Gahan v Emirates, Court of Appeal - Civil Division, October 12, 2017, [2017] EWCA Civ 1530

Issuing Organization:Civil Division
Actores:Gahan v Emirates
Resolution Date:October 12, 2017
 
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Neutral Citation Number: [2017] EWCA Civ 1530

Case No: B2/2016/2856 & B2/2017/0942

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM LIVERPOOL COUNTY COURT

DISTRICT JUDGE BENSON

AND

ON APPEAL FROM LIVERPOOL COUNTY COURT

DISTRICT JUDGE BALDWIN

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 12/10/2017

Before :

LADY JUSTICE ARDEN

LORD JUSTICE LEWISON

and

LORD JUSTICE McCOMBE

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Between :

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Brad Pomfret (instructed by Hughes Walker Solicitors) for the Appellant in the first appeal and the Respondent in the second appeal

Tim Marland (instructed by DLA Piper Solicitors) for the Respondent in the first appeal and the Appellant in the second appeal

Iain McDonald and Anna Medvinskaia (instructed by Civil Aviation Authority) for the First Intervener

Robert Lawson QC (of Clyde & Co LLP) for the Second Intervener - written submissions only

Hearing dates: 26-27 July 2017

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Judgment ApprovedLADY JUSTICE ARDEN :

  1. AIR PASSENGERS' EU LAW RIGHT TO COMPENSATION FOR FLIGHT DELAY

    1. Sturgeon and Regulation 261

    1. In (C-402/07 and C-432/07) Sturgeon v Condor Flugdienst GmbH [2009] ECR 1-10923, the Court of Justice of the European Union (``CJEU'') held, by applying the principle of equal treatment, that airline passengers had a right to compensation in the event of delay under Regulation (EC) No 261/2004 (``Regulation 261'') even though there was no express provision in Regulation 261 to that effect. These appeals concern claims for such compensation.

    2. Regulation 261, as interpreted by the CJEU, establishes common rules on compensation and assistance to passengers in the event of denied boarding, cancellation or delay of three or more hours. It distinguishes between passengers on flights operated by Community carriers and passengers on flights operated by other carriers (``non-Community carriers''), according to whether the carrier's operating licence is issued in the EU or elsewhere. Where the carrier is a non-Community carrier, Regulation 261 only applies to passengers on flights leaving from an EU airport (Article 3).

    3. Regulation 261 gives passengers different rights for three types of disruption: denied boarding, cancellation and long flight delay. The rights include a right to compensation (Article 7), a right to reimbursement and rerouting (Article 8) and a right to care and assistance (Article 9). Following Sturgeon, compensation is also payable where there is a delay of three hours or more on arrival at final destination. However, it is scaled with regard to the flight distance: €250 (all flights of 1500 kilometres or less), €400 (intra-Community flights of more than 1500 kilometres, and all other flights between 1500 and 3500 kilometres) and €600 (all other flights) (Article 7(1), Sturgeon [61]). Where the delay is more than three hours but less than four hours, the operator may reduce those amounts by 50% (Article 7(2), Sturgeon [63]).

    4. The carrier involved in both appeals before us is Emirates, which is established in the Emirate of Dubai, United Arab Emirates, and is a non-Community carrier.

    5. The principal issues are whether the right to compensation against a non-Community carrier is available at all if the flight is to a destination outside the EU, and whether the right to compensation can take account of delay on a connecting flight starting or ending outside the EU. The Liverpool County Court, from which both appeals come, reached conflicting views on these questions.

    6. As the regulator of civil aviation, the Civil Aviation Authority (``the CAA'') and the International Air Transport Association (``IATA''), a representative body of airlines worldwide, have been given permission to intervene in these appeals.

    2. The passengers in these appeals and their flights

    7. The key difference between the two appeals is the amount of delay on the flights out of EU airspace (flight 1).

    Miss Gahan

    8. The appellant in the first appeal, Miss Thea Gahan, made a single booking with Emirates to travel from Manchester to Bangkok via Dubai. Her flight from Manchester to Dubai (flight 1) (a distance of some 5,652.02 km) was delayed so that it arrived in Dubai 3 hours 56 minutes late. She missed her connecting flight (flight 2) and arrived in Bangkok 13 hours 37 minutes after her originally scheduled arrival time.

