JACKSON v HORIZON HOLIDAYS LTD [1975] 3 All ER 92
Court of Appeal, Civil Division
Lord Denning MR. Mr Jackson is a young man, in his mid-twenties. He has been very successful in
his business. He is married with three small children. In November 1970 there were twin boys of three
years of age; and his wife had just had her third child. He had been working very hard. They
determined to have a holiday in the sun. He decided on Ceylon. He enquired of Horizon Holidays Ltd.
He made arrangements with their agent, a Mrs Bremner, for a holiday at a hotel, the Pegasus Reef
Hotel, Hendala Point, Ceylon. He wrote them a letter which shows that he wanted everything of the
highest standard:
‘With reference to our telephone conversation would you please confirm that you can arrange
for my wife myself and my two twin boys aged 3 years to stay for 28 days from 23 January to
stay at the HOTEL PEGASUS REEF, HENDALA POINT, CEYLON. Would you also
arrange that the children’s room has an adjoining door to our room this is essential and is a
condition of me booking this holiday. Would you please make sure that the balcony is facing
the sea and would you also confirm the distance the hotel is from the sea. Would you confirm
that the meals are four course with a choice of 3 or 4 dishes to each course. Could you
confirm that there has been arrangements made that an English speaking Doctor would call on
the Hotel if needed. Would you please make a clear answer to all these questions appreciating
that you might have difficulties in answering some of these questions and not to send an
evasive answer to any of these questions.’
He spoke on the telephone to Mrs Bremner. She led him to believe that the hotel would come up to his
expectations. She wrote on the booking form: Remarks Twins Room with connecting door essential.
Total charge, £1432.’ He sent it in and booked the holiday.
In the middle of January it was
discovered that the Pegasus Reef Hotel would not be ready in time. So Horizon Holidays
recommended a substitute. This was Brown’s Beach Hotel. It was described in the advertisement as
being—
‘superbly situated right on the beach, with all facilities for an enjoyable holiday including
mini-golf, excellent restaurant, cocktail lounge, swimming pool, beauty salon, hairdressers
and gift shop … The bedrooms are well furnished and equipped in modern style. All rooms
have private bath, shower, w.c., sea view and air-conditioning.’
Mr Jackson had some hesitation about this other hotel. But Horizon Holidays assured him that it
would be up to his expectation. So Mr Jackson accepted it. But Horizon Holidays reduced the charge.
Instead of the price being the total sum of £1,434, now, because of the change of hotel, it would be
£1,200. That included air travel to Ceylon and back and a holiday for four weeks. So they went there.
The courier, Miss Redgrave, met them and took them to Brown’s Beach Hotel. But they were greatly
disappointed. Their room had not got a connecting door with the room for the children at all. The
room for the children was mildewed—black with mildew, at the bottom. There was fungus growing
on the walls. The toilet was stained. The shower was dirty. There was no bath. They could not let the
children sleep in it. So for the first three days they had all the family in one room. The two children
were put into one of the single beds and the two adults in the other single bed. After the first three
days they were moved into what was said to be one of the best suites in the hotel. Even then, they had
to put the children in to sleep in the sittingroom and the parents in the bedroom. There was dirty linen
on the bed. There was no private bath but only a shower; no mini-golf course; no swimming pool, no
beauty salon, no hairdressers’ salon. Worst of all was the cooking. There was no choice of dishes. On
some occasions, however, curry was served as an alternative to the main dish. They found the food
very distasteful. It appeared to be cooked in coconut oil. There was a pervasive taste because of its
manner of cooking. They were so uncomfortable at Brown’s Hotel, that after a fortnight they moved
to the Pegasus Reef Hotel. It appears that by that time it was nearing completion. But a lot of building
work was still going on. At any rate, for the fortnight they were in the Pegasus Reef Hotel, where
things were somewhat better than at Brown’s Beach. They stayed out the four weeks and came home.
Soon after their return, Mr Jackson wrote a letter setting out all his complaints from the beginning to
the end. Then Mr Jackson brought an action for damages in respect of the loss of his holiday for
himself, his wife and the two small children. Horizon Holidays admitted liability. The contest was
only on the amount of damages.
In Jarvis v Swans Tours Ltd [1973] 1 All ER 71 it was held by this court that damages for the loss of a
holiday may include not only the difference in value between what was promised and what was
obtained, but also damages for mental distress, inconvenience, upset, disappointment and frustration
caused by the loss of the holiday. The judge directed himself in accordance with the judgments in that
case. He eventually awarded a sum of £1,100. Horizon Holidays Ltd appeal. They say it was far too
much. The judge did not divide up the £1,100. Counsel has made suggestions about it. Counsel for
Horizon Holidays suggests that the judge gave £100 for diminution in value and £1,000 for the mental
distress. But counsel for Mr Jackson suggested that the judge gave £600 for the diminution in value
and £500 for the mental distress. If I were inclined myself to speculate, I think the suggestion of
counsel for Mr Jackson may well be right. The judge took the cost of the holidays at £1,200. The
family only had about half the value of it. Divide it by two and you get £600. Then add £500 for the
mental distress.
