This judgment was handed down remotely at 10.30am on 30 May 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Richard Spearman KC
INTRODUCTION AND NATURE OF THE DISPUTE
- The Claimant ("NT") is a small family owned and run travel agent based in Nottingham. The Defendant ("PIAC") is the national flag carrier airline of Pakistan. As an International Air Transport Association ("IATA") approved Passenger Sales Agent, NT was required to enter into a Passenger Sales Agency Agreement in the form of the 32nd edition of IATA Resolution 824 ("IATA 824") with each of the airlines whose tickets NT was authorised to sell, including PIAC. NT was appointed to act as agents for PIAC in or around 2008.
- In or around 2011, a dispute arose between PIAC and a number of travel agents which were members of, and were supported by, the Association of Pakistan Travel Agents ("APTA"), a trade association representing the interests of a substantial number of travel agents in the UK who were authorised to sell air passenger transportation on the services of PIAC. One APTA agent commenced proceedings against PIAC on 25 February 2011, and a further 30 APTA agents commenced proceedings against PIAC on 25 October 2012.
- NT and another unrelated travel agent, Times Travel (UK) Limited ("TT"), each alleged that it was pressured by PIAC not to participate as a claimant in those proceedings and instead to enter into a new agreement with PIAC. In 2012, NT and TT each signed a new agreement ("the 2012 Agreement"), in a form which was common to each of them, under which it gave up all accrued claims for commission under previous contractual arrangements in force between 2008 and 2012. NT and TT commenced proceedings against PIAC by a Claim Form dated 31 December 2014 ("the First Claim"). In the First Claim, each of them (1) alleged that it had entered into the 2012 Agreement as the result of improper pressure and/or misrepresentation, (2) alternatively, sought a declaration that clause 6.2 of the 2012 Agreement by which it was to give up all accrued claims for commission was unfair and unenforceable, (3) further or alternatively, alleged that it had made a collateral contract with PIAC under which, in consideration of its agreement not to participate in the earlier proceedings and signing the 2012 Agreement, it would receive certain commission payments, which it had not been paid, and (4) sought an account of the commission due to it. Further to head (3), NT and TT each claimed: (i) 9% basic commission, (ii) 2% overriding commission, (iii) commission due on the fuel surcharge element of the fares applicable which PIAC wrongly excluded, and (iv) commission due from 2013 onward at the rates applicable to an incentive scheme that applied in 2012.
- The First Claim was tried by Warren J over 6 days in February 2017, and resulted in his reserved judgment dated 14 June 2017 ("the Trial Judgment") from which I have gratefully adopted the substance of the above summary. The First Claim then proceeded through a series of further steps, hearings, orders and judgments, as discussed below.
- The Order of Warren J dated 14 June 2017 ("the Trial Order") provided at paragraph 1: "Judgment is hereby entered in favour of [NT] against [PIAC] for an account and enquiry as to the amount due on the basis of the judgment herein and for an order that [PIAC] do pay the sums found due upon the taking of the said account".
- In due course, the claim for an account was tried by Edwin Johnson QC sitting as a Deputy Judge of the High Court. Mr Johnson QC handed down judgment on 7 February 2020 ("the Account Judgment"). He held at [62]: "
the exercise of determining the sums due on the taking of the Account is limited to those sums which are said to have accrued due up the date on which judgment was entered for the Claimants; namely 14th June 2017. The Account is not concerned with sums said to have accrued due after this date. A claim for those latter sums would need to be the subject of separate proceedings".
- Against this background, and in circumstances where NT contends that after 14 June 2017 PIAC has continued not to comply with its obligations under the 2012 Agreement, NT commenced the present proceedings by a Claim Form dated 12 June 2023. The substance of NT's claim is simple: it seeks payment of sums due from PIAC from 15 June 2017 down to the date of judgment in the present claim, on the basis that PIAC's obligations to NT pursuant to the 2012 Agreement are as determined by Warren J in the First Claim. In the alternative, NT contends that it is entitled to payment on the same basis pursuant to a collateral contract made orally between its representatives and representatives of PIAC.
- The total sum claimed in NT's Particulars of Claim is £2,570,861.16, made up of a series of sums in respect of each year from 2017 to 2023. PIAC did not plead any positive case in answer to NT's pleaded figures, although it must have known the value of the sales of tickets that it made to NT each year, and whether NT's figures were correctly calculated.
- Be that as it may, when Mr Asim Nasir of NT was cross-examined he readily accepted that NT's calculations were not entirely correct, and needed adjustment. By the conclusion of the hearing, no adjusted figures had been produced by NT, still less agreed with PIAC.
- The thrust of PIAC's defence is as follows:
(1) Warren J did not determine the nature of PIAC's obligation to make payments to NT pursuant to the 2012 Agreement, but merely determined the basis on which PIAC was obliged to account to NT for the period up to 14 June 2017.
(2) Warren J's determination of that issue was not based on an analysis of the provisions of the 2012 Agreement, but on PIAC's pleaded case in the First Claim as to the nature of PIAC's financial obligations to NT under the 2012 Agreement.
(3) PIAC's pleaded case in that regard was incorrect, and in accordance with PIAC's true obligations to NT under the 2012 Agreement, which PIAC should now be allowed to put forward and rely upon in the present proceedings, PIAC has no liability to NT (or, at least, no liability on the basis alleged by NT in the present proceedings).
(4) In particular, when PIAC sought to contend for the purposes of the account that had been ordered in the First Claim that the nature of PIAC's financial obligations to NT was different from PIAC's pleaded case in the First Claim, Warren J did not decide that PIAC was precluded by estoppel from contending for a different basis of liability to that originally pleaded by PIAC, but instead decided that in order to advance a different basis of liability PIAC would need to amend its pleaded case in the First Claim (which PIAC thereafter decided that it would not apply to do).
- PIAC further contends that NT's claim based on a collateral contract must fail, as (1) it has not been properly pleaded, and (2) it is not made out on the evidence in any event.
- In these circumstances, the principal issues which now arise for consideration are:
(1) Whether NT's entitlement to payment from PIAC under the 2012 Agreement as determined in the First Claim applies in respect of the period after 14 June 2017.
(2) If NT fails on issue (1), whether NT is entitled to payment from PIAC on the same basis as was determined in the First Claim, pursuant to an oral collateral contract.
(3) If NT fails on both issues (1) and (2), whether Clause 5 of the 2012 Agreement was effective to incorporate the terms of PIAC's Statement of Practice ("SOP") effective from 16 October 2010 for purposes of determining NT's entitlement to remuneration.
(4) If PIAC succeeds on issue (3), whether, as PIAC contends, the SOP provides for "remuneration", or whether, as NT contends, the SOP does not provide for "remuneration" - it being common ground between NT and PIAC that (pursuant to Clause 1 of the 2012 Agreement) IATA 824 forms part of the 2012 Agreement, and that Paragraph 9 of IATA 824, headed "REMUNERATION", provides:
"for the sale of air transportation and ancillary services by the Agent under this Agreement the Carrier shall remunerate the Agent in a manner and amount as may be stated from time to time and communicated to the Agent by the Carrier. Such remuneration shall constitute full compensation for the services rendered to the Carrier."
(5) If NT fails on issues (1) and (2) but succeeds on either issue (3) or issue (4), it is common ground that NT is entitled to payment on a quantum meruit, and that any issues as to the form of order in that regard should await delivery of this judgment.
(6) The applicable rate of interest (also to be determined after delivery of this judgment).
ISSUE ESTOPPEL
The First Claim
- The Particulars of Claim of TT and NT pleaded at paragraph 9: "As a member of IATA the Defendant's contractual relationship with the Claimants is defined by the resolutions contained within the IATA Passenger Agency Conference Resolution Manual".
- Paragraph 10 of those Particulars of Claim then pleaded Paragraph 9 of IATA 824.
- In response to those pleas, PIAC's Defence (dated 31 March 2015) pleaded as follows:
"11. Paragraph 9 is admitted, though it is noted that the relationship between the Defendant and the Claimants is also governed by other terms and conditions agreed between them, particularly the agreements entered into between the Claimants and the Defendant in 2012 ("the New Agreements") as described below.
12. Paragraph 10 is admitted. Since 16 October 2010 the manner in which the Defendant has remunerated all of its accredited IATA member agents for the services they have rendered to it (by selling tickets on the Defendant's behalf) is by providing them with tickets at a base fare discounted 7% below the price which the Defendant makes them available to the public, and permitting those agents to then charge and retain a passenger service charge on those tickets when selling them on to the public ("Net Sale Remuneration")."
- Further, paragraph 18(a) of that Defence pleaded:
"On or around 18 September 2012 the Defendant served upon all of its accredited IATA member agents who provided it with a bank guarantee (except two with whom the Defendant was then in litigation, namely Global Service Travel Agents (UK) Ltd and Raison Travel Ltd) a Notice of Termination ("NOT") which terminated all then existing contractual arrangements between each of those agents, who included the Claimants, and the Defendant with effect from 31 October 2012. At the same time, the Defendant offered to enter into a New Agreement with each of those agents, including the Claimants, pursuant to which they could continue to sell tickets on the Defendant's air services on the terms set out therein (and thereby continue to earn Net Sale Remuneration)."
- In addition, paragraph 29(b)(iii) of that Defence pleaded:
"Any disadvantage to the Claimants in giving up any potential claim that they might otherwise have had against the Defendant was balanced by the advantage to them in terms of having the benefit of an ongoing commercial relationship with the Defendant (and thereby the opportunity to earn Net Sale Remuneration) and of having the benefit of the opportunity to earn commission pursuant to the incentive scheme for the period 1 July 2012 to 31 December 2012 forming part of the New Agreement."
- The Reply of TT and NT contained no direct response to any of these paragraphs in that Defence, although paragraph 21 of that Reply pleaded (without explanation as to the basis of this plea): "As to paragraph 27, "Net Sale Remuneration" was not in practice of any value whatever to the Claimants as the Defendant must have appreciated."
- Pausing there, it is apparent from these pleadings that PIAC's case in the First Claim included:
(1) A contention that NT was bound by the 2012 Agreement (which was referred to in PIAC's Defence as "the New Agreement").
(2) An acceptance that, under the 2012 Agreement, PIAC was obliged to provide remuneration to NT.
(3) A detailed positive assertion that PIAC's obligation in that regard was to provide "Net Sale Remuneration" ("NSR") as defined in paragraph 12 of PIAC's Defence.
(4) A contention that PIAC had in fact remunerated NT by providing NT with NSR.
(5) A reliance on the opportunity for NT to earn NSR under the 2012 Agreement as part of PIAC's case that the 2012 Agreement was not disadvantageous to NT.
- Further, NT did not respond to paragraph 12 of PIAC's Defence, and accordingly did not contest PIAC's case that its remuneration obligation was to provide NSR as there defined.