    9. Miss Thea Gahan sought compensation under Regulation 261, Article 7 for the delay. District Judge (DJ) Benson dismissed her claim. Emirates accepted that flight 1 fell within Regulation 261 but contended that was the only flight within the scope of Regulation 261. The judge took the view that flight 2 had to be viewed separately from flight 1. He followed the decision of Proudman J in Sanghvi v Cathay Pacific Airways [2012] 1 Lloyd's Rep 46. Emirates offered to pay €300 by reference to the delay on flight 1. DJ Benson agreed that no further compensation was payable. Ms Gahan appeals from that order.

    Mr Darren Buckley, Mrs Karen Buckley and Mr Jordan Buckley

    10. Mr Darren Buckley, Mrs Karen Buckley and Mr Jordan Buckley (together the Buckleys) made a single booking with Emirates to travel from Manchester to Sydney via Dubai. The first flight (flight 1) to Dubai was delayed 2 hours 4 minutes with the result that the Buckleys arrived in Dubai only 46 minutes before their connecting flight. They were automatically rebooked on to a flight the following day (flight 2). After a further delay of 16 hours 39 minutes, they arrived in Sydney.

    11. The Buckleys brought proceedings for compensation under Regulation 261, Article 7. Emirates again contended that only flight 1 was within the scope of Regulation 261 and that, since that flight was delayed less than three hours, no compensation was payable. DJ Baldwin disagreed and awarded the Buckleys compensation of £505.31 each, being the sterling equivalent of the compensation provided for by Article 7 on the basis of flights 1 and 2. DJ Baldwin noted that Regulation 261 referred to ``flights'' rather than ``journeys''. On the other hand, it also referred to ``final destination'' (Article 7(2)). He carefully analysed a number of decisions of the CJEU, and he rejected Emirates' argument that flight 2 should be disregarded because it started and ended outside the EU and because to take it into account would give Regulation 261 extra-territorial jurisdiction. He accepted the argument for the Buckleys that the delay on flight 2 was merely the consequence of the delay on flight 1, which departed from an airport within the EU, which brought it within the scope of Regulation 261. That Regulation was aimed at protecting passengers and so should be interpreted to give effect to that purpose. Emirates appeals from the order of DJ Baldwin.

    12. I will refer to Miss Thea Gahan and the Buckleys together as ``the Passengers''.

    3. Summary of the relevant provisions of regulation 261

    13. Recitals (1) and (2) explain that the purpose of Regulation 261 is to afford a high level of protection for passengers, including protection against the inconvenience caused by delay to flights:

    (1) Action by the Community in the field of air transport should aim, among other things, at ensuring a high level of protection for passengers. Moreover, full account should be taken of the requirements of consumer protection in general.

    (2) Denied boarding and cancellation or long delay of flights cause serious trouble and inconvenience to passengers.

    14. Article 2 defines the ``final destination'' of a flight as follows:

    (h) "final destination" means the destination on the ticket presented at the check-in counter or, in the case of directly connecting flights, the destination of the last flight; alternative connecting flights available shall not be taken into account if the original planned arrival time is respected;

    15. Article 3(1) of Regulation 261 defines the scope of the Regulation, which is to apply:

    (a) "to passengers departing from an airport located in the territory of a Member State to which the Treaty applies"; and

    (b) "to passengers departing from an airport located in a third country to an airport situated in the territory of a Member State to which the Treaty applies, unless they received benefits or compensation and were given assistance in that third country, if the operating air carrier of the flight concerned is a Community carrier"

    16. Articles 4 and 5 set out the passenger's rights in respect of denied boarding and cancellation respectively, which include but are not limited to the right to compensation.

    17. Regulation 261 does not explicitly grant a right to compensation for delay but the CJEU interpreted it as having this effect in Sturgeon. In that case, the CJEU decided that a passenger, travelling on a Community carrier on a flight from Frankfurt to Toronto and who suffered a delay of more than three hours, could claim financial compensation as well as to be provided with care and assistance. The CJEU held that Articles 5, 6 and 7 of Regulation 261:

    must be interpreted as meaning that passengers whose flights are delayed may be treated, for the purposes of the application of the right to compensation, as passengers whose flights are cancelled and they may thus rely on the right to compensation laid down in Article 7 of the regulation where they suffer, on account of a flight delay, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier.

    18. The CJEU confirmed this view in (C-581/10) Nelson v Deutsche Lufthansa AG [2012], which concerned a delay on a flight from Frankfurt to Lagos.

    19. Article 7 of Regulation 261 deals with the amount of compensation (see paragraph 3 above). As I have explained, it is scaled by reference to distance. Article 7 also contains a provision about how distance is to be calculated in these terms:

    In determining...

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