Heidari - Dowling v Leisure Inn Sydney Central Pty Ltd

[2017] NSWCATCD 75

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:	Heidari – Dowling v Leisure Inn Sydney Central Pty Ltd [2017] NSWCATCD 75
Hearing dates:	21 April 2017
Decision date:	01 September 2017
Jurisdiction:	Consumer and Commercial Division
Before:	F Corsaro SC, Senior Member
Decision:	1.The Tribunal orders that the respondent is to immediately pay the applicants the sum of $350 (inclusive of GST) for breach of contract.
Catchwords:	Consumer Claim, Consumer, Supply, Consumer
Legislation Cited:	Hotel letting contract made online– Formation of contract- terms of the contract - Misrepresentation based on statements made by online booking service – damages for breach of contract made for hotel letting – quantification of loss
Category:	Principal judgment
Parties:	Nahid Heidari-Dowling (applicant) Leisure Inn Sydney Central Pty Ltd (respondent)
Representation:	The applicant by telephone from Perth. The respondent in person, by an authorised employee Ms Leanna Su.
File Number(s):	GEN 17/05210
Publication restriction:	Unrestricted

reasons for decision

INTRODUCTION

1. This application concerns a stay in a Sydney hotel, and whether the hotel room and the accommodation met the agreed standards.

2. The applicant, Mrs Heidari-Dowling, lives in Perth, Western Australia. She planned to spend five days in Sydney in December 2016. She booked a “Superior Twin” hotel room (the Room) for her stay at the Leisure Inn Sydney Central hotel. The address of the hotel is 28-30 Regent Street Chippendale (the Hotel). The online booking site used by the applicant to reserve the Room, the “Booking.com” website, stated the address to be ’28-30 Regent Street, Sydney CBD’.

3. The material placed before the Tribunal establishes that the Booking.com website has the facility where hotel owners and operators provide the website operators with hotel and accommodation listings and other information such as room prices, availability and images and reviews. The website has a search tool which then scans the hotel listings so that a website user can access the information and may lodge their accommodation request either online or by contacting the hotel directly.

4. There is no issue that Mrs Heidari-Dowling arranged to let the Room online for the period 31 December 2016 to 5 January 2017 (the Letting Period).

5. According to the application lodged with the Tribunal on 2 February 2017:

1. Ms Heidari-Dowling was looking for a ‘nice/spacious/clean room with internet connection to be able to have a relax[ing] time…and to enjoy Sydney’s events during the new year period’;

2. the various Booking.com webpages made various representations in the text and images about the location of the Hotel and the features of the Hotel and the rooms that it offered, including:

1. a representation that the Hotel was a ‘fully refurbished hotel’ that ‘offer[ed] modern rooms’;

2. a representation that the location of the Hotel was ‘within 20 minutes’ walk’ of the ‘shopping, bars and restaurants of Darling Harbour, QVB, and Pitt Street Mall’; and

3. a representation that each room in the Hotel had ‘a large work space with WiFi connectivity’.

6. Ms Heidari-Dowling says that the reality was different from the picture painted of the Hotel and the Room by the Booking.com web pages that appeared on her web browser when she booked the Room online. She wants the Tribunal to order the respondent hotel owner and operator (Leisure Inn), to refund to her the amount of $1,425.00 that she paid for her stay.

7. The information on the Tribunal’s file establishes that on 13 February 2017, the Tribunal granted Ms Heidari-Dowling’s request for a telephone hearing. Accordingly, the hearing of the application before me proceeded with Mrs Heidari-Dowling appearing at the hearing by telephone from Perth.

8. Leisure Inn appeared at the hearing, represented by an employee, Ms Leanna Su. Ms Su stated that she was employed as the personal assistant of Leisure Inn’s Executive Director, Mr Richard Doyle, and had been authorised to appear to represent Leisure Inn.

9. Mrs Heidari-Dowling opposed the Tribunal giving Ms Su leave to appear for Leisure Inn. She submitted that Ms Su might be “pressured” and unable to objectively and fairly deal with her application. Having considered Mrs Heidari-Dowling’s submissions on this issue, I decided that Ms Su should be granted leave to appear for Leisure Inn. My reasons for doing so were:

1. Ms Su, reporting to Mr Doyle, was the Leisure Inn employee charged to deal with the application;

2. Ms Su had been dealing with Ms Heidari-Dowling’s complaints about the Hotel and the Room, and had knowledge of the claims being made in the application;

3. Ms Su had prepared the Leisure Inn documents which Leisure Inn lodged with the Tribunal, and on which it relied;

4. Ms Su provided Mr Doyle with the information used by Mr Doyle in letters responding to Mrs Heidari-Dowling’s complaints;

5. Ms Su had been specifically authorised by Leisure Inn to appear at the hearing; and

6. I considered that no real prejudice flowed to Ms Heidari-Dowling in permitting Ms Su to present Leisure Inn at the hearing.

