as amended), and that by reason thereof Travel Republic Ltd were not guilty of the offences set out in the Informations.

(ii)

Whether in relation to my decision in Question (i) above I was entitled as a matter of law to apply the criminal standard of proof.”

The ABTA case lies at the heart of this appeal. We are bound by the reasoning of the Court of Appeal. Mr Croxford QC, counsel for the CAA, submitted that since we are giving effect to legislation which is intended to implement a European obligation, it is necessary to adopt a purposive approach to its construction which is consistent with the meaning of the Directive. However, he accepted that we must assume that the Court of Appeal has adopted that approach in the ABTA case (as indeed Chadwick LJ said he had: see para 9).

ABTA involved a judicial review application in which certain guidance from the CAA about the effect of the Regulations was successfully challenged on the grounds that certain passages in that guidance wrongly described their effect. Goldring J gave a judgment which was critical of parts of the guidance, and the Court of Appeal dismissed the appeal from his judgment, whilst differing in relatively minor respects from his analysis of why and to what extent the guidance did not accurately reflect the law.

The central question facing the court was when the sale of flight accommodation together with some other linked service or services could be said to constitute a package as defined: that is, when the services offered constituted a pre-arranged combination for which an inclusive price was being charged. Chadwick LJ noted that following Garrido it mattered not whether the customer in effect put the holiday together from options identified by the travel agent, or whether the travel agent produced a package of its own. Indeed, as I have said, that much is now made clear in the definition of “package” in regulation 1(2) itself.

Chadwick LJ focused on the requirement that the component elements must be sold at an “inclusive price”. It was common ground that this meant that the consumer was buying and paying for the component parts of the package as a whole. His Lordship observed that in the majority of cases the inclusive price would be less than the price of the combination of elements priced individually. This might be because it is cheaper to provide elements together - for example, hotels might provide free travel from the airport - or simply because a discount is offered for the package.

The more difficult situation is where the price of the package equals that of the elements taken and priced separately. Chadwick LJ said this (para 26):

“The more difficult cases are those in which the price for the whole is equal to the aggregate of the prices for which the components would have been sold or offered for sale separately. The principle is, perhaps, easier to state than to apply in practice. If the components are offered for sale as a pre-arranged combination – albeit that the components are not combined (and, perhaps, not all identified) until “the moment when the parties reach an agreement and conclude the contract” (to adopt the language of the Court of Justice in the Garrido case) – then the price for the combination will be “an inclusive price” notwithstanding that it may have been calculated, arithmetically, by aggregating the prices of the components: that is to say, notwithstanding that the price for the combination is the aggregate of the prices for which each component would have been sold or offered for sale if it had been sold or offered for sale as a separate service outside the combination. The factual question to be resolved – on a case by case basis – is whether the services are being sold or offered for sale as components of a combination; or whether they are being sold or offered for sale separately, but at the same time.”

Chadwick LJ then illustrated the operation of this principle by giving examples of two cases falling either side of the line. He first gave an example of what would be likely to be perceived as the sale of a pre-arranged combination (para 27):

“… Suppose a customer, in London, who wishes to spend a week at a named hotel in, say, Rome. He asks his travel agent what the trip will cost him. The agent ascertains that the cost of the return flight will be £X, the cost of accommodation will be £Y and the cost of the airport transfers will be £Z. Without disclosing the individual cost of each service, the agent offers the customer flights, accommodation and transfers at a price of £(X+Y+Z). The customer accepts without further inquiry. In that case there would be little doubt – as it seems to me – that the services were sold as a pre-arranged combination and at an inclusive price.”

He then gave an illustration of a case where the opposite conclusion would probably be reached (para 28):

“Now suppose that the agent has informed the customer that the cost of flights will be £X, the cost of accommodation will be £Y and the cost of transfers will be £Z; and has explained to the customer that he can purchase any one or more of those services, as he chooses, without any need to purchase the others. He has explained, in effect, that the customer can choose to purchase the other services elsewhere; or to make other arrangements. In that case – as it seems to me – there would be little doubt that the services are not offered for sale as a pre-arranged combination and at an inclusive price.”

To similar effect was his comment on the following sentence which was originally found in paragraph 4.3 of the guidance:

“If an agent offers a customer a choice of travel facilities, including a flight, the resulting sale will be a package requiring the agent to hold an ATOL.”

He agreed with Goldring J that this sentence was misleading because it was not a necessary consequence of the facilities being offered together that they constituted a package as defined.

