CONSUMER, TRADER AND TENANCY TRIBUNAL General Division

CONSUMER, TRADER AND TENANCY TRIBUNAL General Division APPLICATION NO: GEN 07/44282 APPLICANT: Colin Stephenson RESPONDENTS: Flight Centre Ltd. and Club Mediterranee (Australasia) Pty Ltd APPLICATION: Application in General Division for compensation in the sum of $25,000.00 for damages arising from alleged breach of contract and alleged misleading and deceptive conduct: HEARING: 13 December 2007 APPEARANCES: ISSUES: LEGISLATION: The applicant was represented by Mr Bernard Sharp of Counsel instructed by Ms Sally Webber of Cordato Partners. The first respondent, Flight Centre Ltd, was represented by Mr John Whateley. The second respondent, Club Mediterranee (Australasia) Pty Ltd was represented by Mr Cliff Savala, solicitor, of Moray & Agnew. Whether first and/or second respondent in breach of contractual obligations in respect of the services provided to the applicant and his travelling companions, whether the first andlor second respondent engaged in misleading or deceptive conduct in regard to representations made to the applicant, whether the applicant is entitled to recover damages on behalf of his travelling companions, not being parties to the application. Fair Trading Act 1987, s.42,68 G:ICTTI'-CommonlReasons120071GenerallGen 07-44282.rtf 1

ORDERS On the evidence available to me I order the first respondent, Flight Centre Ltd, to pay to the applicant, Colin Stephenson, the sum of $500.00 immediately. I further order that the second respondent, Club Mediterranee (Australasia) Pty Ltd, pay to the applicant, Colin Stephenson, the sum of $4,000.00 immediately. The parties shall pay their own costs. REASONS FOR DECISION APPLICATION This application was filed in the Tribunal on 29 August 2007. On the application the applicant sought orders for a sum of money "between $10,000.00 and $25,000.00" arising from a holiday taken in December 2005. The matter came before Member Williams on 4 October 2007. At that time all parties were present. Leave was granted to the parties to be legally represented and directions were made for exchange of documents. The parties were directed to file written submissions on jurisdiction and other legal issues. The matter was next listed before Deputy Registrar Isaac on 11 December 2007 for return of summons and was listed for hearing before me on 13 December 2007. At the hearing, the parties were represented as noted above. Pursuant to the provisions of the Consumer, Trader and Tenancy Tribunal Act 2001, s.54, the parties were encouraged to resolve the dispute by conciliation. However, as those efforts were unsuccessful the matter proceeded to a hearing. At the conclusion of the hearing the matter was adjourned for a reserved decision. This is my decision and the reasons for it. JURISDICTION It was submitted on behalf of the first respondent that the contract sum was partly paid by Mr Bondi, a resident of Western Australia. To that extent it was argued the contract was partly formed in another state for services supplied G:ICTTT - C ommonlreasons120071generallgen 07-44282.rti 2

outside of New South Wales and the Tribunal therefore has no jurisdiction to hear and determine that part of the claim relating to services provided to Mr Bondi. The applicant's response to that submission was that it was only the applicant who had contracted with the first respondent. The contract was entered into in relation to services to be provided for the applicant and his three travelling companions. The services were invoiced to the applicant. The fact that Mr Bondi paid for some of the services was irrelevant to the issue of with whom the respondent had contracted. In the alternative, it was argued that should the Tribunal determine,that part of the contract was formed outside of New South Wales, the applicant was entitled to commence proceedings and recover damages for his whole party, not just for himself. The applicant relied on the authority of Jackson v Horizon Holidays Ltd [1975] WLR 1468, per Lord Denning MR in support of this proposition. APPLICANT'S SUBMISSIONS It was the applicant's submission that he had entered into two separate contracts with the first respondent. The first was a. contract in which the first respondent was to provide advice in regard to the proposed holiday: The second was for provision of various travel services from several suppliers, including the second respondent. The first respondent had provided advice that the hotel in question was luxury standard as requested, and that a honeymoon suite was not available but that the next best room was booked. The advice given, it was submitted, was in breach of the implied warranties under s.40s(1) and (2) of the Fair Trading Act 1987. In addition the advice was misleading and deceptive, contrary to the provisions of the Fair Trading Act 1987, s.42. In regard to the second respondent it was argued that the applicant had contracted with the second respondent through its agent the first respondent. The contract was to provide luxury standard accommodation and ' that a honeymoon suite or next best room was required as the applicant was intending to marry on the holiday. In entering into this contract the applicant had relied on representations made by the second respondent on its website as well as those of its agent, the first respondent. The standard of accommodation provided was not "luxury" as contracted. The applicant claimed for damages against both respondents, jointly and severally, for breach of contract, including for distress and disappointment and for damages pursuant to the Fair Trading Act, s.68. The following witnesses gave evidence on affirmation in support of the application and were cross examined on their evidence: G:ICTTT - C ommonlreasons120071generallgen 07-44282.rti 3