10. Mrs Heidari-Dowling lodged her application with the Tribunal on 2 February 2017. She lodged her documentary material in support of her application on 4 April (the Application Bundle). Leisure Inn provided its bundle of documents on 3 April 2017 (the Respondent Bundle). I have had regard to:

1. the oral evidence of Mrs Heidari-Dowling and the Application Bundle; and

2. Ms Su’s evidence and the Respondent Bundle.

11. I have relied on the information in the Tribunal file to understand earlier procedural issues.

12. I have considered, and have been assisted by submissions by both Ms Heidari-Dowling and Ms Su at the hearing.

JURISDICTION

13. Section 79E of the Fair Trading Act, 1987 (NSW) (the FTA) states:

(1)    For the purposes of this Part, a "consumer claim" means a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services:

(a)    the payment of a specified sum of money,

(b)    the supply of specified services,

(c)    relief from payment of a specified sum of money,

(d)    the delivery, return or replacement of specified goods or goods of a specified description.

(2)    For the avoidance of doubt, a reference in this Part to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer.

14. The Tribunal’s broad jurisdiction to hear and determine a ‘consumer claim’ is in sections 79B to 79V (Part 6A, Divisions 1, 2 and 3 of the FTA).

15. Section 79I of the FTA states that any ‘consumer’ may apply to the Tribunal for determination of a ‘consumer claim’. It is necessary to consider both concepts.

16. Section 79D of the FTA provides a list of people or bodies who are ‘consumers’ to whom, or to which, a ‘supplier’ has supplied, or agreed to supply, goods or ‘services’ (whether or not under a contract), or with whom or with which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services. Relevantly, the word ‘services’ in this context is defined in section 4 of the FTA as including any ‘facilities that are, or are to be, provided, granted or conferred in trade or commerce’ and section 79F of the FTA makes clear that the provision of ‘services’ includes letting premises for vacation or recreational purposes.

17. Section 79H of the FTA operates to create a presumption that anyone who claims to be a consumer is a consumer, unless the person wishing to prove the contrary is able to establish the contrary.

18. Sections 79K, 79L and 79S of the FTA contains statutory limits on the Tribunal’s consumer claims’ jurisdiction. These are not presently relevant, as:

1. Leisure Inn hired out the Room to Mrs Heidari-Dowling in New South Wales, and on the basis of an agreement made in New South Wales (section 79K);

2. the claim did not first accrue more than 3 years before the date on which the application was lodged with the Tribunal (section 79L); and

3. the application is within the prescribed monetary limit in section 79S of the FTA (section 79S).

19. Section 79O of the FTA states:

In determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Division, make any one or more of the following orders that it considers appropriate:

(a)    an order that requires a respondent to pay to the claimant a specified amount of money,

(b)    an order that requires a respondent to perform specified work in order to rectify a defect in goods or services to which the claim relates,

(c)    an order that requires a respondent to supply to the claimant specified services other than work,

(d)    in the case of a claim for relief from payment of money-an order declaring that a specified amount of money is not due or owing by the claimant to a respondent,

(e)    an order that requires a respondent to deliver to the claimant goods of a specified description,

(f)    an order that requires a respondent to return to the claimant specified goods which are in the possession or under the control of that respondent, whether the property in the goods has passed or not,

(g)    an order that requires a respondent to replace goods to which the claim relates,

(h)    an order that requires a respondent to refund all or part of the purchase price of specified goods that are in the possession (or under the control) of the claimant and the claimant to return all or part of those goods to the respondent (whether the property in the goods has passed or not).

20. As I have already stated, Ms Heidari-Dowling’s claim is for a refund of the amount paid to Leisure Inn to let the Room for the Letting Period, or to use the language of section 79O of the FTA, an order that Leisure Inn pay Ms Heidari-Dowling the amount of $1,425.00.

21. Leisure Inn made no objection to the Tribunal’s jurisdiction.

22. I accordingly find that I have jurisdiction to deal with the present application. Mrs Heidari-Dowling is a consumer. The claim is a consumer claim as defined in the FTA. Leisure is a supplier of services, as these terms are defined in the FTA. The claim arises from an agreement made in NSW, and relates to the hiring out of premises for vacation or recreational purposes in NSW. The claim has been made to the Tribunal within the time period allowed.

THE FINDINGS

23. The application raises three principal issues:

1. the terms of any agreement which governed the relationship between Mrs Heidari-Dowling and Leisure Inn, and whether, in the circumstances, Leisure Inn breached any terms of any agreement;

2. whether the information presented to Mrs Heidari-Dowling on the Booking.com webpages made any actionable misrepresentation about the Hotel or the Room; and

3. whether the Tribunal is justified in making any order in all of the circumstances.

Formation of the Contract - Booking the Room

24. The Application Bundle contained a colour print-out of the Booking.com webpages which were downloaded and displayed on Mrs Heidari-Dowling’s web browser when she booked and paid for the Room online through the Booking.com website on 9 December 2016 (document 1 in the Application Bundle).

