United Kingdom – Cases

2015

Corporate Oil and Gas Ltd v Marshall Aviation Services Ltd [2015] EWHC 3447 (Comm)

High Court (QBD)
Mr Justice Knowles CBE
27 November 2015

The Defendant provided aircraft maintenance and repair services. The Claimant was the owner of a business jet aircraft of the BAe125/800A model (“the Aircraft”). When the Claimant purchased the Aircraft it was already about 20 years old. On 4 May 2009, the Claimant delivered the Aircraft to the Defendant in order that work could be done to it.

This dispute concerned whether the Defendant had met its responsibilities while the Aircraft was with it, and whether the Claimant owed substantial further sums for work done. Before the proceedings, the Defendant asserted a lien to justify retaining possession of the Aircraft whilst (on the Defendant’s case) the Claimant did not pay what was due. The Claimant has now said it does not want the Aircraft back.

On the facts of the case, the Court held that there was no error in the Defendant’s assertion of a lien until its charges were agreed and paid. The Claimant had no claim in damages for conversion.

 

Dunbar v easyJet [2015] ScotSC 70

Sheriffdom of North Strathclyde at Paisley
Sheriff Livingston
4 November 2015

This was a claim brought by Ms Dunbar against easyJet in respect of a flight from Glasgow to Malaga on 28th July 2014. Ms Dunbar’s flight was delayed by over 6 hours invoking EC Regulation 261/2004 entitling passengers to compensation for any delay exceeding three hours unless there are both extraordinary circumstances and the delay could not have been avoided even if all reasonable measures had been taken. On the basis of the flight distance, the compensation payable was €400.

The onus was on the easyJet to show that the delay was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

The Sheriff held that the underlying delay was caused by extraordinary circumstances in that the aircraft in question could not leave Gatwick. This was because of an air traffic control decision which itself seems to have been predicated upon a number of factors. It is clear from Recital 15 of the Regulation referring as it does to “the impact of an air traffic management decision” that it is not for the court to look behind whether that decision was correct or not. The fact the decision is made leading to a delay or cancellation is self-evidently “extraordinary circumstances”.

However, the sheriff concluded, “while the original delay between Gatwick and Bologna was caused by extraordinary circumstances and that by the time of the Pursuer’s flight was due to depart the extraordinary circumstances continued to exist I am not satisfied that the Defender took all reasonable measures to avoid the delay meaning the limit or exclusion of liability set out in Recitals 14 and 15 is not invoked due to deemed extraordinary circumstances not existing”.

 

Johnston & Ors v TAG Farnborough Airport Ltd [2015] UKUT 534 (LC)
Upper Tribunal (Lands Chamber), Martin Rodger QC, Deputy President, 15 October 2015

Compensation – Land Compensation Act 1973 Part I – aerodrome – preliminary issues – runway or apron alterations – relevant date – estoppel – limitation – validity of claim notices – occupation by government department – whether alterations pursuant to a single planning permission but separated by five years a single “scheme” – Johnston references dismissed – Dandy references proceed on limited grounds

 

Air Canada & Ors v Emerald Supplies Limited & Ors [2015] EWCA Civ 1024
Court of Appeal (Civil Division)
Lord Justice elias, Lady Justice Gloster, Sir Bernard Rix
14 October 2015

Appeals against certain case management and other orders made by Peter Smith J in proceedings brought by some 565 claimant companies against British Airways plc, arising out of an alleged unlawful cartel said to have operated worldwide between 1999 and 2007. The claimants are shippers of air freight who purchased air freight services in various territories worldwide, in virtually all cases acquiring those services indirectly through freight forwarders who contracted directly with the airline concerned. The object of the cartel, it is alleged, was to co-ordinate and fix prices for air cargo services, especially with respect to fuel and security surcharges, thereby distorting competition and inflating prices for those acquiring the services.

 

Thai Airways International Public Company Ltd v KI Holdings Co Ltd [2015] EWHC 1250 (Comm)
High Court, Mr Justice Leggatt, 11 May 2015

Damages for breach of contract for failing to supply parts of aircraft (seats).

 

British Airline Pilots’ Association v Jet2.com Ltd [2015] EWHC 1110 (QB)
High Court, Mr Justice Supperstone, 23 April 2015

Employment of pilots: collective bargaining, method of determining “pay, hours and holidays”.

 

Swiss International Air Lines Ag v (1) the Secretary of State for Energy And Climate Change (2) the Environment Agency [2015] EWCA Civ 331
Court of Appeal
Lord Justice Underhill, Lord Justice Vos, Lord Justice Burnett
1 April 2015

The appellant and claimant, Swiss International Air Lines AG (“Swiss”), challenged the validity of Decision 377/2013/EU of the European Parliament and of the Council of 24 April 2013 (the “Decision”). The Decision made provisions that derogated temporarily from Directive 2003/87/EC (the “Directive”) of the European Parliament and of the Council of 13 October 2003 which had established a scheme for greenhouse gas emission allowance trading within the European Union (“EU”) (as amended by the Directive 2008/101/EC (the “Aviation Directive”) of the European Parliament and of the Council of 19 November 2008 so as to include aviation activities). The effect of these directives was extended to states in the European Economic Area (“EEA”) by EEA Joint Committee Decisions 6/2011 and 43/2011.

Swiss is an air transport operator licensed in Switzerland. Switzerland is not a member of the EEA or the EU.

Rather than directly challenging the Decision, Swiss alleged before the UK court the invalidity of the regulations implementing the Decision in the UK, namely the Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2013 (No. 1037) (the “Regulations”). Since the Regulations do no more than implement the Decision, Swiss sought a reference to the CJEU, which is the only court that has jurisdiction to declare an EU measure invalid.

Swiss contended that it is badly affected by this state of affairs, and alleged that the Decision is a breach of the EU law principle of equal treatment. The lower courts rejected the application on the grounds that the EU law principle of equal treatment did not apply to differential treatment by the EU towards third countries, and that, even if the principle did apply, there was no arguable case that it had been breached in this case. The issue before the Court of Appeal was whether the judges were right on these two points. If they were not, then, it was common ground that a reference to the CJEU would be appropriate at least as to the validity of the Decision. Swiss aims to recover the surrendered allowances or their monetary worth.

Swiss brought the proceedings in the UK because the UK is Swiss’s “administering Member State” under article 18a of the Directive, as Swiss’s greatest estimated attributed aviation emissions in the relevant period were in relation to UK flights. The Environment Agency, the 2nd defendant and 2nd respondent, is the agency that undertakes that administration. The 1st defendant and 1st respondent, the Secretary of State for Energy and Climate Change, were joined because they were responsible for making the Regulations that are directly challenged.

The appeal was allowed and the following questions were referred to the CJEU for a preliminary ruling:

Question 1: Does the Decision infringe the general EU principle of equal treatment insofar as it establishes a moratorium on the requirements to surrender emissions allowances imposed by the Directive (as amended) in respect of flights between EEA states and almost all non-EEA states, but does not extend that moratorium to flights between EEA states and Switzerland?

