When Napoleon invaded Italy in 1796 an immediate objective was to steal shoes. His army was poorly supplied and the soldiers were often barefoot. Given the success he achieved by speed and manoeuver, arguably the stealing of the shoes was necessary. Napoleon thought so, and who, now, would second-guess him?

However, what if he had had to seek permission to steal the shoes, beforehand?

That is, metaphorically, what an applicant for discovery in the High Court must do.

In High Court litigation a party to an action will not get discovery from his/her opponent even of relevant documents without demonstrating that the documents are necessary to conduct the litigation.

The Statutory Instrument specifies that the applicant depose that:

…the discovery of documents sought is necessary for disposing fairly of the cause or matter or for saving costs.”

This is a staggeringly bad idea. It implies that is possible to be complicit in, effectively, suppressing documents, and be ACTING FAIRLY.

It also implies that it is open to debate that, when a party has furnished copies of incriminating documents to the other party, there would not be a saving in costs in the litigation (by dint of the rapid capitulation of the miscreant or the economy with which his wrongdoing may be proved).

See an earlier post HERE on the subject of defective motor cars.

In 2007, the High Court gave judgment (seen HERE) in a case where the consumer had the benefit of a warranty, given to him on the purchase of the car, that it would return not less than 50 miles to the gallon.

In fact it did and it did’nt. It did’nt when the Plaintiff was driving it; it did during two fuel consumption tests carried out by a motor engineer engaged by the importers of the motor car.

The court accepted the evidence and records of the Plaintiff as to the consumption of fuel and found the defendant was in breach of contract.

However, it had taken a long time to resolve the matter and the Plaintiff had run up over 50,000 miles on the car. He sold it and therefore could not be awarded a rescission of the contract.

The court said:

“The issue to be decided is what damages the plaintiff should be entitled to recover. He has sold the car now, and he had the use of the car since January 2003 until March 2006 and he travelled 56,000 miles in it over that period. In my view the level of damages cannot equate to the cost of the car less what he sold it for, or less that what he ought according to the defendant to have been able to sell it for, namely about €18,000. That would be unfair to the defendant, since there was not a complete failure of consideration.”

Damages were the appropriate remedy, calculated in the sum of €6,625.

(The High Court was on circuit and the case was on appeal from the Circuit Court. The sum awarded was just over the upper limit of the jurisdiction of the District Court and therefore properly (just) within the Circuit Court jurisdiction. The outcome allocated the costs of two expensive proceedings. The costs would have been at least twice, and probably three times, the compensation. Litigation is dangerous).

A breach of contract does not give rise to an entitlement to compensation for every loss sustained by a Plaintiff.

Some losses are deemed too remote for the Defendant to be held responsible for them.

A good example of this occurred in Balfour Beatty Construction (Scotland) Ltd v Scottish Power plc [1994] CILL 743.

The Plaintiff was constructing a concrete aqueduct over a roadway. It established a batching plant to provide the concrete on site, with the Defendant supplying the power to run the plant. The concrete had to be delivered in one continuous process; a hiatus longer than 30 minutes would prevent a re-start and would ruin the work and materials applied. The Defendant’s power supply failed during the batch run. The work done had to be undone and the Plaintiff had to start again.

The court held that the Defendant was not answerable for the cost of demolition and reconstruction because the Plaintiff had not informed it of the need for a continuous pour.

Irish consumers intending to book a package holiday are covered by the Package Holidays and Travel Trade Act 1995.

(The Act was passed to comply with Ireland’s obligation to transpose European Union law into national law. In short, we have the EU to thank for the legislation.)

The Act serves one purpose, by two means. It is designed to secure proper service and facilities to consumers who have booked holidays with a tour operator. It does this by specifying the circumstances in which holidays are to be booked and the requirements on the tour operator to deliver the holiday as agreed. It makes a breache of the Act a criminal offence. It makes provision to imply certain terms in every consumer contract for the delivery of a package holiday:

18.—(1) In every contract the following terms are implied—

( a ) that, subject to section 17, where the organiser is compelled before departure to alter significantly an essential term of the contract, such as the price, the consumer will be notified as soon as possible in order to enable the consumer to take appropriate decisions and in particular to withdraw from the contract without penalty or to accept a variation to the contract specifying the alterations made and their impact on the price; and

( b ) that the consumer will inform the organiser or the retailer (as appropriate, in the light of the organiser’s instructions) of the decision as soon as possible.

