Written by Marlysa Razak and Daniel Tan

Introduction

In July 2020, a twitter user posted that she and her friends, allegedly, had to clean up their hotel room and change all the sleeping covers themselves when they checked in at a hotel situated in Cameron Highlands. She elucidated that she checked in sometime in the afternoon but had to wait until 10pm for her room to be ready. Then, it was to her horror that she was given a filthy and uncleaned room, littered with leftovers from previous guests. The trip was meant to be for two days at RM 480 per night, but due to this incident, she opted to shorten her stay to only one night. She later demanded for a refund but the hotel did not have a refund policy. 

The above experience is definitely a nightmare to some guests and bad hotel experience will ruin the holiday mood. It is reasonable for customers to be upset and be disappointed with the bad service and unsatisfactory facilities provided by the hotel. As a result, many customers will leave reviews on their own social media, public forum or travel website intermediaries to have their voices heard. However, is it effective? Are hotels treating reviews seriously? What are the avenues to make a complaint? Is social media an answer? 

This article serves to inform the consumers wearing the hat of hotel guests who are aggrieved by the poor hotel service about their rights conferred by the laws and the legal actions that they can consider if at all they wish to seek for monetary compensation.

Before diving into the legal pool, the general refund policies of hotels are noteworthy given that pulling out anytime before the last day of the stay is one of the most common actions that a dissatisfied hotel guest would take. In that regard, many hotel guests might find themselves leaving the hotel without any monetary compensation whatsoever and some might even be wondering where is the justice. 

In general, guests can only avail of the hotel’s refund policies before a certain period of check-in. Any cancellation after that period is likely to trigger a penalty fee. For instance, cancellations and changes made within 48 hours of arrival will attract a per room, per night charge based on the first night’s rate.

In most situations, guests are not entitled for a partial refund after checking in at the hotel, let alone a full one. This is because the room is reserved for the guest with the expectation that the guest will occupy it based on the full period of the intended stay. From a business point of view, upon checking in at the hotel and if a guest wants to cancel the stay, the hotel would not be able to find another guest in time to substitute the person, even though it might be probable, it is highly unlikely for the other guest to stay at the hotel for exactly the same period as the original guest intended. Therefore, to give a refund to the original guest without any money received from the other guest to offset that refund is contrary to the hotel’s business interest and general business sense. 

More often than not, a guest can only be said to be “dissatisfied” about the hotel service after stepping into the hotel lobby. Hence, if he were to cancel after arrival due to the poor service, he may not expect any refund from the hotel. However, this is by no means that the frustrated guest is left without any recourse. 

Legal relationship between hotels and their guests is governed and regulated under the Contracts Act 1950 arising from the booking, payment by guests, terms and conditions for the stay, hotel policies and any other fineprints issued by the hotels which set out legal obligations and limitation of liability of the hotels. These legal obligations include any implied terms and conditions such as the duty of the hotels to provide a room as well as satisfactory and proper service and facilities to their guests, i.e to provide a hotel room with clean bed and functional toilets as well as other amenities in the room or hotel. 

Failure to provide or deliver complete and satisfactory performance by the hotel may give rise to a breach of the terms and conditions (express or implied). Pursuant to such breach, hotel guests, in this case as consumers, may find a recourse under the Section 74 of the Contracts Act 1950 for monetary compensation. Section 74 of the Contracts Act 1950 states:

  1. When a contract has been broken, the party who suffers by the breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from the breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
  2. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
  3. When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default as if the person had contracted to discharge it and had broken his contract.

In the situation illustrated above, an apparent breach is non-delivery of a satisfactory room which led to cancellation of the “contract” before full performance of the same. This, in itself, is a possible cause of action against the hotel and damages may be an adequate remedy under Section 74 of the Contracts Act 1950. In furtherance thereto, if the guest makes other arrangements and checks-in to another hotel, the guest is now entitled to claim for these additional costs as a result of the breach. It is important to note that these costs or claims are special damages which have to be proven.

Another possible statute a hotel guest may refer to is the Consumers Protection Act 1999 (“the Act”). As the name suggests, the law is designed to safeguard consumers. 

