Post Office v British World Airlines Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 11 January 2000 |
| Judgment citation (vLex) | [2000] EWHC J0111-7 |
| Docket Number | Case No: 1996 Folio 508 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 11 January 2000 |
[2000] EWHC J0111-7
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr Justice Thomas
Case No: 1996 Folio 508
Mr Geoffrey Kinley (instructed by Clyde & Co). for the Claimants
Mr Robert Lawson (instructed by Beaumont & Son) for the Defendants
I certify that the attached text records my judgment and direct that no further note or transcript need be made.
The Hon Mr Justice Thomas
Copies of this judgment are available in Word 6 for Windows on provision of a clean disk; apply to the Clerk to Mr Justice Thomas: 0171 936 6339
Introduction
On the evening of 25 February 1994 a BAe Viscount 813 freighter aircraft left Edinburgh for Coventry with a cargo of mail consisting of parcels. It crashed 4 miles south of Uttoxeter and the aircraft and its cargo were totally destroyed; one of the crew was killed and the other injured.
The aircraft was owned by the defendants (BWA) who had entered into an agreement on 24 December 1993 with the first claimants (the Post Office) to carry mail on a round trip from Edinburgh to Coventry five nights a week. The mail to be carried was that provided by a subsidiary of the Post Office, the second claimant (Parcelforce). Parcelforce in its turn entered into contracts with the third to sixth claimants (Motorola, Burberrys, Wemyss Weavecraft and BT) for the carriage of parcels. No distinction was made between Parcelforce and the Post Office for the purposes of these proceedings and it is therefore convenient to refer solely to the Post Office as the interested party.
As a result of the accident and the destruction of the parcels being carried, the Post Office settled claims made by Motorola, Burberrys, Wemyss Weavecraft and BT. On 23 February 1996 the Post Office issued these proceedings against BWA seeking to recover £149,687.28 which they had paid by way of compensation. After the exchange of pleadings, Cresswell J on 5 March 1999 ordered the trial of two preliminary issues. One preliminary issue was whether the Post Office could maintain a claim under the contract between the Post Office and BWA in respect of the sums it had paid and, if so, for what amount. The other preliminary issue was whether the Post Office could bring an alternative claim against BWA under the Carriage by Air Acts (Application of Provisions) Order 1967 as amended (the 1967 Order).
As might be anticipated, the primary claim of the Post Office lay under the contract with BWA; it is therefore convenient to consider that claim first, though because of a provision of the contract, it will also be necessary to consider the 1967 Order and the legislation surrounding it in connection with the contractual claim.
The contract between the Post Office and BWA
The contract into which BWA and the Post Office entered followed an invitation to tender made by the Post Office and dated 25 November 1993. The terms of the tender made it clear that the Post Office was seeking tenders for the provision of an Air Charter Service between Scotland and Coventry. The specification stated that the Post Office wanted a quotation on the basis of a minimum payload of 5000kg and 1200 useable cu/ft of space on an aircraft; detailed conditions of contract were attached. BWA tendered, and their tender was accepted upon the basis of the specification and conditions sent by the Post Office.
Under the contract signed by the parties, BWA were to provide two BAe Viscount aircraft per night with each aircraft having a minimum load of 8000kg per sector and useable capacity of 2000 cu/ft to operate five days a week Monday to Friday (except for Bank and Public Holidays). The price payable per aircraft rotation was fixed irrespective of the amount of mail carried. The contract provided that the aircraft were to be painted and to have transfers applied to them, as required by the Post Office. The conditions of the contract made it clear that the aircraft were to be used exclusively for the Post Office, unless the Post Office agreed otherwise. It was common ground that the contract was in substance and form a charter.
The contract also made clear by clause 3 that the mail was to be at the risk of BWA from the moment at which it was accepted by them and loaded onto the aircraft until it was offloaded and accepted by the Post Office at the airport of arrival. The contract also contained a force majeure clause (clause 16).
The two most important clauses for the purposes of the preliminary issue were clauses 4 and 13.