25. The first webpage in the Application Bundle downloaded by Mrs Heidari-Dowling from the Booking.com webserver gave the Hotel’s address and a general description of the Hotel with a rating determined by Booking.com by reference to reviews that users had given, and some extracts purporting to come from some reviews of the Hotel (Screen 1). Screen 1 also contained a hyperlink to a webpage with a map which pin-pointed the Hotel’s actual map location (the Map Screen).

26. The second webpage in the Application Bundle downloaded by Mrs Heidari-Dowling contained a table of information listing the types of the Hotel’s rooms, including the “Superior Twin Room”, and providing the room rates for each room type (Screen 2).

27. From the Application Bundle, I infer and find that:

1. once Mrs Heidari-Dowling made her decision to book the Room, by clicking on an appropriate link on one of the webpages, Mrs Dowling was able to download a webpage from the Booking.com webserver which required her to provide personal information, and a booking request for the Letting Period and which contained both her credit card details, and a form of authority to allow Leisure Inn to obtain pre-payment for reservation from the credit card provider (the Request Form).

2. Mrs Heidari-Dowling uploaded the information in the Request Form to the Booking.com website by clicking an appropriate feature appearing on one Request Form webpage on her web browser;

3. Leisure Inn either itself, of through the agency of the Booking.com operators, received and processed the reservation request by means of the submission of the Request Form to the Booking.com web site; and

4. the Booking.com website then generated a confirmation web page on the Booking.com web server to confirm that Leisure Inn had received Mrs Heidari-Dowling’s booking, and to acknowledge the receipt of Mrs Heidari-Dowling’s pre-payment (the Booking Screen).

28. The images and texts appearing on the Booking.com Screen 1, Screen 2, the Map Screen and the Booking Screen are the foundation for Mrs Heidari- Dowling’s claims against Leisure Inn.

29. There is no real issue that Mrs Heidari-Dowling and her friend, Ms Nellie David checked into the Hotel on 31 December 2016, and signed a Guest Registration Form.

30. Although neither Mrs Heidari-Dowling nor Ms Su made submissions dealing with the contract for the letting of the Room for the Letting Period, it is necessary to determine when, and how, that contract came into existence. If the contract only came into existence when Mrs Heidari-Dowling filled in the registration form, then any representations made in Screen 1, Screen 2, the Map Screen and the Booking Screen are pre-contractual representations which may have become terms of that contract. If, on the other hand, the contract came into existence when Mrs Heidari-Dowling submitted the Request Form to the Booking.com website, any representations made about the Hotel and the Room in the Booking Screen may have been made too late to not become terms of the contract.

31. The legal requirements for a contract are the same, whether a contract is made on-line or not. There must be intention to enter into a legally binding agreement, and there must be ‘consideration’. In the case of services, payment or a promise to pay for those services, will be consideration. In the present circumstances, the requirement for consideration is satisfied by Mrs Heidari-Dowling’s credit card payment for the Room.

32. The law breaks down the formation of a contract into stages, which are not always obvious: an invitation to treat, an offer and an acceptance. An invitation to treat is an indication that a party is prepared to enter into a contract. It comes before an offer. The acceptance of an offer to contract is the point where a contract comes into existence. Until an offer has been accepted, one is free to walk away from the proposed transaction.

33. In many situations, it may be difficult to analyse at precisely what point in time there is offer and acceptance.

34. In Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153, Heydon JA (at 177 [74]) indicated that a tribunal must consider the possibility of finding that a contract exists even though it is not easy to locate an offer or acceptance. His Honour referred with apparent approval to the judgment of the New South Wales Court of Appeal in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523.

35. The information in Screen 1 and Screen 2 essentially advertised the Hotel and the availability and rates of the Hotel’s various categories of room. One may consider them metaphorically as being the online equivalent of a store window display; an invitation to treat made to all Booking.com users potentially considering making a reservation with the Hotel.

36. I find that:

1. the information on Screen 1 and Screen 2 was information about the Hotel and the accommodation offered by Leisure Inn at the Hotel, provided by Leisure Inn to the Booking.com operator;

2. Leisure Inn provided Booking.com with that information in the knowledge that the information would be displayed on the web browsers of all users of the Booking.com website searching for relevant accommodation captured by the Booking.com search tool; and

3. by filling in the Request Form, Mrs Heidari-Dowling submitted an offer to Leisure Inn, through the Booking.com operator, to reserve and let a Superior Twin Room at the Hotel for the Letting Period, and offering to pay for that room by a credit card payment from the credit card provider.

37. The Booking Screen relevantly said:

(1) ‘You will be charged a prepayment of the total price at any time’;

(2) ‘This reservation can not be cancelled free of charge’; and

(3) ‘You have guaranteed your booking by credit card. Payment will be taken by your hotel’.

1. These statements support the conclusion that the contract for the hire of the Room came into existence once the credit card provider had indicating that the payment for the Room would be met.