Paragraph 47 of the judgment also touches on the same issue. It concerns another of the paragraphs of the guidance, namely paragraph 4.7, which ABTA was also submitting was inaccurate:

“If an agent advertises that he can provide tailor-made holiday arrangements or he can provide dynamic packages, then he will need an ATOL to cover the majority of such sales. However if all facilities were offered and sold by the agent on behalf of a single ATOL holder, an ATOL would not be required.”

Chadwick LJ said this about this paragraph:

“The first sentence is a correct statement of the law in so far as it relates to “dynamic packages” – provided, of course, that the package includes flight accommodation. On the other hand, “tailor-made holiday arrangements” are not necessarily within the definition of “package”; although some (indeed, perhaps, the majority) will be. That issue will turn on the facts of the particular case: is the advertisement to be seen as an offer to sell a pre-arranged combination of travel services (including flight accommodation) or as an offer to sell a number of separate services, each at its own price. If the latter, the agent will not need to hold an ATOL. The second sentence is plainly correct – see the saving provision in regulation 3(1A)(a) of the ATOL Regulations.”

Chadwick LJ returned to the same issue in paragraph 49 of this judgment when he considered paragraph 6.1 of the guidance:

“Paragraph 6.1 contains the following general observation, by way of summary:

“Travel firms which sell air package arrangements which they have constructed themselves will in the majority of cases need to hold an ATOL to protect those sales. From the agent’s perspective this means that if they have selected specific travel components, or they have offered for sale travel facilities including a flight, then the resultant sale will usually be a package. From the customer’s perspective, if he approaches an agent and explains that he wants to buy a flight and accommodation and/or other services, or merely wants to buy a holiday, then it is likely that the arrangements will have been sold or offered for sale to him as a package.”

Taken as a general observation, that paragraph is unobjectionable. The first sentence is plainly correct. The premise which underlies that sentence is that the arrangements are sold as an air package. The second sentence is also correct. The fact that the agent has selected the travel components is likely to point to the conclusion that the components are offered for sale as a pre-arranged combination. The position may be less clear where the agent has “offered for sale travel facilities including a flight”. As I have explained, an offer to sell two or more separate travel services at the same time does not necessarily lead to the conclusion that the services are being sold or offered for sale as components in a pre-arranged combination and at an inclusive price; but, on the facts of the particular case, it may do so. I do not think that ABTA is in a position to challenge the CAA’s view that an offer made in the circumstances described in the second sentence will usually lead to that conclusion. …”

Finally, I also draw attention to paragraph 45 which considers the significance of the customer’s understanding of what he is getting when he approaches the travel agent:

“There are other statements in the Guidance Note which are said to contain or reflect errors of law. Paragraph 2.3 – under the heading “Package” – is in these terms:

“The definition is at paragraph 1.5. One reasonable test is to consider what the consumer thinks he is getting when he approached the agent or travel organiser; artificial arrangements to sell components at separate times and with separate billing would not mean that a package had not been sold.”

The second limb of the sentence is unobjectionable: it reflects the proviso to the definition of “package” in the Directive (proviso (i) to the definition in the regulations). The first limb is open to the criticism that the test is not subjective. But the fact that the customer thinks he is buying two or more separate services at the same time rather than a combination of services at an inclusive price – (or vice versa) – may be a powerful evidential pointer to the true nature of the transaction. ”

Chadwick LJ therefore treated the subjective understanding of the customer as of evidential relevance only. The fact that he thinks he is being sold components in combination does not of itself render what is on offer a package.

In my judgment the issue in this case is whether it was open to the district judge, in the light of the evidence before him, to conclude that there was no breach of regulation 3(1A).

The CAA submits that it was not. The facts here bring this case firmly and incontrovertibly within the first example of a pre-arranged combination of services for an inclusive price. The evidence was that in virtually all cases the consumer is seeking, and says that he or she is seeking, a holiday. That is what they thought they were getting which, as paragraph 45 of Chadwick LJ’s judgment shows, is potentially relevant to the proper analysis of the arrangements. The fact that he and not the agent selects the linked components is immaterial, as Garrido, and now regulation 1(2)(c)(ii), makes clear. Indeed, the submission is that this case is covered by that principle: here the customer is choosing linked services from a range made available to him. It is in substance no different from the situation where the agent puts together a package at the request of the customer, save that the potential elements of the package have been made available to him in advance.

