Failure of consideration and food poisoning

By Legal Eagle

Via the Restitution Discussion Group, a fascinating case…this time a celebrity diner who became violently ill after eating a meal at a celebrity restaurant. From The Independent:

Boxing TV host Jim Rosenthal lost a legal bout with chef Heston Blumenthal today as a judge ruled he should not be refunded for a £1,300 meal which left him “disastrously” sick.

The veteran ITV presenter, also known for fronting the channel’s coverage of football and motor racing, was one of more than 500 guests who fell ill during the norovirus outbreak at the award-winning Fat Duck last year.

District Judge Tim Parker dismissed Rosenthal’s claim at Oxford County Court after hearing he and his dinner companions had already received £6,000 compensation for pain suffered in the wake of the meal.

Rosenthal and his guests were struck down by jelly oysters served as part of a food and wine-tasting evening at the “prestigious” restaurant.

He and his wife, who had been eating with boxing promoter Frank Warren and three other guests, spent a total of £1,346.33 on a “gastronomic evening” in February last year which turned to “catastrophe”, the court heard.

The oysters which made them ill had a market value of just 78p each, Rosenthal’s counsel, Andrew Sheriff, said.

They were among more than 500 diners who fell ill, forcing the two week closure of the three Michelin starred Fat Duck, in Bray, Berkshire.

Describing the meal as a “total failure”, the lawyer said the Fat Duck “entirely failed to provide their side of the bargain”.

Mr Sheriff said it would be “artificial and absurd” if his client was only refunded for the ingredients which made them ill.

He added: “All the claimants were violently unwell for several weeks.

“The meal was of negative nutritional value and none of the other ingredients were of benefit … The meal failed to deliver the benefits the claimant paid for.

“Nutritionally, it was as though they had paid for no meal at all.

“It was not simply disappointing – they were left wishing that had never had the meals.

“Put in graphic terms, they did not even keep the meals down.

“What is the value of a meal that is going to make you violently ill? It must be zero. No one is going to pay for a meal which is going to make them violently ill – so on that basis, he is entitled to get the cost back.”

Clearly there was a breach of contract. But how far should the restaurant have to compensate the diners? Plaintiffs are entitled to damages for distress caused by a breach of contract if the purpose of the contract was to provide pleasure. But there is also a question of whether a plaintiff in these circumstances is entitled to restitution of the entire cost of the contract as well. The typical cases dealing with these sorts of questions involve contracts for a holiday: see eg, Jarvis v Swan Tours Ltd [1973] QB 233 (‘Jarvis‘); Baltic Shipping Co v Dillon (a.k.a. The Mikhail Lermontov‘) (1993) 176 CLR 344 (‘Baltic Shipping‘).

I’m going to explain each of those cases for our lay readers a little before I get to the Fat Duck. Jarvis is Lord Denning at his finest. In Jarvis, Mr Jarvis, a solicitor, booked a Christmas holiday to Switzerland. In the brochure, it was said that the hotel owners would provide a “house-party” and that there would be easy access to activities like skiing or and opportunities to attend yodeling evenings. He paid £63.90 for the holiday.

Lord Denning sums up the result of the holiday thusly:

The plaintiff went on the holiday, but he was very disappointed. He was a man of about 35 and he expected to be one of a house-party of some 30 or so people. Instead, he found there were only 13 during the first week. In the second week there was no house-party at all. He was the only person there. Mr. Weibel could not speak English. So there was Mr. Jarvis, in the second week, in this hotel with no house-party at all, and no one could speak English, except himself. He was very disappointed, too, with the ski-ing. It was some distance away at Giswil. There were no ordinary length skis. There were only mini-skis, about 3 ft° long. So he did not get his ski-ing as he wanted to. In the second week he did get some longer skis for a couple of days, but then, because of the boots, his feet got rubbed and he could not continue even with the long skis. So his ski-ing holiday, from his point of view, was pretty well ruined.

There were many other matters, too. They appear trivial when they are set down in writing, but I have no doubt they loomed large in Mr. Jarvis’s mind, when coupled with the other disappointments. He did not have the nice Swiss cakes which he was hoping for. The only cakes for tea were potato crisps and little dry nutcakes. The yodler evening consisted of one man from the locality who came in his working clothes for a little while, and sang four or five songs very quickly. The “Alphutte Bar”was an unoccupied annexe which was only open one evening. There was a representative, Mrs. Storr, there during the first week, but she was not there during the second week.