- As indicated above, the First Claim was tried by Warren J and resulted in the Trial Judgment. At [8] of the Trial Judgment, Warren J set out a table of terms derived from the skeleton argument of PIAC's Counsel for the trial, which he said he would "incorporate with some modifications". This included the following definition of "Net Sale Remuneration": "A form of remuneration introduced by PIAC on 16 October 2010 in which the Claimants were offered tickets at 7% below the Net Price (thus at a price lower than that at which PIAC offered them for sale directly to the public)". This definition is similar to the definition contained in paragraph 12 of PIAC's Defence in the First Claim.
- At [18] of the Trial Judgment, Warren J said that, originally, TT and NT were each entitled to two elements of remuneration which were relevant to the dispute before him, one of which was "9% Basic Commission" a term defined in the table in [8] as meaning "a 9% Commission paid by PIAC on the price of the ticket". Part of the dispute before Warren J was whether 9% Basic Commission was payable on the Base Ticket Price (i.e. the price of a ticket less (i) tax and (ii) YQ (the letter code for the variable surcharge levied by airlines on the price of a ticket as a result of fluctuations in the cost of fuel) or on the Net Ticket Price (i.e. the price of the ticket less tax, in other words (i) the Base Ticket Price plus (ii) YQ).
- At [20] of the Trial Judgment, under the heading "The 9% Basic Commission Claim" (and referring to IATA 824 as "the PSAA"), Warren J explained:
"PIAC contends that it was entitled under the terms of the PSAA to stop paying the 9% Basic Commission. It alleges that it did so by giving notice to agents on or about 23 September 2010 that it was moving to "net fares" ie Net Sale Remuneration. The Claimants contend that it was not permissible to reduce commission, under the PSAA, to zero which was the effect of the change to Net Sale Remuneration. Further, they contend that Net Sale Remuneration was not remuneration at all by PIAC but rather depended on an agent charging its own customers."
- At [24], Warren J set out terms of the 2012 Agreement that he considered to be material to the dispute before him. Those terms did not include Clause 5 of the 2012 Agreement, which is, in fact, the provision which relates to the payment of "Net Sale Remuneration".
- Above [189] of the Trial Judgment is the heading "9% Basic Commission on Base Ticket Price". At [190]-[192], Warren J considered the parties' pleaded cases in the First Claim. This consideration included, at [191](i), rehearsing the text of paragraph 12 of PIAC's Defence. Having done that, also in [191](i), Warren J observed that "There is no allegation in the Defence that [PIAC] served the notices requisite to move remuneration from commission to Net Sale Remuneration (assuming that this was possible)".
- At [193], having considered the parties' pleaded cases in the First Claim, Warren J recorded that "It is not, therefore, entirely clear from the pleadings precisely what the Claimants are claiming". He went on to say that the case of TT and NT had become clearer as it developed in their Skeleton Argument and in their closing submissions, and that, with the exception of allegations concerning collateral contracts, PIAC's Counsel had not objected to the raising of any of the additional claims that were sought to be raised, which "included the contention that, since Net Sale Remuneration was not validly introduced, the Claimants remained entitled to 9% Commission even after 16 October 2010".
- Warren J then considered the facts and law in relation to that claim, and concluded at [203]: "In my judgment, the Claimants remained entitled to receive 9% Basic Commission (including commission on the YQ element of the fare) after October 2010". Warren J immediately added: "The issue, then, is for how long, the answer to which depends on the effect of the Notice and the New Agreement on that entitlement".
- Warren J next considered the question of whether NSR was "other remuneration paid to the Agent" within the meaning of the provisions which he considered applicable to the issues before him. At [208] he said that his provisional view was that it was. He continued:
"In the context of [inter alia, IATA 824], it is appropriate to give a reasonably wide meaning to the concept of remuneration paid. There is no reason in principle why IATA agents should not conduct business with an airline on the basis of Net Sale Remuneration
It does not strain the language to bring within its scope as "remuneration paid" the provision of tickets at a discount. After all, the economic effect is the same as selling the tickets at full price and then paying a rebate, something which would clearly be "remuneration paid"".
- At [224], Warren J summarised the position immediately prior to the service of the Notice of Termination relied on by PIAC. He said: "The result of the above discussion is that the position immediately prior to service of the Notice on 14 September 2012 was this: (i) Each of TT and NT was entitled to 9% Basic Commission including the YQ element of the fare
"
- At [225] of the Trial Judgment, Warren J turned to consider "The Claimants' claims following the Notice and the New Agreement". He first considered claims based on collateral contracts, which he upheld, and misrepresentation, which he rejected. At [262], Warren J held that TT had established its case based on economic duress. He then considered the consequences, in terms of the relief available to TT, of his findings in relation to a collateral contract, duress and so forth. At [268], Warren J held that NT's position differed from that of TT, and accordingly rejected NT's case based on economic duress, reasoning that:
"the additional term of NT's collateral contract that it should become entitled to the same terms as the APTA agents might achieve in their litigation
effectively eliminates the objectionable element of the New Agreement, namely the giving up of all past claims".
- At [269], Warren J concluded that NT's entitlement included the following:
"
It is entitled to Net Sale Remuneration from 1 November 2012 together with the APS provided for in the New Agreement
"
- At [278], Warren J said with regard to TT:
"If it elects to affirm the New Agreement and the collateral contract, it will have no right to commission in respect of the period prior to 1 November 2012 and its rights thereafter will be to Net Sales Remuneration together with the APS for 2012 and a similar incentive for 2013."
- At [271]-[280], Warren J considered, and rejected, claims made by TT and NT in respect of Clause 6.2 of the 2012 Agreement.
- At [281], Warren J summarised his conclusions and stated his disposition so far as concerned NT as follows (emphasis added):
"NT is bound by the New Agreement and cannot claim commission in respect of any period prior to 31 October 2012. It is entitled from that date to the reward of Net Sales Remuneration and the amounts due under the APS for the second half of 2012 (which as I understand it has in fact been paid). It is also entitled to a similar incentive for 2013 and the first half of 2014 and to the same benefits as the APTA litigation agents received under their compromise agreement."
- Warren J's Order following the trial of the First Claim is dated 14 June 2017 ("the Trial Order"). The Trial Order provides at paragraphs 1 and 3 as follows:
"1. Judgment is hereby entered in favour of TTL and NTL against the Defendant for an account and enquiry as to the amount due on the basis of the judgment herein and for an order that the Defendant do pay the sums found due upon the taking of the said account.
3. In the case of NTL such account shall be taken on the following basis
(i) NTL is entitled from 31 October 2012 to remuneration in the form of NSR for the sale of air passenger transportation ;
(ii) NTL must give credit to the Defendant for the value of any benefit already received in the form of Net Sale Remuneration
"
- On 21 July 2017, NT and TT served their Particulars of Claim in the account. Paragraph 1 of those Particulars of Claim pleaded that "Upon the trial of the action before Mr Justice Warren on 2, 3, 6-8 and 10 February, and his Judgment on the 14 June 2017 and the Order made on 14 June 2017
Mr Justice Warren ordered that: (i) NTL is entitled from 31 October 2012 to remuneration in the form of NSR for the sale of air passenger transportation; (ii) NTL must give credit to the Defendant for the value of any benefit already received in the form of Net Sale Remuneration
" Those Particulars of Claim then went on to plead, among other things, that NT had not received any NSR benefit.
- On 2 October 2017, PIAC served its Defence in the account. Paragraph 3 pleaded:
"As to paragraph 1 of the Particulars of Claim, the Defendant admits that the following the trial of the action before the Honourable Mr Justice Warren, and the judgment ("the Judgment") handed down on 14th June 2017, Mr Justice Warren made an order ("the Order of 14th June 2017"). The Defendant relies on the Judgment and the Order of 14th June 2017 their full terms and effect."
- Notwithstanding that plea, that Defence went on to place reliance on a radically different definition of NSR ("Revised NSR") to that which had formed the basis of Warren J's judgment, as appears from paragraph 7 onwards. Paragraph 7 pleads:
"
the Defendant did switch its remuneration of the Second Defendant to Net Sale Remuneration with the effect from autumn 2010. Under Net Sale Remuneration travel agents including the Second Claimant are provided with tickets for a Base Fare on which they are permitted to charge customers a Passenger Service Fee of up to 7%. The Defendant automatically charges the Passenger Service Fee at the rate of 7% on tickets sold direct to customers at its own offices."
- That Defence further pleaded:
(1) At paragraph 9, that NT had been given notice of Revised NSR by email from PIAC dated 6 October 2010.
(2) At paragraph 10, that the SOP had been attached to that email and that the SOP set out the procedure for remuneration of agents under Revised NSR, the charging of a Passenger Service Fee on the sale of tickets from PIAC's own offices and by agents, and other matters.
(3) At paragraph 11, that by Clause 5 of the 2012 Agreement "[PIAC] and [NT] agree that the only remuneration to which the Agent shall be entitled for the sale of any air transportation and/or ancillary services on behalf of [PIAC] shall be as set out in [PIAC's] Statement of Practice effective from 16th October 2010 ...".
(4) At paragraph 16, that NT had received full benefit of Revised NSR from 1 November 2012 by receiving "the entitlement to charge customers a Passenger Service Fee of up to 7% of the Base Fare which [NT] was required to pay [PIAC] for the ticket."
- The Reply to that Defence was served on 23 October 2017, and pleaded, among other things:
(1) That Revised NSR represented a wholly inconsistent definition of NSR compared to the definition of NSR that was advanced in PIAC's Defence in the First Claim, that was before Warren J, and that was found by Warren J.
(2) That PIAC was issue estopped from raising Revised NSR or that it would be an abuse for PIAC to raise Revised NSR at that stage of the First Claim.
(3) That (see paragraph 23 of the Reply) NT denied receiving the email dated 6 October 2010 or the attachment to the same and that (i) neither document had been disclosed as part of the First Claim, (ii) the question of notification in autumn 2010 had already been determined, (iii) NT did not accept the authenticity of this alleged email, and (iv) PIAC had not supplied the email in native format despite requests that it should do so.
(4) That NT had not been notified of a change of remuneration or Revised NSR anyway.
- In light of these developments, by Order dated 2 November 2017, Warren J ordered, among other things, (1) by paragraph 1, that PIAC should be debarred from defending the account unless (in sum) by 4pm on 10 November 2017 it disclosed copies of the email dated 6 October 2010 and another email, or explained by Affidavit made by a proper officer why it was unable to do so, and (2) by paragraph 4 as follows:
"There shall be a trial of the following preliminary issues to be listed before the Hon Mr Justice Warren on 4 and 5 December 2017 namely:
1. Whether by reason of the Judgment in this action or the Order any issue estoppel arises between the parties precluding
a. the Defendant from contending
i. that the meaning and effect of Net Sale Remuneration (otherwise referred to as "NSR") is otherwise than as found and/or described in the Judgment or
ii. that the Defendant ever served a valid notice under IATA Resolution 818g and/or 824 to change the basis of remuneration of the Claimants or either of them or
b. the Defendant from relying on the Emails or either of them for any purpose
c. the Second Claimant from contending that the commission payable under the Agent Productivity Scheme for periods falling in 2013 and 2014 should be calculated on a basis different from that set out in paragraphs 3(iii) and 3(iv) of the Order.