Moreover, TRL’s website specifically refers to “tailor made holiday flights plus hotel”. That is what TRL is providing, albeit that the elements can be separately purchased and that there is no discount in buying them together rather than separately. The facts fall clearly within paragraph 47 of Chadwick LJ’s analysis, set out above, in which he said that the majority of tailor-made holidays fall within the definition of package. The services are purchased at the same time and are linked to each other by the customer’s desire in virtually all cases to create a holiday.

By the time the contract is made, there is a pre-arranged combination of elements together making up a holiday. The fact that there is a separate supplier with respect to each element does not alter that fact. By purporting to treat each element separately, TRL had deprived the customers of the ATOL guarantee with respect to everything save their flight accommodation component. Although some passages in Chadwick LJ’s judgment, such as paragraph 28, might appear at first blush to support TRL’s case, they should not be read in isolation but in the context of the whole judgment. In particular, the observation of Chadwick LJ in paragraph 49 is particularly relevant. There he accepts that the guidance was not wrong to say that if the customer approaches an agent and explains that he wants to buy a flight and accommodation and/or other services and this is provided, that will usually constitute a package.

TRL’s submission advanced by Mr Purnell QC can be shortly stated. The principle which the judge had to apply was to ask whether the service was offered for sale or sold as components of a combination or as a single package. If offered for sale or sold separately, even if at the same time, there is no package within the meaning of the definition. As Chadwick LJ pointed out, this is a question of fact for the judge. In this case the judge heard extensive evidence over nine days, and he reached a conclusion on the evidence which he was entitled to reach.

The issue is not whether the customer is seeking a holiday, nor even whether he would consider himself to be buying a holiday; nor is it whether a holiday is properly described as a package. The issue is whether what is being made available are components of a pre-arranged combination or are separate elements being sold at the same time. Linkage between the elements is neither necessary nor sufficient to amount to a package.

The judge was faced with an issue of fact to determine and he found in favour of TRL. Looking at the primary facts he was not willing to infer that this involved making available the components of a combination for an inclusive price. This was obviously not a perverse conclusion. On the contrary, it was a conclusion which was virtually dictated by paragraph 28 of Chadwick LJ’s judgment. Even if that is not so, it was certainly a permissible conclusion compatible with what Chadwick LJ said in, for example, paragraph 31. As to Chadwick LJ’s observation in paragraph 49 of his judgment, that was not envisaging a situation where the customer could select one or more services as a matter of his own choice, but rather was assuming that the agent was choosing and providing the selection for the customer. In those circumstances it is easy to see why the arrangement would constitute a package as defined.

The solution to this case involves applying the principles adopted in the ABTA case to the facts. That was the function of the district judge. I accept the submissions of TRL that the fact that someone wants to buy a holiday does not of itself mean that when making available the components necessary to enable him to achieve that wish, TRL is selling a pre-arranged combination for an inclusive price.

It is clear from paragraph 45 of Chadwick LJ’s judgment that the subjective perception of the customer is not conclusive as to the nature of the transaction. I accept, as did Chadwick LJ, that the distinction between cases caught by the regulation and those falling outside it can on the particular facts be a fine one; to that extent each transaction is fact sensitive. So the regulation will almost certainly bite in a case where the customer specifically tells the agent that he wishes to buy a holiday and the component services are either offered or suggested to him as part of a proposed single holiday package. The combination is then put together by the agent for the customer. Whilst that may well have happened on occasions with this agent, particularly where holidays were booked by telephone, that is not the typical situation which we are required to address in this test case.

Essentially we are dealing with a situation where the customer chooses his or her own combination of services from a wide range of options, in circumstances where TRL does not know whether a customer will select only a single service or a combination. The customer is putting together his own combination for himself. Of course, TRL will wish to sell as many services as it can, and it will know that the majority - and perhaps an overwhelming majority - of its customers are seeking to combine the services to make a holiday. Their website recognises that fact when it advertises that holiday packages are available. But, in my judgment, that does not necessarily mean that they are selling the services or otherwise making them available at the point of sale as component elements of a pre-arranged combination.

It follows that, in my view, the only basis for challenging this conclusion would be on traditional Edwards v Bairstow principles, namely that there was no evidence to sustain the decision or that it was otherwise a perverse conclusion on the evidence i.e. one which no reasonable judge could have reached. In my judgment there is no basis for so holding. On the contrary, in my judgment, his analysis is entirely consistent with the Court of Appeal’s decision. On the face of it, these selling arrangements fall solidly within the example given in paragraph 28 of Chadwick LJ’s judgment, and even if Chadwick LJ did later resile a little from the strong view addressed in that paragraph, such as in paragraph 31, he clearly envisaged that arrangements of the kind adopted here would readily fall outside the definition of a package.

