Gasl Ireland Leasing A-1 Ltd v Spicejet Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Foxton |
| Judgment Date | 10 May 2023 |
| Neutral Citation | [2023] EWHC 1107 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2020-000856 |
[2023] EWHC 1107 (Comm)
Mr Justice Foxton
Case No: CL-2020-000856
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Philip Shepherd KC and Erin Hitchens (instructed by Watson Farley & Williams LLP) for the Claimant
The Defendant did not appear and was not represented
Hearing date: 3 May 2023
Draft Judgment Circulated: 4 May 2023
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HONOURABLE Mr Justice Foxton
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Wednesday 10 May 2023 at 10:30 am.
The Honourable
This is a straightforward claim arising under a commercial aircraft lease dated 10 May 2017 ( the Lease) of a Boeing 737–800 aircraft bearing manufacturer's serial number 29670 ( the Aircraft), fitted with two engines bearing manufacturer serial numbers 892380 and 892381 ( the Engines, and respectively Engine 380 and Engine 381). The Aircraft was leased to the Defendant ( SpiceJet), which operates a low-cost airline based in India. There is no longer any dispute that the Claimant ( GASL) is now the lessor under the lease (following a determination to that effect in these proceedings by Mr Simon Salzedo KC, sitting as a Deputy Judge of the High Court ( GASL Ireland Leasing A-1 Limited v SpiceJet Limited [2022] EWHC 382 (Comm)).
The Lease provides for the application of English law and the exclusive jurisdiction of the High Court of England and Wales. It also contained a number of provisions which are standard in aircraft leases of this kind relating to the payment of rent and the conditions which the Aircraft had to meet when redelivered back to the lessor at the end of the Lease (which I will refer to as the Redelivery Conditions).
GASL commenced proceedings against SpiceJet relating to the alleged non-payment of rent and the alleged failure to comply with the Return Conditions. On 18 February 2022, GASL obtained summary judgment on the claim for outstanding rent in the sum of US$5,334,121.25. This hearing concerns the balance of its claim arising from the alleged non-compliance with the Redelivery Conditions.
The proceedings
SpiceJet was served with these proceedings in accordance with the terms of the Lease. Through the well-known firm of solicitors, Reed Smith LLP ( Reed Smith), SpiceJet acknowledged service, and it made no challenge to the court's jurisdiction. For the major part of the proceedings, SpiceJet was represented by Reed Smith and by leading and junior (and then junior) counsel. On 28 February 2023, both solicitors and counsel for SpiceJet came off the record for non-payment of fees.
The Adjournment and Amendment Applications
SpiceJet applied to adjourn the hearing, relying in that context on the fact that it no longer had legal representation and on the fact that on 4 April 2023, GASL indicated its intention to seek permission to re-amend the Particulars of Claim. I considered SpiceJet's application for an adjournment and GASL's application for permission to amend at the start of the hearing. I refused SpiceJet's application for an adjournment and allowed GASL's application for permission to amend. I repeat the substance of my reasons for doing so in this section of this judgment.
In considering the adjournment application, it is important to note the position SpiceJet is now in:
a. The Defence does little more than put GASL to proof of its claim or deny breach of the Lease in general terms, without complying with CPR 16.5(2) or advancing any alternative version of events. This is also true of the Amended Defence, which admits many of the complaints made by GASL about the aircraft's physical condition on redelivery while maintaining a bare denial of GASL's case.
b. SpiceJet has served no factual witness evidence.
c. SpiceJet has served no expert evidence.
It has been a hallmark of the case to date that SpiceJet has sought to delay the timetable whenever possible:
a. It opposed GASL's application to serve Particulars of Claim of over 25 pages, and would not serve a defence until such permission had been granted. SpiceJet's defence to the Particulars of Claim (which were served on 22 March 2021) was not served until 10 June 2021.
b. SpiceJet refused to consent to minor amendments to the Particulars of Claim or agree the case memorandum or list of common ground prepared by GASL.
c. SpiceJet put forward an objectively unreasonable 8-day trial estimate, leading to a trial date being fixed in November 2021 for April 2023.
d. SpiceJet put forward no real answer to the rent claim, before raising a series of technical and unsuccessful points for the first time orally at the summary judgment hearing. That unsatisfactory behaviour led to the order for indemnity costs.
e. SpiceJet has repeatedly sought to adjourn hearings and delay procedural steps, including an attempt to adjourn the first CMC, two extensions for its amended defence, two extensions totalling 8 weeks for disclosure and two requests for an extension of time to serve its expert report. When GASL sought an order debarring SpiceJet from calling expert evidence, SpiceJet sought to adjourn the hearing listed before Mr Justice Bright on 17 March 2023 for two weeks.