38. Booking.com processed Mrs Heidari-Dowling’s reservation through the Booking.com website, and then communicated Leisure Inn’s acceptance of Mrs Dowling’s request for a Superior Twin Room at the Hotel by sending the Booking Screen to Mrs Dowling’s webserver. For these reasons, I find that a contract for the letting of the Room for the Letting Period came into existence at that time.

The Terms of the Contract - Representations Explained

39. The contents of contracts are called 'terms'. They will typically involve both:

1. express terms (mentioned in writing or orally) and

2. implied terms (not mentioned but still there).

40. Neither Mrs Heidari-Dowling nor Leisure Inn paid any attention to the terms of the contract which governed Mrs Heidari-Dowling’s letting of the Room.

41. The terms of a contract are to be distinguished from representations. In broad terms, a representation is a statement, and not all pre-contractual representations become terms of a contract.

42. Representations can at one end of the spectrum be merely ‘puff’, which are not intended to have legal or contractual force, and which viewed objectively by a reasonable person do not indicate the maker of the statement is accepting any liability for their truth. At the other end of the spectrum a representation may be a statement which when objectively viewed by a reasonable person does indicate the maker’s intention to accept liability for its truth: see eg MWH Australia Pty Ltd v Wynton Stone Australia Pty Ltd (in liq) [2010] VSCA 245 at [90], 31 VR 575 at 597 – 8.

43. A representation made before a contract is formed, can also become a term of a contract. In Oscar Chess Ltd v Williams and Dick Bentley Products Ltd v Harold Smith (Motors) Ltd [1957] 1 WLR 370 Lord Denning stated (at 627)

If a representation is made in the course of dealings from a contract for the very purpose of inducing the other party to act upon it, and actually inducing him to act upon it, by entering into the contract, that is prima facie ground for inferring that it was intended as a warranty [term]. It is not necessary to speak of it as being collateral. Suffice it that it was intended to be acted upon and was in fact acted upon.

44. Anson's Law of Contract provides the following summary of how a court will determine whether a representation does become a contractual term:

… Courts can be said to take into account a number of factors. First, they may have regard to the time which elapsed between the time of making the statement and the final manifestation of agreement; if the interval is a long one, this points to a representation. Secondly, they may consider the importance of the statement in the minds of the parties; a statement which is important is likely to be classed as a term of the contract. Thirdly, if the statement was followed by the execution of a formal contract in writing, it will probably be regarded as a representation should it not be incorporated in the written document. Finally, where the maker of the statement is, vis-a-vis the other party, in a better position to ascertain the accuracy of the statement, the Courts will tend to regard it as a contractual term.

45. However, these are at best only guides. The true test of contractual intention is whether there is evidence of an intention by one or both parties that there should be contractual liability in respect of the accuracy of the statement. The question therefore becomes whether on the totality of evidence, the maker of the representation is to be taken to have made a promise to make the statement good.

46. Based on the material on which both Mrs Heidari-Dowling and Leisure Inn both relied, I find that the contract:

1. expressly mentioned only a few core terms: the letting of the Room, the price that Leisure Inn would charge for the Room, the facilities that the Room was to contain, the cancellation policies that applied, the checking-in and checking-out times and the length of Mrs Dowling’s stay in the Hotel;

2. the contract contained implied terms, implied by reference to the subject-matter of the contract and by consumer protection legislation, including implied terms that:

1. the condition of the Hotel, the Room and the Hotel’s facilities and equipment to which Mrs Heidari-Dowling and Ms David had access and use would be safe and fit to use;

2. the Hotel and the Room would comply with relevant legislation, and would be hygienic and to a standard to be reasonably expected for a hotel room of this type; and

3. the Hotel and the Room would comply with the quality standards and have the characteristics and features advertised on Screen 1, Screen 2 and the Booking Screen; and

4. that services provided by Leisure Inn to Mrs Dowling and her guest would be provided with reasonable care and skill.

The Complaints

47. In the application to the Tribunal, Mrs Heidari-Dowling relevantly alleges that:

1. the Hotel did not provide Mrs Heidari-Dowling with the correct address, that this mislead Ms David, who picked Mrs Dowling up from Sydney Airport on her arrival, and which resulted in Mrs Dowling and Ms David getting lost;

2. the reception area was ‘dark, smelly and small, nothing close to the photos on their website’;

3. the Hotel was ‘located in Chinatown” as opposed to the description in the Booking.com webpages which said “5 minutes away from Chinatown”’;

4. the process for getting internet connection was too difficult which required Mrs Heidari-Dowling and Ms David to take their mobiles and laptop computers downstairs to the reception desk to obtain internet connection every day of their stay;

5. the Room was ‘smelly dirty, dark and too small’, with ‘dirt, marks everywhere, on walls, carpets, windows, sheets and even on our pillow cases’, and ‘omitting routine cleaning procedures’;

6. ‘there was no mirror above the bathroom basin where it should be’, and ‘there was an old rusty mirror on the bathroom’s door’;

7. although the Booking.com webpages referred to the Room having a coffee maker, the Room only had ‘just a kettle and 2 cups (no napkins)’;

8. when Mrs Heidari-Dowling asked to move rooms, the Hotel informed her that ‘they could not do so and could not change the sheets or pillow cases either, because of their short staff (sic)’; and

9. Mrs Heidari-Dowling was informed that there would be no staff onsite after 9:00 pm on New Year’s Eve.

48. Mrs Heidari-Dowling gave evidence that her complaints to Hotel management were not promptly or properly addressed on the day that she checked into the Hotel, the following or the day after that, and her request for a refund after making a complaint was refused. She and Ms David cut their stay at the Hotel 2 days short, leaving the Hotel very unhappy. In addition, Mrs Dowling had to pay the amount of $181.00 to change her flight.

