Aviation v Sayegh Group Aviation & Anor

A party cannot enforce a contract where it signed as agent for an identified principal different from the claimant. Contractual identity is determined by interpreting the agreement in its commercial and documentary context.

Apparent authority requires a representation by the alleged principal and reliance on that representation. Access to a company stamp, a close relationship with an owner, or limited authority to conduct other transactions will not, without more, establish authority to conclude a substantial contract. A condition precedent based on regulatory approval may suspend both performance and payment obligations. The parties may nevertheless owe implied obligations to co-operate in fulfilling the condition. Damages must be proved by reliable evidence and disclosure.

Galaxy Aviation, a Canadian partnership, claimed damages and declaratory relief under an aircraft lease agreement concerning five aircraft. The agreement named “Galaxy Aviation Canada” as lessee and “Sayegh Group Aviation” as lessor. It was signed for the alleged lessor by Mr Ramadan, an employee of a related paint business.

The claimant alleged that the defendants were bound through actual or apparent authority, ratification, or their own participation in the agreement. It also alleged non-delivery, failure to co-operate in obtaining aviation approvals, repudiation, and loss arising from an intended passenger service. The central issues were the identity of the contracting parties, Mr Ramadan’s authority, the effect of the regulatory approval clause, breach, and damages.

1. Contracting parties. The agreement was to be interpreted with the earlier agency agreement, which it superseded. “Galaxy Aviation Canada” naturally referred to the limited company Galaxy Aviation Co Ltd, not the claimant partnership. Since Mr Kabolinejad purported to act for an identified principal, neither he nor the claimant could claim the benefit of the contract as a different principal. The claimant was therefore not a party to the lease agreement (paras 72–82).
2. Lessor and authority. The sole lessor was SGAF. The reference to Mr Sayegh as owner, the use of masculine pronouns, and the claimant’s disputed assertion that he owned some aircraft did not make him a contracting party. Mr Ramadan had neither actual nor apparent authority. The evidence did not establish a relevant power of attorney or a representation by SGAF that he could enter into the lease. Apparent authority required representation and reliance; the claimant failed on both elements. Ratification also failed because there was no unequivocal adoption with knowledge of the material circumstances (paras 83–109).
3. Damages. The lost-profit claim was unsupported by adequate evidence, disclosure, or a sufficiently established prospect of obtaining the proposed passenger contracts. The wasted-expenditure claim was similarly unproved, with unexplained exchange rates, uncertain liability for expenditure, curious calculations, and no supporting documentation. The court would have awarded nominal damages only if liability had been established (paras 110–132, 147).
4. Regulatory condition and co-operation. Article 18 was not literal approval of the lease terms. It made performance, delivery, and the obligation to pay hire conditional on obtaining the necessary aviation authorisations. The lessors’ delivery obligation therefore arose only after the relevant approvals. Consistently with Chitty on Contracts, the agreement also carried implied obligations to take reasonable steps to co-operate in fulfilling the condition and obtaining airworthiness and operating approvals. No breach supporting the pleaded damages was proved (paras 134–146).
5. The claim was dismissed because the claimant was not party to the lease, neither defendant was bound by it, and no relevant breach was established. Declaratory relief would in any event have been refused.