Payless Travel Ltd v Baba Krupa Holidays, Court of Appeal - Civil Division, March 26, 2004, [2004] EWCA Civ 472

Issuing Organization:Civil Division
Actores:Payless Travel Ltd v Baba Krupa Holidays
Resolution Date:March 26, 2004


Neutral Citation Number: [2004] EWCA Civ 472





Royal Courts of Justice


London, WC2

Friday, 26 March 2004

B E F O R E:



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(Computer-Aided Transcript of the Stenograph Notes of

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MR G KIRK (instructed by Chartwell and Sadlers Solicitors, London SE15 2LB) appeared on behalf of the Appellant

MR R C D REES (instructed by P M Suchak & Co Solicitors, Leicester LE4 6QR) appeared on behalf of the Respondent

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J U D G M E N T Friday, 26 March 2004

1. LORD JUSTICE RIX: This is the appeal of Payless Travel Ltd from a judgment of Miss Recorder Macur QC given in the Birmingham County Court. It arises out of a holiday booking for 23 March 2002 with an airline called Balkan Bulgarian Airlines ("Balkan") which, unfortunately, went wrong. When the passengers turned up at the airport with their tickets to fly with Balkan to Dubai they were told that their names were not on the passenger lists for the flight, and Balkan refused to carry them. In the circumstances, costs were incurred on behalf of the passengers by their travel agent, Baba Krupa Ltd, who are the respondents to this appeal. Those costs included, in the main, the cost of one night's hotel accommodation while alternative arrangements were made, and in particular the additional costs of booking on an alternative airline. In the end, the majority of the passengers did manage to get off to Dubai two days later on 25 March 2002.

2. As a result of these difficulties the recorder found that Payless Travel who, at Baba Krupa's request, had procured the airline tickets from Balkan, were in breach of their duties to Baba Krupa and gave judgment in the sum of £9,254.98 which, together with interest, amounted to a total judgment sum of £10,259.08. As I have said, most of those damages were made up by the cost of an overnight stay at an hotel, and in particular the extra costs of the replacement airline tickets.

3. The judgment proceeded on the basis that there was a contract between Payless Travel and Baba Krupa to procure the airline flight tickets, and that in connection with that contract Payless Travel was in breach of their implied duty to use skill and care in and about their obligations. Although I am not sure that the recorder mentions in her judgment the source of that implied contractual obligation, it is common ground that it is to be found in section 13 of the Supply of Goods and Services Act 1982. That section reads as follows:

"In a contract for the supply of a service where the supplier is acting in the course of a business there is an implied term that the supplier will carry out the service with reasonable care and skill."

That was the contractual duty which was concerned in this case.

4. The recorder found that the tickets for the flight in question had been issued to the named passengers on 23 February 2002. She also records that on the same day a fax was sent by Payless Travel to Balkan recording the names of the passengers in question. In as much as Baba Krupa's case at trial depended upon an allegation that no tickets had ever been issued in the first place, the recorder rejected that submission. Nevertheless, within a few days of the issue of those tickets things began to go wrong.

5. On 1 March 2002 Balkan sent to Payless Travel a letter addressed to their managing director, Mrs Kalavati Mavji, in these terms:

"Subj: 20 pas group booking 09-17 March 2002

Dear Mrs Mavji

Further to our telephone conversation yesterday 28th February 2002, please be informed that we are now cancelling the above group of 20 seats as its time limit has run out and no passenger names have so far been submitted.

Further to the above, I would like to inform you that by holding allocations on our flights for groups supposedly to be sold by Payless Travel and their subagents does not produce the required revenue, quite the opposite - we are turning away other clients and therefore suffering losses.

The above practice contradicts your statement at our meeting on 25th of February 02 that Payless Travel supports Balkan with 'year round' sales.

I have been directed by our Head Office to cancel all existing Payless Travel (and those of their subagents) as of 23rd of March 2002. This gives you enough time to make alternative bookings on your own system based on 'free sale' of the available seats or offer your clients alternative arrangements. Please contact me if further information is required."

It may be that in that dispute which had arisen between Balkan and Payless Travel Balkan, who wrote that letter under the name of their manager, Mr Georgi Avgarsky, had failed to appreciate that within the last few days they had received the passenger names in respect of the flight of 23 March 2002, which is the subject matter of these proceedings. All that, however, is rather lost and mysterious in the background to this litigation, and because Balkan became insolvent and were never party to this litigation, was never properly investigated or elucidated at trial. Be that as it may, it came to be the case of Payless Travel that following the receipt of that letter Mrs Mavji had spoken on the telephone to Mr Avgarsky on the next day, 7 March, and in the course of that conversation had received from Mr Avgarsky an oral assurance that the flight of 23 March was on and that the cancellation as of 23 March (referred to in that letter)...

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