4. Liability
The contractor shall be responsible for the loss, damage or violation of any item of Mail accepted by the contractor under this agreement and in the event that any such loss, damage or violation occurs, the Contractor shall be liable to pay to the Post Office in respect of each item so lost, damaged or violated, such sums of money as shall be equal to the amount which the Post Office shall, at its sole option and discretion, pay to the sender or addressee of such items as compensation, provided always that such amount shall not in any case exceed the maximum amounts payable by the Post Office under the Post Office Act 1969 (as amended).
The Contractor shall at all times by subject to the liabilities imposed by The Carriage of Air act 1961 (as amended).
13. Indemnity
The Contractor shall indemnify the Post Office against any action, loss, damage, claims, costs or expense of whatsoever kind arising as a result of any act or omission on the part of the contractor, its employees or agents in connection with the performance of its obligations under this Contract.
As can be seen from clause 4, there was a reference to sums that were payable by the Post Office under the Post Office Act 1969. It is therefore convenient next to refer to the general arrangements of the Post Office and the specific arrangements it had with Motorola, Burberrys, Wemyss Weavecraft and BT.
The schemes and contracts under which the Post Office carried mail
The Post Office Act 1969 created the Post Office as a statutory corporation; by s.7 it has power to provide postal services. Insofar as is relevant to these proceedings, the postal services provided by the Post Office were provided in one of two ways —under schemes and under contracts.
• Where a letter or package was carried by the Post Office without any contract between the Post Office and the sender, the letter or package was carried upon the terms of a scheme made under s.28 of the Act. Such schemes determined the charges, terms and conditions applicable to the postal service. One of the schemes was in respect of inland packets. Under the terms of that scheme, as I understand it, the Post Office accepted that where a packet was damaged or lost, it was to be presumed, unless the contrary was shown, that that loss or damage was due to the wrongful act, neglect or default of the Post Office or its agents or employees; this mirrored the liability under s.30(2) Act; the scheme provided for a scale of compensation. In 1994, the maximum payable was £1500 per item.
•There has, however, been a gradual trend for the Post Office to provide services under contract; each of the claimant customers of the Post Office had a contract.
•In the case of Motorola, Burberrys, and Wemyss Weavecraft, the contract entered into was on the terms of the Royal Mail Parcelforce 24 and Parcelforce 48 terms and conditions (Parcelforce 24/48 terms). Under those terms, the Post Office guaranteed a 24 or 48 hour delivery service and provided specific terms for loss or damage and insurance cover. Those terms were set out in condition 6:
6.1 The Customer acknowledges that the object of this Contract is to give the Customer, in return for posting Post Office Datapost/24/48 Parcels in bulk, a service which is not available to Customers posting Parcels under the relevant statutory scheme and that one of the benefits of the service is the availability of insurance cover in respect of Post Office Datapost/24/48 Parcels.
6.2 Neither [the Post Office] nor its officers, servants or agents, shall be liable to the Customer or any other person for any loss of or damage to any Parcel dealt with by [the Post Office] hereunder, or for any loss of or damage to the contents of any such Parcel or for any loss or damage arising from delay in the collection, conveyance or delivery of any such Parcel howsoever any such loss or damage of any of the foregoing kinds was caused and whether by the negligence of [ the Post Office] or its officers, servants or agents or otherwise.
6.3 The insurance cover arranged by [the Post Office] in respect of Post Office Datapost/24/48 Parcels includes insurance cover for the Customer's Post Office Datapost 24/48 Parcels whilst the same are being handled by [the Post Office] pursuant to this Contract and in the event of loss of or damage to such a Parcel the Customer shall whilst such insurance cover remains in effect, be entitled to claim compensation in respect thereof pursuant to that insurance cover and in accordance with the terms and conditions thereof.
6.4 [The Post Office] may at any time modify or withdraw these insurance arrangements.
6.5 …Under the Post Office 24 and 48 services, and subject to Conditions 6.3 and 6.4, the insurance covers loss of or damage to the Parcels or their contents, but not consequential loss caused by late delivery (as defined in the last preceding paragraph) or loss of or damage to the Parcels. Each Parcel is insured for a maximum value of £1,000 and a maximum limit of £1 million applies in respect of any one claim or series of claims.
6.6...
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