The relevant provisions of the statute are as follows:

 

Section 54

Implied guarantee as to fitness for particular purpose


(1) Where services are supplied to a consumer, there shall be implied a guarantee that the services, and any product resulting from the services, will be— 

(a) reasonably fit for any particular purpose; and 

(b) of such nature and quality that it can reasonably be expected to achieve any particular result, 

that the consumer makes known to the supplier, before or at the time of the making of the contract for the supply of the services, as the particular purpose for which the services are required or the result that the consumer desires to achieve.

Section 55

Implied guarantee as to time of completion

Where services are supplied to a consumer, there shall be implied a guarantee that the services will be completed within a reasonable time where the time for the services to be carried out is not— 

(a) determined by the contract; 

(b) left to be determined in a manner agreed by the contract; or 

(c) left to be determined by the course of dealing between the parties. 

Section 57 

Consumer’s right of redress against suppliers

This Part gives a consumer a right of redress against a supplier of services where the services or product resulting from the services fail to comply with any of the implied guarantees under sections 53 to 55. 

Section 60

Options against suppliers where services do not comply with guarantees 

(1) Where a consumer has a right of redress against the supplier under this Part in respect of the failure of any services or any product resulting from the services to comply with a guarantee under Part VIII, the consumer may exercise the following remedies: 

(a) where the failure is one that can be remedied, the consumer may require the supplier to remedy the failure within a reasonable time; 

(b) where the failure is one that cannot be remedied or is of a substantial character within the meaning of section 62, the consumer may— 

(i) subject to section 61, cancel the contract for the supply of the services in accordance with section 63; or 

(ii) obtain from the supplier damages in compensation for any reduction in the value of the product resulting from the services below the charge paid or payable by the consumer for the services. 

(2) In addition to the remedies under subsection (1), the consumer may obtain from the supplier damages for any loss or damage suffered by the consumer, other than loss or damage through a reduction in the value of the product resulting from the services, which is proved to be a result or consequence of the failure.

(3) Where the supplier refuses or neglects to remedy the failure as required under paragraph (1)(a), or refuses or neglects to do so within a reasonable time, the consumer may— 

(a) have the failure remedied elsewhere and obtain from the supplier all reasonable costs incurred in having the failure remedied; or

(b) subject to section 61, cancel the contract for the supply of the services in accordance with section 63. 

Section 62

Failure of substantial character

For the purposes of paragraph 60(1)(b), a failure to comply with a guarantee shall be of a substantial character where— 

(a) the product resulting from the services— 

(i) is substantially unfit for a purpose for which services of the type in question are commonly supplied; or 

(ii) where subsection 54(1) applies— 

(A) is unfit for a particular purpose made known to the supplier; or

(B) of such a nature and quality that the product cannot be expected to achieve a particular result made known to the supplier,

and the product cannot easily and within a reasonable time be remedied to make it fit for the particular purpose or to achieve the particular result; or 

(b) the product resulting from the services is unsafe.

Section 63

Rules applying to cancellation of contract

(1) A cancellation of a contract for the supply of services shall not take effect— 

(a) before the time at which the cancellation is communicated to the supplier; or 

(b) where it is not reasonably practicable to communicate with the supplier, before the time at which the consumer indicates to the supplier, by means which are reasonable in the circumstances, his intention to cancel the contract. 

(2) Subject to subsection (3), a cancellation of the contract may be communicated by words or conduct or both which indicate the intention of the consumer to cancel the contract, and it shall not be necessary to use any particular form of words, as long as the intention to cancel is clear. 

(3) Where it is reasonably practicable to communicate with the supplier, subsection (2) shall take effect subject to any express provision in the contract requiring notice of cancellation to be in writing.

Section 64

Effect of cancellation of contract 

(1) Where the consumer exercises the right conferred under this Act to cancel a contract for the supply of services— 

(a) the consumer shall be entitled to obtain from the supplier a refund of any money paid or other consideration provided in respect of the services unless a court or the Tribunal, as the case may be, orders that the supplier may retain the whole or any part of the money paid or other consideration provided by the consumer; 

(b) in so far as the contract has been performed at the time of the cancellation, no party shall by reason of the cancellation be divested of any property transferred or money paid under the contract, except as provided under paragraph (a); and 

(c) in so far as the contract remains unperformed at the time of the cancellation, no party shall be obliged or entitled to perform it further. 

(2) Nothing in subsection (1) shall affect— 

(a) the right of a party to recover damages in respect of a misrepresentation or the repudiation or breach of the contract by another party; 

(b) the right of the consumer to obtain damages under subparagraph 60(1)(b)(ii) or subsection 60(2) for failure to comply with a guarantee; or (c) the right of the consumer under this Act to reject goods supplied in connection with the services.

