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Milner & Milner v Carnival Plc, Court of Appeal, 20th April 2010

5 May 2010
The issues

Loss of holiday – appropriate method of calculating damages.

The facts

In June 2006, Mr and Mrs Milner booked passages on the maiden world cruise of the Queen Victoria, departing Southampton 6th January 2008 on a round the world voyage, returning 106 days later. The cost was £65,558.00, discounted to £59,052.20.

They had booked early to secure a cabin of their choice – a princess grade cabin, midships on the starboard side of deck 7. In the bay of Biscay the liner hit stormy weather. The ship pitched causing flexing midships. The floor plates in Mr & Mrs Milner’s cabin flexed and vibrated. The Judge, who heard Mr Milner give evidence as to the noise, described “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”. Sleep was impossible for 2 nights. The lack of sleep affected Mrs Milner’s chest problems and asthmatic episodes due to stress. The Milner’s were offered an inside cabin with no natural light on the lower deck, 6. It lacked some of the amenities of the cabin they vacated. Their clothes were left in the vacated cabin, leaving them to walk downstairs and through the corridors in their dressing gowns to sleep, returning to their own cabin during the day. On reaching New York 4 days later, they were provided with a suite. Initially they thought they would not be allowed to retain the suite for the whole voyage and therefore stayed unpacked. Eventually they had to leave their suite and returned to their originally booked cabin.

Sailing from Los Angeles again the liner hit heavy seas and the banging and noise reoccurred. On arrival in Hawaii, after 28 days, Mr and Mrs Milner disembarked. They claimed a refund of £65,558.00 plus compensation for the stress, anxiety, distress, disappointment and loss of enjoyment that they had undergone, together with out of pocket expenses and wasted expenditure. They were offered and accepted a refund of £48,270.00, leaving a net cost of £10,812.00.

They proceeded with the claim seeking £8,500.00 for the diminution in value of the holiday; £50,000.00 for distress and disappointment; £4,300.00 for wasted expenditure on dresses Mrs Milner had bought for the cruise; and £13,440.00 for the cost of the return voyage. The Judge awarded £2,500.00 each for the diminution in the value of the cruise; £7,500.00 each for distress and disappointment; and £2,000.00 for wasted expenditure on the wardrobe of formal gowns.

The cost of the return journey was disallowed by the Judge. This claim had been brought under the Package Travel, Package Holidays and Package Tours Regulations 1992. Under Regulation 14 where after departure a significant proportion of the services contracted for were not provided, the organiser had to make suitable alternative arrangements and if those were not accepted by the consumer for good reason, the organiser had to provide the consumer with equivalent transport back to the place of departure. The Judge accepted, for the purposes of this part of the claim that suitable alternative accommodation was provided.

The Defendant Appealed against the measure of damages.

The decision

The measure of damages was such compensation as would place the Claimants, as far as money could do so, in the same position as they would have been had the contract been properly performed. The task was to compare and contrast what was promised and what was received, doing the best one could bearing in mind that money could never truly compensate such a deficit. Three aspects of loss of holiday claims fell to be considered:

Firstly, compensation for pecuniary loss – the diminution in value. The loss was the monetary difference between what was bought and what was supplied and the task was 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 such as out of pocket expenses, the cost of alternative accommodation and the cost of alternative travel arrangements. Thirdly, compensation for physical inconvenience and discomfort.

There had been a number of decisions on holiday claims, notably Jarvis v Swan Tours Ltd (1973) and Jackson v Horizon Holidays Ltd (1975). In Adcock v Blue Sky Holidays Ltd, Cumming-Bruce LJ had noted that contracts for holidays varied on their facts very greatly and that it would be a grave mistake to look at the facts of the Jackson or Jarvis case and compare those facts with the facts in another case as a means of establishing the measure of damages. It was a question of fact and degree in each case.

As to diminution in value, the Judge had taken as the starting point, the price of the advertised holiday. This was wrong. What mattered was the discounted price actually paid, namely £10,802.00 for the 28 days that they were at sea. In the round, the value of the cruise was diminished by about one-third when regard was had overall to that which was not provided, balanced against that which was enjoyed. Therefore, under this head, Mr and Mrs Milner would receive £3,500.00. As to damages for physical inconvenience, discomfort and mental distress, again, it was part of the task to compare expectation against reality. Expectations were sky high. Mr and Mrs Milner could reasonably expect the experience of a lifetime.

Whilst Lord Steyn in Farley v Skinner had recommended that awards in this area should be restrained and modest in order not to contribute to the creation of a society bent on litigation, the experience of Mr and Mrs Milner was horrendous enough to justify exceptional awards. The Judge’s awards against a background of comparable awards for psychiatric damage in personal injury cases and injury to feelings in cases of sex and race discrimination was too high. Doing the best the Court could, it would substitute £4,000.00 for Mr Milner and £4,500.00 for Mrs Milner.

The Trial Judge had allowed £2,000.00 to Mrs Milner under the cost of wasted expenditure in respect of her evening wear. The wardrobe had not been enjoyed partly because of the unsettled time but mainly because Mr and Mrs Milner had terminated the voyage when they reached Hawaii. The Defendant’s breach did not cause the loss. Mrs Milner’s disappointment in not being able to wear her gowns was a matter properly to be brought into account when assessing the measure of her distress. In conclusion, the total award, adding in £3,500.00 for the diminution in value, was £12,000.00.

Appeal allowed to that extent.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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