Analysis of Laroche v Spirit of Adventure Ltd - Case Study Example

Case Analysis Laroche v Spirit of Adventure (UK) Ltd, [2009] EWCA Civ 12, [2009] 2 All ER 175 Case Facts: This involves a defendant company that runs a business engaged in adventure experiences, including hot air balloon flights (Laroche v Spirit of Adventure (UK) Ltd, [2009] EWCA Civ 12, [2009] 2 All ER 175). In December 2001 the claimant received a voucher, bought by a friend, for a hot air balloon flight arranged by the defendant. On 20 August 2003 the claimant took his balloon flight, but sustained a serious personal injury when the balloon made a bumpy landing (Laroche v Spirit of Adventure (UK) Ltd, 2009). After such an incident, negotiations were made between the claimants then solicitors and the defendants insurers (Laroche v Spirit of Adventure (UK) Ltd, 2009). On 29 June 2004 the defendant went into voluntary liquidation (Laroche v Spirit of Adventure (UK) Ltd, 2009). The parties continued to negotiate (Laroche v Spirit of Adventure (UK) Ltd, 2009). On 27 October 2004 the defendants insurers stated to the claimant that they were not disputing liability (Laroche v Spirit of Adventure (UK) Ltd, 2009). In October 2005 however, the insurers changed their position and sought to avoid liability (Laroche v Spirit of Adventure (UK) Ltd, 2009). The defendant was dissolved on 8 March 2006 but was restored on 19 May 2006 to the register of companies with the intent of allowing proceedings to be brought by the claimant against the defendant (Laroche v Spirit of Adventure (UK) Ltd, 2009). On 8 August 2006 the claimant initiated the present proceedings against the defendant (Laroche v Spirit of Adventure (UK) Ltd, 2009). During the hearing of preliminary issues, the defendant argued that the claim was time-barred because it had not been brought within the two-year prescription period provided for by Article 29 of schedule 1 to the Carriage by Air Acts (Application of Provisions) Order 1967 (the 1967 Order) (Laroche v Spirit of Adventure (UK) Ltd, 2009). The claimant countered that the 1967 Order did not apply because: (1) the hot air balloon was not an “aircraft”, (2) the claimant was not being carried pursuant to a contract of “carriage”, and (3) the claimant was not a “passenger” (Laroche v Spirit of Adventure (UK) Ltd, 2009). The claimant added that if the 1967 Order applied, the effect of the defendants voluntary liquidation was to suspend the running of the two-year prescription period in Article 29, the defendant would then be estopped from relying on the prescription period (Laroche v Spirit of Adventure (UK) Ltd, 2009). At first instance, Eady J rejected all the claimants’ arguments and held that the claim was time-barred (Laroche v Spirit of Adventure (UK) Ltd, 2009). The claimant then obtained permission to appeal (Laroche v Spirit of Adventure (UK) Ltd, 2009). Issues: Whether the 1967 Order applied to the claim and in particular whether: (1) the hot air balloon was an “aircraft”, (2) the claimant was being carried pursuant to a contract of “carriage”, and (3) the claimant was a “passenger”. The claimant also sought permission to appeal against the judges refusal to hold that the effect of the voluntary liquidation of the defendant was to suspend the running of the two-year period in respect of the claim. Held: The Court of Appeals (Mummery, Dyson and Jacob LJJ) held that the 1967 Order applied to the claim, as the balloon was considered as an aircraft (Laroche v Spirit of Adventure (UK) Ltd, 2009). The fact that it was being used for recreational purposes was immaterial, as was the fact that it was not a regular or obvious means of international transport (Laroche v Spirit of Adventure (UK) Ltd, 2009). The balloon was capable of being used for international transport and was so used from time-to-time (Laroche v Spirit of Adventure (UK) Ltd, 2009). The Court also held that the claimant was being carried pursuant to a contract of carriage (Laroche v Spirit of Adventure (UK) Ltd, 2009). The claimants submissions that a contract of carriage involved agreement as to the point of departure and destination prior to embarkation, and that Council Regulation (EC) 2027/97 affected the interpretation of the 1967 Order was rejected (Laroche v Spirit of Adventure (UK) Ltd, 2009). The Court explained that the article does not say that “the two points” within the territory of a single state must be agreed beforehand for the purposes of the Convention (Laroche v Spirit of Adventure (UK) Ltd, 2009). Furthermore, it explained that Regulation 2027/97 could have no application in the present case because the defendant has not been a Community air carrier at any material time and