(2) ( a ) The terms set out in paragraphs (b) and (c) shall be implied in every contract and shall apply where the consumer withdraws from the contract pursuant to the term in it implied by virtue of subsection (1) (a) or where the organiser, for any reason other than the fault of the consumer, cancels the package before the date when it is due to start.

( b ) The consumer is entitled—

(i) to take a replacement package of equivalent or superior quality if the organiser (whether directly or through a retailer) is able to offer such a replacement; or

(ii) to take a replacement package of lower quality if the organiser is able to offer such a replacement and to recover from the organiser the difference in price between that of the package purchased and the replacement package; or

(iii) to have repaid as soon as possible all the moneys paid under the contract.

( c ) The consumer is entitled, without prejudice to paragraph (b), to be compensated by the organiser for non-performance of the contract except where—

(i) the package is cancelled because the number of persons who agree to take it is less than the minimum number required and the consumer is informed of the cancellation, in writing, within the period prescribed in the contract, or

(ii) the package is cancelled by force majeure, that is to say the package is cancelled by reason of unusual and unforeseeable circumstances beyond the control of the organiser, the retailer or other supplier of services, the consequences of which could not have been avoided even if all due care had been exercised.

( d ) Overbooking shall not be regarded as a circumstance falling within paragraph (c) (ii).
Significant failure of performance after start of the package.

19.—(1) The terms set out in subsections (2) and (3) shall be implied in every contract and shall apply where, after departure, a significant proportion of the services contracted for is not provided, or the organiser becomes aware that a significant proportion of the services cannot be provided.

(2) The organiser shall make suitable alternative arrangements, at no extra cost to the consumer, for the continuation of the package and shall compensate the consumer for any difference between the services to be supplied under the contract and those actually supplied.

(3) If it is impossible to make arrangements as described in subsection (2), or these are not accepted by the consumer on reasonable grounds, the organiser shall, where homeward transport arrangements are a term of the contract, provide the consumer at no extra cost with equivalent transport back to the place of departure or to another place to which the consumer has agreed and shall compensate the consumer for the proportion of services not supplied.
Extent and financial limits of liability.

20.—(1) The organiser shall be liable to the consumer for the proper performance of the obligations under the contract, irrespective of whether such obligations are to be performed by the organiser, the retailer, or other suppliers of services but this shall not affect any remedy or right of action which the organiser may have against the retailer or those other suppliers of services.

(2) The organiser shall be liable to the consumer for any damage caused by the failure to perform the contract or the improper performance of the contract…”

The Act makes it a criminal offence for a tour operator to breach the terms of the Act. The prosecuting authority is the National Consumer Agency.

However, for an individual consumer, the relevance of the Act is the establishment of the clear obligations of a tour operator with regard to the delivery of the holiday.

Thus, even if a brochure purports to exclude a liability on the tour operator, either expressly or by implication, it will be ineffective.

Consequently, a consumer’s right to demand compensation for the breach of contract by a tour operator is made less problematic than it would otherwise be.

In practical terms, when the breach of contract is discovered by the consumer (usually in some foreign location) the tour operator has the upper hand; it can, through its representatives plead shock and surprise and profess to be “doing its best”. The consumer will feel helpless; he/she is not psychologically geared to manage the problems. It will appear inconceivable that the operator would not deliver what it is obliged to deliver and would try to pass off to the consumer a holiday or parts of a holiday at variance with what has been agreed.

Nevertheless, that is what sometimes happens. The reasons for the failure are, generally, irrelevant. They are the tour operator’s problem, not the consumer’s problem.

If variation is unavoidable the tour operator must deliver an equivalent service to that contracted for. That means that a consumer who contracted for a 5 star hotel must be accommodated in a 5 star hotel and any replacement accommodation must be equivalent in location to the original hotel. The contract, a copy of which must be given to the consumer will set out; the destination; the length of the holiday; the transport provided; departure times; departure location; location of accommodation and its features, including official rating if in EU; meal plan, if any; included excursions; details of taxes; cancellation provisions; complaints procedure.

