VIRGIN AVIATION TM LIMITED & Anor. v ALASKA AIRLINES INC (formerly VIRGIN AMERICA INC)

Permission to appeal should be refused where the proposed grounds have no realistic prospect of success. “Realistic” means more than fanciful. A challenge to contractual construction will generally fail where it repeats arguments considered and rejected at trial, particularly where the decision depends materially on factual findings with which an appellate court is unlikely to interfere. Separate proposed grounds should be assessed independently. Permission may be refused where those grounds are hopeless and do not depend on the outcome of the principal issue.

The court had previously given judgment on the parties’ contractual dispute on 16 February 2023. The defendant applied for permission to appeal. It alleged that the court had misapplied the principles of contractual construction by giving insufficient weight to particular contractual provisions, the nature of the minimum royalty, the factual and statutory background, commercial common sense, the defendant’s commercial position, and termination and relicensing rights.

The claimants opposed permission, relying on the court’s factual findings and its conclusion that their construction was clearly correct. The outstanding issue was whether the proposed appeal had a realistic prospect of success.

1. Permission refused. The defendant’s proposed appeal had no realistic prospect of success. A realistic prospect means more than a fanciful prospect.
2. The proposed grounds substantially repeated the arguments advanced at trial. Those arguments had been fully considered and rejected. The judge remained in no doubt as to the correctness of the decision.
3. The decision concerned contractual construction. It was also based, at least to some extent, on factual conclusions, including findings concerning the commercial and statutory background to the current agreement. That made permission less appropriate because an appellate court would be unlikely to interfere with those findings.
4. The defendant’s criticisms concerning the contractual provisions, the minimum royalty, the factual background, business common sense, the duration of the payment obligation, and termination and relicensing rights did not establish an arguable error with a realistic prospect of success.
5. The proposed appeals on Issues 2 and 3 were hopeless. In any event, permission would have been refused because the outcome on those issues was not dependent on the answer to Issue 1.

The court had previously given judgment in the contractual dispute on 16 February 2023. In this judgment, the High Court refused the defendant permission to appeal.