because the flight did not involve carriage between different airports (Laroche v Spirit of Adventure (UK) Ltd, 2009). The Court also held that the claimant was a passenger (Laroche v Spirit of Adventure (UK) Ltd, 2009). A passenger was someone who was not regarded as contributing to the carriage of himself or the other persons on board, and who was on the aircraft for the predominant purpose of being conveyed from one place to another (Laroche v Spirit of Adventure (UK) Ltd, 2009). The fact that the claimant just went for the ride and the destination was to a large extent unpredictable was immaterial to whether he was carried as a passenger (Laroche v Spirit of Adventure (UK) Ltd, 2009). The predominant purpose of the journey was to be carried by air from the starting point to the destination point, wherever that turned out to be (Laroche v Spirit of Adventure (UK) Ltd, 2009). The claimant was not a member of the crew and did not contribute to the flight in any way (Laroche v Spirit of Adventure (UK) Ltd, 2009). As between the claimant and the defendant, the purpose of the hot air balloon flight was to carry the claimant as a passenger (Laroche v Spirit of Adventure (UK) Ltd, 2009). The Court cited that the judge had been correct in holding that the voluntary liquidation of the defendant did not suspend the running of the two-year prescription period (Laroche v Spirit of Adventure (UK) Ltd, 2009). Although the commencement of a voluntary liquidation stopped time for bringing proceedings under English law, Article 29(2) did not permit the two-year period to be suspended, interrupted or extended by reference to domestic law (Laroche v Spirit of Adventure (UK) Ltd, 2009). The signatories to the Warsaw Convention intended that, in the interests of certainty, all claims under the Convention would be extinguished at the expiry of the two-year period (Laroche v Spirit of Adventure (UK) Ltd, 2009). Hence, in answering the issue of whether the action had been brought within the two-year period, the Court’s view was that it was clear that the signatories to the Warsaw Convention intended to adopt the Italian proposal that, in the interests of certainty, at the expiry of the two-year period, all claims under the Convention would be “extinguished” and that the only matters for determination by the court seised of the matter would be determination of the dates and whether the action was brought within the two-year period (Laroche v Spirit of Adventure (UK) Ltd, 2009). This was said to be a powerful indicator that the words of Article 29(1) mean what they say and that the two-year period is not subject to suspension, interruption or extension in any circumstances (Laroche v Spirit of Adventure (UK) Ltd, 2009). In interpreting Article 29(1), the Court explained that the object of the Convention was to have “a uniform international code, which could be applied by the courts of all the high contracting parties without reference to the rules of their own domestic law” (Laroche v Spirit of Adventure (UK) Ltd, 2009). As regards the argument of US jurisprudence, the Court pointed out that decision of New Pentax Films Inc v Trans World Airlines Inc was a first instance decision (Laroche v Spirit of Adventure (UK) Ltd, 2009). In the subsequent decision of Fishman v Delta Air Lines Inc 132 F.3d 138 (1998), the Court of Appeals of the same circuit rejected the proposition that Article 29(2) permitted the limitation period to be determined in accordance with the lex fori (Laroche v Spirit of Adventure (UK) Ltd, 2009). The Court explained that, although New Pentax does not appear to have been cited in Fishman, the latter is a decision of a superior court. Fishman was then accorded with a considerable body of jurisprudence from the courts of other signatories to the Convention (Laroche v Spirit of Adventure (UK) Ltd, 2009). Finally, the Court stated that the Parliament gave the Convention the force of law domestically without modification (Laroche v Spirit of Adventure (UK) Ltd, 2009). Pursuant to Section 10, the Convention was then extended to domestic carriage by the 1967 Order (Laroche v Spirit of Adventure (UK) Ltd, 2009). The exclusivity of both schemes was held not to be in dispute. Hence, the Court refused permission to appeal and thus, dismissed the appeal (Laroche v Spirit of Adventure (UK) Ltd, 2009). Commentary Nigel Tomkins comments that the claimant was caught out “by the complexities of international conventions and their impact on UK law” (Tomkins, 2009). It opined that, “this was not a case concerning the Warsaw Convention because this was domestic air travel (the journey started and landed, albeit heavily, in England)” (Tomkins, 2009). He said that, being such, “it was not actually subject to the Convention which like its successor the Montreal Convention actually governs international air travel” (Tomkins, 2009). He explained that the Parliament, however “decided to standardise the provisions for domestic as well as international air travel with the Carriage by Air Act (Application of Provisions) Order 1967 Sch.1 to the 1967 Order so that ostensibly there was no distinction caused by geography” (Tomkins, 2009). It was Art.29 of that Order that provided the limitation period of two years (Tomkins, 2009). Hence, Tomkins summarises the case in the following manner: 1. “If it flies and carries passengers it is likely to be an ‘aircraft’.” 