Section 65

Power of court to grant ancillary relief

(1) Where the consumer cancels a contract for the supply of services under this Act, a court, in any proceedings or on an application made for the purpose, may make any order or orders granting relief under this section as it thinks just and practicable to do so. 

(2) An application for an order under this section may be made by— (a) the consumer; (b) the supplier; or (c) any other person who has suffered loss. 

(3) An order under this section may— (a) vest in any party to the proceedings the whole or any part of any real or personal property that was the subject of the contract or was the whole or part of the consideration for it; (b) direct any party to the proceedings to transfer or assign to any other such party or to give him the possession of the whole or any part of any real or personal property that was the subject of the contract or was the whole or part of the consideration for it; (c) without prejudice to any right to recover damages, direct any party to the proceedings to pay to any other such party such sum as the court thinks just; or (d) permit a supplier to retain the whole or any part of any money paid or other consideration provided in respect of the services under the contract. 

(4) An order under subsection (1) or any provision of it, may be made on and subject to such terms and conditions as the court thinks fit, not being a term or condition that would have the effect of preventing a claim for damages by any party.


(5) In considering whether to make an order under this section, and in considering the terms and conditions it proposes to impose, the court shall have regard to the following: 

(a) any benefit or advantage obtained by the consumer by reason of anything done by the supplier in or for the purpose of supplying the services; 

(b) the value, in the opinion of the court, of any work or services performed by the supplier in or for the purpose of supplying the services; 

(c) any expenditure incurred by the consumer or the supplier in or for the purpose of the performance of the services;

(d) the extent to which the supplier or the consumer was or would have been able to perform the contract in whole or in part; and 

(e) such other matters as the court thinks fit.

 

Depending on the facts of the case, an aggrieved consumer, in this case a hotel guest, may invoke the relevant section(s) of the statute. Using the facts stated in the introduction as an example and for hypothetical purposes only:

  1. Where the sleeping covers were not changed and the room was not cleaned up, the guest, as a consumer, may invoke Section 54 of the Act where it is mandatory for the hotel services be reasonably fit for the guest to stay in. Besides, given that hotels are meant to provide a comfortable environment for a consumer to stay in and a guest can reasonably expect to find comfort in the hotel room, the fact that the sleeping covers were not changed and the dirty state of the room kills such expectations. If the condition of the room is horrendous, i.e. leftovers littered by the previous guests are too much in the room, the room is too dirty or stinky etc. to the extent that it cannot be remedied within a reasonable time, the guest may further invoke Section 62 of the Act to argue that the failure is of a substantial character.
  2. Where the guest had to wait until 10pm for her room to be ready, he/she may invoke Section 55 of the Act – waiting until 10pm for the room to be ready when the check-in time is earlier than 9.30pm is arguably not a reasonable time for the completion of the service. However, this should not be treated as a one-size-fits-all situation because what constitutes a reasonable time is fact-specific. For instance, if the hotel is so renowned to the extent that all the rooms are fully occupied and/or the time when guest A checks-out is the same time when guest B checks-in, a half-and-hour to an-hour time for the hotel staff to clean and tidy the room is arguably reasonable. On the contrary, if the reputation of the hotel is average and/or the room has been vacant for a considerable amount of time before a guest checks-in, taking a half-an-hour, let alone an-hour time for the room to be cleaned and tidied is arguably not a reasonable time. Nevertheless, most commonly than not hotels will provide their own expected check-in and check-out time so the guests are able to have a reasonable expectation as to the same. For example, it is quite common for hotels to now fix 11am for check-out and 3pm for check-in. Therefore, the above situation may amount to an unreasonable waiting time to check-in since the guests had to wait for almost 6 hours before checking-in. On the definition of “reasonable time”, we make reference to the case of Penang Development Corporation v Khaw Chin Boo & Anor [1993] 2 MLJ 161, where the Court held: “what is ‘a reasonable time’ is, in each particular case, a question of fact.”
  3. Where the consumer shortened the stay to one day and asked the hotel for a refund but the hotel did not have a refund policy, the guest may cancel the contract (Section 60 of the Act) and be entitled to obtain from the hotel a refund of any money paid or other consideration provided in respect of the services except otherwise provided by a court or the Tribunal for Consumer Claims. (Section 64 of the Act).
  4. A hotel guest who lives in Kuala Lumpur is feeling stoked to go for a vacation at Cameron Highlands. After having driven for some good 3 to 4 hours, the guest encountered the experience as stated above; or another instance the whole family members of the guest intend to go on a holiday somewhere only to find out that the hotel booked by them provides such horrible service and this caused the feeling of frustration. In such a situation, Section 60 of the Act may be invoked by a frustrated guest to claim for a non-pecuniary loss, i.e unquantifiable monetary claims. In the case of Subramaniam a/l Paramasivam & Ors v Malaysian Airlines System Berhad [2002] 1 MLJ 45, the High Court held that claims of non-pecuniary loss can succeed on the basis that “personal, social, or family interests” is affected and the loss is not too remote. The consumer may succeed on the claim if he/she can prove that the feelings of frustration affects his/her personal, social or family interests. In relation to remoteness of the loss, the loss suffered is arguably not too remote because it stems directly from the hotel’s failure to fulfill the services as required by the Act. However, this claim is limited only to be heard in a civil suit by the civil courts and not to be heard by a tribunal (Section 112(3) of the Act).    