2. Whether it would otherwise now be an abuse of Process for the Defendant or the Second Claimant so to contend or rely.
3. Subject to the determination of issues 1 and 2 above, what is the correct basis for quantifying the benefit (if any) received by the Claimants by way of NSR."
- Warren J delivered his judgment on those issues on 8 December 2017 ("the Account Preliminary Issues Judgment"). No approved version is available to me, but the parties before me invited me to proceed on the basis that the unapproved version that is available is accurate. Warren J decided that PIAC should be debarred from defending the account because PIAC had not complied with paragraph 1 of his Order of 2 November 2017. Warren J nevertheless considered the other issues raised by that Order. At [15] of the Account Preliminary Issues Judgment Warren J said: "The question is whether PIA is permitted to contend that the meaning and effect of NSR is otherwise than as found and/or described in my judgment and my order of June 2017. This issue is raised in the context of both issue estoppel and abuse of process." Warren J further stated:
(1) At [53]:
"In a strict sense, the question of issue estoppel does not arise as formulated. NSR is defined as it is. It is not a question of being allowed to say that NSR is modified. The question in reality is whether it is now open to PIA to contend that the Claimants were not remunerated as they would have it by NSR, but rather they were remunerated by Revised NSR or indeed did not receive any other benefit. That is one limb. The other is whether there is an issue estoppel which could not be cured by an amendment to the pleading or variation of my order preventing them from doing so, or whether it would be an abuse for them to do so."
(2) At [54]:
"In my judgment, no issue estoppel arises in relation to NSR. I made no finding about whether PIA was in fact operating net fares in accordance with the definition of NSR. It was the underlying assumption that it did so. But neither the pleadings nor Mr Schama's skeleton argument are sufficient to give rise to an estoppel. An estoppel can arise only out of my actual findings or matters which, because of common ground, can be treated in the same way."
(3) At [55]:
"It was not necessary to any of my conclusions that NSR as defined actually existed and was implemented. Although I did discuss NSR in the context of remuneration, it was a matter on which I expressed only a provisional view. In relation to the main claims, it was not necessary to decide whether NSR was the precise basis of the new method of reward in all its detail. The arguments on those issues would have been the same on the basis of Revised NSR. Nor did I make any findings about what had actually been paid or received. That was certainly not common ground. And I certainly made no finding that payment had been made in accordance with NSR."
(4) At [62]-[65]:
"So far as the accounting exercise is concerned, whether the profit was available because PIA was purporting to implement NSR or Revised NSR or simply not implementing its own policies at all, the inquiry would be the same in all cases.
However, for the Defendant to raise this point, it needs to amend paragraph 12 of its defence in the action. It is inconsistent with that pleading for it to claim that it has remunerated or benefited the Claimants by Revised NSR.
In principle, paragraph 12 seems to me - save for the first sentence of it - unnecessary to PIA's case at all. What PIA really needs is a revision of my order to provide - in the light of my early ruling for PIA - for the Claimants to give credit for the actual profit which they have made, that is to say the difference between their purchase price from PIA and their sale price to customers.
As a matter of power and jurisdiction, I consider that I am able to amend my order to provide for credit to be given in this way. However, no application has yet been made for me to do so, I have not had argument on the point, nor has Mr Shepherd had the opportunity to say that I have no power to do so
"
(5) At [71]-[73]:
"
since this argument formed part of Mr Shepherd's argument that NSR should be left out of account, I propose to express my views. These are not - unlike what I said in the judgment - provisional views.
First: NSR is, in my view, remuneration. I reach this conclusion for the reasons given in paragraphs 205 and following of the judgment, which I do not repeat.
Secondly: in contrast, Revised NSR is not remuneration. There is a real difference between the two, notwithstanding their economic effect may be the same. It is commonplace to find commercial results being effective in different legal ways. This does not mean that they fall to be treated in the same way for all purposes
"
(6) At [76]-[77]:
"It is correct that my order does provide only for credit for NSR. For the reasons given above, an amendment to my order would be needed, as well as amendment to paragraph 12 of the defence in the main claim to allow PIA now to claim credit for some other discount. Again for reasons already given, I do not now amend my order because the Claimants may seek to argue that I have no power to do so or that I should not exercise that power for reasons other than those which have already been made in relation to the abuse argument.
The Claimants will no doubt reflect on this judgment to decide whether they wish to continue to contend that PIA should not be entitled to credit in accordance with what I have concluded is the correct principled approach. Assuming that I have power to amend my order in relation to the basis on which credit is to be given, continued opposition would, as I see it at present, have to be on the footing that to allow it to take place would be an abuse of the process of the court by PIA."
(7) At [80]:
"The answers to the preliminary issues are as follows. The question of issue estoppel does not arise in the precise way which is formulated in the preliminary questions. But as to the substance of the preliminary issues, there is no issue estoppel preventing PIA from contending that the Claimants were provided with some sort of benefit other than NSR, in particular Revised NSR."
(8) At [82]-[83]:
"I turn to issue 3 next. The correct way for quantifying the benefit received by way of NSR is not the real issue. No benefit was provided by implementation of NSR. Such benefit as was provided was provided by provision of tickets for a price, the benefit being in principle the profit made on each ticket. In order to obtain this credit, PIA needed to amend its defence and obtain a variation to my order.
The abuse issue: I would decline to answer this issue other than as part of an application to amend the defence or vary my order."
- On 21 March 2018, Sir Nicholas Warren, as by then he was, delivered a judgment granting PIAC relief from sanctions and allowing PIAC to defend the account, but stated at [36]:
"The condition which I impose is that the defendant undertakes to the court and to the claimant not to seek in any appeal or in any other proceedings or in any other circumstances whatsoever to contend that the claimant received the two emails. It is critical to my conclusion to allow this application that the emails are irrelevant to any issue in light of my finding that they were not received. Apart from that factor, my conclusion would be to dismiss the application and it would be a clear decision in that direction."
- That undertaking was embodied in an Order of Sir Nicholas Warren dated 16 April 2018. That Order further recorded a number of amendments to the Trial Order, the only one of which that is material to the issues that arise in the present proceedings is that paragraph 3(ii) was amended to read: "NTL must give credit from 31 October 2012 to the Defendant for any sum charged to a customer for a given ticket that exceeded the price for which NTL purchased that ticket from the Defendant." It should be noted that no amendment was made to paragraph 1 or to paragraph 3(i) of the Trial Order (see [35] above).
- It seems to me that what Sir Nicholas Warren was saying in the Account Preliminary Issues Judgment was that (1) on the one hand, there was no question, in his view, of PIAC being allowed to revisit the meaning of NSR as advanced before him by PIAC in the trial of the First Claim, as set out in the Trial Judgment, and as embodied in the Trial Order, but (2) on the other hand, it had not been his intention, when ordering that NT should give credit against PIAC's liability to pay NSR as thus defined, to limit the credit that NT should give only to NSR as thus defined, such that if PIAC had in fact already paid NT some other remuneration, such as Revised NSR, as a starting point it would be right to permit PIAC to rely upon that in amelioration of its obligation to pay NSR as thus defined. That is reflected in the amendments that were made to the Trial Order on 16 April 2018.
- That, in any event, is made clear by a "Decision and Ruling concerning the basis of the Second Claimant's remuneration" that Sir Nicholas Warren delivered on 26 June 2018:
(1) At [3], he said:
"The first question I need to address is whether PIA is entitled to rely on Revised NSR as the proper contractual basis under which NT is to be rewarded or whether it has to accept NSR as the proper basis. I dealt in some detail with the differences between NSR and Revised NSR in my oral judgment on 8 December 2017. The differences between the two arise in two contexts. The first is the basis on which NT is to be remunerated; the second is the credit which NT must give in the taking of the account. In that latter context, it had, until comparatively recently, been NT's position that no credit need be given at all. This was because the June Order provided for credit to be given for remuneration received in the form of NSR: since it was no longer PIA's case that NT was entitled to and had received NSR but was entitled to and had received only Revised NSR, my order did not bite since I had not ordered credit to be given in relation to Revised NSR. However, the current position is that NT accepts that credit is to be given for the benefit which it has actually received in respect of ticket sales in accordance with my earlier ruling about the principled way of giving such credit. The June Order is to be given effect to accordingly. I come later to what that credit is to be given against."
(2) At [5], he said (emphasis added):
"What I said [in my judgment delivered on 12 March 2018] was said in relation to the credit which NT has to give in the account for the benefit it has received. I said nothing there (or elsewhere so far as I can recollect) about an amendment to the pleadings to reflect a change in the basis of reward for which PIA wished to contend. For it to be able now to run that case, not only would the Defence require amendment but also my main judgment would require revision and the June Order too might require amendment. At present, the June Order provides (a) at paragraph 1 for an account and enquiry to be taken as to the amount due on the basis of the judgment and for an order that the Defendant do pay the sums found due upon the taking of the said account and (b) at paragraph 3(i) that NT is entitled from 31 October 2012 to remuneration in the form of NSR. Paragraph 3(i) simply reflected what I had said in the judgment and was consistent with paragraph 1. If PIA is now to assert that Revised NSR is the correct method of reward, then not only does paragraph 3(i) need to be amended, but also the judgment needs to be revised to explain the revised basis."
(3) At [6], he said (emphasis added):
"There is no application by PIA to amend its pleadings let alone to revise my main judgment (with the result that paragraph 1 of the June Order would, as already worded, automatically give effect to any revision). There are obvious and significant difficulties which would face such applications, even assuming that I have power to revise the judgment (which I doubt I do have). Not least among the difficulties is this consideration. If such amendments were effected, NT's claim would be very different from that which it has so far established. Instead of the remedy so far sought and obtained, it would appear that NT's claim against PIA would be for damages for breach of contract, that is to say by selling tickets without adding a 7% service charge. To succeed on that claim, NT would need to succeed on the point of construction of the SOP, namely whether online sales were also subject to the obligation to add the 7% service charge. If NT lost on that issue, it may wish to consider and raise other matters (including the possibility of rectification) arising out of what it was told about the New Agreement, an aspect which it was not necessary to investigate at the trial because it was common ground that the basis of reward was NSR as I described it in my main judgment. Another difficulty is that Revised NSR may not be "remuneration" at all, an aspect on which I have expressed a preliminary, obiter, view that it is not. The consequences of that are likely to be significant because, on any view I would have thought, IATA regulations require agents to be provided with some form of "remuneration"."
(4) At [7], he rejected the submissions of Mr Bell on behalf of PIAC, which he summarised as including that "to insist upon 'Old NSR' being applied, would be to hold the parties to a fiction created by an infelicitous pleading, rather than to the true contractual bargain they struck", saying (emphasis added):
"This categorisation of the position is not one which I accept. It is not an infelicitous pleading which has led to the difficulty. It is the express assertion by PIA throughout the proceedings until comparatively recently of NSR as the basis of remuneration which now presents PIA with problems."