Like the judge, I do not think that the approach of the CAA gives any proper recognition to the possibility that services might be sold separately but at the same time.

Mr Croxford submitted that this situation would arise in only two situations; the first is where wholly unconnected services are acquired, such as a ticket to France one week and hotel accommodation in Germany for some other time. The second is where it is made absolutely plain to the customer that the services are being made available to him separately and distinctly.

The former is uncontroversial, but does not exhaust what Chadwick LJ had in mind. His Lordship plainly envisaged that even linked services might be sold separately and fall outside the definition of a package. As to the latter example, I am not persuaded that the agent’s insistence as to the nature of the transaction would suffice to deny the status of a package to something that would otherwise be so treated in law. EU law focuses on substance and not form, and I do not think that the assertion by the agent that the services are being separately provided can define the nature of the transaction.

There is in any event the further problem with relying on this second example on the facts of this case. It is that in paragraph 47 of his judgment below, the district judge found that the consumers knew and accepted that they were not choosing services as components of a pre-arranged combination. So if that is indeed the test for determining when services must be treated as having been offered separately but at the same time, TRL appear to have met that test. It follows that in my judgment the answer to the first question posed by the judge is that he was right, or at least entitled, to reach the conclusion he did.

I turn to the second question posed by the judge. It was whether he was entitled to apply the criminal standard of proof.

There can only be one answer to that question, as both parties accept. Plainly the normal criminal burden and standard of proof applies. However, Mr Croxford submitted that the criminal standard of proof has no relevance in this case. He submitted that where the facts are not disputed, the question whether they fall within the scope of the statute is a question of law with only one answer. Either TRL was making a package available or it was not and the judge was wrong to treat this as though there was a criminal burden which the prosecution had to discharge.

I do not accept that, at least not in the circumstances of this case. The primary facts were indeed undisputed, or at least very largely so; but from those primary facts, such as how the information was provided on the web, how the sale was effected and so forth, it was necessary to determine whether it could be inferred that what TRL was making available was a package as defined. That involved an assessment of various factors, including for example the customer’s own perception of what he or she was getting.

I do not think that in all cases it could properly be said that there is only one answer to this question of fact. In my view Chadwick LJ was also envisaging that the issue will sometimes be fact sensitive, and in such circumstances different judges may reach different conclusions without either erring in law. If that is right, then in my judgment it was appropriate for the judge to ask himself whether the prosecution had made him sure that on the facts he had found, TRL was making available package holidays as defined. Strictly it was not necessary for the judge to reach a concluded view as to whether it was or not; for the purposes of determining criminal liability it was acceptable simply to say that the burden of proof lying on the prosecution had not been discharged.

In fact, however, I think that it is plain from the way in which the judge formulated the first question that his view was that these arrangements made by TRL did not constitute making available a package as defined. In my view that was a conclusion that he was entitled to reach on the evidence before him. Indeed, I doubt whether on these particular facts the alternative was open to him in the light of the ABTA decision, but it is not necessary to go that far.

I touch upon two further matters. First, TRL submitted that even if we had found against it we should not in our discretion remit the case to the judge, or alternatively we should order a stay of the criminal proceedings. The basis of this submission was that for a variety of reasons the proceedings were an abuse of process. That was strongly disputed and was rejected by the judge below. We were not able to hear submissions on this issue without the hearing going into a second day and since in the event we do not have to resolve it, we will not do so.

Second, in the course of the proceedings I suggested that this might be a case which is suitable for reference to the ECJ. Neither side had originally asked for that, although the CAA was not opposed to the idea when it was floated at the hearing.

On reflection, however, I have decided that this would not be appropriate. An important factor was that the European Commission has finished consultations on a possible redrafting of the Directive to take account of selling patterns of this kind, and so has the Department for Transport with respect to changing the Regulations. Given that the purpose of these proceedings is to provide a test case to determine the current state of the law, that objective may well be undermined by a reference at this stage. We also bear in mind that Chadwick LJ thought that the point was acte clair.

In my judgment, the appeal fails. I would answer both questions posed by the judge in the affirmative.

I agree.