Trident Turboprop (Dublin) Ltd v First Flight Couriers Ltd

An international supply contract within section 26 of the Unfair Contract Terms Act 1977 is excluded from the Act’s statutory controls over clauses restricting liability. This exclusion extends to clauses restricting liability or remedies for pre-contractual misrepresentation under section 3 of the Misrepresentation Act 1967.

Goods “will be carried” between states under section 26(4)(a) where, when contracting, both parties contemplate cross-border movement to achieve the contract’s commercial object. The supplier need not undertake delivery abroad. An aircraft may be “carried” by being flown under its own power.

The claimant leased two aircraft to the defendant under agreements made in England between parties carrying on business in different states. The agreements provided for delivery in England, but both parties knew that the aircraft were intended for use in India.

After the defendant stopped paying rent, the claimant terminated the leases and sought possession and damages. The defendant alleged pre-contractual misrepresentations and asserted a right to rescind. Aikens J granted the claimant summary judgment, holding that the leases were international supply contracts excluded from statutory control by section 26 of the Unfair Contract Terms Act 1977: [2008] EWHC 1686 (Comm).

The appeal concerned whether section 26 encompassed restrictions upon remedies for misrepresentation and whether the contemplated movement of the aircraft from England to India satisfied section 26(4)(a).

1. The appeal was dismissed unanimously. The leases were international supply contracts within section 26 of the Unfair Contract Terms Act 1977 and were excluded altogether from the Act’s statutory controls. The exclusion clauses therefore did not have to satisfy the requirement of reasonableness.

2. Moore-Bick LJ held that the limits referred to in section 26(1) included the reasonableness control applied to clauses restricting liability or remedies for misrepresentation through section 8 of the 1977 Act and section 3 of the Misrepresentation Act 1967. Section 3 of the 1967 Act was not an independent control surviving where the 1977 Act imposed none. A contrary construction would frustrate Parliament’s policy of excluding international supply contracts and would create an unjustified distinction between contractual and misrepresentation liability.

3. The expression “liability arising under” an international supply contract extended to damages and rescission for a pre-contractual misrepresentation. The statutory purpose supported that broad construction. Arden LJ added that section 13(1)(b) extended references to excluding liability so as to encompass the exclusion of rights and remedies. Section 1(2), by making Part I subject to Part III, also supported the primacy of section 26.

4. The leases satisfied section 26(3): possession of goods passed under them and the parties had places of business in different states. Sections 26(4)(b) and (c) were not satisfied because the agreements were made in England and provided for delivery there.

5. Section 26(4)(a) nevertheless applied. Goods “will be carried” between states where, at the time of contracting, the parties contemplate their cross-border movement to achieve the contract’s commercial object. The movement need not fulfil a contractual delivery obligation. Both parties knew that the aircraft would be taken to India for commercial use.

6. An aircraft may be “carried” between states even when flown under its own power. Parliament could not sensibly have intended to distinguish self-propelled vehicles from other goods. Waller LJ agreed with both judgments.

1. Court of Appeal (Civil Division): By [2009] EWCA Civ 290, unanimously dismissed the defendant’s appeal and affirmed the summary judgment.

2. High Court, Commercial Court: Aikens J granted the claimant summary judgment under CPR Part 24, holding that the leases fell within section 26 of the Unfair Contract Terms Act 1977: [2008] EWHC 1686 (Comm), also reported at [2009] 1 All E.R. (Comm) 16.