(5) At [8], he said:
"If PIA wishes to rely on Revised NSR as the method of reward to NT it needs to amend its pleading and needs to persuade me that I should revise my main judgment and that I have jurisdiction to do so. If it makes an application, it would need to also to persuade me that it is not too late to do so."
(6) At [9], he said:
"It follows from this discussion that, in the taking of the account, NT is entitled to claim that it should have paid PIA for a ticket only an amount 7% below the price at which PIA was offering the ticket to the public."
(7) At [11], he said:
"Accordingly, my ruling is that NT is entitled to reward (which for reasons previously given I consider to be "remuneration") in the form of NSR."
(8) At [15], he said:
"These examples show that the net amount for which PIA must account is actually independent of the amount for which NT actually sold the ticket: PIA simply has to account for a figure equal to the difference between the price at which NT was entitled to acquire the ticket (£93 in the two examples) and the price at which it actually acquired the ticket (£100 or £95 in the two examples). My ruling is that the account should now proceed on that basis, but subject to what I say below in relation to ascertainment of the price at which NT was entitled to acquire the ticket."
- This ruling was followed by a further Order of Sir Nicholas Warren, dated 9 July 2018, paragraph 1 of which provided as follows:
"Paragraph 3(i) of the Order of 14 June 2017 is to be interpreted and applied on the following basis:
a. NSR carries the meaning given to it in the judgment dated 14 June 2017;
b. NSR is to be applied on the basis of the lowest published fare at which the public can acquire the same ticket direct from PIA whether over-the-counter or online or otherwise; and
c. PIA must account to NTL in respect of each ticket sale for the difference between the price at which it in fact provided the ticket to NTL and the price at which NTL was entitled to acquire the ticket (which is calculated by reference to the lowest published price at which it offered the same ticket to the public on the exact date and time the ticket was issued by NTL)."
- The First Claim then moved on to the taking of the account. As already mentioned, the claim for an account was tried by Edwin Johnson QC (now Edwin Johnson J) and resulted in the Account Judgment. By this time, TT was in the same position as NT, because Warren J's finding that TT could avoid the 2012 Agreement on grounds that it had been obtained by duress had been overturned on PIAC's appeal to the Court of Appeal (an outcome ultimately upheld by the Supreme Court: see Pakistan International Airlines Corporation v Times Travel (UK) Ltd [2023] AC 101). For present purposes, it is only necessary to note that the account proceeded on the basis that NT's entitlement to NSR was as PIAC had pleaded in paragraph 12 of its Defence, and as Warren J had accepted in the Trial Judgment, reflected in the Trial Order, and ruled that PIAC was bound by in the absence of an application for permission to amend which he doubted that he had power to entertain:
(1) At [24], Mr Johnson QC said:
"Remuneration under the New Agreement is in the form of Net Sale Remuneration ("NSR"). This replaced the previous form of commission payable under the Original Agreements, and requires the Defendant to provide tickets to travel agents at a discount of 7% in comparison to the lowest published price at which it offers tickets to the public."
(2) At [41], he said:
"In relation to the calculation of NSR the essence of the account which has been directed is one which requires a comparison, in respect of each ticket sale to each of the Claimants, between (i) the price at which the ticket was in fact provided to the relevant Claimant, and (ii) the price at which the relevant Claimant was entitled to acquire that ticket. In relation to (ii), the price at which the relevant Claimant was entitled to acquire the ticket falls to be calculated by reference to the lowest published price at which the Defendant offered the same ticket to the public on the exact date and time the ticket was issued to the relevant Claimant. To state the obvious, an integral component of this accounting exercise is, in the case of each ticket sold to the Claimants, information as to the lowest published price at which the Defendant offered the same ticket to the public on the exact date and time the ticket was issued to the relevant Claimant. The 7% discount, of which the Claimants should have had the benefit on each ticket purchased from the Defendant, was a 7% discount from the lowest published price at which the Defendant offered the same ticket to the public on the same date and at the same time."
The applicable legal principles
- There was no difference between the parties as to the applicable legal principles.
- Both Ms Hitchens and Mr Bell relied on the speech of Diplock LJ in Thoday v Thoday [1964] P 181 at 197-198:
"The particular type of estoppel relied upon by the husband is estoppel per rem judicatam. This is a generic term which in modern law includes two species.
The second species, which I will call "issue estoppel", is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was."
- Mr Bell relied on this passage in his Skeleton Argument, and Ms Hitchens did so because it is quoted in the speech of Lord Keith of Kinkel in Arnold v National Westminster Bank plc [1991] 2 AC 93 at 105, upon which she relied. They both further relied on Lord Keith's statement preceding that citation that: "Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue."
- Ms Hitchens further relied on Hoystead v Commissioner of Taxation [1926] AC 155, Lord Shaw at 165-166:
"In the opinion of their Lordships, it is settled, first, that the admission of a fact fundamental to the decision arrived at cannot be withdrawn and a fresh litigation started, with a view of obtaining another judgment upon a different assumption of fact; secondly, the same principle applies not only to an erroneous admission of a fundamental fact, but to an erroneous assumption as to the legal quality of that fact. Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principlenamely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken. The same principle of setting parties' rights to rest applies and estoppel occurs."
- This passage was cited with approval by Brightman LJ in Khan v Goleccha International [1980] 1 WLR 1483 at 1489, upon which Ms Hitchens relied. She also relied on a further passage in the judgment of Brightman LJ at 1490, dealing with the case that was before the Court of Appeal in that instance, in which Brightman LJ stated:
"The judgment was given by consent and the consent was given because the company claimed, and the plaintiff accepted, that there was no lending of money. In my view, that admission by the plaintiff, given to the court and founding the judgment by consent, was just as efficacious for the purpose of issue estoppel as a judicial decision by the court after argument founding a similar judgment. The only sensible approach of the law, in my view, is to treat an issue as laid at rest, not only if it is embodied in the terms of the judgment, or implicit in the judgment because it is embodied in the spoken decision, but also if it is embodied in an admission made in the face of the court or implicit in a consent order."
- Finally, Ms Hitchens relied on the recent decision of the Court of Appeal in Skatteforvaltningen v MCML Ltd [2025] EWCA Civ 371. Having considered by reference to a number of decided cases "what sort of issues have been held to be capable of giving rise to an estoppel", Nugee LJ gave the following examples at [70]:
"Suppose A sues B for payment of a sum said to be due under a contract. B may defend the action on any number of grounds. Some of these are undoubtedly capable of giving rise to an issue estoppel (against A if the defence succeeds, and against B if it fails). So for example if B's defence is a purely factual one such as that his signature on the contract was forged, then a decision on that question will be binding on the parties, and will preclude them from relitigating the point if A subsequently sues B in a second action for a further sum said to be due under the same contract. So too if B's defence in the first action is that on the true construction of the contract the sum is not due; a decision in the first action, whether in favour of A or B, will prevent the parties from arguing for a different construction of the same clause in a second action on the same contract (subject to the special circumstances exception recognised in Arnold ). And thirdly if B's defence is that, on a true analysis of the circumstances, there was no consideration provided by A and hence the supposed contract was not legally binding, that too would preclude the parties from relitigating the point in a second action on the same contract."
- Ms Hitchens submitted that if one adds to Nugee LJ's examples the example of what has occurred in the present case, it is clear that PIAC is precluded from relitigating in the present proceedings the meaning of NSR in the 2012 Agreement that PIAC pleaded as part of its Defence in the First Claim, that formed part of the basis of the Trial Judgment, that was embodied in the Trial Order, that PIAC did not even attempt to retract or alter in the First Claim by applying for the amendments which Warren J had ruled were needed, and that was then re-iterated in later Orders and therefore formed the basis of the account.
- In addition to Lord Diplock's speech in Thoday and Lord Keith's speech in Arnold, Mr Bell cited the following further authorities (a number of which were also referred to by the Court of Appeal in Skatteforvaltningen):
(1) Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, Lord Sumption at [17]: "
there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties: "Issue estoppel" was the expression
adopted by Diplock LJ in Thoday v Thoday [1964] P 181, 197-198."
(2) Carl Zeiss Stiftung v Rayner & Keeler Ltd (No. 2) [1967] 1 AC 853, Lord Upjohn at 947: "there may be many reasons why a litigant in the earlier litigation has not pressed or may even for good reason have abandoned a particular issue. It may be most unjust to hold him precluded from raising that issue in subsequent litigation and see Lord Maugham's observations in the New Brunswick case. All estoppels are not odious but must be applied so as to work justice and not injustice and I think the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind."
(3) Vervaeke v Smith [1983] AC 145, Lord Hailsham LC's reference at 156D to the earlier decision as having been a decision "on the very point at issue" in the later proceedings.
(4) Skatteforvaltningen v MCML Ltd [2025] EWCA Civ 371, the judgment of Newey LJ:
(a) At [127]: "For something decided in earlier proceedings to give rise to an issue estoppel, it must have been fundamental to the outcome of those proceedings."
(b) At [128], approving the following statement in Spencer Bower and Handley: Res Judicata (6th ed.) at paragraph 8.23: "The determination must be fundamental, not collateral. An express decision will not necessarily create an issue estoppel. Only determinations which are necessary for the decision, and fundamental to it, will do so. Other determinations, however positive, do not."
(c) At [129], citing the judgment of Dixon J, sitting in the High Court of Australia, in Blair v Curran (1939) 62 CLR 464, where he said at 532-533: "Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous."
(5) Spencer Bower at paragraph 8.05 (footnotes omitted): "Estoppels require a court invited to apply contradictory statements to take the earlier as the truth. There can be no issue estoppel unless there is a substantial identity between the res judicata and an issue in the later proceedings. Both must relate to the same subject matter, and the party setting up the estoppel must establish this."
(6) Spencer Bower at paragraph 8.19: "An issue estoppel only applies if an issue in the second proceedings is the same as one decided in or covered by the first."
- In addition to these authorities, Mr Bell placed particular emphasis on the decision of the House of Lords in New Brunswick Railway Co v British and French Trust Corpn Ltd [1939] AC 1. In his Skeleton Argument, Mr Bell relied on the statement of Lord Maugham LC at 20: "If an issue has been distinctly raised and decided in an action, in which both parties are represented, it is unjust and unreasonable to permit the same issue to be litigated afresh between the same parties or persons claiming under them." In his oral submissions, however, he placed emphasis on those passages which appear to have informed Lord Upjohn's statement in Carl Zeiss that "All estoppels are not odious but must be applied so as to work justice and not injustice". According to the headnote in New Brunswick, the relevant facts were that "In a previous action on one bond of the same series by the respondents against the appellants, the latter did not enter an appearance and judgment was obtained against them by default", and the relevant holding was that "such a judgment did not operate an estoppel to prevent the appellants raising as a defence to the present action questions as to the construction of the bonds, though these were couched in the same terms as the bond upon which judgment was obtained by default". The headnote also paraphrases Lord Maugham LC's words at 20, which read as follows:
"In my opinion we are at least justified in holding that an estoppel based on a default judgment must be very carefully limited. The true principle in such a case would seem to be that the defendant is estopped from setting up in a subsequent action a defence which was necessarily, and with complete precision, decided by the previous judgment; in other words, by the res judicata in the accurate sense."