Question 2: If so, what remedy must be provided to a claimant in the position of Swiss, which has surrendered emissions allowances in respect of flights that took place during 2012 between EEA states and Switzerland, to restore that claimant to the position it would have been in, but for the exclusion from the moratorium of flights between EEA states and Switzerland? In particular:-

a) Must the register be rectified to reflect the lesser number of allowances that such a claimant would have been required to surrender if flights to or from Switzerland had been included in the moratorium?

b) If so, what (if any) action must the national competent authority and/or the national court take to procure that the additional allowances surrendered are returned to such a claimant?

c) Does such a claimant have a right to claim damages under Article 340 of the TFEU against the European Parliament and the Council for any loss that it has suffered by reason of having surrendered additional allowances as a result of the Decision?

d) Must the claimant be granted some other form of relief, and if so what relief?

 

Cassley & Ors v GMP Securities Europe LLP & Ors [2015] EWHC 722 (QB)
High Court, Mr Justice Coulson, 31 March 2015

The Judge concluded that, although the employer, GMP, had failed in their duty to Mr Cassley, if they had done what they should have done, he would still have been on the flight that crashed at Avima on the morning of 19 June 2010. The accident, and the causes of the accident, was not reasonably foreseeable and/or too remote in law. The claimants seek to make GMP liable for the selection of Aero-Service as the carrier for the flight, and the manner in which that flight was executed when GMP was two steps removed from that decision. The manner in which the charter was executed was the responsibility of the pilots.

There is no general liability on a defendant for the action of a third party unless what happened was a “highly likely” consequence of the actions of that third party. That is not this case: the actions of the pilots that caused the accident were not ‘highly likely’. In those circumstances, the duty owed by GMP did not extend to the performance of the carrier once the flight had started: again that is consistent with the judgment of Hamblen J in Dusek. Or to put the same proposition in another way, no risk assessment performed by GMP would have identified the risk of pilot error, which was the primary cause of the accident.

 

Ryanair Holdings Plc v The Competition And Markets Authority & Anor [2015] EWCA Civ 83
Court of Appeal
Lord Justice Laws, Lord Justice Patten, Lord Justice Floyd
12 February 2015

Takeover bids and European competition law. Ryanair appealed to the Court of Appeal against a decision of the Competition Appeal Tribunal (view here), who rejected previous challenges to the findings of the Competition Commission (CC). Ryanair’s three grounds of appeal were:

(1) it was procedurally unfair for the CC to have refused to disclose to Ryanair (or its external lawyers) the material allegations and evidence relied upon by the CC in reaching the conclusion that Ryanair might affect Aer Lingus’s ability to participate in a combination with another airline. Particular weight was attached to the evidence of other airlines but their identities and the underlying evidence were withheld from Ryanair despite its requests for their disclosure. It was therefore denied a fair opportunity to respond;

(2) the decision to require divestiture of all but 5% of the minority stake involved a breach of the duty of sincere co-operation under Article 4(3) of the Treaty on European Union (“TEU”) because of a material risk of conflict between the order and a future decision of the European Commission (following the appeal to the General Court) that Ryanair should be permitted to bid for 100% of Aer Lingus; and

(3) The divestiture remedy was disproportionate and was imposed by the CC on the basis of a misdirection as to the degree of risk of an SLC occurring that has to be found before a remedy can be imposed and which dictates the type of remedy required.

Appeal dismissed.

 

Oxford Aviation Services & Anor, R (On the Application Of) v Secretary of State for Defence Civil Aviation Authority & Anor [2015] EWHC 24 (Admin)
High Court, Mr Justice Popplewell, 23 January 2015

Judicial review of the Government’s arrangements for overseeing and regulating the use of Northolt Airport (“RAF Northolt”) by civil aircraft in order to determine whether they are lawful, particuarly in respect of safety. The case was not concerned with whether RAF Northolt met appropriate safety standards for such aircraft.

Note: Military airports fall within the responsibility of the Secretary of State for Defence through the Military Aviation Authority, an autonomous body created by Charter, administered within the Ministry of Defence.

 

2014

Foster & Anor v Action Aviation Ltd & Ors [2014] EWCA Civ 1368
Court of Appeal
Lord Justice Longmore, Lady Justice Gloster, Lord Justice Underhill
23 October 2014

Purchase of aircraft – negligent misrepresentation – fraudulent misrepresentation – whether the aircraft had ever been in an accident – unreportable incidents – difference between purchase price and sale price – beneficial ownership – appeal against trial judge’s finding of fact

 

NATS (Services) Ltd v Gatwick Airport Ltd & Anor [2014] EWHC 3133 (TCC)
High Court, Mr Justice Ramsey, 2 October 2014

Proceedings relating to a procurement for the provision of air traffic control services at Gatwick Airport.

 

Dawson v Thomson Airways Ltd [2014] EWCA Civ 845
Court of Appeal
Lord Justice Moore-Bick, Lord Justice, Kitchin, Lord Justice Fulford
19 June 2014

Delay – compensation – limitation period – Montreal Convention – Regulation 261/2004 – Limitaton Act 1980

The claim arose out of a delay to a flight from Gatwick to the Dominican Republic in December 2006. Departure was delayed by crew shortages caused by sickness and the flight eventually arrived at its destination over six hours late. Mr. Dawson sought to recover from the airline the amount of €600 per person which under EC Regulation No. 261/2004 is payable as compensation for a flight of that length. Mr. Dawson was awarded £1,488.73 by the Cambridge County Court.

Mr. Dawson began proceedings in December 2012, just before the six year limitation period under section 9 of the Limitation Act 1980 expired. The airline accepted that it would have been liable to make the payment if he had brought proceedings in time, but argued that the claim was out of time and had been discharged by virtue of the two year limitation period contained in article 35 of the Montreal Convention, which governs the liability of carriers by air.

The airline accepted that in the light of the decision in Moré national law governs the question of limitation, but it contended that the application of English law leads one straight back into the Convention with its two year limitation period. Although the English courts are bound to accept the European Court’s decision that there is a right to compensation for delay in cases of this kind, they are not bound to accept and apply the reasoning by which it reached that conclusion and as a matter of English law must follow and apply the decision in Sidhu. Mr. Dawson, on the other hand, contended that the court must follow and apply the decisions of the European Court. The claim falls outside the Montreal Convention and as a matter of domestic law the six year period prescribed by section 9 of the Limitation Act 1980 applies.

The Court of Appeal held that it was bound to follow and apply the decisions of the European Court in relation to the nature of the claim for compensation under article 7 and its compatibility with the Montreal Convention, which included the Court’s ruling that the obligation in question lies outside the scope of the Convention. The European Court had ruled on the nature of the obligations created by Regulation 261 and its decisions had to be taken into account when deciding whether the claim fell within the scope of the Convention.

The airline’s appeal was dismissed.