For some reason I have always found the sentence, “the only cakes for tea were potato crisps and little dry nutcakes,” to be simultaneously tragic and hilarious. I’d be in trouble with little dry nutcakes because of my nut allergy; but then I have to be careful with many European cakes for this reason.

The Court of Appeal found that there had been a breach of contract, and that the trial judge was wrong to simply award Mr Jarvis the difference in value between the holiday he had been provided and the holiday he had been promised (which the trial judge had calculated at half of £63.90). The general rule is that that damages for anxiety, disappointment and distress are not recoverable in actions for breach of contract, but in contracts of this sort where the aim is to provide pleasure and enjoyment, the Court found that there was an exception. Thus, the Court of Appeal awarded £150 to compensate for the loss of entertainment and enjoyment suffered as a result of the breach of contract. The damages in this case were simply an extension of ordinary compensatory damages.

Baltic Shipping concerned a cruise holiday booked by Mrs Dillon, a widow. Mrs Dillon paid $2205 in advance for the cruise. The cruise was to last 14 days, and was to be around New Zealand. On the 9th day of the cruise, the cruise ship, a Russian ship named the Mikhail Lermontov, hit a shoal and sank. Mrs Dillon was injured and lost personal possessions. The cruise ticket had stated that damages for personal injury were limited. After the accident, the cruise company offered Mrs Dillon an ex gratia payment in settlement of her claim which did not cover personal injuries on the condition that she signed a release form.

Mrs Dillon made a number of claims in the High Court. Importantly for present purposes, she argued that she was entitled to restitution of the entire cruise fare because there had been a total failure of consideration (in other words, she didn’t get the performance she bargained for, so she should get all her money returned to her). Failure of consideration has been described by Birks with customary succinctness as follows:

Failure of the consideration for a payment…means that the state of affairs contemplated as the basis or reason for the payment has failed to materialize or, if it did exist, has failed to sustain itself.

The cruise company had already refunded the money covering the balance of the tour which she was unable to complete because of the sinking of the ship.  The High Court disagreed with the trial judge’s assessment that Mrs Dillon’s enjoyment of the benefits of 8 days of the cruise was entirely negated by the foundering of the ship. It held that the failure of consideration was only partial, not total, in that Mrs Dillon got part of the performance for which she bargained, and thus Mrs Dillon was not entitled to restitution.

Mrs Dillon also made claims for damages for distress as a result of the breach of contract. The High Court said that there was an exception to the general principle that damages could not be recovered for distress and anxiety where where the object of the contract was been to provide pleasure and relaxation (relying in part on Jarvis).

So we now return to the Fat Duck. Hopefully, after my explanation of the cases above, you can see what Rosenthal’s counsel was attempting to argue. He was trying to argue that there had been a total failure of consideration such that Blumenthal was liable to pay back the entire cost of the meal, over and above the damages for distress which Blumenthal had already paid Rosenthal and the other diners. (It is clear from cases like Jarvis and Baltic Shipping that the restaurant ought to be liable for damages for distress as a result of the breach of contract).

I think one’s attitude to this kind of case depends on one’s attitude as to what constitutes proper performance of a contractual obligation (although cf McHugh J in Baltic Shipping at 393). In Baltic Shipping, the trial judge saw the breach as destroying the entire performance. So part of a holiday was not a satisfactory performance. The High Court saw performance as segmented: full performance was constituted by a holiday at a variety of destinations, and although only some of the destinations were visited, this was enough to constitute part performance. The High Court was also determined not to render advance payments for contractual services conditional (i.e. dependent upon satisfactory performance).

Mason CJ said at 353:

Would the respondent be entitled to a return of the fare if, owing to failure of the ship’s engines, the ship was unable to proceed on the last leg of the cruise to Sydney and it became necessary to airlift the respondent to Sydney? Would the fare be recoverable if, owing to a hurricane, the ship was compelled to omit a visit to one of the scheduled ports of call? The answer in each case must be a resounding negative.

I think this might be a place for my concept of “substitutability”. The real question is: supposing there were breaches of the kind mentioned by Mason CJ, was the performance provided by the defendant an adequate substitute? Arguably, if the defendant airlifted the plaintiff to Sydney, this might well be an adequate substitute for that leg of the journey. If the plaintiff had been prevented from landing in a particular port, it depends on what the defendant had done to try to provide an adequate substitute for the promised performance. In Baltic Shipping, there was no substitute for that part of the  performance which was not provided — the passengers were not moved onto another ship to complete their journey, for example, or taken by bus to ports which they particularly wished to see.