- Mr Bell also relied on a long passage in the speech of Lord Romer, which includes the following words at 41-42:
"
I am unable to discover anything in the judgment or in the record of the proceedings in the former action that can estop the appellants from now litigating the question of the amount of interest payable under the 992 bonds sued upon in the present action. In the earlier action the only question of construction mentioned in the writ or in the statement of claim was one as to the construction of the bond then being sued upon, and the judgment pronounced in default of appearance cannot, in my opinion, be regarded as having determined the question of the construction of the other bonds possessed by the respondents."
The parties' submissions
- Ms Hitchens submitted that NT's entitlement to NSR under the 2012 Agreement was one of the issues that arose for determination in the First Claim, that this issue had been determined by Warren J, and that PIAC was estopped from now re-litigating that matter.
- In this regard:
(1) NT's Particulars of Claim in the current proceedings plead at paragraph 6:
"In a judgment dated 14 June 2017, Warren J upheld the validity of the 2012 Agreement and found that pursuant to the terms of that agreement, from 1 November 2012 the Claimant was entitled, inter alia, to Net Sale Remuneration ("NSR"), which entitled the Claimant to be offered tickets at 7% below the price at which the Defendant offered them for sale directly to the public."
(2) Those Particulars of Claim further plead at paragraphs 13, 14 and 15:
"13. Pursuant to the terms of the 2012 Agreement, and further to the findings of Warren J in the Main Proceedings, the Defendant was and is obliged to provide tickets to the Claimant at a 7% discount from the lowest published fares at which tickets were offered by the Defendant to members of the public ("the Discounted Price").
14. In breach of the 2012 Agreement, the Defendant has failed to provide tickets to the Claimant at the Discounted Price for the period from 15 June 2017.
15. PIA is therefore liable to pay to NTL in respect of each ticket sale the difference between the price at which it in fact provided the ticket to NTL and the Discounted Price (which is calculated by reference to the lowest published price at which it offered the same ticket to the public on the exact date and time the ticket was issued by NTL)."
- I have already summarised the heart of Mr Bell' submissions in [10] above.
- Mr Bell's other principal points were as follows. First, he submitted that the way in which the claim is put in NT's Particulars of Claim is wrong on two counts: (i) estoppel does not give rise to a cause of action, and (ii) the claim is not, on proper analysis, based on the provisions of the 2012 Agreement, but instead on Warren J's findings, that were made without any material analysis of those provisions. Second, the authorities show that issue estoppel is not to be applied in a technical way and/or so as to work injustice. Third, the present proceedings concern a different cause or causes of action (relating to different sales of tickets at different times) than the cause or causes of action that formed the subject of the First Claim. Fourth, there was no material finding of fact in the First Claim what was found was a matter of law, relating to NT's rights in respect of a different period of time. Fifth, there was no adjudication on the merits with regard to NT's rights to NSR under the 2012 Agreement. Sixth, PIAC was not prevented by issue estoppel from relying on Revised NSR but was instead prevented from doing so because PIAC's wish to do so was not properly brought before the Court. Seventh, it would have been open to Warren J to allow PIAC to advance a revised case if PIAC had brought that revised case properly before him. Eighth, underlying all these points, the case as to NSR that PIAC had pleaded in the First Claim and persisted in from 31 March 2015 (the date of PIAC's Defence) until 2 October 2017 (the date of PIAC's Defence in the account) was the product of mistake.
Discussion
- Because of the way in which proceedings in the First Claim unfolded, it requires a certain amount of time and effort to trace through the history of the First Claim; and to determine which issues were necessary, or fundamental or cardinal, to the decision in the First Claim, and how they were decided. At the end of the day, however, it seems to me clear that:
(1) The issue of what NT was entitled to be paid by PIAC pursuant to the 2012 Agreement was an issue that fell to be decided by Warren J. This issue arose because, in answer to NT's claims (a) that NT was not bound by the 2012 Agreement and (b) that NT was entitled to (among other things) 9% basic commission in accordance with arrangements which pre-dated the 2012 Agreement, PIAC contended (a) that NT was bound by the 2012 Agreement and (b) that NT was not entitled to (among other things) 9% basic commission but was instead entitled under the 2012 Agreement to NSR as defined in paragraph 12 of PIAC's Defence (in terms that were slightly modified by the time of the trial on liability in the First Claim). PIAC's case in those respects was not limited to direct assertions that entitlement to NSR (as defined by PIAC) was one of NT's contractual rights, and that by remunerating NT with NSR (as defined) PIAC had provided NT with all the remuneration to which NT was entitled under the 2012 Agreement, but extended to relying upon the availability to NT of NSR (as defined) in support of PIAC's case that the 2012 Agreement was not disadvantageous to NT.
(2) That issue needed to be decided by Warren J in order to decide the relief to which NT was entitled under the 2012 Agreement, which, in accordance with PIAC's case, Warren J held to be binding on NT (and, also, to decide the relief to which TT would be entitled in the event that TT elected to affirm the 2012 Agreement). (Whether NT and TT were entitled to be paid NSR (as defined by PIAC) was also relevant to the issue of whether NSR (as defined) was "remuneration", which both TT and NT put in issue in the First Claim (see [20] of the Trial Judgment, and [23] above). However, it may be Warren J did not consider he needed to decide that issue in order to determine whether NSR was validly introduced in 2012, as he expressed only a provisional view about whether NSR was "remuneration" in the Trial Judgment (see [28] above)).
(3) Warren J clearly decided that issue: he held that NT was bound by the 2012 Agreement and was entitled to the reward of NSR from 1 October 2012 (see [269] of the Trial Judgment, and [31] above; and, further, [281] of the Trial Judgment and [34] above).
(4) That decision was affirmed and repeated in the Decision and Ruling of Sir Nicholas Warren (as by then he was) of 26 June 2018. By that time the issue of whether PIAC was entitled to argue that NT's entitlement under the 2012 Agreement was not to NSR but was instead to Revised NSR had been fairly and squarely placed before the Court. That issue was considered, first, in the Account Preliminary Issues Judgment, which resulted (by Order dated 16 April 2018) in amendments to the Trial Order. Those amendments did not disturb paragraph 3(i) of the Trial Order, which provided that the account should be taken on the basis that "NTL is entitled from 31 October 2012 to remuneration in the form of NSR for the sale of air passenger transportation". However, those amendments did amend paragraph 3(ii) of the Trial Order. This was changed from "NTL must give credit to the Defendant for the value of any benefit already received in the form of Net Sale Remuneration" to "NTL must give credit from 31 October 2012 to the Defendant for any sum charged to a customer for a given ticket that exceeded the price for which NTL purchased that ticket from the Defendant". It is evident from that change of wording, and indeed from the Account Preliminary Issues Judgment which precipitated it, that Warren J was not prepared to allow PIAC to replace NSR (as defined by PIAC) with Revised NSR for the purposes of delineating PIAC's obligation to make payments to NT pursuant to the 2012 Agreement. It would appear that the question of whether PIAC might be entitled to make that replacement was raised with the court yet again, and resulted in the above Decision and Ruling. That included a clear decision that "NT is entitled to reward (which for reasons previously given I consider to be "remuneration") in the form of NSR" (see [11] of the Decision and Ruling, and [46](7) above). The explanation for the words in parenthesis is that, by the time of the Decision and Ruling, Warren J had given express consideration to the difference between NSR and Revised NSR, and had come to the clear conclusion that NSR comprised "remuneration" and that Revised NSR did not (see [71]-[73] of the Account Preliminary Issues Judgment, and [42](5) above). Accordingly, it was embodied in the decision that PIAC could not replace its reliance on NSR with reliance on Revised NSR that by holding PIAC to its original case it was not open to NT to say that PIAC was not providing "remuneration".
- In my judgment, it is clear that in light of these matters an issue estoppel arises, which has the effect of preventing PIAC from now seeking to relitigate in the present proceedings the nature of its obligation to make payments to NT pursuant to the 2012 Agreement. Using the words of Lord Shaw in Hoystead, this is an attempt by PIAC to litigate afresh "what should be a proper apprehension by the court
of the construction of the documents (i.e. in this instance, the 2012 Agreement)". Similarly, paraphrasing the second example given by Nugee LJ in Skatteforvaltningen at [70]: "if B's defence in the first action is that on the true construction of the contract [what is due is NSR]; a decision in the first action, whether in favour of A or B, will prevent the parties from arguing for a different construction of the same clause in a second action on the same contract".
- Indeed, although the history requires a little untangling, this is a strong case of issue estoppel. This is because the relevant issue namely, the nature of PIAC's obligation to make payments to NT pursuant to the 2012 Agreement was not only decided in the trial on liability in the First Claim but was sought to be revisited in the proceedings for an account in the First Claim and resulted in a clear and specific ruling that "NT is entitled to reward
in the form of NSR" at [11] of the Decision and Ruling dated 26 June 2018. In accordance with that Decision and Ruling, it was not open to PIAC to attempt to rely upon Revised NSR in place of NSR without making an amendment application. PIAC made no such application. Accordingly, PIAC remained fixed with the definition of NSR for which PIAC itself had consistently contended in the First Claim until long after the Trial Judgment had been handed down and the Trial Order had been made. If that Decision and Ruling was right, PIAC's prospects of success on any such application were slim. However, in my opinion that only serves to underline that PIAC was, indeed, precluded from revisiting the case that it had chosen to put forward in its Defence and at the trial on liability in the First Claim, and which had formed part of the decision embodied in the Trial Judgment, to which PIAC had taken no objection. The only alternative possibility, it seems to me, is that PIAC might have argued that it was open to PIAC to rely upon Revised NSR in the account, essentially on the footing that the Trial Judgment did not contain, and the Trial Order did not reflect, any binding determination concerning NSR, and that the ruling that amendments were required was incorrect. However, PIAC made no attempt to appeal that ruling, and so, even on this approach, is bound by the result.
- I reject Mr Bell's primary submission that the relevant issue that was determined by Warren J in relation to NSR was merely the basis on which PIAC was obliged to account to NT up to 14 June 2017. That does not accord with the pleaded issues or the Trial Judgment, or indeed, as far as I can see, any of the subsequent events and rulings.