49. The Application Bundle contains a statement by Ms Nellie David which Mrs Heidari-Dowling relies on to support her own evidence. Ms David’s statement mirrors the complaints made in the application. The statement refers to:

1. the address of the Hotel appearing on the Booking.com website being shown as in ‘Sydney’ and not ‘Chippendale’, and accordingly that she could not locate the Hotel using the car’s navigation system or the Google maps website;

2. the Hotel’s reception was ‘dark, smelling like dampness and dirty’;

3. there was one staff member at the desk at time of check in and because the receptionist was busy with her work, Mrs David and Mrs Heidari-Dowling had to go back and forth to set the internet connections in their room;

4. on arrival, Mrs Heidari-Dowling and Ms David were informed that the reception and the Hotel would be unattended after nine pm until the next day; and

5. the Room was ‘small, dark and dirty’, and there was no manager in attendance to which Ms Heidari-Dowling and Ms David could complain.

Incorrect Address

50. Screen 1, Screen 2 and the Booking Screen each give the Hotel’s address as ‘28 Regent Street, Sydney CBD, 2008’. Mrs Dowling relies on the description of the Hotel set out in Screen 1 as part of her application against Leisure Inn. That webpage states the location of the Hotel as being ‘opposite Central Station in the CBD’.

51. Mrs Dowling’s firs complaint is that the Booking.com website should have given the Hotel’s address as being in the suburb of Chippendale, rather than giving its address as being in Sydney’s CBD. Because the address did not mention Chippendale as being the suburb, Ms David had difficulty in using either her car’s satellite navigation system, or Google maps, to provide her with guidance to drive to the Hotel’s location.

52. It was no doubt frustrating for Ms David and for Mrs Dowling to attempt to obtain satellite navigation assistance in driving to the Hotel on 31 December 2016, without knowing that the Hotel was in the Sydney suburb of Chippendale. I accept that it would have been much easier for them had the Booking.com website given the Hotel address as ‘Chippendale’, rather than referring to the Hotel by reference to the CBD.

53. The application makes clear that Mrs Dowling rang the Hotel, as one would expect, to try and precisely locate it if one were having difficulty in finding it within a satellite navigation system. Again, I can accept the frustration encountered when the Hotel’s phone was busy, making it difficult for Mrs Dowling to clarify the Hotel’s location. Eventually, any ambiguity was clarified by the Hotel staff giving Mrs Dowling the suburb and Ms David could find her way there.

54. I take the CBD is taken as being the main commercial centre of Sydney, running from Circular Quay in the north, to Central railway station in the south. According to the Response Bundle, the Hotel is located near Central railway station. By referring to the location of the Hotel as being in the CBD, the Booking.com website was placing the location of the Hotel within that geographical area, but not giving the Sydney suburb. There is no evidence that the Booking.com website misdescribed the Location of the Hotel by referring to it being within the commercial area or geographical zone of the Sydney CBD.

55. As a Sydney-Sider I take ‘Chinatown’ as an area centred on the Dixon Street pedestrian street mall, and with a Chinese gate or ‘Paifang’ at each end. There was no evidence given by either Mrs Dowling or by Leisure Inn as to the geographical limits of Sydney’s ‘Chinatown’ beyond the Dixon Street mall, and whether being located opposite Central railway station means that the Hotel is located within that zone.

56. Mrs Dowling, as the applicant, has the legal burden of proving that the Booking.com webpages misdescribed the location of the Hotel, and because I do not have evidence to establish that the Hotel is not within the ‘Chinatown’ area. Mrs Dowling has not established to my satisfaction that Leisure Inn made any misrepresentation because the Booking.com website described the Hotel as being a five-minute walk from Chinatown. Even if it were, I do not believe that a misstatement to this effect would justify the Tribunal making an order refunding the Room charges paid by Mrs Dowling, or justifying any other compensation order.

57. Accordingly, I find that Mrs Dowling has not established legal grounds to justify the Tribunal ordering Leisure Inn to either refund of the accommodation booking fee paid to Leisure Inn, or to pay any amount of compensation to Mrs Dowling, because Leisure Inn described the Hotel’s location as being in the Sydney CBD, rather than in the Sydney Suburb of Chippendale, or by describing the Hotel as being a five-minute walk from 'Chinatown’.