On this question a point of law arises. The judge said that he could only consider the mental distress
to Mr Jackson himself, and that he could not consider the distress to his wife and children. He said:
‘… the damages are the Plaintiff’s; that I can consider the effect upon his mind of his wife’s
discomfort, vexation and the like, although I cannot award a sum which represents her
vexation.’
Counsel for Mr Jackson disputes that proposition. He submits that damages can be given not only for
the leader of the party, in this case, Mr Jackson’s own distress, discomfort and vexation, but also for
that of the rest of the party.
We have had an interesting discussion as to the legal position when one person makes a contract for
the benefit of a party. In this case it was a husband making a contract for the benefit of himself, his
wife and children. Other cases readily come to mind. A host makes a contract with a restaurant for a
dinner for himself and his friends. The vicar makes a contract for a coach trip for the choir. In all
these cases there is only one person who makes the contract. It is the husband, the host or the vicar, as
the case may be. Sometimes he pays the whole price himself. Occasionally he may get a contribution
from the others. But in any case it is he who makes the contract. It would be a fiction to say that the
contract was made by all the family, or all the guests, or all the choir, and that he was only an agent
for them. Take this very case. It would be absurd to say that the twins of three years old were parties
to the contract or that the father was making the contract on their behalf as if they were principals. It
would equally be a mistake to say that in any of these instances there was a trust. The transaction
bears no resemblance to a trust. There was no trust fund and no trust property. No, the real truth is that
in each instance, the father, the host or the vicar, was making a contract himself for the benefit of the
whole party. In short, a contract by one for the benefit of third persons.
What is the position when such a contract is broken? At present the law says that the only one who
can sue is the one who made the contract. None of the rest of the party can sue, even though the
contract was made for their benefit. But when that one does sue, what damages can he recover? Is he
limited to his own loss? Or can he recover for the others? Suppose the holiday firm puts the family
into a hotel which is only half built and the visitors have to sleep on the floor? Or suppose the
restaurant is fully booked and the guests have to go away, hungry and angry, having spent so much on
fares to get there? Or suppose the coach leaves the choir stranded half-way and they have to hire cars
to get home? None of them individually can sue. Only the father, the host or the vicar can sue. He can,
of course, recover his own damages. But can he not recover for the others? I think he can. The case
comes within the principle stated by Lush LJ in Lloyd’s v Harper ((1880) 16 Ch D 290 at 321):
‘…I consider it to be an established rule of law that where a contract is made with A. for the
benefit of B., A. can sue on the contract for the benefit of B., and recover all that B. could
have recovered if the contract had been made with B. himself.’
It has been suggested that Lush LJ was thinking of a contract in which A was trustee for B. But I do
not think so. He was a common lawyer speaking of the common law. His words were quoted with
considerable approval by Lord Pearce in Beswick v Beswick ([1967] 2 All ER 1197 at 1212, [1968]
AC 58 at 88). I have myself often quoted them. I think they should be accepted as correct, at any rate
so long as the law forbids the third persons themselves to sue for damages. It is the only way in which
a just result can be achieved. Take the instance I have put. The guests ought to recover from the
restaurant their wasted fares. The choir ought to recover the cost of hiring the taxis home. There is no
one to recover for them except the one who made the contract for their benefit. He should be able to
recover the expense to which they have been put, and pay it over to them. Once recovered, it will be
money had and received to their use. (They might even, if desired, be joined as plaintiffs.) If he can
recover for the expense, he should also be able to recover for the discomfort, vexation and upset
which the whole party have suffered by reason of the breach of contract, recompensing them
accordingly out of what he recovers.
Applying the principles to this case, I think that the figure of £1,100 was about right. It would, I think,
have been excessive if it had been awarded only for the damage suffered by Mr Jackson himself. But
when extended to his wife and children, I do not think it is excessive. People look forward to a
holiday. They expect the promises to be fulfilled. When it fails, they are greatly disappointed and
upset. It is difficult to assess in terms of money; but it is the task of the judges to do the best they can.
I see no reason to interfere with the total award of £1,100.
I would therefore dismiss this appeal.
Orr LJ. I agree.
James LJ. In this case Mr Jackson, as found by the judge on the evidence, was in need of a holiday at
the end of 1970. He was able to afford a holiday for himself and his family. According to the form
which he completed, which was the form of Horizon Holidays Ltd, he booked what was a family
holiday. The wording of that form might in certain circumstances give rise to a contract in which the
person signing the form is acting as his own principal and as agent for others. In the circumstances of
this case, as indicated by Lord Denning MR, it would be wholly unrealistic to regard this contract as
other than one made by Mr Jackson for a family holiday. The judge found that he did not get a family
holiday. The costs were some £1,200. When he came back he felt no benefit. His evidence was to the
effect that, without any exaggeration, he felt terrible. He said: ‘The only thing, I was pleased to be
back, very pleased, but I had nothing at all from that holiday.’ For my part, on the issue of damages in
this matter, I am quite content to say that £1,100 awarded was the right and proper figure in those
circumstances. I would dismiss the appeal.
Appeal dismissed. Leave to appeal to the House of Lords refused.