- It is true that at the trial of the proceedings in the account which had been ordered by the Trial Judgment, Mr Johnson QC accepted that one of the matters that required to be determined was the date on which the period of time covered by the account should come to an end. It is also true that he held that this date was 14 June 2017. He did so for two reasons. First, because he considered that this was the meaning and effect of paragraph 1 of the Trial Order (see [55]-[60] of the Account Judgment). Second, because (as explained in [61] ibid) he considered that it would be wrong to extend to an indefinite period the determination of what he described as the "Evidence Issue". That is an issue that he determined as follows: "there is no evidence before me which can or should qualify my finding that the Defendant did fail to give the Claimants the benefit of the 7% discount to which the Claimants were entitled by way of NSR" (see [107] ibid). In my view, however, these matters provide no support for the conclusion for which Mr Bell contended. They merely show that the relief to which NT was entitled in accordance with the contractual obligation of PIAC to provide NSR which had been determined in both the Trial Judgment and the Decision and Ruling was, at that time, limited to a cut-off date of 14 June 2017
- Indeed, the Account Judgment at [53] records that, in support of his submissions that 14 June 2017 was the end date for the account, Mr Bell (i) "pointed out that an account is a quantification of sums which have been found in principle to be due", (ii) suggested "that sums accruing due after the giving of the relevant judgment would need separate judicial determination", and (iii) and argued that if that was not taken as the end date for the account "if a dispute had arisen over the terms of the New Agreement after 14th June 2017, which was not settled by the Substantive Judgment and which affected the taking of the Account, it would have been necessary to resolve that dispute in the Account". In my opinion, these arguments reflect, correctly, a recognition of the difference between, on the one hand, a quantification exercise, which is properly the subject of an account; and, on the other hand, a dispute as to the terms of the 2012 Agreement, which is not. Further, they reflect that the terms of the 2012 Agreement up to 14 June 2017 had been "settled" by the Trial Judgment. Accordingly, any dispute as to those terms could only arise if they were altered after that date, which is not suggested by PIAC before me.
- Turning next to Mr Bell's submission that PIAC's case on NSR in the First Claim was advanced by mistake, the following points can be made. First, PIAC's Defence in the First Claim was settled by Leading Counsel (Robert Lawson QC), instructed by Clyde & Co LLP, a well-known and reputable firm of solicitors with vast experience of commercial litigation. Second, PIAC persisted with its pleaded case concerning NSR down to and throughout a 6 day trial, by which time PIAC was represented by different Counsel and solicitors, and indeed until PIAC served its Defence in the account on 2 October 2017, more than 2.5 years after PIAC's original Defence had been served. Third, PIAC has placed no evidence before me in support of the argument that PIAC's case on NSR was advanced by mistake. Fourth, in so far as the assertion of mistake is based on a comparison between (a) Clause 5 of the 2012 Agreement and the SOP that is referred to in that Clause and (b) PIAC's pleaded case in its Defence in the First Claim, and the suggestion that Clause 5 must have been misread, it does not seem to me to be safe to conclude from other aspects of PIAC's conduct of the First Claim that it should be presumed to have acted in the manner that one might expect a substantial and reliable commercial entity to act. Of relevance in this regard are (i) the saga relating to the email dated 6 October 2010 (which, in sum, PIAC said it could not produce in native form because no copy was available on its server) and (ii) the fact that PIAC was debarred from defending the account before 21 March 2018 (see [42]-[43] above), and, having obtained relief from sanctions, again for a second time after that (see [8] of the Account Judgment: "the Defendant was the subject of a debarring order, which debarred the Defendant from defending the Account").
- For these reasons, the issue of mistake is, at lowest, unclear. In any event, the authorities make clear that the fact that a stance (whether, in the words of Lord Shaw in Hoystead, of "fundamental fact" or "the legal quality of that fact") may have been adopted in one action "erroneously" makes no difference to whether an issue estoppel arises, preventing the parties to that action from re-opening in a second action an issue decided in the first.
- As to Mr Bell's criticisms of NT's Particulars of Claim in the present proceedings, I do not consider that the plea that "Pursuant to the terms of the 2012 Agreement, and further to the findings of Warren J in the Main Proceedings, the Defendant was and is obliged to provide tickets to the Claimant at a 7% discount from the lowest published fares at which tickets were offered by the Defendant to members of the public" either (i) relies on estoppel as a cause of action, or (ii) advances a claim based on the provisions of the 2012 Agreement, when instead the claim is in truth based on the findings of Warren J. These arguments ignore the fact that the material terms of the 2012 Agreement (relating to NSR) have been determined by Warren J in the First Claim, and that Warren J's determination is binding on both NT and PIAC. NT's pleaded case accords with that state of affairs.
- Mr Bell's next point, that issue estoppel is not to be applied in a technical way and/or so as to work injustice, is uncontroversial, but takes PIAC nowhere in the present case.
- Mr Bell is also right to say that the present proceedings concern a different cause or causes of action than the cause or causes of action that formed the subject of the First Claim. It is also right, as a broad statement of general principle, that such differences may prevent an issue estoppel from arising. For example, this may occur where different claims are brought in reliance on different contracts. This appears to have formed part of the reasoning of the House of Lords in New Brunswick Railway Co, although I consider that, properly analysed, the decision in that case rests primarily, or at least as much, on the consideration that the judgment in the first action in that case was a default judgment.
- In the present case, however, the different cause or causes of action arise because NT is claiming further relief for breaches of the 2012 Agreement arising subsequent to the date of applicability of the Trial Order. However, that does not mean that no issue estoppel arises. The relevant question is whether PIAC is seeking in the present claim to argue for a different basis of liability to NT under the 2012 Agreement than Warren J held in the First Claim to be the basis of PIAC's liability to NT under that Agreement. That question falls squarely, in my view, within the second and third examples given by Nugee LJ in Skatteforvaltningen at [70]: a decision on the true construction of the 2012 Agreement that NSR is due from PIAC to NT prevents the parties from arguing for a different construction of the same contractual provision in a second action on the same contract. If and to the extent that Warren J's determinations were arrived at without him being invited to compare Clause 5 of the 2012 Agreement and the SOP with PIAC's pleaded Defence (which seems unlikely in respect of the Decision and Ruling of 26 June 2018, but plausible in respect of the Trial Judgment), that does not affect that result. Uncontested issues and even errors can give rise to estoppels, as is clear from Lord Shaw's speech in Hoystead.
- Each of Mr Bell's next points, viz (1) that there was no material finding of fact in the First Claim, and that what was found was a matter of law, relating to NT's rights in respect of a different period of time, (2) that there was no adjudication on the merits with regard to NT's rights to NSR under the 2012 Agreement, and (3) that PIAC was not prevented by issue estoppel from relying on Revised NSR but was instead prevented from doing so because PIAC's wish to do so was not properly brought before the Court, are also, in my opinion, of no avail to PIAC. I consider that they are all covered by what is said above.
- For all these reasons, I consider that NT's arguments based on issue estoppel succeed: NT's entitlement to NSR under the 2012 Agreement has been determined in the First Claim; that determination concerns the meaning and effect of the 2012 Agreement, and applies just as much to claims for NSR after 14 June 2017 as it did to claims for NSR up to that date; and PIAC is estopped and precluded from now seeking to argue in the present proceedings that NT is not entitled to NSR exactly as Warren J decided in the First Claim.
- In light of that conclusion, the remaining substantive issues do not arise for determination.
- However, as they were fully argued and in case the claim goes further, I will address them.
COLLATERAL CONTRACT
- NT's pleaded case based on a collateral contract is not mentioned in the Particulars of Claim but is instead to set out in paragraph 2 of the Reply, as follows:
"(ii)
at the time the Claimant and the Defendant entered into the 2012 Agreement and in order to induce the Claimant to enter into the 2012 Agreement, Mr Zulfiqar Bijarani, a manager of the Defendant, confirmed to the Claimant that the Claimant would be offered tickets at 7% below the price at which they were offered by the Defendant to the public to allow the Claimant a 7% margin for remuneration or commission. (i.e. it would be entitled to NSR, as defined in the Particulars of Claim).
(iii) It was therefore a term of the 2012 Agreement, alternatively a term of a collateral oral contract between the Claimant and the Defendant, that the Claimant would be entitled to NSR."
- Mr Bell complained, rightly in my judgment, that this manner of pleading is contrary to CPR PD 16 para 9.2, which provides:
"A subsequent statement of case must not contradict or be inconsistent with an earlier one; for example a reply to a defence must not bring in a new claim. Where new matters have come to light a party may seek the court's permission to amend their statement of case."
- More substantially, as I believe that Ms Hitchens was realistically constrained to accept during her closing submissions, this claim is not supported by NT's evidence for trial.
- NT called two witnesses: Mr Khawar Nazir, who is a director of NT, and his brother, Mr Asim Nazir, who is employed by NT as a manager. Both of them were called to give evidence in the First Claim, and Warren J and Mr Johnson QC found them to be honest and reliable witnesses, as do I. The relevant witness statement is that of Mr Asim Nazir, which deals with a meeting at PIAC's Manchester office on or around 17 October 2012 between him and three representatives of PIAC: Messrs Zulifiqar Bijarani, Rehan Ashraf, and Mirza Faraz Baig. In the First Claim, PIAC did not call Mr Bijarani to give evidence. He was instead called as a witness by NT, as his evidence was perceived as favourable to NT. However, he could not give evidence before me, because he has since sadly died.
- At paragraphs 28 and 29 of his witness statement, Mr Asim Nazir states as follows (sic):
"28. Mr Bijarani said that if NTL signs this new 2012 agreement, whatever the ABTA case settles at, NTL will get that and an additional 2% ORC. He also said "I know it is unfair but if you sign the new 2012 agreement the "ORC" incentive will continue from 2013 onwards and the ticket stock will increase".
29. Mr Bijarani stated that we would get comission on the ticket sales, as well as the aditional overiding commision and a per ticket cash incentice. He spicifically stated "This my promise to you and you have my word that we will look after you and also give such high incentive that you will forget the court case. You will make more money over these incentives over what the court will award you on conclusion of this case which is not even gurenteed.""
- This evidence is in almost identical terms to the second half of paragraph 25 of Mr Asim Nazir's witness statement in the First Claim, which is dated 13 October 2016, including the mis-spelling of words such as "gurenteed", save that the earlier evidence omits the first sentence of paragraph 29 of the current witness statement. Mr Asim Nazir was cross-examined about this by Mr Bell, who suggested that the earlier evidence was likely to be more reliable as it was made nearer to the time of the material events than the current witness statement, which is dated 12 February 2025. Mr Asim Nazir did not disagree.
- In my judgment, however, the real point is that, taken at its highest, this evidence does not amount to evidence of an agreement or promise that PIAC would offer NT tickets at 7% below the price at which they were offered by PIAC to the public to allow NT a 7% margin for remuneration or commission, in accordance with NT's pleaded collateral oral contract.