58. Even if these findings were incorrect, I do not believe that the alleged misstatements about the precise location of the Hotel would justify the Tribunal making an order refunding the Room charges paid by Mrs Dowling, or justifying any other compensation order against Leisure Inn.

59. As to the failure to refer to the location of the Hotel by reference to its location in Chippendale, rather than its location within the Sydney CBD the application makes clear that Mrs Heidari-Dowling rang the Hotel, as one would expect, to try and precisely locate it if one were having difficulty in finding it within a satellite navigation system. This was, of course, a perfectly reasonable course of action for Mrs Heidari-Dowling to have taken. Although I can well accept the frustration encountered by Mrs Heidari-Dowling and Ms David when the Hotel’s phone was so busy that they could not clarify the precise location of the Hotel with the Hotel staff, I do not understand why the simple solution would not have been for Ms David to have stopped driving and asked directions.

60. As to whether the Hotel was in ‘Chinatown’ or ‘within 5 minutes’ walk from Chinatown’, Mrs Heidari-Dowling offered no submission as to why this made a difference to her. The suggestion that being within ‘Chinatown’ makes a Hotel less palatable to a guest than being outside ‘Chinatown’, but there was no rationale submission put as to why this might have been the case, and I do not accept that this difference would ever matter.

The State of the Reception and the Room

61. Screen 1 makes only one statement that is relevant to Mrs Heidari-Dowling’s complaint about the condition of the Hotel’s reception area and the state of cleanliness of the Room during her stay. It states: ‘Guests love it because…” very clean and tidy” (130 related reviews)’. Neither Screen 2 nor the Booking Screen make any statement relating to the standard of cleanliness of the Hotel or its rooms.

62. I construe the statement ‘Guests love it because…” very clean and tidy” (130 related reviews)’ as a representation as to the satisfaction that other guests have expressed by leaving their reviews on the Booking.com website as to their own perceptions of the state of cleanliness of the Hotel. It is not reasonable to construe this as a representation that the Hotel or its rooms would comply with any objective criteria which the state of the Hotel’s reception area or the Room would achieve. Another way of looking at this is the concept of being ‘clean and tidy’ has a considerable subjective element about it.

63. I do not view the representation as contractual, or to put this another way, as a promise by Leisure Inn that it would comply with any particular standard as to the condition or state of cleanliness. Even if the contrary were true, one cannot elevate the statement ‘Guests love it because…” very clean and tidy” (130 related reviews)’ as conveying a promise that the Hotel or the Room would be perfect, or free from all blemishes. However, I do find that the implied terms of the contract did require Leisure Inn to provide Mrs Heidari-Dowling and Ms David with a room to a state of cleanliness that one would reasonably expect of accommodation in a room in an hotel of the type and standard of the Hotel here.

64. I consider that there are features of the Room illustrated in the photographs taken by Mrs Heidari-Dowling that do point to a failure on the part of the Hotel to provide Mrs Heidari-Dowling with a room to a standard that a guest in her position might reasonably have expected, and it is certain that Mrs Heidari-Dowling’s stay was unhappy because she and Ms David considered the state of the Room to not meet their standards.

65. The photographs on which Mrs Dowling relied show:

1. rusting along the edges of lintels and shower curtains and at the corners of a wall and door;

2. cracked edges where tiles are separating from the door surrounds;

3. spots and blemishes on small areas of carpet in the Room;

4. a smudge or dirt and marks on the window glass;

5. a scuff or dirt mark on a pillow case;

6. dirt at the back of a curtain;

7. dirt on the window glass; and

8. stains and streaking on bathroom tiles.

66. I find by reference to some of those photographs, and the photographs showing the state of the bed linen in the Room, the stains and streaking on the bathroom tiles and the smudges and dirt marks on the window glass, that the Room had not been properly cleaned to the state that one would reasonably expect of a Room before a new guest takes occupation.

67. I do not consider it to be an acceptable excuse that the Room was not properly cleaned, as is obvious from the photographic evidence on which Mrs Heidari-Dowling has relied, and the fact that Mrs Heidari-Dowling’s bed linen had unacceptable scuff marks and stains.

68. The Respondent Bundle contains an email from Mr Doyle to Mr Craig dated 17 January 2017, responding to Mrs Heidari-Dowling’s complaint. It states:

During her stay [Mrs Heidari-Dowling] was provided with the attached Two Days Limited Housekeeping Service Notice. The notice clearly states that “if you require any additional assistance during your stay, please do not hesitate to contact our team by dialling 9 on your room phone.

…

Our front desk team folio notes for Mrs Heidari-Dowling show that she did not ring by ‘by dialling 9’ nor did she approach reception to ask or request for ‘full service’ for her room. If she had done so then the service would have been provided in accordance with her request.

