The Gazette 1986

GAZETTE

JULY/AUGUST 1986

A employees commenced on 31 March 1979 and a message was sent to United's managers directing them to notify all airlines in their areas that, due to suspension of services, all carriers were requested not to issue tickets on United airlines until advised of resumption of service and that pre-paid ticket authorities would not be accepted for ticket insurance by United after 31 March and until further notice. Notwithstanding this Aer Lingus issued group tickets on 6 April. However, United's area represen- tative had received a telex on 31 March that all United flights were cancelled but there was no need for alarm with regard to the Vintners Association. Subsequently the area representative tried to organise a management crew but ultimately the group were taken by different airlines. The Plaintiff sought to recover the additional costs occasioned by the strike. As against Aer Lingus it was claimed that the issue of the tickets by Aer Lingus was a representation that the tickets were binding on United and their issue after the strike had been declared was negligent. United's defence was based on, firstly, the Plaintiff took a calculated risk that United would be able to carry the group and the Plaintiff should have cancelled the tour and, secondly, the contract was frustrated by the strike. The Court HELD that Aer Lingus was acting as agent for one or other of the Plaintiff and United. On the Plaintiff's evidence Aer Lingus was acting as United's agent and United was then saying that the group would still be carried. As agent for a disclosed principal Aer Lingus could not be held liable in contract. Aer Lingus was instructed to print the tickets by one of the parties with the consent of the other. As all the terms of the contract of 24 January 1979 between the Plaintiff and United had been agreed when Aer Lingus was requested to print the tickets, the issue of the tickets could not affect the contract. The Judge stated that the following principles appeared to apply when considering a claim that a contract has been frustrated. 1. A party may bind himself by an absolute contract to perform some- thing which subsequently becomes impossible. without default of either party, a contractual obligation has become incapable of being performed. 3. The circumstances alleged to occasion frustration should be strictly scruti- nised and the doctrine is not to be lightly applied. 4. Where the circumstances alleged to cause the frustration have arisen from the act or default of one of the parties, that party cannot rely on the doctrine. 5. All the circumstances of the contract should also be strictly scrutinised. 6. The event must be an unexpected event. 7. If one party anticipated or should have anticipated the possibility of the event which is alleged to cause the frustration and did not incorporate a clause in the contract to deal with it, he should not be permitted to rely on the happening of the event as causing frustration. strike by United's 2. Frustration occurs when,

which was prepared by Mr. Stuart was served on Flynn. Subsequent to the hearing of the High Court proceedings, Flynn was returned for trial on foot of the indictable charges to the Circuit Court. The Plaintiff sought a number of declarations as against the Defendant and an injunction against the Defendant arising out of the appointment by the Defendant of Mr. Stuart. The Plaintiffs claims were dismissed by the High Court on 4 July 1985. The Plaintiff appealed to the Supreme Court. The grounds of Appeal for the Plaintiff/ Appellant were:— 1. A mistrial had occurred in that the trial Judge: (a) refused to grant an amendment to the Statement of Claim which had not been opposed by Counsel on behalf of the Defendant whereby it was sought to add an additional plea, and (b) (it was also complained) that the trial Judge refused to permit the Plaintiff to give evidence which would support his additional plea. HELD by Finlay J. that the two rulings made by the trial Judge (at the commence- ment of the action) did not create any injustice and could not have contributed to a wrong decision. No mistrial had occurred. Having regard to the legal issues which arose in the second ground of Appeal, the submissions were held to be incorrect in law and failed for a number of reasons. The Prosecution of Officers Act of 1974 vested in the newly created office of the Director of Public Prosecutions the power and duty to prosecute all offences other than in a Court of Summary Jurisdiction. There is an implied power to engage Solicitor and Counsel to carry out the constitutional duty imposed. There can be no conceivable logic or requirement of justice which restricts the DPP in his choice of Solicitor to take part in the conduct of a trial on indictment. There was also no possibility of an injustice flowing from the decision to appoint Mr. Stuart. The Plaintiff has and would have the total protection of the Court and of the Judge presiding over his trial from any attempt to introduce into it any incorrect procedures or an unjust result. The submission that there would be an apparent injustice and that justice wGuld not appear to be done was also rejected. Stephen Flynn -v- The Director of Public Prosecutions - Supreme Court (per Finlay C.J. (nem. diss.)), 8 November, 1985 — unreported. Liam Mac Hale CONTRACT Breach of Contract - Agency - Frustration - Damages. The Plaintiff organised a tour for members of the Vintners Federation to travel with Aer Lingus from Dublin to New York (return) and with United Airlines Incorporated ("United") from New York to Hawaii via San Francisco and back via Los Angeles and Las Vegas. In November 1978, United confirmed the flights. On 24 January 1979, the Plaintiff sent United a deposit for the American part of the tour.

A significant circumstance was that there had been a sixty-day "cooling-off" period in operation prior to the strike which must have been within the knowledge of United at all times from 30 January 1979. There must have been some threat of industrial action before the "cooling-off period". At no time were these circumstances made known to the Plaintiff presumably because United felt that if the Plaintiff knew he might try and get another airline to carry the group. United being aware of the threat or possibility of a strike took the risk of entering into the contract without including a provision to safeguard its position in the event of a strike. Under these circum- stances United was not entitled to succeed on its defence that the contract was frustrated. The Plaintiff was entitled to recover damages for (1) the increase in air fares over the contract price; (2) the increase in hotel bills; (3) the extra cost of a represen- tative's visit to Las Vegas; (4) the extra cost of ground transport; (5) the cost of long distance phone calls which did not relate to the proposed legal proceedings. Damages were not allowed for (1) the travel agent's commission; (2) the legal fees; (3) the accountant's fees; (4) advertisement cost in the brochure; (5) the booking at a Las Vegas hotel; (6) the expense of Washington and New York meetings with lawyers. Damages were not awarded for mental distress, upset or inconvenience. First, there was no medical evidence. Second, the Judge could not see any justification for giving damages to a man who found that the strain of conducting one particular transaction in the course of his chosen business was too much for him — the Plaintiff being a tour promoter. The Judge accepted the principle that, if the Plaintiff had not had to expend the extra money, he would either have paid off debts due to the bank and so saved interest payments, or he would have been in a position to place the money so as to earn interest on it. Interest at 10 per cent per annum was allowed on the extra expendi- ture from the time it should have been repaid to him. The Judge did not accept the argument that the Plaintiff should have mitigated his damages by cancelling the tour, as the argument meant the Plaintiff should have repudiated or agreed to waive the contract neither of which constitutes mitigation. As to United's claim for an indemnity against Aer Lingus, the tickets were issued in respect of a contract already made. As it was a charter flight the terms of which were already agreed tickets were issued purely for administrative purposes and could not affect the contract. The telex had been intended to prevent any further contracts. Furthermore, United had agreed to the tickets being printed and took no steps specifically to cancel the printing. The second telex, which stated no need for alarm for the group, made it clear that United were not cancelling the flight and considered the contract binding. United were net entitled to any indemnity or contribution from Aer Lingus. Enda McGuili -v- Aer Lingus Teoranta and United Airlines Incorporated - The High Court (per McWilliam J.), 3 October 1983 — unreported. William Johnston

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