- It is also right to point out that there was no mention of a collateral contract which included these terms in the evidence of the same witnesses for NT in the First Claim. Such a contract would not have been helpful to NT's case in the First Claim. This included an assertion of entitlement to commission in accordance with arrangements which were in place before the date of the 2012 Agreement, and opposition to PIAC's case that NT was bound by the 2012 Agreement and was entitled thereunder to NSR as defined by PIAC. If a collateral contract had existed in the terms now suggested on behalf of NT in the present proceedings, the need to avoid that contract (as well as the 2012 Agreement) would have presented NT with an additional hurdle to surmount to succeed on its case.
- This not only supports the conclusion that no such collateral contract was made, but also gives rise to the prospect that if, contrary to that conclusion, such a contract did exist, it is impermissible for NT to seek to rely upon it in these proceedings in light of the principles enunciated by Lord Bingham in Johnson v Gore-Wood & Co [2002] AC 1 at 30H-31F.
- Accordingly, I consider that the claim based on a collateral contract cannot succeed.
- Mr Bell also argued, in reliance on AXA Sun Life Services Plc v Campbell Martin Ltd [2011] EWCA Civ 133 and The Interpretation of Contracts, 8th ed. at chapter 3, section 16, that even if Mr Bijarani had provided the confirmation pleaded in paragraph 2(ii) of the Reply, its incorporation into the 2012 Agreement or its efficacy as a collateral contract was entirely negated by Clause 3 of the 2012 Agreement, which provides:
"In consideration for the aforesaid (hereafter the "New Agreement"), it is agreed that the New Agreement supersedes, nullifies, voids and replaces any and all previous agreements between PIAC, its directors, officers & employees and the Agent and/or anybody representing the Agent of any nature whatsoever and howsoever arising, and that henceforth the New Agreement shall constitute the sole, exclusive and entire agreement between PIAC and the Agent."
- However, it is unnecessary for me to decide this point in light of my earlier conclusions.
INCORPORATION OF THE SOP
- Clause 5 of the 2012 Agreement provides:
"PIAC and the Agent agree that the only remuneration to which the Agent shall be entitled for the sale of any air transportation and/or ancillary services on behalf of PIAC shall be as set out in and according to the procedures of PIAC's Statement of Practice effective from 16 October 2010 (the "General Arrangements"), together with any amount payable pursuant to the PIAC Agent Productivity Incentive Scheme 01 July to 31 December 2012 as set out in Appendix I (or any further incentive scheme agreed between the parties in writing hereafter)."
- The material provisions of the SOP are as follows:
"Application of Pax Service Fee:
7% YR will be automatically applied on Base Fare for tickets issued at PK counter.
Travel agents will be allowed to charge PSF up to 7% from Pax, which will not be reported in ASR/BSP report.
Sale by PK Office in Net/Net Fare Market:
When pricing a Net fare itinerary, system will automatically charge 7% of the fare as PSF under the Head of 'YR'
In case of SOTO ticketing [i.e. "Sold Outside, Ticketed Outside, such as a ticket bought in England for a flight from France to Pakistan], 7% of the fare as PSF under the Head of 'YR' will be charged.
Sale by Travel agents in Net/Net Fare Market:
When pricing any Net/Net fares itinerary, Travel agents will be allowed to charge their Passenger/Agency Service Fee up to 7% of base fare.
In case of SOTO ticketing, Travel agents will be allowed to charge their Passenger/Agency Service Fee up to 7% of base fare.
In both the above scenarios, the PSF will not be reflected in the BSP report. However, agent will issue a travel itinerary/receipt to passenger, reflecting the total amount charged for the itinerary from the passenger."
- Mr Bell submitted that the SOP therefore provided that a travel agent would be supplied tickets by PIAC exclusive of the 7% passenger service fee ("PSF") (which has the IATA code "YR") and would in turn charge customers its own PSF of up to 7%.
- That would appear to be correct. However, it is right to point out two further matters.
- First, the evidence before me is that PIAC had in 2012, and has, only a limited number of counters at a limited number of locations. Accordingly, as the 7% fee only applies to ticket sales made by PIAC at those counters, it follows that it only applies to a limited number of PIAC's sales. There was no evidence before me as to the precise volume of sales made at counters compared to the volume of sales made otherwise, for example online, but common sense and general knowledge of modern consumer purchasing habits suggests that in the Internet age, and particularly where there is limited opportunity to purchase at a counter, the vast majority of sales is likely to be made otherwise than over the counter.
- These points were confirmed by the evidence of the only witness called by PIAC, Ms Nadia Gul, its Country Manager UK & Ireland. According to her witness statement:
"20. NSR as set out in the Statement of Practice and therefore the New Agreement requires the Defendant to charge the 7% passenger service fee on sales over the counter or by telephone in its offices in the UK. The passenger service fee is automatically applied to the base fare by the Defendant's computer system when the ticket is sold.
21. NSR as set out in the Statement of Practice and the New Agreement does not require the Defendant to apply the passenger service fee to the sale of tickets online.
22. Historically, the Defendant has sold very few tickets through its own offices, which it has only had in London, Birmingham and Bradford during the period covered by the Claimant's claim since June 2017. The Defendant has always relied on its agents and their networks of sub-agents to sell the majority of its tickets to members of the Pakistani community in the towns and cities throughout the country."
- Second, Mr Bell accepted that the amount of profit made by a travel agent such as NT on the sales of ticket to its customers is a matter for the travel agent and does not fall to be taken into account when determining its entitlement as against PIAC (as was ultimately acknowledged in the First Claim: see [15] of the Decision and Ruling dated 26 June 2018, cited at [46](8) above; and the terms of the order made on 9 July 2018, cited at [47] above). The above provisions of the SOP therefore, in truth, have the effect of limiting (to 7%) the uplift that the agent would otherwise be entitled to charge on its own sales of tickets.
- It was common ground that the SOP was not provided to NT before or at the time the 2012 Agreement was made. In light of the undertaking contained in the Order dated 16 April 2018 in the First Claim (see [44] above) PIAC was unable to contend that the email dated 6 October 2010 was received by NT. Further, although Ms Gul stated at paragraph 9 of her witness statement that "The Defendant produced a Statement of Practice setting out the changes which Mr Akhlaq Akhi, who was then the manager of the Manchester office of the Defendant sent to the Claimant and other agents by email on 6th October 2010", she did not claim to have any personal knowledge that the email was sent to NT, or identify any source that enabled her to say that it was according to her information and belief. It would appear that she based her evidence simply on reading the text of one copy of the email (but not one which she professed to locate on PIAC's system). Accordingly, there is no satisfactory evidence before the Court that the email was even sent to NT. Further and in any event, PIAC did not suggest the SOP was provided to NT in any other way.
- Mr Bell did, however, contend that the SOP was "available" to NT. In this regard, when cross-examined by Mr Bell, both Mr Khawar Nazir and Mr Asim Nazir frankly and readily accepted that they had never made any attempt to gain access to the SOP, and confirmed that they had never been told by PIAC that they could not see it. Accordingly, they were in no position to say that, if they had made a request of PIAC, they would not have been shown the SOP, or provided with a copy of the SOP. At the same time, PIAC's only witness, Ms Gul, did not address the availability of the SOP in her witness statement (other than by asserting that it was sent out as an attachment to the email dated 6 October 2010, which PIAC was unable to rely upon vis-ΰ-vis NT), and appeared unable to say from her own knowledge whether, and if so how, the SOP was "available" to NT. Her witness statement explains that she has 22 years of experience of working in PIAC's sales and marketing division, and she did not profess to have direct knowledge or involvement in the genesis and implementation of the SOP. For example, when asked about her evidence that "The Defendant stated that instead of paying the agents the commission, henceforth it would automatically apply a 7% passenger service fee under code YR on the base fare of tickets sold at PIAC counters" she clarified that what she meant was that "PIAC decided that
", and that she only knew of this as a matter of general knowledge within PIAC.
- This leaves Mr Bell's argument that the court should infer that the SOP was available to NT. In many cases, such an inference might readily be drawn. In the present case, however, the matter is more difficult, because PIAC's starting point (adhered to by Ms Gul in the present claim) is that the vehicle for communicating the SOP to all its agents was the email dated 6 October 2010. When challenged in the First Claim to make good the case that the email was authentic by producing a version in native format, PIAC was unable to do so, and eventually, as set out above, was required by the Court as a condition for obtaining relief from sanctions, to undertake that under no circumstances would PIAC contend that the email was received by NT. However, from 6 October 2010 down to the date when the 2012 Agreement was made, and indeed in the account in the First Claim, it was PIAC's position that the SOP had been sent to NT under cover of that email.
- Against that background, I ask myself whether or not PIAC would have made the SOP available to NT at the time when the 2012 Agreement was made if asked to do so by NT.
- On the premise that PIAC had already sent the SOP to NT once under cover of that email, there are two possibilities: (i) that PIAC would be only too willing to make it available again, alternatively (ii) that having already provided it once, PIAC would see no reason to provide it again. However, that premise begs the question of whether PIAC had already sent the SOP to NT once under cover of that email. As to that, if the email was sent to NT, there is no obvious reason why it should not have been received by NT. Yet PIAC is unable to contend that it was received by NT. Further, PIAC has produced no satisfactory evidence that it was even sent to NT. That, again, gives rise to two main possibilities: (i) that something went wrong with PIAC's efforts to provide the SOP to NT (but quite what and how is difficult to understand), in which case PIAC might well have been happy to make the SOP available to NT and (ii) that there is some more sinister explanation about this series of events, such as that PIAC did not want NT to see the SOP as that might strengthen NT's resistance to signing the 2012 Agreement, in which case PIAC might well have been unwilling to do so (although I bear in mind that this is a possibility that should not lightly be entertained). On the materials before me, I am unable to decide between any of these possibilities, and thus to decide this issue in PIAC's favour.
- In any event, I am not persuaded that even if the SOP was "available" to NT that would be sufficient to incorporate the terms of the SOP into the 2012 Agreement.