Indeed, at the hearing before Mr Salzedo KC, SpiceJet admitted that it was, essentially, playing for time, its leading counsel submitting:
“So in one sense, it is true that SpiceJet does have a general commercial strategy of trying to get itself into a position to honour its proper obligations. Delay is a significant, but not the only, aspect of that. It is not a dishonourable delay, but rather the reverse. Sometimes creditors, who wish their due, must appreciate this and it is no use saying there is a ‘hell and high water’ obligation if there is no financial ability to satisfy it.”
SpiceJet sought to adjourn this trial on the basis that it needs time to find and brief new solicitors. However, there was no evidence from SpiceJet as to what steps (if any) had been taken to find legal representatives in the period of over 2 months since Reed Smith applied to come off the record on 21 February 2023. Further, the reality is that problems between SpiceJet and Reed Smith must have become apparent before then.
On 17 March 2023, Mr Sand, an in-house lawyer and company secretary of SpiceJet, appeared at the hearing before Mr Justice Bright and made submissions. Mr Sand informed the court that SpiceJet was in the process of instructing solicitors, finalising an expert report, and that the report would be ready in two weeks. Those predictions have not come to pass. That suggests the court must approach SpiceJet's explanations for why it says it is not ready for trial and its statements that it can be ready in six weeks with great circumspection.
On 13 April 2023, Mr Sand suggested an adjournment was justified because GASL had recently served proposed amendments to its claim, which were described as “substantial”. The principles relating to amendments are very clear. Parties are expected to consent to limited amendments which can comfortably be addressed at the trial. In this case, the amendments in question are very limited. As is frequently the case at the start of a trial, they bring the pleaded case as to quantum into line with the expert evidence served in accordance with the timetable to which SpiceJet agreed. They also rely on a provision which is standard in aircraft leases that the lessor can certify amounts due under the Lease, which is binding in the absence of manifest error, with the result that those amounts are recoverable as a debt. I was satisfied that it was appropriate to grant permission to amend, and that the attempt to seize on the proposed amendments as a basis for an adjournment was without merit and wholly opportunistic.
I was fully satisfied that it would not be appropriate to adjourn this long outstanding trial:
a. As I have explained, the application for the adjournment was the latest in a long-running series of attempts by SpiceJet to play for time. This came against the background of financial difficulties which have led to summary judgment being entered against SpiceJet (see for example Wilmington Trust SP Services (Dublin) Ltd v SpiceJet Ltd [2021] EWHC 1117 (Comm), referring at [70] to evidence that SpiceJet was “in a parlous financial state”, and similar submissions made by SpiceJet before Mr Salzedo KC).
b. The effect of such an adjournment would be to push this trial back for a substantial period of time, well into 2024, and not simply for 6 weeks as SpiceJet suggested. That would cause serious prejudice to GASL, who has been looking to recover amounts alleged to be due since early 2021, and disrupt other court users at a time when court resources are under considerable pressure.
c. The adjournment would involve significant wasted costs for GASL, in circumstances in which I have the gravest doubt as to SpiceJet's ability or willingness to pay them. SpiceJet has failed to pay the judgment of $5.34m entered against it on 18 February 2022 in respect of rent or the indemnity costs of $213,000 it was ordered to pay on that occasion.
d. There is nothing to suggest that SpiceJet's difficulties in meeting legal fees have been resolved since it parted company with Reed Smith, or that there is any prospect of it being better placed in 6 weeks or 6 months.
e. There is no evidence that SpiceJet is making serious attempts to prepare for trial.
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