2. “International conventions do not just impact on ‘international’ accidents.” 3. “Two year, convention based, limitation periods cannot be extended.” 4. “Specialist law is best probably left to specialist lawyers.” Mark Harvey, another author, also comments that this wasnt a case concerning the Warsaw Convention because, like Tomkins’ explanation, this was domestic air travel (Harvery 2008). He also explained that “the Parliament decided to standardise the provisions for domestic as well as international air travel with Sch.1 to the Carriage by Air Act (Application of Provisions) Order 1967” (Harvery 2008). He explains that the judge in this case applied the same interpretation to non-international rules as that to the international ones and applied the established jurisprudence that they provide exclusive jurisdiction as decided by the Lords in Sidhu v British Airways Plc [1997] A.C. 430. The Sidhu case however as weakened by a decision in New Zealand in DanzasAG v Hally Press Ltd [2005] 3 NZLR 146, wherein the Court of Appeal permitted a Warsaw Convention claim “erroneously commenced in the High Court in its Admiralty jurisdiction to be transferred to the Courts civil jurisdiction” even “after the two year limitation period had expired,” and stated that “while there was an irregularity of procedure, there was no nullity” (DanzasAG v Hally Press Ltd [2005] 3 NZLR 146). Harvey also cites the claimant’s argument of Regulation 2027/97, which provided that “information about the Warsaw Convention should be set out in the “ticket document” in plain and intelligible language,” to support the argument that “because the terms and conditions of the contract had not referred to the Convention it could not be applied” (Harvery 2008). Harvey explains that the judge rejected such argument, as he relied upon the views of Nelson J. in the first DVT litigation decision where it was explained that the “EC Regulation did not create a separate action where the Convention did not provide a remedy” (Harvery 2008). Harvey then comments that practitioners are now tied between the necessity of the application of the Warsaw and now Montreal Conventions to accidents arising out of air travel (which extends also to embarking and disembarking and may therefore even include accidents in the airport terminal subject to the facts) (Harvery 2008). He says that this is further “compounded by the common misconception that the shorter limitation period is only different to the more common one of three years in time period” (Harvery 2008). He explains that “this limitation is not a defence but is actually an extinguishing of the claimants right of action which cannot be extended by agreement, by the court or be suspended by the Claimants minority or incapacity, similar to the 10-year Consumer Protection Act limitation period” (Harvery 2008). He further explained that the claimant’s argument that “he could have the benefit of s.651 of the Companies Act 1985 in excluding the period post dissolution of the defendant company until restoration and so come back within the two year period cannot hold as the two-year period had expired even before the dissolution” (Harvery 2008). Harvey also commented that the claimant’s argument that “the defendant was estopped from relying on the Convention and its two-year limit because it had been dealing with the claim in negligence and breach of contract,” will not hold as it also “failed through the exclusivity of the Convention” (Harvery 2008). References Carriage by Air Act (Application of Provisions) Order 1967 Sch.1. DanzasAG v Hally Press Ltd [2005] 3 NZLR 146. Harvey, Mark (2008). Personal Injury. Journal of Personal Injury Law 2008, 3, C143-147. Sweet & Maxwell and its Contributors, 2010. Laroche v Spirit of Adventure (UK) Ltd, [2009] EWCA Civ 12, [2009]. Sidhu v British Airways Plc [1997] A.C. 430. Tomkins, Nigel (2009). Personal Injury. Journal of Personal Injury Law 2009, 2, C67-70. Sweet & Maxwell and its Contributors, 2010. Read More