Noble Caledonia Ltd v Air Niugini Ltd, Court of Appeal - Queen's Bench Division, May 12, 2017, [2017] EWHC 1095 (QB)

Issuing Organization:Queen's Bench Division
Actores:Noble Caledonia Ltd v Air Niugini Ltd
Resolution Date:May 12, 2017


Case No: HQ16X03968

Neutral Citation Number: [2017] EWHC 1095 (QB)



Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 12/05/2017

Before :


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Between :

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William Audland QC (instructed by Travlaw LLP) for the Claimant

Rupert Allen (instructed by Clyde and Co) for the Defendant

Hearing dates: 27 April 2017

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  1. The claimant Noble Caledonia (``NC'') is a tour operator which operates cruises in various parts of the world. Air Niugini Ltd (``ANG'') is the national airline of Papua New Guinea This claim relates to an ANG flight from Singapore to Port Moresby, which was to carry a number of NC's clients to embark on a cruise ship at Port Moresby, but which failed to be available for take off in time for them to do so. The flight was arranged by NC through Flight Directors Scheduled Services Limited (``FDL'') , which has an office near Gatwick Airport.

  2. There is a preliminary issue which I deal with in this Judgment, namely whether service has been effected on ANG by NC in accordance with Rule 6.9 of the Civil Procedure Rules. ANG is a company incorporated under the laws of Papua New Guinea. It follows that according to Rule 6.9 service may be effected upon it if it is served at a place within the jurisdiction where the company carries on its activities; or any place of business of the company within the jurisdiction. The defendant has issued an application under CPR Part 11 to strike out this claim in part on the basis that the claim was not validly served. It is the contention of the claimant that service was validly effected under Rule 6.9.

  3. The claim form was purportedly served by Mr Stephen Mason of the solicitors for NC on the 8th November 2016 by way of personal service on the general manager of FDL, Sally Malthouse. On that occasion Ms Malthouse told Mr Mason that she was not accepting service on behalf of ANG but that she would send the documents to them.

  4. It is common ground that ANG did not have an office of its own in the jurisdiction. The issue for this judgment is whether the FDL office is a place at which ANG was conducting its activities.

  5. I shall deal with matters as follows

    i) The nature of the claim

    ii) The evidence

    iii) The case for the Defendant

    iv) The case for the Claimant

    v) Discussion and conclusions.

    (i) The nature of the claim

  6. The claimant NC wished to arrange transport of 45 clients from Singapore to Port Moresby in Papua New Guinea, where they were going to join a cruise ship which was due to depart on the 12th February 2016 on a tour of Indonesia. The claimant NC contends that the contracts were formed by a series of requests for tickets made by them of the general sales agent of ANG, namely FDL. FDL have premises at their offices near Gatwick Airport on the Sussex/Surrey border. The claimant contends that it was an express term of the contracts made with ANG through FDL that the flight from Singapore to Port Moresby would take off from Singapore on the 11th February 2016 at 8:35pm and land in Port Moresby on 12th February 2016 at 5:09am, and in any event in good time for the clients of NC to depart on the cruise ship on 12th February 2016. It is also alleged that it was an implied term of the contract that the defendant ANG would take all reasonable steps to ensure that the Singapore to Port Moresby flight arrived on time, and if it did not, that the clients would be transported to Port Moresby to arrive as soon reasonably possible thereafter, and in any event within a reasonable time.

  7. The claimant alleges that ANG was in breach of the contract because the flight, which as I have indicated was meant to leave Singapore at 8:35pm on the 11th February 2016, was repeatedly delayed until it was cancelled at 6:00am on 13th February 2016. The delays were caused by the need to repair the aircraft.

  8. The claimant alleges that the cruise ship's departure from Port Moresby was delayed. The passengers could not have joined it by the latest time when it could have sailed, namely 14th February 2016. It could not be delayed until the 45 passengers would have arrived, with the result that the 45 passengers were left in Singapore, never being able to take the flight. It sailed on 13th February 2016. NC has compensated its clients. Its claim in these proceedings amounts to £649,091.79 made up by the amount of refunds and out of pocket expenses paid to their clients, together with the costs of repatriating the clients from Singapore to the United Kingdom and other relevant costs and expenses.

