Sabena Technics SA v Singapore Airlines Ltd. [2003] EWHC 1318 (Comm)

“Operators may develop alternate configuration items, and/or procedures in compliance with applicable operational rules. These alternate configurations and/or operational equivalents shall be approved in compliance with applicable operational rules, and are not included in this document.”

“Improved HPT lenticular seal. Incorporate at next HPT module exposure, but no later than 31/Dec/99.”

“The limit date for compliance is next shop visit in which the HPC is exposed, or no later than 4,000 cycles since new/refurbished HPC, but no later than 30/June/2000.”

“However, the DGAC would like to point out that other airworthiness authorities may proceed in a different manner regarding compliance to the CMP.”

“Configuration items listed in the DGAC approved CMP must be incorporated before the calendar end date specified in the text of the items. When a letter check, a shop visit or any maintenance action is indicated in the text, it corresponds to the most appropriate time to incorporate the configuration item, as determined by the manufacturer. It is expected that the configuration item will be incorporated at the first occurrence of the associated scheduled maintenance action. If for some reasons the operator is not in the position to do so, the operator may have to schedule a dedicated maintenance action to implement the item before the calendar end date. Pending the incorporation of a CMP configuration item, a temporary maintenance check or operational procedure may be required to maintain the level of reliability required for ETOPS. Such checks and procedures appear in the CMP with a cross-reference to the concerned configuration item. They must be adhered to until the configuration item has been effectively incorporated.”

“Each ETOPS CMP item requiring the incorporation of a design change through a Service Bulletin has a compliance end date in calendar time defined by the JAA experts through a risk analysis. ETOPS compliance is not invalidated so long as the end date for the CMP item is not exceeded. The CMP Document also indicates what is the best opportunity for incorporating each item, considering the access requirements and the complexity of the work to be done. This information is useful for maintenance planning purposes but does not constitute a legal limit to conduct ETOPS flights for the operator. It allows the operator to decide the optimum time for accomplishing the SB without losing the remaining service life of the engine part. The ETOPS operator is responsible to devise a retrofit schedule adapted to its maintenance methods and schedule within the limit of the specified end date. For example, SB PW7R4 72-382 for PW engines JT9D-7R4 E1 was a requirement for A310 aircraft ETOPS after 31 Dec 1999. This constituted the end date by which the retrofit of each ETOPS engine must have been completed, prior to the end date for this item, unmodified aircraft remained compliant with ETOPS in accordance with national requirements.”

“The ETOPS CMP Document for A310 aircraft, approved by DGAC France effectively prescribes that MODEL A310-222 with Engine PW JT9D-7R4 E1 500 must be modified to incorporate SB PW7R4 72-382 ‘At next HPT Module Exposure, but no later than 31/Dec/99’ This wording originates from a policy of the Authorities to define: - The best opportunity to incorporate the SB (This is usually at the occasion of a maintenance action when the parts are exposed). and - An end date, that must not be exceeded without a formal prior permission obtained from the responsible Authority (Authority of the operators country). When the SB cannot be incorporated at the occasion of the maintenance action considered as the best opportunity, we recommend to inform the national Authority and to let them know what are the reasons that make it impractical ie. Unavailability of parts or other industrial reasons. Our experience is that Authorities never object to a legitimate delay that stays within the specified end date. If the end date itself cannot be met, a formal permission from the Authority must be sought and the reasons must be very strong to obtain such permission. In such cases, Airbus and the engine manufacturer may have to provide technical data to support the operator’s demand.”

“If your clients wish to prove the contrary, they will have to provide us/our clients with details as to date, method and proof of compliance. Our clients suggest that “dirty finger print” copies are produced.”

“What is clear from that case is that the answer to the question warranty or no warranty cannot be given by looking simply at the words which are used. How must the respective parties have regarded the representation when it was made? How were they then related respectively to the subject matter? What was the purpose of making the representation and might it influence the outcome of what was in negotiation between the parties? The answers to these questions will provide the touchstone for answering the ultimate and critical question, did the representation made found a warranty by the party making it?”

“In determining whether it was so intended, a decisive test is whether the vendor assumes to assert a fact of which the buyer is ignorant, or merely states an opinion or judgment upon a matter of which the vendor has no special knowledge, and on which the buyer may be expected also to have an opinion and to exercise his judgment.”