 

Virgin Atlantic Airways Ltd v K.I. Holdings Co. Ltd & Anor [2014] EWHC 1671 (Comm)
High Court, Mr Justice Burton, 22 May 2014

jurisdiction – gateways – exclusive jurisdiction – breach of contract – fraudulent misrepresentation – negligent misrepresentation

Ryanair Ltd v HM Revenue and Customs [2014] EWCA Civ 410
Court of Appeal
The Master of the Rolls, Lord Justice Patten, Lord Justice Pitchford
4 April 2014

Ryanair made a claim to recover Air Passenger Duty (APD) totalling £10,230,613 which it alleged was overpaid between 16 September 2007 and 31 March 2011. The claim was rejected by HMRC and Ryanair appealed against the refusal under s.16 Finance Act (FA) 1994. At a subsequent hearing before the First-tier Tribunal, the FTT transferred to the Upper Tribunal (Tax and Chancery Chamber) the issues of the proper construction of the relevant provisions of FA 1994 and the orders made under it and whether, on the proper construction of those provisions, Ryanair was entitled to the benefit of an exemption for connected flights. Ryanair also issued proceedings in the Administrative Court for judicial review of HMRC’s treatment of it in respect of the connected flights exemption which it alleged was substantially unfair and inconsistent in the way that it has allowed some other airlines to enjoy the benefit of the exemption even though they do not issue conjunction tickets as defined but has refused to extend the concession to Ryanair.

 

Hoyle v Rogers & Anor [2014] EWCA Civ 257
Court of Appeal
Lady Justice Arden, Lord Justice Treacy, Lord Justice Christopher Clarke
13 March 2014

On appeal from the High Court decision of Mr Justice Leggatt: 2013 EWHC 1409 (QB)

On 15 May 2011 Orlando Rogers was a passenger in a vintage Tiger Moth propeller bi-plane manufactured in 1940 of which the appellant, Scott Hoyle, was the pilot. In the course of the flight the aircraft crashed to the ground. Mr Rogers was killed. Mr Hoyle was seriously injured but survived. The claimants, respondents to this appeal, who are Mr Rogers’ mother and sister, bring this action as executors on behalf of his estate and as dependants, claiming damages for his death as a result of the accident, which they attribute to Mr Hoyle’s negligence.

The Air Accident Investigation Branch (“AAIB”) investigated the accident and on 14 June 2012 produced a report (“the Report”). The issue in this appeal was whether the judge was right to hold that the Report was admissible in evidence and to decline to exclude it as a matter of discretion.

As to whether the Report was admissible, the judge held that “it is not apparent to me that any part of the Report should be regarded as simply expressing an opinion on matters of fact (as opposed to recording evidence) in relation to which the expertise of the AAIB has no relevance. But even if any part of the Report was (or proves on close analysis hereafter) to have that character, the correct approach is as outlined by the judge.” The Report is admissible for its record of factual evidence (of whatever degree of hearsay) and its expert opinion.

Stott v Thomas Cook Tour Operators Ltd [2014] UKSC 15
UK Supreme Court
Lord Neuberger, Lady Hale, Lord Reed, Lord Hughes, Lord Toulson
5 March 2014

Watch the judgment being handed down here: http://www.youtube.com/watch?v=U76J4GilB-A

The issue was whether a court may award damages for a claimant’s discomfort and injury to feelings caused by a breach of the UK Disability Regulations. The conclusion of the lower courts was that any such award is precluded by the Montreal Convention, as adopted in the EU by the Montreal Regulation (or, to use its full title, “Council Regulation (EC) No 2027/97 on air carrier liability in the event of accidents, as amended by Parliament and Council Regulation (EC) No 889/2002”).

Lord Toulson, with whom the other judges agreed, held that:
The claim (in question) was for damages for the humiliation and distress which Mr Stott suffered in the course of embarkation and flight. The particulars of injury to Mr Stott’s feelings and the particulars of aggravated damages related exclusively to events on the aircraft. In the course of argument it was suggested that Mr Stott had a complete cause of action before boarding the aircraft based on his poor treatment prior to that stage. If so, it would of course follow that such a pre-existing claim would not be barred by the Montreal Convention, but that was not the claim advanced. Mr Stott’s subjection to humiliating and disgraceful maltreatment which formed the gravamen of his claim was squarely within the temporal scope of the Montreal Convention. It is no answer to the application of the Convention that the operative causes began prior to embarkation. To hold otherwise would encourage deft pleading in order to circumvent the purpose of the Convention. Many if not most accidents or mishaps on an aircraft are capable of being traced back to earlier operative causes and it would distort the broad purpose of the Convention explained by Lord Hope in Sidhu to hold that it does not apply to an accident or occurrence in the course of international carriage by air if its cause can be traced back to an antecedent fault.

The [Montreal] Convention is intended to deal comprehensively with the carrier’s liability for whatever may physically happen to passengers between embarkation and disembarkation. The answer to that general question also covers the more specific question.

Under the law as it stands, a declaration that the carrier was in breach of the UK Regulations is likely to be small comfort to a passenger who has had Mr Stott’s experience, but I draw attention, as did Sotomayor CJ at the end of her opinion in King v American Airlines, to the fact that there are other possible means of enforcement. It is for the Civil Aviation Authority to decide what other methods of enforcement should be used, including possible criminal proceedings.

The embarrassment and humiliation which Mr Stott suffered were exactly what the EC and UK Disability Regulations were intended to prevent. I share the regret of the lower courts that damages are not available as recompense for his ill-treatment and echo their sympathy for him, but I agree with the reasoning of their judgments and would dismiss this appeal.

 

Donkers & Anor v Storm Aviation Ltd [2014] EWHC 241 (QB)
Judge B C Forster QC sitting as a Deputy Judge
20 February 2014

The court had to determine four preliminary questions:
(a) Whether and, if so, to what extent, the claim of Mr Donkers against the Defendant in tort is governed by German law;
(b) Whether and, if so, to what extent the claim of the BGT against Storm is governed by German law;
(c) Whether Storm’s claim against Lufthansa for a contractual indemnity under the Ground Handling Agreement is governed by German law; and
(d) Whether and, if so, to what extent, Lufthansa is entitled in principle to rely on any of the defences, exclusions, limitations, or conditions governing employer’s liability in German Social Accident Insurance Law (in particular those provisions contained in SS104 – 113 of SGB V11) in response to Storm’s claim against it, pursuant to Regulation (EC) 883/2004, or Article 93(1) of EEC Regulation 1408/71, or otherwise.

In sum, the court held:
(1) The Claim brought by the First Claimant is to be determined by English Law.
(2) The Claim of the Second Claimant is subject to German law only to the extent that any issue arises as to whether there has been a subrogation or as to the extent of the subrogation. The applicable law of the claim is English law.
(3) The Third Party cannot rely upon exclusions and limitations governing employers liability in German Social Accident Insurance Law.
(4) The Claim by the Defendant against the Third Party is to be determined by English Law.