Mr Colin Stephenson, Mrs. Palmina Stephenson. The applicant relied on the following relevant documentary evidence: Statements of Colin Stephenson dated 16 October 2007 and 6 December 2007. + Statement of Palmina Stephenson dated 23 October 2007. Statement of Brian Bondi dated 23 October 2007. Statement of Lilliana Merendino dated 23 October 2007. Printed copy of relevant Club Med Website. Correspondence between Flight Centre and the applicant confirming details for all four travellers. Tax invoice/statement issued by Flight Centre to applicant for all four travellers in the sum of $25,876.32. Vouchers for accommodation. Correspondence between the parties. Written submissions. The applicant relied on the following cases in support of the application; Keppel-Palmer v Exsus Travel Ltd. and anor. [2003] All ER (D) 183 Jun. Jackson v Horizon Holidays Ltd.[1974]EWCA Civ 12 per Lord Denning MR Beveridge v Great Southern Railway Travel Pty Ltd. [2003] NSWCTTT 194. FIRST RESPONDENTS SUBMISSIONS Mr Whateley, on behalf of Hight Centre Ltd ("Flight Centre"), made relevant submissions to the following effect. Flight Centre acts only as an agent of the various service providers from which the public purchase travel services. That fact is specifically made clear to the public in Flight Centre's booking terms and conditions. In the present case, it was argued that no representations were made by Flight Centre employees regarding the standard of luxury of the Club Med Resort but rather the applicant was encouraged to make his own enquiries. Furthermore, the amount paid by the applicant was $11,899.86 including $6,423.28 for services unrelated to the accommodation charges at Club Med. The first respondent called Ms Carolyn Clark who gave evidence on affirmation and was cross-examined on her evidence. In addition, the applicant relied on the following: Tax invoice statement issued to the applicant (including statement of booking terms and conditions); Itinerary for all four travellers; Evidence of payment of $13,775.06 by Mr Brian Bondi for services provided for. himself and Ms Merendino; G:ICTTT - Commonl Reasons120071Generaf\Gen 7-44282. If

Statement of Carolyn Clark (undated and unsigned); Written submissions. SECOND RESPONDENT'S SUBMISSIONS Mr Cliff Savala,.solicitor for Club Mediterranee (Australasia) Pty Ltd ("Club Med"), made relevant submissions to the following effect. "Club Med" is not the owner of the subject resort at St. Moritz and therefore any claim made against the second respondent must be in its capacity as. agent. The agreement between the applicant and Club Med was made subject to the terms and conditions in the current Club Med brochure. No contact was made between the applicant and Club Med except through the Website. Accordingly Club Med was unaware of the applicant's requirements. The services provided were in accordance with the descriptions set out on the Website. The "four trident" rating for the resort was an internal Club Med rating system which was intended to establish the resort was at the highest level of accommodation provided by Club Med. There was no misrepresentation by the second respondent. In regard to the description of bedding it was available on the Internet and was normal for European resorts. The applicant received the best accommodation available. The description as "luxury" was mere puffery and not intended to mislead the applicant in any way. Ms Kristie Green provided an affidavit in support of the second respondent. Ms Green was made available to be cross-examined on her statement, but was not required to give evidence. The second respondent relied on the following documents: Website information about Club Med resorts generally, a number of specific resorts and Roi Soleil at St. Moritz; Correspondence between Club Med and the first respondent and between Club Med and the applicant; Description of the "Trident Classification System" used by Club Med; Concise Oxford dictionary definition of "luxury"; Written submissions. FINDINGS Jurisdiction I am satisfied on the evidence that the contract for all four travellers was entered into between the applicant and the first respondent as agent of the second respondent (and others). The fact that part of the contract sum was paid by Mr Bondi does not alter that fact. The contract was therefore entered G:ICTIT - Corrn 7onlReasons12o071General\Gen 07-44282.rtf 8