In any case, there should be some room for principles of restitution to operate where there is only partial failure of consideration. In my opinion, part of the purchase price should be returned where there is partial failure.

As with Baltic Shipping, in the Fat Duck case, the question is how one sees the promise. Did the fact that the plaintiff had a number of other satisfactory courses constitute part performance of the contract, even though ultimately the result of the meal was dire? In consensus with those on the RDG, I see the promise as a whole promise. Even though the deficiency was only with respect to one course of the meal, in my opinion, the end result was that the entire meal was spoiled because it was not fit for purpose, and the enjoyment intended to be provided by the meal was not provided. There was total failure of consideration. (Note: having had suspected norovirus, I sympathise very much with Rosenthal — when I had it, we had to get a doctor out to the house to inject me with some medicine so that I could keep anything down).

One of the questions being asked on the Restitution Discussion Group was whether Rosenthal would have been able to seek restitution of the contract price if he had made himself sick by drinking too much claret, or by eating something to which he was allergic. In those two cases, I don’t believe that the restaurant would have breached its contract, because these things were not part of any promise between the restaurant and the diner. They may have been liable if Rosenthal had specifically asked the restaurant not to serve him dishes containing shellfish, and in breach of this promise, he had been served food containing shellfish — then the restaurant would have been in breach of its specific oral contract with him. Or perhaps there may have been a breach if Rosenthal had said he was a recovering alcoholic and asked the restaurant not to serve him more than 2 glasses of claret, but they had ignored this request.

Also I see no reason in principle why Rosenthal could not recover restitutionary damages for the price of the meal and damages for suffering, as long as courts are careful to ensure that no “double recovery” occurs (see contra Baltic Shipping).

I must confess that I have a personal interest in this area because my parents recently had a bad experience during a tour of Russia where the tour company put them up in a hotel and the tour guide encouraged them to eat from the hotel buffet because it was “quick”. Subsequently, a majority of the tour group became ill with salmonella poisoning and my parents and the other unwell tour members spent a week in hospital on drips. Certainly not the experience they had been hoping for! Interestingly, my parents’ experience is a weird amalgam of all the elements of the cases above (holidays, food poisoning and Russian accommodation). Hmm. I think perhaps the tour company had better watch out, Legal Eagle is on the case…

19 Comments

  1. Posted September 17, 2010 at 4:41 pm | Permalink

    Completely irrelevant, but kind of linked… My son Mat once won a competition run by a radio station in Palmerston North, New Zealand to create an original riddle. His was: What’s yellow and sticky and lies at the bottom of the ocean? A: The Mikhail Lemon Toffee. Riotous applause please. And another minor link: He’s now studying law at Birkbeck College in London. Clearly he has the kind of twisted mind that will ensure he does well at this new profession. 🙂

  2. Posted September 18, 2010 at 3:23 am | Permalink

    M-H: I’m assuming when that ship sank it must have been a major, major news story in NZ. I only heard the story second hand, at law school, and immediately wondered why I hadn’t heard more about it at the time.

  3. Nick Ferrett
    Posted September 18, 2010 at 6:30 am | Permalink

    I don’t really see how you can justify restitution for failure of consideration and damages for breach. Isn’t restitution for failure of consideration an acknowledgment that the contract has failed. How do you justify a right to damages for breach if you haven’t paid for that right?

    The other thing that occurs to me is that the point might be a bit sterile because in cases such as this there would be a duty of care which would allow recovery.

  4. Chris
    Posted September 18, 2010 at 3:30 pm | Permalink

    I would have thought most reputable tour companies would at least refund the costs of the tour if something seriously bad happened because of something they were clearly at fault for. Even if it’s just because of the cost to their public reputation and future business if they don’t do so.

    I went on a hiking trip a few years back in a 3rd world country and near the end of the trip our guide and some of the porters got drunk and ended up in a fight with the guide and porters from another tour group. As a result, the other group came around in the middle of the night and slashed our tents – while we were in them! Which was not the most pleasant of experiences.

    The tour company, with only a little bit of an argument (no lawyers involved) ended up refunding the entire cost of the tour – which I ended up donating to a charity that works in the country because I saw it as a bit of a windfall gain.

  5. Nick Ferrett
    Posted September 18, 2010 at 4:39 pm | Permalink

    LE, I guess I just don’t see why you should be put in the position in which you would have been if the contract had been performed when you are being excused from performing your side of the bargain (i.e., paying the contract price).

