Legal Updates

Commercial Law – Breach of Contract – Damages for breach of Contract - Interpretation of Legislation – Summary Decree – Travel Law – Breach of ABTA Code - Causation – Contributory Negligence

The case of Stewart and Another v Pure Ltd [2008] involved an action in which a travel agent claimed damages for an aircraft brokers' breach of contract. The aircraft broker failed to procure a return flight from Rhodes, and therefore the pursuers in this case sought a grant summary decree from the court.

The pursuers in this case were travel agents. The travel agents had clients who lived in the Western Isles and Shetland Islands. Those clients wanted to participate in the Island Games which took place in Rhodes in June and July 2007. The pursuers subsequently approached the defenders, who were aircraft brokers. The aircraft brokers were to procure aircraft for the flights from Scotland to Rhodes and back again.

The purpose of the flights was made clear to the defenders. They were also informed as to the number of passengers (189), and the requirement to return the passengers to Scotland in time to permit same day onward transfers was also highlighted.

In January 2007, the pursuers and defenders reached an agreement whereby the defenders undertook to procure flights for 189 people from Inverness to Rhodes departing on the 28th of June 2007 and returning on the 7th of July 2007. The total price of this procurement was £81,270.00.

The outwards bound flight took place according to plan. However, the defenders failed to procure an aircraft for the return flight on the 7th of July 2007. This meant that the pursuers were obliged to make alternative arrangements for their clients so as to return them home.

Furthermore, the alternative flight did not arrive in Inverness in time for same day onward transfers to take place and subsequently the pursuers had to arrange overnight accommodation for their clients in Inverness and then alternative connections to the Islands.

The pursuers therefore entered a claim for £55,893.00 in damages to be paid by the defenders for their breach of the terms of the contract. The fact that the defenders were in breach of the terms of the contract was not disputed as the defenders had failed to procure a return flight.

However, the defenders raised questions of causation and contributory negligence. The pursuers in this case argued that those matters provided no defence to the action being brought. Accordingly, the pursuers moved the court to grant summary decree in terms of Rule of Court 21.2.

Once the argument on the motion for summary decree had been heard, the court was of the opinion that the issues were capable of being dealt with by such a motion. With regards to causation, the defenders said that it was an implied term of the contract that the pursuers would confirm the booking of their return flight when confirming the booking of the outbound flight:

“…And in any event, prior to the departure of the outbound flight”.

It should be noted that that phrase was customary in the travel industry, and that both parties in this case were experienced with the use of such a term.

It was held that the pursuers had failed, in breach of contract, to confirm the booking for the return flight in accordance with that implied term. The result of the breach meant that the pursuers sustained their loss or materially contributed to it. Had they enquired whether the return flight had been booked, they would have been informed of the hardships in procuring a flight. At that point they would have been told that no flight had been booked for the return journey and they could then have sourced a return flight with another aircraft booking company.

Counsel for the pursuers presented the argument that the fact that there was an implied term based upon custom was irrelevant. Even if there was such a term, there were no positive statements made relating to it sufficient to prove what consequences arose due to the alleged breach of it. Furthermore, there was no quantification given in relation to it. There was no offer to show conclusively that the return flight would have cost any less than the pursuers had to pay in any event.

The defenders also argued that the loss sustained was caused in whole or in part by the pursuers' contributory negligence. The pursuers, who were members of the Association of British Travel Agents (“ABTA”), were bound by the ABTA Code of Conduct. The ABTA Code of Conduct required them to ensure that they gave accurate information to their clients. The defenders argued that by failing to confirm that a return flight had been booked, the pursuers failed to provide accurate information to their clients and that no competent travel agent, acting with ordinary skill and care, would have allowed clients to travel on the outwards bound flight without having first confirmed that the return flight was booked.

It was argued that the pursuers' breach of contract and the breaches of the ABTA code were wrongful acts which contributed to the loss they incurred. It was therefore argued that the damages should be reduced.

Counsel for the pursuers argued that that defence was irrelevant because there was no attempt to quantify what would have happened had the pursuers acted differently. Furthermore, the pursuers’ counsel also argued that a plea of contributory negligence was simply not available as a matter of law.

The court held as follows:

Firstly, the causation argument as stated by the defenders in this case was deemed to have no substance and that the counsel for the pursuers was clearly right in saying that the defenders' case was deficient in showing how the alleged breach of the alleged implied term regarding confirmation of the booking of the return flight had the consequence of causing the pursuers' loss.

Secondly, it was decided by the court that the Law Reform (Contributory Negligence) Act 1945 (“the 1945 Act”) did not provide the defenders with the opportunity to bring a defence to the pursuers’ claim of contributory negligence in whole or in part.

The defence was deemed irrelevant due to the fact that there was no attempt to quantify what would have happened had the pursuers acted differently. The 1945 Act provided that in a case where an individual suffered damage partly as a result of his own fault and partly due to the fault of another, liability should be apportioned appropriately.

In relation to Scotland, the expression 'fault' was defined in s.5(a) of the 1945 Act as meaning:

“…Wrongful act, breach of statutory duty or negligent act or omission which gives rise to liability in damages, or would apart from this Act, give rise to the defence of contributory negligence”.

In relation to England, ‘fault' was given a slightly different meaning. “Wrongful act” was replaced by “negligence” and “liability in damages” by “liability in tort”.

The defenders' counsel argued that in Scotland contributory negligence had a wider application than in England, and could be considered a defence to a contractual claim as presented in this case.

In the Scottish definition in the 1945 Act, fault was not defined by reference to negligence; rather it encompassed any wrongful act, including those arising from a breach of contract. However, the court concluded that that argument must fail.

The court looked to previous authority. The definition of fault in s.4 of the 1945 Act, namely the part of the 1945 Act applicable to England, comprised of two limbs. One limb was applicable to defendants and the other limb was applicable to the plaintiffs.

The structure of s.5 was identical. Therefore, the court was of the opinion that in the case of a defender, fault meant 'wrongful act, breach of statutory duty or negligent act or omission' which gave rise to a liability in damages, and in the case of a pursuer it meant 'wrongful act, breach of statutory duty or negligent act or omission' which gave rise to a defence of contributory negligence.

It was held that the pursuers' conduct in the instant case could not be deemed to be 'fault' within the meaning of the 1945 Act since it did not give rise to a defence of contributory negligence. This was because the pursuer’s claim was in contract and did not rely on a breach of a duty of care.

This meant that the court was therefore satisfied that there was no defence to any part of the action. Accordingly, the court granted the motion for summary decree by the pursuer in the sum claimed plus interest.

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© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

 

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