MUSHARAF DIN v. AMERICAN AIRLINES AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

SMALL CLAIMS TRIBUNAL APPEAL NO. 41/88

(CLAIMS No. TWSC 2099/88)

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J U D G M E N T

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1. This is an appeal from a decision of the Small Claims Tribunal. As in every appeal of this nature, it is always reassuring to make a study of all the documents presented to and the material placed before the Small Claims Tribunal. It was done in this case. Whilst it must be recognised that the danger of an unaided Adjudicator overlooking a point of substance is real, this Court is ever conscious of the need for a balanced assessment.

2. In addition, with his cooperation counsel for the appellant was invited to address himself to likely topics in opposition. At the conclusion, the Court's first impression was explained to the representative of the 2nd defendant limited company, who had no right of audience. The Court expressed the hope of being assisted by full submissions in this appeal which involves a matter of general interest. It is regrettable that the 2nd defendant called for no legal representation.

3. I had the able and fair submissions made to me, in the best tradition of the Bar, by counsel for the claimant to whom I am greatly indebted. In the end, I felt confident enough to deliver judgment ex tempore. The parties were told that I would reduce it into writing, which I have now done.

4. The claimant was desirous of visiting Montreal, Canada, and the 2nd defendant company, Top Flight Enterprises Limited, was approached. Apparently, in an attempt to provide the best possible service to the claimant, it was suggested by the 2nd defendant that a slight detour should be made so as to take advantage of the lower sector fares. According to the representative of the 2nd defendant before the Small Claims Tribunal, a direct flight from Hong Kong to Montreal was expected to be well over $8,000. The claimant, as in the case of most travellers, hoped to be able to reach his destination on the cheapest fare. The claimant was categorically advised so the 2nd defendant's representative recalled, that if he was to switch over to American Airlines from Tokyo, after Hong Kong, with a stop over in Dallas for his forward journey to Montreal, he would enjoy the most economical offer available at the time. The claimant took to the idea as he found the fare, as suggested, attractive.

5. The representative of the 2nd defendant was recorded as having said the following to the Adjudicator :

"(The) claimant asked if he needed (a) transit visa. I said I must check. I checked directly by phone with (the) reservation department of America Airlines. I was told (for) transit of less than six hours, (there was) no need for (a) visa. As (the) Claimant's stay (was) for less than three hours, I told him he needed no visa. I. called American Airlines directly. (His) ticket (was) booked throught another IATA agent."

6. The claimant purchased a ticket through the 2nd defendant for the recommended route. Having changed plane on an American Airlines flight from Tokyo to Dallas, he was confronted with technicalities from the American Immigration Officials after he had landed. Apparently, being a Pakistani national a US transit visa would be required for a break in his onward journey. The claimant's plan to visit Montreal was frustrated. He was offered and took a free passage from Dallas back to Hong Kong. He was advised to pursue his claim in Hong Kong.

7. The claimant felt aggreived. He had complained to American Airlines but to no avail. He took the American Airlines and the 2nd defendant to the Small Claims Tribunal. His claim was for the price of the ticket in the sum of $6,600 and additional expenses of $1,050 for staying in Hong Kong for a week, a total outlay of $7,650. There does not seem to be any dispute as to the quantum of these additional expenses.

8. The central issue before the Adjudicator of the Small Claims Tribunal was, as it now stands before this Court, whether it was the responsibility of the American Airlines and/or the 2nd defendant to keep the claimant properly informed. The short point was one of liability.

9. American Airlines claimed to have no record of any visa enquiry from the 2nd defendant, but it would have been somewhat extraordinary if the 2nd defendant, running a travel agency, had made no proper enquiry after suggesting the most economical fare from Hong Kong, making a detour for Montreal.

10. As against American Airlines, the claimant faced not inconsiderable difficulties. There was no privity of contract between the claimant and American Airlines. The 2nd defendant company was not one of its accredited agents. The ticket was not purchased from or issued by American Airlines. As a matter of fact, there was no direct or any contract between American Airlines and the claimant.