  6. desipis
    Posted September 18, 2010 at 5:58 pm | Permalink

    Is the “compensation for pain suffered” determined by comparing the outcome of what did happen to what should have happened (as per the contract), or just assessing the outcome to a neutral position of assuming the contract had never been made in the first place? If it’s the former, then isn’t the cost of the contract effectively built into compensation already paid?

    Also, how does the £6,000 compare to other cases involving food poisoning?

  7. sweeney
    Posted September 18, 2010 at 7:44 pm | Permalink

    Potato crisps and little dry nutcakes for dessert in the Swiss Alps! I would have been spitting chips.

    Years ago my sister decided to get married, in North Queensland, in January. Unsurprisingly, there were floods. Fortunately the excellent local restaurant served wonderful margaritas and whisky sours. By the jug if necessary, which it was as the rain poured relentlessly down day after day. Poor Mr Jarvis. For £63.90 just a few jugs of schnapps from the Alphutte Bar might have made his holiday bearable, unless he was a teetotaller like Lord Denning.

    As for the Rosenthals, I love oysters and eat them often. ‘Jelly oysters’ sound dodgy. I would have been wary.

  8. Posted September 18, 2010 at 9:21 pm | Permalink

    In carlton in the early 80s, a friend and I got Vietnamese takeaway.. Half and hour later, with the brick walls dancing in /very/ strange ways, my friend called on my pharmacology knowledge… No racing pulse, only half-eaten meal, pupils neither dilated nor pinpoint… So some weird alkaloid, possibly the picking of mushrooms on the cheap that /looked/ like straight ones at home in Vietnam.

    Whether that was a fail by the takeaway place, or an added bonus, would vary from customer to customer, especially with a uni around the corner.

    A restaurant in Warrnambool (early 80s again) didn’t take such risks… it was well-known for letting you bring your own mushrooms to be cooked on your takeaway pizza.

  9. Posted September 19, 2010 at 3:23 am | Permalink

    I’m with Nick Ferret on this: what is the need for restitutionary remedies if there are also damages for breach? As you respond, it may be relevant when there is an exclusion clause, but then, that’s the deal isn’t it? (subject, as in the ML, to the Contracts Review Act)

    I know restitutionists are always eager to talk up their special topic, but I think there really is a difference between total failure of consideration and a very serious breach – after all, a serious breach can lead to a better remedy – that’s often the beauty of expectation damages as opposed to reliance damages. Money-back is a pretty piss-weak one really.

    And I hate to spoil the party, but it isn’t clear to me that the case has been determined. Press reports of celebrity cases can be so unreliable.

    Reading the [The] Independent story I was mystified by the reference to the judge asking for written submissions against the possibility of an appeal. Too late, surely? [I murmured to myself.] Other press reports suggest that the matter was adjourned, and I note that the BBC report which is consistent with that (here: http://www.bbc.co.uk/news/uk-england-11302718) states that it was corrected.

    Many may feel that, as counsel for the boxing commentator-celebrity [excuse me!] apparently submitted, bringing the food up means that there was a total failure of consideration, but there was still the taste on the way down and the atmosphere and all which was doubtless pleasant enough before it all went so horribly wrong.

    To put it more bluntly, what part of “total” don’t you accept?

  10. Nick Ferrett
    Posted September 19, 2010 at 7:50 am | Permalink

    LE, whatever the correct outcome, at least you have a contract case which involves disgorgement.

  11. desipis
    Posted September 19, 2010 at 11:40 am | Permalink

    LE,

    because that would not adequately compensate for the contracted-for performance

    What I was asking was does the £6,000 take into account the expected experience of the diners. That is, is the equation:

    A) gastronomic evening -> nonovirus = £6,000

    which might lead to something like:

    B) 78p oyster -> nonovirus = £3,000

    OR, is the equation:

    C) 78p oyster -> nonovirus = £6,000

    If the damages are assessed using C then I can see how a refund might be merited. However, if the damages are assessed using A then claiming a refund would then only entitle the diners to damages from the result of B.

  12. Nick Ferrett
    Posted September 19, 2010 at 12:01 pm | Permalink

    Desipis, the news websites suggest that the GBP 6000 was for personal injury. It is likely to be a combination of medical expenses and mental anguish. If the damages were awarded in contract then it is likely to be as compensation for breach of a duty to take proper care in preparing the meal. There does not appear to have been compensation for the loss of amenity of the evening per se, but (arguably) compensation for mental anguish of the food poisoning is of a piece with compensation for loss of the amenity of the evening.

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