 

2013

Credit Suisse AG v Arabian Aircraft & Equipment Leasing Co EC & Ors [2013] EWCA Civ 1169
Court of Appeal, Lord Justice Mummery, Lord Justice Lloyd and Lord Justice Moore-Bick, 2 October 2013

At first instance the judge ordered the defendant, AA, to pay into court the sum of US$2,563,000 as a condition of defending the claim brought against them by a bank, Credit Suisse AG. The bank had agreed to lease a Canadair Challenger aircraft to AA with a view to its being sub-leased to, and operated by, Bexair. AA had previously entered into an agreement with a Canadian company, Bombardier Aerospace Corporation, to buy the aircraft for the sum of US$13,055,000, but had subsequently obtained financing from the bank, which took an assignment of the benefit of the purchase contract in order to enable it to lease the aircraft to AA. The lease was guaranteed by Mr Mansour, a shareholder in and a director of both AA and Bexair, and was supported by an assignment by Bexair of the benefit of insurances and other agreements which it had entered into as operator of the aircraft. The assignment included a covenant on the part of Bexair to discharge the obligations of AA under the lease. The initial term of the lease was eight years from the delivery of the aircraft. The aircraft was delivered in March 2004.

For some time AA made monthly payments under the lease in accordance with its terms, but in early 2009 it encountered financial difficulties and failed to make the payments due in April, May and June that year. By clause 18.1(A) of the lease the failure to make payments promptly when due constituted an event of default, the consequences of which were set out in the following parts of clause 18. Defendants appealed the judge’s decision. The Court of Appeal allowed the appeal. The judge had erred in interpreting the contract provisions.

 

Ford v Malaysian Airline Systems Berhad [2013] EWCA Civ 1163
Court of Appeal, Lord Justice Maurice Kay, Lord Justice Leveson, Lord Justice Aikens, 27 September 2013

Meaning of ‘accident’ – passenger injected for prior condition by doctor who was a passenger on board flight and then unable to urinate – not an ‘accident’ in the sense of the Montreal Convention 1999

This was a claim by a passenger on an international commercial flight for damages for bodily injury resulting from accident. Mrs Ford suffered pre-existing physical discomfort caused by fluid retention resulting from urethral stenosis. On the flight, she was injected with a diuretic by a doctor who was a fellow passenger. The injection (it was assumed for present purposes) exacerbated her physical discomfort. The question for decision was whether the injection constituted an accident for the purposes of article 17.1 of the Montreal Convention 1999 “for the Unification of Certain Rules for International Carriage by Air” (“the Montreal Convention”). At first instance, the judge held that it did not.

The Court of Appeal dismissed the appeal. To achieve an appropriately international interpretation of the Montreal Convention 1999, the court considered case law from the US Supreme Court and Australia as well as English authorities. It concluded that to constitute an accident the occurrence on board the aircraft must be unusual, or unexpected, an unusual or unexpected happening. The event in this case was the actual administration of the injection. That, in itself, was not unexpected or unusual.

 

Singapore Airlines Ltd v Guijarro (Unfair Dismissal) [2013] UKEAT 0386_13_0509
Employment Appeal Tribunal, Judge David Richardson (sitting alone), 5 September 2013

Unfair dismissal – Employment Judge erred in law in having regard to subsequent events when reaching her decision that the Claimant was already a disabled person by December 2011 – Employment Judge was not bound to conclude in the Respondent’s favour that the Claimant was not a disabled person – Comment upon the importance of case managing – especially where a claimant is in person – the evidence to be adduced on the question whether a claimant is a disabled person

 

Joint Stock Company “Aeroflot Russian Airlines” v Berezovsky & Ors
High Court (Chancery Division), Mr Justice Morgan

[2013] EWHC 1209 (Ch) (29 April 2013)
[2013] EWHC 1210 (Ch) (19 April 2013)

Application made by Aeroflot in respect of Mr Berezovsky’s estate who died in March 2013. Mr Berezovsky was one of seven defendants named in a previous action for fraud, which began on 15 December 2012.

See also the decision of Mr Justice Floyd [2012] EWHC 3017 (Ch) on 30 October 2012 below.

 

Thomas Cook Airline Services Ltd v Wolstenholme [2013] UKEAT 0353_12_1601
Employment Appeal Tribunal, Judge Peter Clark (sitting alone), 16 January 2013

Employment – Practice and Procedure – Striking-out or dismissal – dismissal of comatose pilot

 

2012

Olympic Airlines SA v ACG Acquisition XX LLC [2012] EWCA Civ 1659
Court of Appeal, Lord Justice Rix and Lord Justice Rimer, 17 December 2012

The case concerned an application by Olympic to stay an earlier interim payment order (IPO) by Teare J, along with applications by ACG for a condition as to compliance with the IPO, and a condition as to the provision of security for its costs.

 

Ryanair Holdings Plc (Ryanair) v Competition Commission (CC) & Anor [2012] EWCA Civ 1632
Court of Appeal, Lord Justice Pill, Lord Justice Etherton and Lord Justice Lewison, 13 December 2012

Pursuant to section 22 of the Enterprise Act 2002, the Competition Commission is currently conducting an investigation under Chapter 1 of Part 3 of the Enterprise Act (mergers) into Ryanair’s 29.82% shareholding in Aer Lingus. The European Commission is concurrently exercising its jurisdiction under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (“the Merger Regulation”) to consider Ryanair’s current public bid for the entirety of Aer Lingus’ share capital. The case discusses whether the Competition Commission has no jurisdiction to continue its investigation or ought not to exercise any such jurisdiction pending completion of the EC’s review under the Merger Regulation.

 

Virgin Atlantic Airways Ltd v Jet Airways (India) Ltd & Ors [2012] EWHC 3318 (Pat)
High Court (Chancery Division) (Patents Court), Mr Justice Floyd, 23 November 2012

Patents.

 

Stuart v London City Airport [2012] UKEAT 0273_12_0911
Employment Appeal Tribunal, Mrs Justice Cox DBE, Mrs C Baelz and Mrs L S Tinsley, 9 November 2012

Employment: Unfair dismissal, London City Airport.

 

Quantas Cabin Crew (UK) Ltd v Lopez & Anor [2012] UKEAT 0106_12_0211
Employment Appeal Tribunal, Judge McMullen QC, Mr D Evans CBE, and MR J R Rivers CBE, 2 November 2012

Employment: unlawful deduction from wages.

 

Joint Stock Company (Aeroflot – Russian Airlines) v Berezovsky [2012] EWHC 3017 (Ch)
High Court (Chancery Division), Mr Justice Floyd, 30 October 2012

An action to enforce a money judgment or judgments of the Russian courts holding the two defendants, Boris Berezovsky and Nikolay Glushkov, liable to compensate the claimant, Aeroflot, for fraud perpetrated upon it. Both defendants had been convicted by Russian criminal courts (in the case of the first defendant, in his absence) of crimes based on the Andava fraud.

