I don't know why, other than the fact that I operate with an incredibly warped mind, this incident does remind me of an old story, 'The case of the negotiable cow' :
http://en.wikipedia.org/wiki/Board_of_Inland_Revenue_v_Haddock
First, on the issue of the expense of the party, I totally agree with Adanor that 'five year olds do not need to have such an expensive party thrown for them'. However, that is the way of the world now as parents try to outdo each other in so many ways. In case it is not recognised by all, the £15:95 represented the cost per head to hold the party at a dry ski slope centre near Plymouth. Obviously it had to be prepaid and there would have been a cut-off point for a cancellation.
Do not concur Adanor's thoughts on the five year old, some of which seem irrelevant. As I understand it, parents accepted invitation on behalf of the child and subsequently realised they ALL had a prior engagement at grandparents. To send child to party might well have represented great disappointment to grandparents. And as a prior engagement it was correctly assigned 'PRIORITY'.
Moving to the legal points, I cannot believe that acceptance of this invitation represented in any way a binding contract. So it is difficult to envisage on what basis the court can find against the parents of the non-attendee. By preferred outcome would be that the court fine the plaintiff for gross waste of its time.
Yes the world has gone mad. I do feel that we in the UK have sadly followed a US trait in tending to rush to litigation. No wonder we have so many wealthy lawyers (ambulance chasers).
I do recognise that the parents of the non-attendee were guilty of bad-manners. The are occasions when I feel bad-manners should be treated as a criminal offence (but note that would be action in the criminal courts and not the civil courts). But one must note that I feel that in rip-off Britain there should be far more action by our police against the rip-off companies and matters should not be left to the citizen (or BBC reality TV programmes) to chase down offenders.
End of rant before I move on to another one!