  9. The defendant has indicated that it will seek to contest the claim on various grounds. In particular, it is its case that the delays to the flight were permitted within the contract, because ANG was using its best endeavours to make the aircraft available for use.

    (ii) The evidence

  10. The claim form was purportedly served by Mr Stephen Mason of the solicitors for NC on the 8th November 2016 by way of personal service on the general manager of FDL, Sally Malthouse. On that occasion Ms Malthouse told Mr Mason that she was not accepting service on behalf of ANG but that she would send the documents to them.

  11. It is common ground between the parties that service could only be effected if the activities carried on by FDL are to be attributed to ANG. I have therefore received witness statements from the parties which address that issue. Much of the evidence concerns the activities of Ms Vikki Joyce, who is the Head of Sales and Marketing at FDL, a post which she has held for 18 years. She is also the Head of Sales in relation to the general sales agency operated by FDL on behalf of the defendant ANG. Much of the claimant's case depends upon its contention that Ms Joyce was effectively carrying on the activities of ANG in the United Kingdom. However to put those matters in context it is necessary to understand first what the legal relationship was between ANG and FDL.

  12. Ms Benneth Kome is the company secretary of ANG, a position which hse has held for six years. She works at the offices of ANG in Papua New Guinea (``PNG''). In her evidence she states that ANG is a company incorporated under the laws of PNG and operates its business as the national airline of PNG. ANG also carries on business in Australia and operates sales offices in Sydney, Brisbane and Cairns, and also maintains a sales office in Manila in the Philippines. Ms Kome says in her evidence that

    ``ANG does not, however, maintain any offices or carry on any business in the United Kingdom. Instead passengers around the world can book tickets on ANG flights through various different general sales agents located in a number of locations''

    which she then lists, and includes the United Kingdom as well as many other countries.

  13. The relationship between ANG and FDL is governed by a General Sales Agency Agreement dated 20th January 2011, with an addendum dated 21st April 2015, but effective from 1st April 2015.. According to that agreement;

    i) FDL is required to carry on its activities in its own name and must give notice to ANG of any change of name of its principal office (Article 3(3));

    ii) FDL is required to ``observe accurately all instructions and information in timetables, tariffs or otherwise'' and cannot ``vary or modify the terms and conditions set forth in the conditions of carriage or other publications'' of ANG. FDL is limited to selling tickets of the prices and on the terms set by ANG;

    iii) FDL does not have any power, discretion or authority to bind ANG to different terms. While FDL has access to ANG's electronic passenger reservation system (known as ``Mercator''), any booking is confirmed and tickets issued to customers by ANG by and through that system. If a client should approach FDL wanting a large number of seats or wanting a more competitive price, FDL have to contact ANG;

    iv) FDL is required to follow reasonable instructions given to it by ANG based on the applicable order and regulations of the appropriate authorities but, in the absence of such instructions, it is required to provide services ``in accordance with standard practices and procedures followed by the General Sales Agent in connection with its own operations'';

    v) the GSA (General Sales Agency) allows FDL to act as sales agents for other airlines and allows ANG to carry on business in the United Kingdom through its own representative or organisation, although it did not in fact do so;

    vi) remuneration of FDL is limited to commission on sales calculated in accordance with the terms of the agreement. There are no fixed regular payments made by ANG to FDL nor is there any contribution or reimbursement of FDL for the cost of its staff or the running costs of its offices or any other overheads.

  14. It is the belief of Ms Kome that FDL is carrying on its own business rather than the business of ANG in jurisdiction. She also states that FDL had no authority to negotiate any refunds in connection with the Noble Caledonia flight.

  15. Mr Paul Argyle is the owner and managing director of FDL. He has held that position for 29 years. In his evidence he describes how FDL acts as a General Sales Agent (``GSA'') to a number of airlines including Air Malta, Air Calin, Aerolineas Argentinas, Tianjin Airlines, RwandAir, Blue Air and Atlantic Airways as well as ANG. FDL commenced it relationship with ANG in 2003. The contract helps ANG generate revenue from customers in the United Kingdom market without the need for it to establish or maintain a place of...

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