U.K.: Cruise Ship Operator Bound by Purser's Compensation Deal With Passenger

April 2001

 In a recent decision by the English Court of Appeal cruise line operators were held liable to honour terms of compensation agreed by the ship’s purser in favour of a passenger.

The defendants are part of a group of companies who operate cruise liners including the vessels "Silver Cloud" and "Silver Wind" out of Fort Lauderdale in Florida. The claimant, Garwood, took a cruise on the "Silver Cloud" leaving Fort Lauderdale to tour the Caribbean, call at Rio and back to Fort Lauderdale. It was accepted that Garwood had signed one of the defendants’ standard booking forms.

Garwood arranged for the cruise through his travel agent in Guernsey where he lives. He was to travel with his friend, Lady Alliot, and made the booking for both of them. They were to occupy adjoining veranda suites. The judge at first instance found that Garwood was the contracting party for both his and Lady Alliot's cruise. He paid the deposit and although the balance was paid by Lady Alliot by credit card (in order gain "air miles"), Garwood had paid her the balance.

Halfway through the cruise, when the ship was in Rio, Lady Alliot had to leave for her own reasons. Nevertheless, Garwood intended to continue to use both suites. However, when his singing was interrupted by knocking on the partition between the two suites he discovered that the suite formerly occupied by Lady Alliot was now occupied by two strangers.

Garwood complained to the purser about this and the purser agreed that Garwood would be paid or reimbursed 50% of the fare for Lady Alliot's suite.

On his return to Guernsey Garwood took the matter up with his travel agent. After some correspondence, the defendants issued a cruise credit voucher worth £8,000 to the agent in May 1995.

It was Garwood’s case that over the following years he wanted to use this credit but had not been able to book another cruise with the defendants to make use of it. When they refused to refund its value in cash, he started proceedings in November 1998.

The defence denied that a contract had been made with the defendant company, that Garwood was party to any contract in respect of the suite occupied by Lady Alliot or that any agreement had been made to reimburse him.

They also relied on conditions in the booking form which they said exempted them from liability and alleged that the purser had no authority to make any agreement of the kind alleged.

The judge at first instance accepted Garwood’s evidence that such an agreement had been made and that the purser had apparent or ostensible authority to make it. Evidence from the defendants in the form of a written statement from one of its officers was to the effect that the purser had no actual authority to make such an agreement. Graham J, at first instance, held:

"I find that the Purser had apparent or ostensible authority to enter into such an agreement. He was in charge of the hotel administration on the vessel and if he had authority to put two passengers in accommodation which had been paid for by another party he would have had apparent authority to compensate that other party for the use of his accommodation."

The defendants argued that there was no evidence from which the judge could have concluded that the purser had of his own initiative put two passengers in this accommodation. They also argued that the judge's reasoning was flawed because it does not follow that even if the purser had authority to relocate passengers on board ship, he also had authority to compromise potential claims against his employers, the defendants.

Garwood won on appeal. Tuckey LJ held as follows:

" A cruise ship is a large floating commercial enterprise in which the senior official on board representing the commercial interests of the cruise operator is the purser. He is the equivalent of the hotel manager - in this case managing a ship rather than a hotel based on land where one might expect more senior management to be on hand. But on a ship, faced with a complaint of the kind the claimant made, one would expect the purser's usual authority to include authority to make the kind of promise relied on by the claimant. The purser must have authorised other passengers being put in the suite formerly occupied by Lady Alliot. Whether or not it followed that he had authority to deal with the claimant's complaint in the way he did was a strong indication that he did. One would expect a purser to have authority to deal with accommodation problems of this kind which must inevitably arise in a large enterprise of this kind."

 Garwood v Silversea Cruises Ltd, [2001] EWCA Civ 107