The Tribunal for Consumer Claims Malaysia is an independent body established under the Consumer Protection Act 1999 with the primary function of hearing and determining claims lodged by consumers under the Act. The Tribunal is often the first recourse sought by an aggrieved consumer given that the claim can be done in a simple, cheap and expeditious manner, as opposed to bringing a civil suit in the courts where litigation is infamous for being complex, costly and time consuming. The relevant aspects of the tribunal are:

 

Jurisdiction of the Tribunal

The Tribunal can hear:

  • Any claim in relation to any matter within its jurisdiction to hear as provided for under the Act
  • Where the total amount in relation to which an award is sought does not exceed RM 25,000.00
  • Any claim in relation to any goods or services for which no redress mechanism is provided for under any written law

Limitation of Jurisdiction

The Tribunal cannot hear:

  • A claim based on a cause of action which accrues after three years of the claim 

Types of Claims that may be Lodged in the Tribunal

Rights against the service provider in relation to guarantees in the supply of services:

  • Reasonable care and skill
  • Fitness for a particular purpose 
  • Completion within a reasonable time
  • Reasonable price to be charged

The Methods of Lodging a Claim

  • By way of making appointments, Lodging a claim at any Tribunal’s counter in Malaysia including the Federal Territory of Putrajaya, Kuala Lumpur and Labuan. For this purpose, contact: 
  1. Hotline 1800 88 9811 [Monday-Friday (8am – 5pm)]; and
  2. Email or call the respective TCC branches [refer to https://ttpm.kpdnhep.gov.my/portal/home].
  • Online lodging of claim via “e-Tribunal V2 System” – https://ttpm.kpdnhep.gov.my/login

Any dissatisfied party may initiate a challenge against the Award by the Tribunal by way of judicial review at the High Court of Malaya. Judicial review is a procedure by which a court reviews the decision of a public body (in this case, the Tribunal for Consumer Claims).

It is vital to note that judicial review is a discretionary exercise of the courts and it is generally not exercised by the courts except in cases where the decision of the Tribunal has caused an injustice to any of the party. The Court of Appeal held in the case of Hazlinda bte Hamzah v Kumon Method of Learning Centre [2006] 3 MLJ 124:-

“Being a specialist body, the Tribunal has been conferred with extraordinary powers to do speedy justice for consumers. As such, its awards should not be struck down save in the rarest of cases, where it has misinterpreted some provision of the Act in such a way to produce an injustice. For courts should be ever remindful that certiorari is not a remedy that is available as of right. It is a discretionary remedy. It is not every error of law committed by an inferior tribunal that entitles the High Court to issue certiorari. It must be demonstrated that the error has occasioned an injustice in a broad and general sense.”

Conclusion

 Having a bad hotel experience undeniably causes one to feel vexed, what more when you have been feeling excited about the trip and later found to be in such upsetting condition. As a guest who is also a consumer, one does have a right to seek legal remedy and to claim monetary compensation from the service provider(s) at the correct platform, provided always that such claims are sustainable, can be proven and reasonable. So, know your rights and just travel!

 

Published on 3 August 2020

Photo by Rhema Kallianpur on Unsplash

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