 

British Airways plc v Williams & Ors [2012] UKSC 43
Supreme Court, Lord Hope, Lord Walker, Lord Mance, Lord Clarke and Lord Sumption, 17 October 2012

Paid annual leave for pilots.

 

Jet2.com Ltd v S C Compania Nationala De Transporturi Aeriene Romane Tarom SA [2012] EWHC 2752 (QB)
High Court (Queen’s Bench Division), Judge Mackie QC, 11 October 2012

Quantum of damages – how many Jet2 aircraft Tarom would have serviced if the Agreement had not been terminated.

 

Netjets Management Ltd v Central Arbitration Committee & Anor [2012] EWHC 2685 (Admin)
High Court (Administrative Court), Mr Justice Supperstone, 5 October 2012

Employment of pilots

 

Newcastle International Airport Ltd (NIAL) v Eversheds LLP [2012] EWHC 2648 (Ch)
High Court (Chancery Division), Mrs Justice Proudman, 2 October 2012

Alleged negligence in relation to new service contracts.

 

Shaker v Vistajet Group Holding SA [2012] EWHC 1329 (Comm)
High Court, (Queen’s Bench Division), Mr Justice Teare, 18 May 2012

Aircraft – Letter of intent – Return of deposit – Good faith and use of reasonable endeavours – Contractual estoppel

Shaker (claimant) paid a deposit to VistaJet (defendant) pursuant to the terms of a letter of indemnity (LOI) whereby Shaker agreed to proceed in good faith to reach agreement for the purchase of an aircraft and to deliver transaction documents until the cut-off date stipulated in the LOI. The defendant was the guarantor under the LOI and agreed to return the deposit to Shaker where, despite exercise of good faith, Shaker would fail to deliver the documents until the cut-off date. The cut-off date was amended five times as Shaker sought written confirmation from a financing party. Shaker claimed for return of his deposit and VistaJet argued that Shaker did not act in good faith to agree the transaction documents and to seek written confirmation of the financing party, and was therefore not entitled to a return of deposit. The issues before the court were: (i) whether VistaJet’s argument was enforceable in law; (ii) whether VistaJet was contractually estopped from relying on that defence up to the date of the fifth amendment (10 January) given its terms; and (iii) finally whether Shaker acted in good faith and used reasonable endeavours as between 10 December 2010 and the last agreed cut-off date (17 January 2011). The defendant counterclaimed for the costs of certain flights provided to Shaker; however this was rejected by the court.

 

Jet2.com Ltd v Transporturi Aeriene Romane Tarom SA [2012] EWHC 622 (Comm)
High Court (Queen’s Bench Division), His Honour Judge Mackie QC, 15 March 2012

Contract for maintenance to aircraft – Delay in providing maintenance services – Non-payment – Breach of contract – Notice – Common law right to terminate – Whether time for payment is of essence

Jet2 (Claimant) entered into a contract with Tarom whereby Tarom was to carry out maintenance of Jet2’s aircraft. The contract was initially for three years and had an option for extension on the same terms. Jet2 wanted to extend the contract which was at the time economically unattractive to Tarom who preferred renegotiating the terms. During the currency of the contract Tarom lost manpower and accordingly delayed in completing the checks of some of the aircraft. Jet2 entered into an agreement with JAT for the provision of maintenance services, yet wanted to benefit from the favourable rates in its contract with Tarom and therefore did not terminate that contract. Tarom sent an e-mail to Jet2 which they contended was a notice of termination, claimed for sums unpaid by Jet2 and terminated the contract later on by a letter on this basis. Jet2 claimed damages for breach of contract alleging that Tarom did not have the right to terminate the contract and that their letter operated as a renunciation.

His Honour Judge Mackie QC decided in favour of Jet2, holding that Jet2 was entitled to claim for damages from Tarom. So to assess the damages suffered by Jet2 the court had to conduct a factual inquiry as to how the contract would have been performed had it not been repudiated. The e-mail sent by Tarom was not a valid notice for termination. Time was not of essence and Tarom did not have a common law right to terminate the contract, and the contract was not terminated by mutual written consent of the parties. To the extent that there was repudiatory conduct by Tarom it was affirmed by Jet2 until Tarom purported to terminate the contract by their letter.

 

Air Transworld Ltd v Bombardier Inc [2012] EWHC 243 (Comm)
High Court (Queen’s Bench Division), Mr Justice Cooke, 20 February 2012

Sale of goods – Aircraft – Whether parties had ousted statutory implied terms – Whether exclusion valid – International supply contract – Applicable law – Dealing as a consumer – Sale of Goods Act 1979, sections 13 and 14 – Unfair Contract Terms Act 1977, sections 6, 12, 26, 27 and schedule 2

ASA, an Angola company controlled by M, agreed to buy a Challenger 605 private jet aircraft from BI, a Canadian manufacturer. The contract was stated to be governed by English law. ASA subsequently assigned its rights under a tripartite assignment agreement to AT, a Gibraltar company also controlled by M. The assignment agreement incorporated the terms of the sale. It was asserted that the jet was brought for his private use. The jet was delivered in March 2009 and was rejected in July 2010 on the basis of various alleged mechanical problems. AT asserted that the jet did not correspond to its description, was not of satisfactory quality and was unfit for purpose, within sections 13 and 14 of the Sale of Goods Act 1979. The preliminary questions for the court were whether the relevant contract (the assignment contract) ousted the implied terms and, if they did, whether the exclusion clauses fell within the Unfair Contract Terms Act 1977. A contract of sale was an international supply contract and outside the 1977 Act if it was a contract for the passing of property by parties whose places of business were within different states (section 26(3)) and it met any of the three requirements in section 26(4)).

Cooke J held as follows.
(1) The contract, properly construed, ousted the statutory implied terms and replaced them with the more limited provisions of the contract. Although the exclusion referred only to warranties, so that on the face of things it did not apply to conditions, that was simply one illustration of the wider provision that the duties of the parties were to be found exclusively in the contract.
(2) The contract was an international supply contract within the meaning of section 26 of the Unfair Contract Terms Act 1977, in that it was one for the sale of goods and between parties whose places of business were within different states for the purposes of section 26(3).
(3) The contract satisfied the additional requirements of section 26(4)(b), in that “the acts constituting the offer and acceptance have been done in the territories of different states”. The subsection referred to the totality of the acts which constituted the offer and acceptance including both the making and receiving of each. It was necessary to look at the sale, because that was incorporated into the assignment, and the sale was an international sale agreement within the section.
(4) Alternatively, the contract satisfied the requirements of section 26(4)(a), that “the goods in question are, at the time of the conclusion of the contract, in the course of carriage, or will be carried from the territory of one State to the territory of another”. The aircraft was, in the contemplation of the parties, to be “carried” from the territory of one state to the territory of another, since delivery was to take place in Canada and the aircraft was to be exported straight away, with a view to it being based in Africa and registered abroad, with the ability to fly into Europe if desired.
(5) The contract was also excluded from the 1977 Act by section 27, under which the Act does not apply to a contract governed by English law only by reason of the parties’ choice of English law. In the present case there was an express choice of English law although, but for that choice, the assignment contract had no real connection with England and would have been governed by the law of Quebec.
(6) AT had not been “dealing as a consumer” within the meaning of section 12 of the 1977 Act. AT’s business was owning and operating aircraft, and the fact that it was M’s alter ego did not mean that it had no business at all. The transaction was an integral part of its business.
(7) Had the 1977 Act applied, the exclusions would have been reasonable under section 6 of the 1977 Act and the schedule 2 guidelines. The parties had allocated the risk between them on the terms of the agreement and the terms were reasonable.

