The key distinction is whether the Hong Kong tour operator contracted merely as an agent to arrange for services to be provided by others (e.g. local tour service providers) or it contracted and undertook to supply the services by itself. The mere fact that the Hong Kong tour operator would delegate all or part of the contracted service to other parties would not automatically make itself an agent, and it all depends on the contractual terms and possibly the circumstantial evidence surrounding at the time the contract was signed.
The Court will look into circumstances surrounding the contractual relationship
While it was not disputed that the victim’s death was caused by the negligent speedboat driver, the question remains whether the Hong Kong tour operator could be held liable. The Privy Council noted that the brochure of Kwan Kin indicated that it has undertaken the task of supplying the package tours. Besides, the detailed itinerary refers Kwan Kin and customers as “we” who would do things, which integrates Kwan Kin into each stage of the tour. Further, Kwan Kin reserved the right to change the itinerary or to ask a customer to leave the tour.
Taking the contract as a whole, the Privy Council held that Kwan Kin had undertaken to provide and not merely to arrange all the services, and hence owed the victim contractual duty of care.
These principles are applied by the Court of First Instance in Chan Shui Ying v HYFCO Travel Agency Limited (HCPI 1060/2005, judgment dated 20 December 2007). In this case the plaintiff was injured when the travel coach crashed in China. The Court held that the accident was at least contributed to by the negligent driving of the travel coach driver. Again the Court was invited to rule whether the defendant, being a Hong Kong tour operator, is liable for the negligent act of its sub-contractor’s employees.
Contending that it was only acting as arranger rather than supplier in relation to those parts of the tour which were provided by local operators, the defendant heavily relies on a document titled “Information for PRC Tour Group Members (ä¸åæ éåååé ç¥)”. There were clauses expressly declared that all transportation, lodging travel etc. in China would be arranged by local tour operators not owned or controlled by the defendant, hence the defendant shall be exempted from any liability caused by acts of those local tour operators.
However, the Court accepted that this document was only produced to the plaintiff after he has paid the tour fee, and the defendant did not draw the plaintiff’s attention to those clauses. Therefore, the Court held that those clauses were not incorporated into the tour contract. Furthermore, the Court opined that, even if those clauses had been incorporated into the contract, an attempt to exclude liability for personal injuries resulting from negligence would be invalidated in law. Accordingly, the defendant was found liable.
Choosing the right defendant
The 1st defendant Citizens Travel Agency Ltd (“Citizen Travel”) was a package tour wholesaler without retail outlet or counters. It merely provides the brochures which bore its brand name of “Dragon Tour” to various selling agents, and at the same time notifies selling agents of the “suggested price” and “net price” of those tour packages. Selling agents would then sell those tour packages at the “suggested price”, but only pay Citizens Travel at the “net price” which is lower. The difference between the two prices would be the commission earned by the selling agents. Once a tour is booked, selling agents would forward the information to Citizen Travel and from then on took no part on the tour.
The plaintiffs in this action rightfully sued Citizen Travel instead of the selling agents, but at the same time brought a claim of negligence against the tour leader as 2nd defendant. Whilst the court held Citizen Travel was liable to the victims, the case against the tour leader was dismissed as he was not involved in selection of the local cruise provider in Manila, and hence no negligence was found on his part.
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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Published by ONC Lawyers © 2014