11. The Adjudicator found against the claimant on both limbs of his claims, against as well American Airlines as the 2nd defendant. No sooner had the decision been delivered in the Small Claims Tribunal, this instant appeal was lodged.

12. Before the hearing today, the claimant had abandoned his appeal against American Airlines. Notice of Discontinuance was given and properly filed. The only determination sought from this Court was of the dispute between the claimant and the 2nd defendant.

13. After an examination of the entire file sent by the Small Claims Tribunal, including papers lodged on behalf of the claimant in the instant appeal, this Court had the added advantage of the willing assistance of counsel for the appellant/claimant on tenable agruments which could possibly be advanced in favour of the 2nd defendant.

14. Various passages were read to the Court. To sum up, what might be contended on behalf of the 2nd defendant was that the claimant specifically limited the scope and extent of his sought assistance from the 2nd defendant to that of merely making an enquiry from American Airlines. As I have said, in the best tradition of the bar, being conscious as this Court is, of the need to do justice to all the parties in this appeal, particularly when a party was unrepresented, counsel began with part of the hand-written statement of the claimant :

"I asked the agent, Top Flight Enterprises, to enquire from American Airlines office if I need(ed) a transit visa for America."

It could be said, so Counsel postulated, that the 2nd defendant was retained exclusively as an enquiring agent. From there the Court was taken to the evidence of the representative of the 2nd defendant given to the Ajudicator :

"As agent of American Airlines, we provide services, but it is not our duty. The information American Airlines gave us, we pass(ed) to (the) claimant."

The claimed agency is incorrect. These passages ate capable of, so Counsel analysed, sustaining an argument to the effect that the perimeter of the appointment of the 2nd defendant as agent was confined to one of enquiry. Thus, it would be arguable that the usual duty of care arising, apart from contract, out of a special relationship such as that of principal and agent was deliberately exempted. On that basis, it might be argued that the Adjudicator made no factual finding as to what the 2nd defendant had undertaken to do. If this approach had been embraced by this Court, so Counsel intimated, the matter would have had to be remitted back to the Adjudicator for a finding to be made on the terms of the agency appointment, with a special direction on the trite principle of duty of care arising out of a special relationship should the 2nd defendant be found to be an agent on general but not limited terms. See para. 422 at p.234, Chitty on Contracts, General Principles, 25th ed.

15. Counsel for the appellant concede that in the main this appeal fell to be decided on the duty of care owed by the 2nd defendant to the appellant. In view of the possible defence open to the 2nd defendant under section 3(1) of the Misrepresentation Ordinance Cap. 284, Counsel did not seriously press upon me the other Grounds of Appeal. The proviso to section 3(1) relieves a person making the misrepresentation from liability for damages if "he proves that he had reasonable grounds to believe and did believe up to the time the contract was made that the facts represented were true". After all, the 2nd defendant claimed to have repeated only the same visa information allegedly obtained from American Airlines.

16. This Court was also reminded that the introduction and breach of an alleged warranty could take the appeal little further. Lord Denning M.R. observed in Jarvis v. Swan Tours Limited, [1973] 1 AER 71 at p.73 Letter j : "It is not necesssary to decide whether (the alleged statements) were representations or warranties; because, since the Misrepresentation Act 1967, there is a remedy in damages for misrepresentations as well as for breach of warranty."

17. I was impressed by the fairness of counsel for the appellant and the able presentation that he had made, both as counsel for the appellant and at the invitation of the Court, in the capacity of a devil's advocate, giving an illuminating review of grounds that could possibly be adumbrated on behalf of the 2nd defendant.