 

Stott v Thomas Cook Tour Operators Ltd; Hook v British Airways Plc [2012] EWCA Civ 66
Court of Appeal (Civil Division), Lord Justice Maurice Kay, Lord Justice Sullivan and Dame Janet Smith, 7 February 2012

International carriage by air – Liability of air carriers – Disabled passengers – Injury to feelings – Whether passengers’ claims are subject to Montreal Convention – Whether Montreal Convention has exclusivity over domestic legislation – Montreal Convention art.17 and art.29

The claimants Stott and Hook were disabled persons. They previously brought separate actions against the defendants Thomas Cook and British Airways on the ground that they sustained injury to feelings during the flight because the defendants did not make efforts in arranging seating needs although that was what had been promised when bookings were made. The common issue in both of these actions was whether injury to feelings could be compensated by virtue of the EC Disability Regulation (Regulation (EC) No 1107/2006) and the UK Disability Regulations (Civil Aviation (Access to Air Travel for Disabled Persons and Persons with Reduced Mobility) Regulations 2007 S1 2007/1895) or whether such compensation was not recoverable according to the Montreal Convention art. 17 and 29. In the proceedings started by Scott, the judge granted a declaration that Thomas Cook had breached Scott’s rights under the EC Disability Regulation but dismissed the claim for damages by reference to the Montreal Convention. On the other hand, Hook’s claim for damages was struck out by the application of British Airways against which Hook appealed, however his appeal was dismissed. Both of the claimants appealed against these decisions.

The claimants in this appeal argued that the EC Regulation was made to give effect to fundamental rights and to give access to air travel for disabled persons which they would not have otherwise. They further argued that both the EC Regulation and the UK Disability Regulations supplemented the protection of air passengers in relation to matters not addressed by the Montreal Convention by making provision that injury to feelings sustained by a disabled air passenger was recoverable. This submission also found support by the Secretary of State for Transport who was the intervener in this action. In turn, the defendants contended that the case of the claimants did not comply with the principle of exclusivity of the Montreal Convention established by Article 29 and which was illustrated by Sidhu v British Airways PLC [1997] AC 430.

The Court dismissed the appeal of the claimants and held that (1) The injuries to their feelings were sustained on board, during the flight which was governed by the Montreal Convention (2) The EC Disability Regulation and the UK Disability Regulation should be construed, if they can be, in a manner consistent with the Montreal Convention. However the Convention had exclusivity over domestic law (i.e. over the UK Disability Regulation) which was supported by foreign and domestic authorities and therefore limited the claimants’ rights and remedies (3) The Convention did not provide the right to compensation for injury to feelings and therefore the claimants could not succeed.

 

Global 5000 Ltd v Wadhawan [2012] EWCA Civ 13
Court of Appeal (Civil Division),Lord Justice Rix, Lord Justice Sullivan, and Lord Justice Lewison, 19 January 2012

Civil procedure – Conflict of laws – Aircraft purchase contract

 

Rosen v easyJet Airline Company Ltd [2012] (unreported)
L.M.L.N. 2012, 839, 1-2
Croydon County Court, District Judge Mayor, 5 January 2012

Carriage of passengers by air – European Law – Flight from Portugal to London cancelled following eruption of Icelandic volcano – Airline offering claimant alternative flight but claimant electing to return home by hired car – Whether claimant entitled to compensation or relief under EU Regulation 261/2004

 

2011

Ryanair Holdings Plc v Office of Fair Trading & Anor [2011] EWCA Civ 1579
Court of Appeal (Civil Division), Lord Justice Lloyd, Lord Justice Elais and Lord Justice Kitchin, 21 December 2011

Competition and company law in relation to takeover of Aer Lingus.

 

Titshall v Qwerty Travel Ltd [2011] EWCA Civ 1569
Court of Appeal (Civil Division), Lord Justice Longmore, Lady Justice Black and Lord Justice Tomlinson, 15 December 2011

Package Holidays – Personal Injury

 

Singapore Airlines Ltd & Anor v Buck Consultants Ltd [2011] EWCA Civ 1542
Court of Appeal (Civil Division), Lord Justice Pill, Lady Justice Arden and Sir Mark Potter, 13 December 2011

The meaning of “Earnings” for the purposes of The Singapore Airlines Pension and Life Assurance Scheme.

 

Baxter v. Titan Aviation Ltd (National Minimum Wage) (Rev 1) [2011] UKEAT 0355_10_3008
Employment Appeal Tribunal, Mr Justice Underhill, Mr C Edwards and Dr B Fitzgerald, 30 August 2011

Employment – Discrimination against part-time workers – Less favourable treatment

 

Driver v Air India Ltd. [2011] EWCA Civ 830
Court of Appeal (Civil Division), Lord Justice Mummery, Lord Justice Rix and Lord Justice Longmore, 19 July 2011

Overtime claims of airport worker.

 

Mahan Air v Blue Sky One Ltd [2011] EWCA Civ 771
Court of Appeal (Civil Division), Lord Justice Stanley Burton and Lord Justice Gross, 1 July 2011

Costs judgment.

 

HMRC v BAA Ltd [2011] UKUT 258 (TCC)
UK Upper Tribunal (Tax and Chancery Chamber), Hon Mrs Justice Proudman DBE and Mr Julian Ghosh QC, 22 June 2011

Whether VAT recoverable as input tax on professional fees incurred by a bidding company in the course of a takeover of a target company which was a member of a VAT group; whether such services were attributable to the economic activities of the acquiring company combined with the taxable supplies of the VAT group; whether there was a direct and immediate link between the supplies constituted by the services and taxable supplies made by the VAT group; appeal by HMRC against decision of First-tier Tribunal successful; claim for input tax denied.

 

Jet2.Com Ltd v Blackpool Airport Ltd [2011] EWHC 1529 (Comm)
Queen’s Bench Division, Commercial Court, Judge Mackie QC, 15 June 2011

Interpretation of agreement to operate low cost services out of Blackpool airport.

 

R v Ahmed Ali & Othrs [2011] EWCA Crim 1260
Court of Appeal (Criminal Division), Thomas LJ, Mr Justice Macduff , Mr Justice Sweeney, 19 May 2011

Court of Appeal rules in case on plot to bomb transatlantic flights.