into for the supply by the first respondent (as agent on behalf of a number of suppliers) to the applicant of various travel services. Consequently, the claim satisfies the definition of a "consumer claim" as that term is defined in the Consumer Claims Act 1998 consumer claim means: (a) a claim by a consumer for the payment of a specified sum of money, or (h) a claim by a consumer for the supply of specified services, or (c) a claim by a consumer for relief from payment of a specified sum of money, or (d) a claim by a consumer for the delivery, return or replacement of specified goods or goods of a specified `description, or (e) a claim by a consumer for a combination of two or more of the remedies referred to in paragraphs (a)-(d), that arises from a supply of goods or services by a supplier to the consumer, whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of goods or services It is not disputed that the contract with the first respondent (acting as agent of _others) was entered into within New South Wales and I am therefore satisfied the Tribunal has jurisdiction to hear and determine the application. Breach of Contract Although the "booking terms and conditions" of the first respondent were not attached to the copy of the "tax invoice/statement" provided in the applicant's documents, it was not disputed that those terms and conditions were provided to the applicant as per the first respondent's filed documents. The applicant was therefore made aware that he was not contracting directly with the first respondent on its. own behalf. The application, to the extent that it alleges a breach of contract by the first respondent must therefore fail. The second respondent, if I understand its argument correctly, also claims that there cannot have been a breach of contract with it because the resort was not owned by it. I do not accept that argument. 'Part of the contract sum - accepted by the first respondent was paid to the second respondent and a voucher issued for provision of accommodation services at Roi Soled St. Moritz. The fact that the second respondent could only meet its obligation by contracting with the owner of the resort does not alter the fact that there was a direct contract between the.applicant and the second respondent. The essence of whether the contract included any terms in regard to the standard of accommodation or specific requirements for the applicant can be determined by consideration of the relevant supporting documents and the agreement made with the second respondent's agent (in this case Ms Clark employed by the first respondent). C :1CT T-Comm onl Reasonsl9o071GenerallGen 07-44282.rtf

There is no dispute that the applicant was referred to the second respondent's Website and that on that Website there was a description of Club Med St. Moritz Roi Soleil as being rated as "four trident" by Club Med which Club Med considered to be [one of its] "finest villages, offering luxury of the highest standard". There is disputation between the parties as to what was said during the discussions between Ms Clark and Mr Stephenson. On the whole, I accept the evidence of Mr Stephenson to be more probably an accurate recollection of what transpired. I reach that conclusion because of a number of factors including the importance of the matter to Mr Stephenson at the time (he was arranging a holiday during which he. intended to.marry his fiancee-and it would accordingly be- their honeymoon), the very large sum of money paid for the holiday (admittedly for four persons and including other services in addition to the accommodation charges) and the fact that Ms Clark dealt with. such enquiries routinely and had no particular reason to remember the discussion preceding this transaction until the complaints that were made some considerable time later. The delay in complaining by the applicant I find entirely understandable in view of his illness on returning from the trip. I am satisfied that Ms Clark said nothing to dissuade the applicant from accepting the description of the resort.as "the height of luxury" that she saw on the second respondent's Website. I am satisfied therefore that it was a term and condition of the contract between the applicant and the second respondent that the accommodation at the St. Moritz resort would be at a standard that could properly be described as "luxury of the highest standard" and "the height of luxury". In respect of the claim that it was also a term of the contract that the applicant was to be provided with a honeymoon suite, I am satisfied on the applicant's own evidence, given during cross-examination, that that was not the case. The applicant was well aware that a honeymoon suite was not available but agreed that the next best room (described as "summit view room") would be available. There may have been some expectations in the mind of the applicant about what the next best room involved, but I am satisfied there was no breach of contract by the second respondent in that regard. Turning to the question of whether what was provided by the second respondent did reasonably meet the description of "height of luxury". The second respondent relied on the Concise Oxford dictionary definition of "luxury" which was inter-alia "choice or costly food, dress, furniture, etc.: thing that one enjoys, thing desirable for comfort or enjoyment but not indispensable..." The "height of luxury" or "luxury of the highest standard" is, I am satisfied, simply an embellishment to indicate one should consider. the upper levels rather than middle or lower standards of luxury as that being described:, I do not accept Mr Savala's argument that the term is a mere puff. It is used quite deliberately by the second respondent to distinguish its "four trident" resorts G:ICTTT-CommonlReasons120071General\Gen 07-44282.rif 10