69. Mrs Heidari-Dowling did not challenge this, and does not suggest either in the application or in the Application Bundle or in her submissions to me that Mr Doyle’s reference to the notice was incorrect, or that she did make a request for assistance or for cleaning of the room which was denied. However, what she did say was that she asked the Leisure Inn employee at the reception desk to change rooms, and that this could not be done and that she was told that the bed linen could not be changed because of a shortage in staff. I accept Mrs Heidari-Dowling’s version of events, and find that Mrs Heidari-Dowling’s failure to do what the notice referred to by Mr Doyle said, would not have resulted in either the Room being cleaned, or the bed linen being changed, as Mrs Heidari-Dowling was informed.

70. The Application Bundle contains the following email from Leisure Inn, which admits that the Room was not cleaned for the first 2 nights of Mrs Heidari-Dowling’s stay. The email states:

We also like to apologise for any inconvenience and discomfort to your first 2 nights of your stay. We already Informed our Housekeeper Supervisor to make a full service in your room today as exception for our minimum service for all guest due to public holiday.

71. There are two things to observe about this:

1. Mrs Heidari-Dowling was not informed at the time she made her reservation that the Hotel would have limited service in this period. Although it is correct to say that there was a notice to this effect at the reception when she registered on 31 December 2016, by this time, the terms of the contract had been made and Mrs Heidari-Dowling and Ms David were reasonably entitled to rely on the Room being cleaned daily during their stay in the Letting Period; and

2. It is unacceptable for any guest of any hotel to have to sleep with dirty bed linen. No matter the quality of the hotel, reasonable and hygienic accommodation standards would require any hotel operator to provide fresh and clean bed linen for any new guest letting a room.

72. The evidence in the Respondent Bundle (email from Mr Doyle to Mr Adrian Craig dated 17 January 2017) establishes that the Room had full housekeeping on the 2 January 2017, and I make that finding. This is confirmed by the following statement by Mrs Heidari-Dowling that appears in the Application Bundle:

My friend and I surprisingly found the room was clean when backed.

Unfortunately, this is too little, too late.

Not only our holiday have been ruined, but also had to spend two nights in such an unpleasant place that we would ever stay.

73. Accordingly, I find that Ms Heidari-Dowling and Ms David occupied the Room for two days, when it had not been properly cleaned, without fresh and clean bed linen, and that Leisure Inn’s failure to provide the Room in a clean and acceptable condition, with fresh and clean bed linen was a breach of Mrs Heidari-Dowling’s contract with Leisure Inn.

Size of the Room, Bathroom Mirror and No Coffee Making Facilities

74. I do not find based on the evidence that Mrs Heidari-Dowling has established that Leisure Inn breached the contract, or misrepresented the position on these items.

75. As to the position and condition of the bathroom mirror, the Booking.com website did not make any specific representation about the location of the bathroom mirror, or its condition. I accept the Leisure Inn position as accurate. Mrs Heidari-Dowling would reasonably have taken the photographs of the type of room offered by the Hotel, as illustrated on the Booking.com website web pages as merely showing a possible arrangement of a room having the features that a “Superior Twin” room would have, and not depicting the precise layout, configuration, shape and size of every feature of that typical room. In any event, perhaps a mirror located on the back of a bathroom door, as opposed to being located above a basin, may be less convenient, I find that the location of the mirror behind the bathroom door of the Room was not a materially significant difference between the illustration of a “Superior Twin” as appearing in the Booking.com website pages, and the Room itself.

76. I make the same findings about the size of the Room. My own assessment of the photographic evidence on which Mrs Heidari-Dowling relies to show that the Room was small and different to that shown on the Booking.com website as unconvincing. I am not satisfied that the photographs show any difference in the size or configuration between the photographs on the Booking.com website and the size and configuration of the Room. Accordingly, I am not satisfied that Mrs Heidari-Dowling has established any breach of the contract by Leisure Inn because of the size of the Room or the location and condition of the bathroom mirror.

77. Screen 2 includes a reference to the Room having a ‘tea/coffee maker’. The inclusion of that as a feature of the room only came after Mrs Heidari-Dowling had reserved the room and made the booking, but before the formation of the contract by Leisure Inn’s receipt of the credit card provider’s authority for payment. Accordingly, I find that Leisure Inn agreed as a term of the contract for letting the Room to Mrs Heidari-Dowling for the Letting Period to provide the Room with a ‘tea/coffee maker’.

78. The issue here is whether a kettle satisfies the description of a ‘tea/coffee maker’. I find that as a matter of construction, the expression ‘tea/coffee maker’ connotes a machine or appliance which can be used to either brew tea or brew coffee by drip brew, or by some other process. As opposed to a device where the water and tea or coffee are brewed in the one appliance, a kettle is used to boil water. It is correct to say that the boiling water produced by a kettle can be used with a tea bag or with instant coffee to make tea or coffee, but I find that a kettle and a ‘tea/coffee maker’ are not the same thing.

79. Accordingly, I find that Leisure Inn technically breached the terms of the contract by not providing Mrs Heidari-Dowling with a ‘tea/coffee maker’, but that nothing flows from that breach. Mrs Heidari-Dowling does not suggest that she was unable to make tea or coffee, or that the provision of a ‘tea/coffee maker’ appliance instead of a kettle would have made any difference to her. Accordingly, I find that nothing flows from Leisure Inn’s technical breach of the contract in this regard.