 

Mahan Air V Blue Sky One Limited [2011] EWCA Civ 544
Court of Appeal (Civil Division), Stanley Burnton LJ and Gross LJ, 11 May 2011

Procedure – Appeal – Security for costs In an action concerning rights in certain aircraft following a transaction that had failed when the US enforced sanctions against Iran, the Court of Appeal issued an order that security for costs be paid as a condition for the appeal to proceed.

 

Sanghvi v Cathay Pacific Airways [2011] EWHC 1684 (Ch); [2012] 1 Lloyd’s Rep. 46
Chancery Division, High Court, Mrs Justice Proudman, 10 May 2011

Aviation — Claimant missing flight connection in Hong Kong — Compensation for delay — Meaning of “flight” — European Parliament and Council Regulation 261/2004/EC

 

Global 5000 Ltd v Wadhawan (Rev 1) [2011] EWHC 853 (Comm)
Queen’s Bench Division, Commercial Court, Mr Justice Beatson, 05 April 2011

Jurisdictional issues under CPR arising from a sale of aircraft.

 

Connock & Anor v Fantozzi, Re Alitalia Linee Aeree Italiane SPA [2011] EWHC 15 (Ch)
Chancery Division, High Court, Mr Justice Newey, 18 January 2011

Cross-border Insolvency of the Italian airline Alitalia. Examines the law applicable to secondary insolvency proceedings taking place in England where assets are located by way of two UK bank accounts. The main proceedings were taking place in Italy. The question at issue was whether English law or Italian law should apply to the proceedings in England, the determination of which would affect the priority of distribution of assets to unsecured creditors, namely, ex-employees of Alitalia domiciled in the UK.

 

2010

Gesner Investments Ltd v Bombardier Inc. [2010] EWHC 2643 (Comm)
Queen’s Bench Division, Commercial Court, Mr Justice Blair, 22 October 2010

Sale of aircraft – Construction of contract for aircraft sale – Liquidated damages – Whether contractual provision entitled buyer to terminate upon expiry of period of stipulated compensation for late delivery – Summary judgment

 

The Queen (On the application of Kibris Türk Hava Yollari) v Secretary of State for Transport [2010] EWCA Civ 1093
Court of Appeal (Civil Division), Lord Justice Ward, Lord Justice Richards and Sir David Keene, 12 October 2010

Carriage (air) – Civil aviation – Public international law -Sovereignty – Meaning of territory of state party for the purpose of operating flights – Rights and entitlements of a state party to the Chicago Convention 1944 – Articles 6, 10 of the Chicago Convention on International Civil Aviation, 1944

An airline had applied to operate scheduled flights and chartered flights between the UK and Ercan, an airport in the northern part of Cyprus. While the whole of Cyprus was nominally a part of the territory of the Republic of Cyprus (RoC), the northern part of the island had since 1974 been governed by an entity not recognised by most other States and known as the Turkish Republic of Northern Cyprus (TRNC). RoC exercised no control over or authority in this territory. It consistently opposed flights to TRNC. It was an interested party to this litigation. Upon the airline’s original application to operate flights between the UK and Ercan, the Secretary of State decided that it would be a breach of the rights of the RoC under the Chicago Convention 1944, to which both UK and RoC were parties, to grant rights of flight between the UK and Ercan. This view was endorsed by the judge at first instance. This was the airline’s appeal against that decision, in which it argued that RoC’s de facto loss of control over the territory had resulted in a suspension of its rights under the Convention; and also that granting the right to operate flights did not violate UK law by recognising the validity of laws and acts of the TRNC, an entity that UK had not recognised.

The Court of Appeal dismissed the appeal. – The Court first agreed with the judge that the grant of the permits sought would be in breach of the UK’s obligation to respect RoC’s rights under the Convention and would be unlawful as a matter of domestic law. A further question was whether RoC remained entitled to exercise such rights in respect of northern Cyprus: a reference in the preamble of the Vienna Convention on the Law of Treaties 1969 to customary international law did not affect the interpretation of the Chicago Convention. – An argument as to suspension of treaties in case of outbreak of hostilities, advanced on a number of different grounds, could not avail the airline and in particular could not result in an indefinite suspension of RoC’s rights under the Chicago Convention. RoC’s rights under the Convention remained capable of being exercised, even if they were not fully effective and enforceable. – The law of closure of seaports, which depended on the state’s effective control and ability to blockade the port, would not be applied to airports because of the existence of a specific treaty in force for airports which laid down rights for states parties that could be implemented also in the absence of effective control. – The principle of effectiveness espoused by international law could not displace the specific treaty provisions and must also be balanced against the need not to recognise unlawful situations. – TRNC was not a state nor a party to the Convention and could not have taken over the right to exercise ROC’s rights thereunder.

 

Aercap Partners 1 Ltd v Avia Asset Management AB [2010] EWHC 2431 (Comm)
Queen’s Bench Division, Commercial Court, Lord Justice Gross, 7 October 2010

Contracts – Sale of aircraft – Breach of contract – Repudiation – Specific goods – Loss of chance – Measure of loss – Sale of Goods Act 1979, section 50(3), 61

Following the conclusion of an aircraft sale agreement between the parties, only partial payments had been made and the aircraft had not been delivered. The claimant had accepted repudiatory breach in February 2009. The delivery dates for the aircraft were to have been in May 2009 and the aircraft were resold in early 2010. The claimant seller and the defendant buyer both argued that the other was in breach of contract and denied that they themselves were in breach.

Gross J allowed the seller’s claim and dismissed the buyer’s counterclaim. It was the buyer who was in repudiatory breach, and its argument for renunciatory breach would equally have succeeded. On a correct interpretation of the sale contract, certain engines referred to therein were not specific goods. Because they were not specific goods, nothing turned on the question of T, a third party, co-operating with the seller to ensure their timely delivery under the sale contract and the loss of chance argument could not succeed. The loss of a chance doctrine was permissive and applied to the causation of damage and not to the quantification of damage. Where applicable, it facilitated recovery where the uncertainty was such that a claimant would fail if required to prove its loss to a balance of probabilities. Once the claimant had proven causation, the doctrine did not apply to reduce the damages. As for the measure of damages, the claimant was not restricted to the available market at the time fixed for the acceptance of the goods per the prima facie rule in Sale of Goods Act 1979, s 50(3). While the period before the resale contract was concluded was admittedly very long, the alternative of limiting the damages by reference to an earlier notional market price, unattainable in practice, was less attractive.