from other less desirable resorts and although it may well be criticised for being a subjective term was nevertheless intended to persuade prospective consumers that the quality of the accommodation was very superior. What did the applicant and his party experience? Was the accommodation in every way of the superior standard that the applicant contracted for? The applicant's evidence was that the "summit view. room" provided by the second respondent was "very basic". The room was very small, "dingy" and equipped with single beds rather than the Queen or King size bed one would -expect. It. had one chair, no no,.:facilities, no bath tube or bath robes, no full length mirror, no iron or laundry service, no facility for making outside calls from the room. In addition, the other services provided by the resort fell short of being "luxury of the highest standard". There was no valet parking, a fifteen minute wait for service at the bar and insufficient seating to accommodate all guests in the dining room were all experienced. Indeed,, the party of four found it necessary to have their Christmas dinner off their laps due to lack of dining room accommodation. Faced with these problems the applicant made genuine efforts to find alternate accommodation,, but due to the time of year that was not possible. One can argue about the subjective nature of the term "luxury" as applied to a hotel or resort. However, I am satisfied the description given by the applicant, if accurate, falls far short of any reasonable understanding of "luxury" much less "luxury at the highest standard". There is no evidence to indicate the applicant's description was in any way inaccurate. I am satisfied therefore that the second respondent is in breach of the term of its contract to provide to the applicant for himself and his party, accommodation at the highest standard of luxury. Misrepresentation The elements of a finding of a breach of the Fair Trading Act 1987 s.42 for which the applicant is entitled to be compensated under s.68 are: 1. That the respondent made a representation that was inconsistent with the truth; 2. That the representation 'led the applicant into error or misconception; 3. The applicant relied on the representation in deciding to undertake a course of action (or to refrain from doing so); 4. The applicant suffered a loss as a result of that action. In this. case, the second respondent has made a representation on the Website in regard to the standard of accommodation to be expected at the St. Moritz resort. Furthermore, lam satisfied the first respondent's representative made representations to the applicant that reinforced the impression he had G:ICTTT-CommonlReasons120071General\Gen 07-44282.rif 11