18. What must not be lost sight of in this case is that it was the 2nd defendant who had suggested the detour and offered the most economical fare to the claimant. The totality of the evidence reveals that it was a package deal, as it were, sold to the claimant. The claimant's sole interest was to pay a visit to Montreal, Canada, on, if possible, the cheapest air fare available in the market. In its Defence Statement, the 2nd defendant admitted to be an agent of the claimant for such purpose. It would be unrealistic to suggest that the claimant was, at any time, making limited enquiry from or through the 2nd defendant. The 2nd defendant was, in the totality of the evidence, entrusted with the task of procuring a passage from Hong Kong to Montreal on, if possible, the lowest fare. It is true that the question of transit visa was said to have been raised by the claimant first. There was no mention that the claimant would only hold the 2nd defendant responsible for making the enquiry and no more.

19. No point was taken in the Defence Statement or before the Small Claims Tribunal on the 2nd defendant serving as a mere enquiring agent.

20. The claimant was principal and the 2nd defendant was agent in a transaction in which an airline ticket was to be acquired for the claimant so that he would be arriving at Montreal without hindrance. It is obvious that a duty of care was owed, in the circumstances, by the 2nd defendant to the claimant as agent to its principal for securing a trouble-free passage. For whatever reasons the claimant was given the wrong advice, the 2nd defendant misinformed him that he would require no transit visa and his planned visit to Montreal was frustrated.

21. A Canadian case by the name of Volk & Schreiber (1978) 82 D. L.R.(3d) 602 was cited by counsel. The case was a Canadian appeal also from a Small Claims Court to the Divisional Court in the Province of Ontario. They headnote is brief and reads as follows :

"A travel agent owes a duty to his clients to exercise proper skill and diligence. He is liable for damages for breach of that duty when he misreads a manual and misinforms a client as to visa requirements."

22. Grange, J. who delivered the judgment of the Divisional Court referred to a breach of "contractual obligations" of a travel agent, but it is reasonably evident that the decision was founded on a duty of care arising out of a special relationship. To that extent, I gladly endorse the observations of Grange, J. in the Canadian Divisional Court. At p. 604, Grange J. had this to say :

"The trial Judge found that there was no negligence in the circumstances on the part of the defendant and accordingly dismissed the action. I am not sure that that is the proper test. In my view, the obligation of a travel agent or anyone holding himself out as having special knowledge and ability is to exercise the appropriate degree of skill and diligence as in the matter. So far as his skill is concerned, it is my conclusion that he was unable properly to interpret what he described as the bible of his trade. So far as his diligence is concerned, he was in doubt on the matter and informed his customer that there was no doubt. He also failed to obtain the visa for her when, in my view, he could readily and should have done so."

23. The Canadian claim, though not on all fours with the facts in the case of the claimant, arose also on negligence. It was, however, a claim based on an erroneous advice given in doubt on the need for a visa. The same special relationship existed in the Canadian case as it did in the present case between the claimant and the 2nd defendant and the same duty of care was owed by the 2nd defendant to the claimant as it was owed by the travel agent in the Canadian case to the plaintiff, Mr Volk.

24. A duty of care was owed by the 2nd defendant as a travel agent to the claimant. The 2nd defendant ought to have enquired of the need for a transit visa from the American Consulate. After all, the Adjudicator concluded that airlines cannot be made liable as "it is the duty of ..... the passenger to ensure that he had the relevant permission of the Government of the Country through which he was making his way." In this case, the passenger had an agent in the 2nd defendant. The 2nd defendant ought to have obtained accurate information from a proper source, the American Consulate and thereafter kept the claimant advised of any change in the visa information so obtained. Unless otherwise agreed, that is clearly a duty of care to a traveller by his travel agent. This duty of cane was owed to the claimant.

25. The principal ground of appeal sought to be supported by counsel for the claimant cannot be flawed and the appeal must therefore succeed. It remains for me to order : (1) appeal allowed; (2) the determination against the claimant in favour of the 2nd defendant be reversed; (3) the claimant to have judgment against the 2nd defendant in the sum of $7,650 as claimed; and (4) costs against the 2nd defendant in favour of the claimant, such costs to be taxed in accordance with the Legal Aid Regulations.