Slovenia, Supreme Court of Republic of Slovenia, 23 April 2015 II Ips 160/2013

Identification of the case

• Code of obligations, articles 179, 246, 892
• Consumers Protection Act, Article57e/2
• Civil Procedure Act, Article 380/2

• Article 220, Treaty of establishment the European Community
• Article 5, Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours

Summary of the case

The court of first instance (correctly) ascertained that the performed service of travel and holiday in hotel A, at the island of Rhodos, which was responsibility of the first defendant, had such serious flaws that it was beyond understanding, since the aim for which the plaintiff decided to travel - to spend quality vacation in a hotel with everything that staying in such hotel entails According to the concluded contract and due to high payment the plaintiff expected a first rate service and a carefree vacation during which he could enjoy leisure time in comfort. The agreed all inclusive service should had provided for everything, it is a complex service satisfying most of needs a guest has during holidays (transport, accommodation, food, animation, sports activities, childcare...). The plaintiff and his family found themselves in the middle of the construction site. The coast and the beach were also undergoing construction interventions. However, several deficiencies were established already regarding the basic level of accommodation, since the hotel compound and facilities for recreation, leisure and childcare were not completed.. The court (of first and second instance) award the plaintiff compensation for material damage (only) in the amount of costs of the entire prepaid tourist package. The court rejected the claim for non-material damage for psychological pain in the loss of enjoyment of the holiday suffered by the plaintiff because of the aforementioned circumstances.

Revision is granted, rulings by the courts of second and first instance are annulled in the part where the claim against the first defendant was rejected regarding the payment of compensation for the loss of enjoyment of the holiday in the amount of EUR 3.533,50 with the accrued costs and the cost of the proceeding.

The revision is right in pledging for an implementation of EU law that is in harmony (consistent and loyal) with the EU system by means of taking into account the position of the aforementioned CJEU judgement, despite the fact that the Article 5 of the Directive (which stipulates that the organiser of a package tour is liable for damage that is a result of the non-performance or improper performance of the contract) was not transposed by our state in line with the interpretation of the CJEU in the case under discussion. The Directive provides for harmonisation and following the CJEU judgement in this case law shows that the Directive is taken into consideration even in those European states which also did not transpose the aforementioned Directive provision in their national laws, or did that at a later stage. The cited CJEU judgement, which quite broadly interprets the aforementioned Directive (as including all different types of non-material damage, including the one under discussion), has EU-wide effect also in many other legal systems. Taking into account the provision of Article 220 of the Treaty establishing the European Community (TEC; “ The Court of Justice shall ensure that the interpretation and application of this Treaty the law is observed.”),  it is a part of legal norm directly binding with the effect ex tunc and erga omnes for all courts in the European Union, and as acte claire not only for the court that instigated the preliminary proceeding, or even if state did not implement it in the aforementioned manner.

It is clear that there are two possible ways of applying the Directive and taking in to account its aims based on the available tools of legal argumentation (linguistic, systematic, logical, historical and teleological): either the provision of the Directive Article 5 is directly applied without taking into consideration the national laws, i.e. direct application of EU law (direct effect of the EU law), or else the national laws are interpreted in line with EU legislation.

In the case under discussion the relevant national provisions regulating the liability for damage of travel organizers  for damage caused to a traveller or a user of 8package) travel for non-performance or violation of the contract are “ special provisions” of the second paragraph of Article 57e of the CPA and Article 892 of the CO, which stipulate the duty to indemnify for the entire damage caused, in relation to general provisions of Article 179 of the CO which define the forms of legally recognised damage, non-material damage, and Article 246 of the CO, which refers to a mutatis mutandis application of the provisions on the indemnity for damage (including the application of Article 179 of the CO) in the case of damage resulting from non-performance of a contract. Taking into account the consideration that Slovenia did not implement the Directive in the aforementioned sense, the right choice regarding the interpretation of national laws in the light of the non-implemented Directive is to look to the case through the prism of the interpretation of the rulings by the CJEU that has the task to interpret directives and whose rulings are binding for the national courts. EU law should therefore be applied indirectly, while national regulation of liability for damage for non-material damage should be taken into account (indirect effect of EU Law). The closest choise of adequate form of non-material damage that would allow such a “relativized” recognition of compensation is the one related to the violation of personal right to mental integrity, considering that this is an intervention into the mental sphere of the injured party (loss of enjoyment, happiness an mental relaxation). What is at issue here is a particular form of damage that is not specifically defined by Slovenian national laws, however, as pointed out the provisions of the national legislation should be interpreted in the light of the aim and goals of the Directive 8consumer protection9 and in particular through the prism of the interpretation by the CJEU. This further means that the fulfilment of the legal standard ”legally recognised forms of non-material damage” is not only causing mental pain listed in Article 179 of the CO (which undoubtedly include for example rage, anger, sadness when seeing the circumstances at the place of vacation, which represent and be part of the loss of justifiability expected enjoyment on vacation or its accompanying emotional factor), but already the withholding or prevention of justifiability expected enjoyment on the holiday (as part of  the enjoyment of life), but not least in relation to expectations that a working person has to get some rest in order to remain productive and healthy, which is without any doubt a part of ones mental integrity in modern society). What is to be recognised  and justifiably expected are harmonized mental conditions of a person throughout his or her life, which are definitely violated in the case when mental and bodily integration and regeneration is prevented on the holiday, which is a “tool for enjoyment”. The loss or absence of justifiably expected enjoyment is in itself an encroachment into the mental experiencing of an individual, his or her mental and also bodily integrity, in other words the withdrawal of justifiably expected relaxation, rest from work, enjoyment of spending time in a pleasant environment, which should of course not be influenced by negative circumstances preventing such conditions. It is therefore sufficient to have an implicitly expressed feeling of frustration or the perception of the lost of enjoyment (possible as a state of shock) and, of course, the loss in itself as a negative representation of the internal life of injured person.