“With all deference to the authority of the Court that decided that case, the proposition which it thus formulates cannot be supported. It is clear that the Court did not intend to depart from the law laid down by Holt CJ. And cited above, for in the same judgment that dictum is referred to and accepted as a correct statement of the law. It is, therefore, evidence that the use of the phrase ‘decisive test’ cannot be defended. Otherwise it would be the duty of a judge to direct a jury that if a vendor states a fact of which the buyer is ignorant, they must, as a matter of law, find the existence of a warranty, whether or not the totality of the evidence shows that the parties intended the affirmation to form part of the contract; and this would be inconsistent with the law as laid down by Holt CJ. It may well be that the features thus referred to in the judgment of the Court of Appeal in that case may be criteria of value in guiding a jury in coming to a decision whether or not a warranty was intended; but they cannot be said to furnish decisive tests, because it cannot be said as a matter of law that the presence or absence of those features is conclusive of the intention of the parties. The intention of the parties can only be deduced from the totality of the evidence, and no secondary principles of such a kind can be universally true.”

“…the test is whether on the totality of the evidence the parties intended or must be taken to have intended that the representation was to form part of the basis of the contractual relations between them.”

“Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result of thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect therefore had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true.”

“Many cases may be put in which it is plainly immaterial that at the commencement of an action for a breach of contract the plaintiff is in fact no worse off than he would have been if the contract had been performed. Charity, insurance, an alteration or market values, may have recouped or nullified his loss. Or it may be proved that the plaintiff, if he acted as a prudent man in his own interest, would, at the end of the defendant’s term, have pulled down the house, even though duly repaired, and built a different kind of structure, so that the repairs if done would have been of no value; but he chooses to relet the house in its existing state. In such a case it could hardly be contended that he might not recover substantial damages. The person whose breach of contract has caused damage is not the less liable because the damage has been made good, or its effect compensated by an extraneous event of such a kind that if it had operated the other way it would not have increased his legal liability. Nor does it seem to us that the relation between the plaintiff and the defendant is directly, if at all, affected by the terms of an agreement made by the plainiff with a third person before the expiration of the defendant’s term. That agreement might be rescinded, or might never be performed. When it was made the parties to it could not foresee, and did not contract on the basis, that there would at the end of the defendant’s term be any breach of the contract to deliver up in repair. It must be not the making but the performance of the new agreement to which the supposed effect would be attributable. But if so, then at the moment of the termination of the defendant’s tenancy, and before the new agreement was performed, a cause of action vested in the plaintiff against the defendant, and this could not be taken away or affected by the subsequent res inter alios acta.” 132. In the Court of Appeal Lord Esher MR observed at pages 43-44: “The rule that the measure of damages in such cases is the cost of repair, is, I think, at all events, the ordinary rule, which must apply, unless there be something which affects the condition of the property in such a manner as to affect the relation between the lessor and the lessee in respect to it. They arose from a relation, the result of a contract between the plaintiff and a third person, to which the defendant was no party, and with which he had nothing to do. In my opinion the contract between the plaintiff and the third person cannot be taken into account; it is something to which the defendant is a stranger. So, also, anything that may happen between the plaintiff and the third person under that contract after the breach of covenant is equally matter with which the defendant has nothing to do, and which cannot be taken into account. These are matters which might or might not have happened, and, so far as the defendant is concerned, are mere accidents. The result is that there is nothing to prevent the application of the ordinary rule as to the measure of damages in such a case.”

“… with regard to the covenants as to alterations, &c, contained in that lease, how can such covenants, which are unperformed at the date of the vesting of the plaintiff’s right of action, take away or modify the right of action which so vested? I will assume that there is a covenant in the second lease to put the premises into the same state of repair as was required by the first lease. But, even so, how can it affect the case any more than an agreement with a builder to do the repairs? It appears to me that it is res inter alios acta, with which the lessee has nothing t do and which he is not entitled to set up. Then, thirdly, how can subsequent performance by the second lessee of the covenants which he has entered into abridge or take away the cause of action that vested in the lessor before the second lease took effect? I can see no ground for thinking that it can do so. As a general rule, I conceive that, where a cause of action exists, the damages must be estimated with regard to the time when the cause of action comes into existence.”

“The principal authority relied upon by McAlpine in support of the proposition that the contracting party suffers no loss if they did not have a proprietary interest in the property at the time of the breach was The Albazero [1977] AC 774. The situation in that case was however wholly different from the present. The Albazero was not concerned with money being paid to enable the bargain, ie. the contract of carriage, to be fulfilled. The damages sought in The Albazero were claimed for loss of the cargo, and as at the date of the breach the property in the cargo was vested in another with a right to sue it is readily understandable that the law should deny to the original party to the contract a right to recover damages for a loss of the cargo which had caused him no financial loss. In cases such as the present the person who places the contract has suffered financial loss because he has to spend money to give him the benefit of the bargain which the defendant had promised but failed to deliver. I therefore cannot accept that it is a condition of recovery in such cases that the plaintiff has a proprietory right in the subject matter of the contract at the date of breach.”