Odyssey Aviation Ltd v GFG 737 Ltd

A contractual warranty as to title expressed to apply “at Delivery” concerns the contractual delivery event, not the earlier scheduled delivery date. Where the parties contemplate simultaneous back-to-back sales, that structure does not itself prevent the seller acquiring and transferring title through the same closing. A buyer relying on a condition precedent requiring receipt of documents or evidence must take reasonable steps to obtain them and notify the seller if they remain outstanding. Failure to do so may prevent reliance on the condition as a termination ground. A payment obligation which must precede pre-positioning of an aircraft makes the positioning obligation conditional on payment. The buyer cannot rely on the seller’s non-positioning when the buyer has not paid. The court granted summary judgment where the contractual construction and undisputed facts left no real prospect of a successful defence.

Odyssey agreed to sell a Boeing Business Jet to GFG under an aircraft sale and purchase agreement. The aircraft was then owned by a third party, and the transaction was structured as a contemplated simultaneous purchase and resale through an escrow agent.

GFG purported to terminate the agreement, alleging breach of the title warranty and non-fulfilment of conditions precedent concerning authorisation, positioning, International Registry evidence and back-to-birth bills of sale. GFG sought repayment of the deposit. Odyssey subsequently terminated for GFG’s failure to pay the balance of the price and the escrow fee, and sought the deposit.

Both parties applied for summary judgment under CPR rule 24.2. The central issues were the construction and effect of the title warranty, the conditions precedent, and the parties’ rights to terminate.

1. Summary judgment. The court applied the principles explained in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and considered the caution in TFL Management Services Ltd v Lloyds TSB Bank plc [2013] EWCA Civ 1415; [2014] 1 WLR 2006. The issues could fairly be determined without a trial because they principally concerned the meaning and effect of the agreement.
2. Title warranty. Clause 6.1 warranted that Odyssey held, and was free to convey, good title free from relevant security interests at Delivery. “Delivery” was a defined event involving the passing of title and delivery of the bill of sale. It was not the same as the separately defined Scheduled Delivery Date. Since Delivery never occurred, the warranty was not breached.
3. The agreement and the escrow terms contemplated simultaneous back-to-back transactions. Nothing in the agreement prohibited Odyssey from acquiring the aircraft from Toerama and simultaneously reselling it to GFG.
4. Implied term. Where a condition precedent required GFG to have received a document, evidence or confirmation, but did not impose on Odyssey an obligation to supply it, GFG had to take reasonable steps to obtain it and notify Odyssey, reasonably in advance of the Scheduled Delivery Date, if it remained outstanding. Without those steps, GFG could not rely on non-receipt as a termination ground.
5. Execution of the agreement by both parties, despite the absence of evidence of authorisation, constituted a written waiver of reliance on that non-receipt and, alternatively, gave rise to estoppel by convention.
6. GFG’s payment obligation under clause 5.1(a)(iii) had to precede any pre-positioning flight. The positioning condition therefore presupposed payment. In any event, GFG could not rely on non-positioning while itself failing to pay, applying Alghussein Establishment v Eton College [1988] 1 WLR 587.
7. The back-to-birth bills of sale meant those existing by the Scheduled Delivery Date. The bill of sale from Toerama to Odyssey would arise only on simultaneous completion and its absence did not breach clause 2.4(g).
8. GFG was not entitled to terminate on 20 July 2018. Odyssey’s termination on 21 August 2018 was valid. Odyssey’s application was allowed, GFG’s application was dismissed, and Odyssey was entitled to the deposit.