Damages for Disappointment?

80. Having found that Leisure Inn breached the terms of the contract it had with Mrs Heidari-Dowling, it is necessary to consider the order to be made in the circumstances.

81. The law does not generally award damages for disappointment or distress following a breach of contract, unless the object of the contract is to provide relaxation or enjoyment. In other words, where disappointment is not simply a reaction to the breach of contract, but is by itself the resulting damage, damages for disappointment and distress may be recovered. The case law provides several examples of this principle.

82. In Stedman v Swans Tours (1951) 95 Sol Jo 727, the plaintiff made a contract with a travel agent for a trip staying in a superior room with a sea view. The plaintiff stayed in an inferior room with no sea view. No other accommodation could be obtained elsewhere, and as a result the holiday was ruined. The plaintiff received an award of damages for the inconvenience and discomfort, for a little more a quarter of what the plaintiff paid for the trip.

83. In the legally significant case of Jarvis v Swans Tours [1973] QB 233, the plaintiff booked and paid for a two-week skiing holiday, based on information in a brochure which described the conditions as to the type of holiday promised. The plaintiff was very disappointed in what he experienced because it was not as represented in the brochure. The court held that where the object of the contract is relaxation and enjoyment, then damages can be awarded for the disappointment, distress, upset and frustration caused by the breach.

84. The Australian case law has adopted the same principle in awarding damages for disappointment or distress following breaches of contract by travel agents. For example, in Athens-Macdonald Travel Service Pty Ltd v Kazis [1970] SASR the plaintiff was misled as to the duration of his planned holiday, and as a result had to leave earlier than planned. The Supreme Court of South Australia found that the plaintiff’s high hopes for a happy holiday for himself and his family in the land of his birth were ruined. The Court, while acknowledging that no amount of money could ever turn the holiday into the sort of holiday the plaintiff contracted for, and reasonably expected to get, awarded the plaintiff $400 for the disappointment and distress which he, and his family, suffered.

85. Baltic Shipping Company v Dillon (1993) 176 CLR 344 is another example. In that case, the respondent to the appeal, Mrs Dillon contracted with a travel agency for a 14-day cruise. The ship sank. The travel agent admitted that it had breached the requirement to exercise reasonable care. She received the amount of $1,417 described as restitution of fare and $5,000 as compensation for disappointment and distress at the loss of entertainment.

86. In each of these cases discussed above, the general question of how the courts should calculate damages for disappointment and loss of comfort was an issue. This is a notoriously difficult area where the assessment of damages will be determined ‘by the exercise of a sound imagination and the practice of the broad axe.’: see Isaacs J in Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71, 81 who quoted Lord Shaw in the case of Watson, Laidlaw & Co. v. Pott, Cassels & Williamson [1914] 31 R.P.C. 104, 117-1188. This may sometimes require ‘guess work rather than estimation’: see Enzed Holdings Ltd v Wynthea (1984) 57 ALR 167, 183.

87. I approach the issue of the quantification for Mrs Heidari-Dowling’s disappointment, and loss of enjoyment of her stay for the Letting Period by reference to these principles.

88. The evidence establishes that the Room was fully serviced on 2 January 2017, and accordingly, I believe that Mrs Heidari-Dowling is not entitled to compensation because she cancelled the last three days of the Letting Period after the Room had been cleaned. She did so because of the other matters to which she refers in the application, and which I have found do not entitle her to compensation because they did not involve either a breach of the contract by Leisure Inn or any misrepresentation. Mrs Heidari-Dowling did use the Room on both the first two days of her stay, presumably to enjoy Sydney’s New Year’s Eve celebrations. Accordingly, the loss of enjoyment and inconvenience resulting from the fact that the Room was not properly cleaned, and the bed linen was not fresh and clean during this period, does not mean that she should have a refund for the rate payable for the Room for the first two days. Having said that, I accept that Mrs Heidari-Dowling’s loss of enjoyment and that of her guest, Ms David, was not insubstantial.

89. Having regard to all of the evidence, and trying as best I can to isolate Ms Heidari-Dowling’s disappointment resulting from having to occupy the Room when it was not clean, and with dirty bed linen, from the overall disappointment based on her getting lost at the start of her stay, the unrealised expectations about the Hotel’s reception area, her unrealised expectation that the Room should have been larger, which I have found do not justify any compensation being paid to her, and adopting a ‘broad axe’ estimation, I find Leisure Inn liable to pay Mrs Heidari-Dowling an amount of $350 by way of damages for breach of contract.

CONCLUSION

90. The Tribunal orders that the respondent is to immediately pay the applicants the sum of $350 (inclusive of GST) for breach of contract.

F Corsaro SC

Senior Member

Civil and Administrative Tribunal of NSW

1 September 2017

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Amendments

06 October 2017 - replacement for decision removed from caselaw

Decision last updated: 06 October 2017