- I take the following general propositions and distillation of the principles to be drawn from a number of decided cases from The Interpretation of Contracts, 8th ed. chapter 16:
(1) "It may also be that case that, where the document which has been signed is one that seeks to incorporate a set of terms and conditions but does not itself contain those terms and conditions, a signature may not of itself suffice to incorporate a term or condition in that document which is onerous or unusual, unless the document which was signed drew attention to the onerous or unusual term." [16-006]
(2) "The conditions must be brought to the notice of the party to be bound before or at the time the contract is made." [16-009]
(3) "The question whether the party tendering the document has done all that was reasonably sufficient to give the other notice of the conditions is a question of fact in each case, in answering which the tribunal must look at all the circumstances and the situation of the parties. But it is for the court, as a matter of law, to decide whether there is sufficient evidence for holding that the notice is reasonably sufficient
It is not necessary that the conditions themselves should be set out in the document tendered: they may be incorporated by reference, provided that reasonable notice of them has been given. Reference to standard terms to be found on a website may be sufficient to incorporate the terms on the website into the contract, so that terms may be incorporated into a contract by ticking a box on a screen or by clicking on a hyperlink." [16-011]
(4) "Although the party receiving the document knows it contains conditions, if the particular condition relied on is one which is a particularly onerous or unusual term
the party tendering the document must show that it has been brought fairly and reasonably to the other's attention
Much depends on the facts and circumstances of the case so that the court must "have full regard to the context and the respective bargaining positions of the parties"
a significant change in the contractual terms used to govern the relationship between the parties may suffice to establish that the term is "unusual"
the case law has left open the possibility that in "exceptional" cases this [additional] requirement [for onerous or unusual clauses] may apply to a contract which has been signed [see above, [16-006]] ." [16-012]
- These points arose for consideration by His Honour Judge Stephen Davies sitting as a Judge of the High Court in Blu-Sky Solutions Ltd v BE Caring Ltd [2022] 2 All ER (Comm) 254, upon which Mr Bell relied. In sum, the Judge reasoned as follows at [93]-[100]: (1) it is a well-established principle of common law that, even if a person signing a contract knew that standard conditions were provided as part of the tender, a condition which was particularly onerous or unusual would not be incorporated unless it had fairly and reasonably been brought to their attention (see Goodlife Foods Ltd v Hall Fire Protection Ltd [2018] EWCA Civ 1371, [2018] BLR 491), (2) it is undecided whether that principle applies where the term is contained in standard conditions incorporated under a signed contract, but even if it does the general principle is that a party who has signed a document is bound by its terms (see Do-Buy 925 Ltd v National Westminster Bank Plc [2010] EWHC 2862 (QB)), (3) the distinction drawn in Bates v Post Office Ltd (No.3: Common Issues) [2019] EWHC 606 (QB) between a case where the terms are contained in the signed contract and where they were not was correct in principle and "Where
the signed contract simply incorporates by reference T&Cs, one of which is unduly onerous, it is difficult to see why as a matter of principle the same extremely restrictive approach should follow, unless the signed contract itself drew attention to the unduly onerous clause" (see [99]), and (4) "
the fact that [a party] was prepared to sign a contractual document must always be a powerful factor against a conclusion that terms expressly incorporated into it were not sufficiently brought to its attention. I would suggest that the weight to be given to that factor in an individual case will be fact-sensitive and that adopting the sliding scale approach may also be useful. It is likely to be very strong if there is a short form signed contract which refers to the term itself, and likely to be relatively weak if the order form is signed but the term is "buried away" in detailed T&Cs, which are incorporated as a matter of law but which are neither found in the signed contract nor provided with the signed contract". On the facts of that case, the Judge held that sufficient had been done to bring to the attention of the defendant standard terms and conditions which were referred to in the signed contract and which were accessible on a website to incorporate those terms and conditions, but that the defendant was not bound by a particularly onerous clause which was "concealed" therein.
- Mr Bell further relied upon the decision of the Court of Appeal in Thompson v London, Midland and Scottish Railway Co [1930] 1 KB 1. I consider that it is sufficient for present purposes to cite the following passages from the judgment of Lawrence LJ at 52-53:
"The facts of the case are simple. On the ticket issued to the plaintiff's agent there was a statement in plain terms that it was issued subject to conditions which would be found on the back, and on the back there is a plain statement indicating where the conditions subject to which the ticket was issued were to be found. In these circumstances (the notice on the ticket not being tricky or illusory) it seems to me that there is no room for any evidence that the company had not done all that was reasonably necessary as a matter of ordinary practice to call attention to the conditions upon which the ticket was issued.
If there were a condition which was unreasonable to the knowledge of the company tendering the ticket I do not think the passenger would be bound."
- In the present case, the 2012 Agreement was signed by Mr Khawar Azir on behalf of NT on or about 18 October 2012, and was then faxed to PIAC's Manchester office. It was not suggested by PIAC, let alone made good by evidence, that the SOP was communicated to NT before that time, or that it was made available to Mr Khawar Azir at that time. As appears from the discussion above, quite how the SOP would have been "available" to NT was not explained by any evidence, and was not clear from Mr Bell's submissions, but the impression conveyed by Mr Bell's cross-examination and submissions was that the SOP was kept at PIAC's offices and could have been viewed there by NT upon request, or possibly would have been sent to NT upon request. In my judgment, those facts are very different from the facts of cases where the standard form terms that are sought to be incorporated by reference into the contract are (a) contained in a timetable which can be obtained at the time and place where the contract was made (albeit for a price of 6d) (see Thompson) or (b) readily accessible at that time on a website (see Blu-Sky Solutions).
- In addition, the evidence before me, which is in substance, at least so far as concerns the witness statements, the same as the evidence that was before Warren J in the First Claim, is that PIAC was in a much stronger bargaining position than NT. In sum, NT's case is that PIAC had NT over a barrel, not least because most of NT's clients are of Pakistani origin, PIAC is the only carrier that flies direct from the UK to Pakistan, NT had to sell PIAC tickets to attract clients, and PIAC was exerting pressure on NT by reducing the supply of tickets to NT; and Mr Bijarani of PIAC accepted that the position was unfair.
- Still further, a move to the SOP constituted a very significant change in the contractual terms used to govern the relationship between NT and PIAC. In my judgment, the relevant provisions of the SOP were for that reason and in any event (as explained below) onerous and unusual. Yet there is no suggestion that PIAC made any attempt to draw the SOP, and in particular these provisions, to the attention of NT. As discussed above, PIAC's general case was that it had informed its agents about the SOP through the medium of the email dated 6 October 2010, but PIAC in unable to rely on that email as far as NT is concerned.
- For these reasons, I hold that the 2012 Agreement did not incorporate the SOP.
THE ISSUE OF "REMUNERATION"
- As set out above, it is common ground between NT and PIAC that IATA 824 forms part of the 2012 Agreement. In this regard:
(1) Clause 4 of the 2012 Agreement provides:
"Pursuant to Clause 9 of IATA Resolution 824, PIAC may notify the Agent from time to time of the manner and amount of remuneration for the sale of air transportation and ancillary services and such remuneration shall constitute full compensation for the -services rendered to PIAC by the Agent."
(2) Clause 5 of the 2012 Agreement is set out in [91] above.
(3) Paragraph 9 of IATA 824, headed "REMUNERATION", provides:
"for the sale of air transportation and ancillary services by the Agent under this Agreement the Carrier shall remunerate the Agent in a manner and amount as may be stated from time to time and communicated to the Agent by the Carrier. Such remuneration shall constitute full compensation for the services rendered to the Carrier."
- Paragraph 9 of IATA 824 contains two requirements (i) for PIAC to provide "remuneration" and (ii) for that remuneration to be in a manner and amount as may be stated from time to time and "communicated" to NT by PIAC. In my judgment, for the reasons set out below, neither of these requirements is satisfied in the present case.
- In the First Claim, Warren J expressed the view that NSR, as defined by PIAC in the First Claim, did constitute remuneration, but that Revised NSR (in other words, NSR as set out in the SOP) did not constitute remuneration. I respectfully consider he was right.
- Remuneration comprises payment for work or services. However, the SOP does not involve any payment being made by PIAC to NT. On the contrary, in accordance with the SOP: (i) PIAC only commits to charge a 7% PSF for tickets issued at its counters, (ii) the price at which tickets are supplied by PIAC to NT is the same as the price at which PIAC supplies (or at least the same as the price at which PIAC is entitled under the SOP to supply) tickets to passengers making purchases online, and (iii) in respect of all tickets purchased from PIAC, the charge which NT is allowed to make is limited to a maximum charge of 7% PSF. The closest those elements might be said to come to involving payment being made by PIAC to NT is that the third element permits NT to sell tickets at a price which competes with the price available to passengers at PIAC's counters. But that is not, in truth, any form of payment by PIAC to NT. Indeed, as NT is otherwise entitled to sell tickets at whatever price it chooses, any profit that it is able to make being a matter for NT in respect of which NT does not have to account to PIAC, this element actually has the effect of limiting the profit which NT would otherwise be entitled to seek. I do not consider that affording NT the opportunity to sell tickets at a price higher than the price at which NT buys them from PIAC amounts to PIAC providing NT with "remuneration".
- Moreover, the SOP provides NT with very limited scope for reward. In accordance with the SOP, any mark-up that NT applies to the price at which it obtains tickets from PIAC will make the price at which it is offering tickets for sale uncompetitive with all but PIAC's counter sales, which are accepted to be "very few" of the ticket sales made by PIAC. At the same time, NT's entitlement to charge a mark-up is restricted on all sales. The ability of NT to run a viable business is therefore radically affected under the SOP.
- In my judgment, these factors render the terms of the SOP unusual and onerous.
- Mr Bell submitted that, in light of the contents of Clause 5 of the 2012 Agreement, it is not open to NT to contend the parties that the SOP does not provide for "remuneration". I do not consider that is correct. In my judgment, to describe an arrangement having the features discussed above as providing "remuneration" is, in the words of Lord Denman, a "mockery, delusion and a snare" (O'Connell v R [1844] 11 Cl & F 155). Further, I consider the words of Lord Templeman in Street v Mountford [1985] AC 809 at 819 are in point:
"If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five-pronged implement for manual digging results in a fork even if the manufacturer
insists that he intended to make and has made a spade."
- Turning to the second requirement of paragraph 9 of IATA, information or knowledge is "communicated" if it is shared, exchanged, or transmitted. Mr Bell argued that, in the present case, the SOP was "communicated" to NT by PIAC because it was "available" to NT. As set out above, PIAC did not establish whether and to what extent the SOP was "available" to NT. In my judgment, however: (a) there is a clear and significant distinction between (i) the SOP being communicated to NT and (ii) the SOP being available, and (b) taking PIAC's case at its highest, the SOP was not communicated to NT by PIAC.
QUANTUM MERUIT
- In light of my determination of the preceding issues, no quantum meruit arises. In the event that, under the 2012 Agreement, (i) contrary to my ruling, NT is not entitled to NSR as defined by PIAC, and as determined by Warren J, in the First Claim, but (ii) as I have decided, PIAC is wrong to say that NT's entitlement to remuneration is as set out in the SOP, then NT's entitlement to remuneration has to be determined in some other way, and it is common ground that NT would then be entitled to payment on a quantum meruit.
INTEREST
- I indicated during the course of the trial that I was not minded to order interest at 5%, as had been ordered in the First Claim, but instead to order it at the rate that I considered to be in line with the typical order that is made in a commercial case of this kind.
CONCLUSION
- For these reasons, NT's claim succeeds. There will be judgment for NT, not for £2,570,861.16 as claimed, but instead for such sum as the parties are able to agree in light of the adjustments to that claim that NT has accepted require to be made, or in default of agreement as is determined by the Court once PIAC's stance on the figures is explained.
- I ask Counsel to agree an order which reflects the above rulings. I will deal with submissions on any points which remain in dispute as to quantum, interest, and the form of the order, and on any other issues such as costs and permission to appeal, either when judgment is handed down, or on an adjourned hearing on some other convenient date.