The consumer should always complain to the tour operator’s representative and keep a copy of any written complaint. A diary of the events should also be kept.

On return home the consumer should write a complaint to the tour operator.

Although some contracts stipulate that disputes are to be referred to arbitration, where the facts permit it, it is possible to go to court for compensation.

McGarr Solicitors represented clients in the Dublin Circuit Court on 20th February 2009. The defendant was Panorama Holidays.

The Plaintiffs wished to take their honeymoon in Sharm El Sheikh in Egypt. Having booked, they were alarmed to receive reports that their hotel was being overbooked. They checked with Panorama and were reassured that was not the case. On arrival in Egypt they found it was the case and they were declined accommodation in the hotel contracted for.

The Panorama representative informed them of the overbooking in writing immediately on their arrival. Panorama had denied, immediately before departure, that overbooking had or would occur.

They were offered inferior accommodation in lieu. It was very noisy. Different alternative accommodation was offered which the clients discovered was several miles from the beach and in the middle of building sites.

Ultimately, while waiting to return home early, one client fell ill from the substandard food in their substandard accommodation. She had to call the doctor who put her on a drip in her hotel bedroom to treat her gastroenteritis.

The court awarded the following damages:

Wife; 5,500 Euros
Husband; 3,500 Euros
Special Damage; 800 Euros
Holiday cost; 1,805.60 Euros

The court awarded the plaintiffs their legal costs.

Most people who buy a motor car conform to the definition of “consumer” in the Sale of Goods and Supply of Services Act 1980.

3.—(1) In the Act of 1893 and this Act, a party to a contract is said to deal as consumer in relation to another party if—

( a ) he neither makes the contract in the course of a business nor holds himself out as doing so, and

( b ) the other party does make the contract in the course of a business, and

( c ) the goods or services supplied under or in pursuance of the contract are of a type ordinarily supplied for private use or consumption.”

A large number of those consumers buy their car on “Hire Purchase” or “Credit Finance”from a Finance Company.

Provision is made in the Consumer Credit Act 1995 for such purchases.

By Section 76 (2) of the Consumer Credit Act 1995, the following are terms of hire purchase agreements with consumers:

a. That the goods are of merchantable quality;

b. That the goods are reasonably fit for the purpose for which the consumer required them, (In the case of a motor car, to provide reliable, durable, defect-free motoriing to the consumer);

c. That the goods should be of satisfactory quality;

Section 76 reads in part:

(2) Where the owner lets goods under a hire-purchase agreement in the course of a business, there is an implied condition that the goods are of merchantable quality within the meaning of section 14 (3) of the Sale of Goods Act, 1893, except that there shall be no such condition—

( a ) as regards defects specifically drawn to the hirer’s attention before the agreement is made, or

( b ) if the hirer examines the goods before the agreement is made, as regards defects which that examination ought to have revealed.

(3) Where the owner lets goods under a hire-purchase agreement in the course of a business and the hirer, expressly or by implication, makes known to the owner or the person by whom any antecedent negotiations are conducted, any particular purpose for which the goods are being hired, there shall be an implied condition that the goods supplied under the agreement are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the hirer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the owner or that person.

(4) An implied condition or warranty as to quality or fitness for a particular purpose may be annexed to a hire-purchase agreement by usage.”

By Section 80 of the Consumer Credit Act 1995 representations made by the salesman selling the car are deemed to be representations made by or on behalf of the Finance Company.

Section 80 reads:

80.—Where goods are let under a hire-purchase agreement to a hirer, the person, if any, by whom the antecedent negotiations were conducted shall be deemed to be a party to the agreement and that person and the owner shall, jointly and severally, be answerable to the hirer for breach of the agreement and for any misrepresentations made by that person with respect to the goods in the course of the antecedent negotiations.”

No provision has been made under the Consumer Credit Act 1995 for the determination of disputes under the Finance agreement to be by Arbitration, whereas the standard Society of Irish Motor Industry (“SIMI”) form of agreement does contain an arbitration clause.

Consequently, disputes under Credit Finance Agreements are, in principle, resolvable in litigation. The consumer is not obliged to go to arbitration.

The consumer has a choice of suing the Finance Company and the motor dealer who “sold” the car to the consumer or just the Finance Company.