received from reading the second respondent's Website. Whilst those representations were not as specific or detailed as the information received from the Website they nevertheless confirmed for the applicant the impression he had received already. The standard of luxury accommodation was, I am satisfied, absolutely critical to the applicant's choice of destination. This was an important occasion for him and his fiancee. Relying on the representations made directly by the second respondent and reinforced by the first respondent the applicant made the choice to travel to St. Moritz Club Med. For the reasons expressed. above-l am-satisfied -the: resort was not-"luxury of the highest standard" and that accordingly the applicant was led into error in relying on the misrepresentations made to him. He is entitled to be compensated for the loss or damage suffered pursuant to s.68. Damages Firstly, l should consider the argument put to me by Mr Sharp that the applicant is not limited to a claim for damages suffered by himself only, but may seek damages that were suffered by the other members of his party had they been able to bring the claim. I have had the benefit of reading Lord Justice Denning's judgement in Jackson v Horizon Holidays Ltd [1975] WLR 1468 to which i was referred. That decision, at first reading, seems at odds with the jurisdictional limit arising from the definition of a "consumer claim" under the Consumer Claims Act 1998. However, the circumstances of that case and this one are in many respects very similar and I think the principle expressed by Lord Justice Lush in Lloyd's v Harper [1880] 16 Ch D. at 321 and quoted by Lord Denning should be applied here. That is: `l consider it to be an established rule of law that where a contract is made with A for the benefit of B, then A can sue on the contract for the benefit of B and can recover all that B could have recovered if the contract had been with B himself'. In this case the applicant's wife and companions could not bring an action in the Tribunal under the definition of a "consumer claim" as they were not the contracting parties. Nevertheless, Mr Stephenson is entitled to recover any damages that they would have been able to recover had they been able to bring the action. What damages then is the applicant entitled to? There is no evidence of any specific damages arising from the breach of contract. For example, there is no evidence of the difference in, price between the accommodation that was received and that for which the applicant had contracted. The damages must therefore be non-economic in nature. G:ICTTT-CommonlReasons120071General\Gen 07-44282.rif 12

In Jarvis v Swan Tours Ltd [1972] 3 WLR 934, it was determined that damages for the loss of a holiday may include damages for mental distress, inconvenience, upset, disappointment and frustration caused by loss of the holiday. That principle was affirmed particularly in contracts made for the purpose of enjoyment in Baltic Shipping Company v Dillon [1993] CLR 344. I am satisfied that the disappointment of the applicant and Mrs. Stephenson was both genuine and substantial. The evidence was that they did all they could to enjoy themselves rather than allow the holiday to. be ruined. Nevertheless they did not enjoy the standard of accommodation for which they had contracted and which had been represented to them. Similarly Mr Bondi and Ms- Merendino were disappointed, but perhaps not to theiextent of the applicant and Mrs. Stephenson. It is always difficult to put a figure on these issues, but 1 think the sum of $800.00 each for Mr Bondi and Ms Merendino is appropriate and the. sum of $1,200.00 each for Mr and Mrs. Stephenson. In addition, I allow the sum of $500.00 to the applicant for the stress and embarrassment he suffered as being the person who had made the arrangements on behalf of the others. The total compensation is therefore $4,500.00. I have been asked to make a joint and several order. However, no finding of a breach of contract was made in regard to the first respondent and the first respondent's misrepresentation was not direct and deliberate as the second respondent's was, but was more by way of confirmation of information that the first respondent had no way of knowing was correct or incorrect and which turned out to be incorrect. I am satisfied therefore that the first respondent should pay the sum of $500.00 and the balance, being $4,000.00 ' should be paid by the second respondent. Costs The applicant's representative requested an order for costs without elaboration on the merits of that application. Mr Savala for the second respondent submitted that the parties should pay their own costs as there were no exceptional circumstances. No submission on costs was made by the first respondent who was not legally represented. Whilst it is not necessary in this case for there to be exceptional circumstances for an award of costs (the parties having been granted leave to be legally represented), I am not satisfied that a case has been made out for such an award. The fundamental ethos of the Tribunal is that the process should be informal and inexpensive. The Consumer Trader and Tenancy Tribunal Act 2001, s.53 provides that the starting position is that parties pay their own costs. Although the parties were granted leave to be legally represented not all of them were, and I am satisfied the outcome would have been unlikely to be any different if the parties had represented themselves. Although the. applicant has been successful, the outcome is nowhere near the amount sought. G :I CM- Co mm onlreasons120071generallgen 07-44282.rtf 13

In all the circumstances l am not satisfied that this is a case in which the Tribunal should exercise its discretion to make a costs order. Jeffery Smith Consumer, Trader and Tenancy Tribunal 15 February 2008 G:1CT T-CommonlReasons120O71GenerallGen 07-44282.rtf 14