 

Vossloh Aktiengesellschaft v Alpha Trains (UK) Ltd. [2010] EWHC 2443 (Ch)
High Court, Chancery Division, Sir William Blackburne, 5 October 2010

Contract – Guarantee – Whether guarantee a demand bond -Whether primary or secondary liability

The claimant VAG had guaranteed the obligations of the defendant Alpha to a number of beneficiaries under a contract referred to as the 2009 Guarantee. This was the claimant’s action for a declaration as to the circumstances under which liability to the beneficiaries of that guarantee would arise. VAG contended that such liability was triggered upon proof of a breach of contract by any one or more of the entities referred to as the guaranteed party. Alpha, which was sued in its own right and as a representative beneficiary, argued that VAG’s liability was triggered by demand alone.

Sir William Blackburne granted the declaration sought. Since the guarantee was not given in a banking context, there was a strong presumption that the payment obligations undertaken by VAG did not constitute a demand bond. It was for the beneficiary to displace that presumption. On the language of the contract, the liability assumed by VAG was not triggered merely by demand on the part of some beneficiary. In addition, it was necessary to demonstrate the existence of a breach or failure of obligation. In particular the “pay now, argue later” terms of sub-clause 6.4 pointed to the existence of a secondary rather than a primary liability. It assumed that the guarantor may raise defences which the guaranteed party could have raised if the demand had been addressed to it and postponed the exercise of that right until after the demand had been fully met. Such defences would be immaterial in relation to a primary liability. The conclusive evidence provision on the guarantee required a certificate “setting forth the amount”. This did not, even when taken together with other provisions in the guarantee, have the effect of transforming the contract into a demand bond.

 

McCandless Aircraft LC v Payne [2010] EWHC 1835 (QB)
Queen’s Bench Division, High Court, Mr Justice Tugendhat, 21 July 2010

Sale of goods – Nature of transaction – Measure of damages – Sale of Goods Act 1979, ss 8 and 50

The claimant, a helicopter and aircraft broker, had purchased a helicopter and delivered it over to the defendants, who carried on a business providing helicopter flying time, under an arrangement the nature of which was in dispute. The claimant said that the defendant was supposed to sell the helicopter. After quite some time, the helicopter remained unsold and the claimant, who was incurring substantial interest charges on the bank loan which it had taken to purchase the helicopter, took it back. The parties’ combined losses on the project, whatever its nature, exceeded the initial purchase price for the helicopter. The parties disagreed on the nature of the agreement under which the helicopter was delivered from the claimant to the defendant. The claimant sought compensation amounting to the price of the helicopter and interest pursuant to what it said was a conditional sale agreement orally made in 2006, alternatively damages for breach of contract, alternatively for conversion. The defendants counterclaimed for expenses incurred in what it said was an agency or joint venture agreement under which profits fell to be divided equally. The only material condition of the sale was a provision on retention of title and the claimant had accordingly obtained delivery up pursuant to an interlocutory court order dated 24 June 2009.

The judge allowed the claim. It was altogether unlikely that the defendants would receive a helicopter without any obligations from virtual strangers; and furthermore the defendants’ version of events was not consistent over time and unsupported by documentary evidence. On the evidence, it appeared that the parties had agreed that the defendants would buy the helicopter from the claimant but with retention of title for the claimant, and that they would resell it in the UK. Upon a failure to sell for two and a half years, the claimant was entitled to have the helicopter returned to it and to be compensated for interest costs. The claimant was entitled to damages for non-acceptance under s 50 of the Sale of Goods Act. The measure of damages would be calculated as the difference between the price between the parties and the (lower) resale price that the claimant had achieved upon redelivery of the helicopter. They were also entitled to interest as agreed, namely as paid on the bank loan taken out to purchase the helicopter until recovery of damages. The counterclaim in restitution failed, except in respect of an amount pertaining to damage having occurred before delivery.

 

Global Knafaim Leasing Ltd v The Civil Aviation Authority [2010] EWHC 1348 (Admin)
Queen’s Bench Division, Administrative Court, Mr Collins J, 11 June 2010

Carriage (air) – Rights in aircraft – Aircraft detained in respect of airport charges and route charges owed by lessee in insolvent liquidation – Lessor of aircraft arguing that detention contravening property rights under European Convention on Human Rights – Whether detention contravened EU competition law

The claimant had leased an aircraft to Z, an airline which had subsequently entered into insolvent liquidation. The aircraft had been detained at Glasgow Airport by the Civil Aviation Authority in respect of unpaid charges pertaining to other aircraft operated by Z. The defendants were BAA and a number of authorities responsible for air traffic control and safety in Europe. These were funded by route charges paid by airlines making use of European air space, including Z. UK law permitted the detention of sister aircraft for such charges.

Collins J held that the claimants had failed to show that the power to detain an aircraft in respect of unpaid landing or route charges pertaining to other aircraft managed by the same operator were in contravention of the European Convention on Human Rights, international conventions on rights in aircraft or European Union competition law.

 

ACG Acquisition XX LLC v Olympic Airlines SA [2010] EWHC 923 (Comm)
Queen’s Bench Division, Commercial Court, Mr Justice Hamblen, 21 April 2010

Aircraft lease – Aircraft delivered against Certificate of Acceptance – Certificate of Airworthiness issued – Defects discovered – Cost of repairing defects exceeding value of aircraft – Certificate of Airworthiness revoked shortly after delivery – Total failure of consideration

The claimant ACG Acquisition XX LLC had agreed to lease to Olympic Airlines SA a Boeing 737 aircraft for a term of five years. By the lease agreement dated 30 May 2008, ACG as the owner and lessor of the aircraft undertook that it would be airworthy and in a condition suitable for immediate operation in commercial service and that it would comply with specified detailed requirements as to the condition of the aircraft on delivery. The aircraft was delivered and granted a Certificate of Airworthiness by the competent authority. Fifteen days after entering into service it was grounded due to a defect and while repairing that defect, Olympic found 14 others. The Certificate of Airworthiness was withdrawn. In these proceedings, Olympic contended that they were under no obligation to pay rent, said that there had been a total failure of consideration and asserted their right to claim damages. ACG contended that the Certificate of Acceptance that Olympic had signed precluded any claim in respect of delivery condition, denied that Olympic had a right to set-off and maintained that rent remained payable. ACG sought summary judgment.

Hamblen J rejected ACG’s application for summary judgment. (1) Olympic did have at least a real prospect of succeeding in making out their case that the conclusive effect of the acceptance of the aircraft was limited to the right of rejection and did not extend to the right to claim damages. The contract did provide that signature of the Certificate of Acceptance constituted deemed delivery, but not that the certificate would constitute conclusive proof that the aircraft complied with the delivery clause; it did not create an estoppel against Olympic in respect of alleging breach of the delivery clause. (2) In relation to total failure of consideration, on Olympic’s case, ACG purported to deliver not merely an aircraft that was unairworthy and incapable of operation in commercial service at the time of delivery, but also incapable of being put into an airworthy condition or rendered capable of operation in commercial service without repairs which would exceed the value of the aircraft. That was such a fundamental failure to provide what was bargained for that Olympic did have a real prospect of making out a case for total failure of consideration.

 

Image: Tim Beach / FreeDigitalPhotos.net

Be Sociable, Share!