Jet2.com Ltd v S C Compania Nationala De Transporturi Aeriene Romane Tarom SA

On 15 March 2012 I gave judgment on liability finding that Tarom had broken its contract with Jet2 and was liable in principle for damages. On 18 and 19 July I heard evidence and argument on the quantum of damage, the parties having been unable to agree this despite, given the imprecision of assessment in this sort of case, urging from me (and from Rix LJ when refusing permission to appeal). I do not repeat the background and other matters set out in the judgment and deal only with the two disputed areas of quantum, first the question of how many Jet2 aircraft Tarom would have serviced if the Agreement had not been terminated and secondly the thirteen issues of detail identified by the parties in their written submissions.

The starting point is the Re-Amended Particulars of Claim in Paragraph 20 of which Jet2 seeks US$ 7,881,283.36 as the difference between what it paid for work and what it would have paid had Tarom done it under the Agreement. The pleading attaches detailed schedules of comparison, giving rise to the thirteen issues, between what Jet2 says it would have paid if Tarom had done the work under the Agreement and what in fact it cost Jet2 to pay JAT to do some checks and to do the remainder itself at Leeds Bradford Airport. Before turning to those issues I first decide a preliminary question raised by Mr Shah.

Mr Shah’s skeleton argument makes submissions between Paragraphs 5 and 9 that the court must first consider whether the loss claimed by Jet2 was in fact caused by Tarom’s repudiatory breach of the Agreement. He submits that there can be no assessment until causation is first distinctly proved and relies, as he did at the first hearing, on the decision of the Court of Appeal in Galoo v Bright Grahame Murray [1994] 1 WLR 1360 at 1374G – 1375B. As I see it the relevant test is set out at Paragraphs 74 and 84 of my judgment leading to the question raised in Paragraphs 85 and 86. The test is also consistent, given the facts of this case, with the guidance set out in Galoo. Causation is distinctly proved by the facts as I have found them to be. I should not depart from the approach in my judgment unless I am now convinced that it was wrong. I am not so convinced and the approach has some support from the remarks made by Rix LJ when refusing permission to appeal. Submissions about the validity of the test itself should be made to the Court of Appeal and not to me.

There are two distinct periods. First the 2007/2008 servicing season which was almost underway when the Agreement was terminated on 18 September 2007 and secondly the two further seasons of 2008/2009 and 2009/2010.

On 4 September 2007 one aircraft had already gone to JAT and does not form part of Jet2’s claim.

Mr Thompson submits that if Tarom had not terminated and had shown itself capable and willing to perform its obligations Jet2 would have required it to carry out as many of the C-checks as it could have managed. The evidence of Mr Meeson and Mr White was to that effect, the C-check, because of its regulatory requirements, is carried out to the same standard whoever does it and Tarom was tied to an exceptionally attractive rate, US$26 per man hour, then equivalent to between €18 and €19, in contrast to JAT which was charging, on a similar pricing structure, €35 per man hour. Furthermore Jet2 had always been reluctant to carry out its own C-checks at its Leeds Bradford Airport (“LBA”) facility as it was not the airline’s policy to take on maintenance as heavy as this. As Mr Meeson and Mr Menzies pointed out in evidence the LBA facility was shut down as soon as the Tarom backlog had been cleared.

Mr Thompson submits that there were no reasons militating against a move back to Tarom at the start of a new maintenance season. Jet2 had paid deposits totalling €49,000 to JAT in respect of seven aircrafts but this, about 2% of the price of the average check, was a small sum and Jet2 had also paid Tarom US$170,000 as deposits. Some deposits were always going to be lost.

While Mr Lloyd had on 6 August 2007 been moved from Tarom at Bucharest to JAT in Belgrade and he and his colleagues had been focused by senior management on the future being with JAT the position could easily have been reversed. Staff were familiar with Tarom, having worked with it for the previous three seasons. Permanent staff had been moved to LBA, because of CAA requirements, and contractors hired to replace them. The contractors could have been dispensed with and the permanent staff could have gone back to their previous places of work. The fact that Jet2 had carried out due diligence on JAT did not mean it was unable to revert to Tarom.

Mr Shah puts forward arguments why no damages can be claimed for the 2007/2008 season. By Article 2.4 of the Agreement Jet2 could not obtain a servicing slot unless it had served a Request For Services (“RFS”) 60 days prior to the commencement date. By 18 September 2007 no RFS had been served as a result of which Tarom would have been within its rights to decline to maintain four aircraft. Further Tarom submits that it would not have been obliged to maintain any other aircraft in the 2007/2008 season because notices required by Article 2.1 and Appendix F of the Agreement had not been served. Mr Shah submits that Tarom was entitled to rely on its strict legal rights whatever in practice the parties had done while the contract was still alive. I reject these submissions for the reasons set out in Paragraphs 77 to 81 of the judgment.

As regards subsequent seasons Mr Thompson says that similar considerations apply. Jet2 had carried out its due diligence and JAT had proved to be satisfactory and it promised (as turned out to be the case) that it could turn aircraft around more quickly than Tarom. The advantage of having aircraft serviced quicker would however have been limited during the off season when the demand for shorter downtimes was lower than in the holiday season. The inefficiency of Tarom would be more than offset by the exceptionally low price.

Mr Shah for Tarom submits that no aircraft would have been sent if the contract had not been repudiated. He points to the documentary evidence at trial that Jet2, through Mr Meeson and Mr Menzies, was telling staff that it would not be continuing with Tarom and that it would be using JAT. He points to the fact that no aircraft was sent to Tarom after mid June 2007. The maintenance plans showed aircraft going to LBA and to JAT and the only aircraft on which Tarom quoted a price was in fact sent to LBA.

Mr Shah also submits that the importance to Jet2 of the low man hour rate has been exaggerated. Jet2 perceived that JAT would be more efficient that Tarom, its normal working hours were more flexible, the maintenance plan envisaged that JAT would have 30% less “downtime” than Tarom, JAT was likely to complete maintenance ahead of schedule.

Mr Shah submits that the combination of JAT and LBA would have permitted completion of base maintenance by the end of March in each season. This was important for Jet2 because it needed its aircraft for summer demand and was an objective contained in each of the three seasons now in issue. Tarom had never been asked to complete base maintenance by the end of March and could not have done so. It had no such contractual obligation and the objective would not have been achieved even if Tarom had been used in tandem with LBA.

Tarom claims that Jet2 had good reasons for sending aircraft to LBA rather than Tarom independently of questions of Tarom’s performance. Mr Shah cites the saving on the costs of ferry flights, personnel expenses, time taken to ferry parts and flexibility in maintenance. He points to the fact that even by August 2007 Jet2 was still planning to send aircraft to LBA. Mr Shah points to the extent to which Jet2 had in practice made a commitment to JAT.

Mr Shah also submits that Tarom’s available capacity in the October to March period was insufficient to complete maintenance on all the aircraft claimed for by Jet2. The starting point for this submission was the evidence of Mr Bucur that Tarom’s maximum available capacity was 100,000 man hours per year, with the same capacity in January as in July. It follows that Tarom would only have 50,000 available man hours in the six month period from October to March. Another way he puts it is to consider the number of maintenance lines required to complete the maintenance within that period, timely maintenance would have required three lines but Tarom could not provide more than two. He submits that with a limit of 50,000 man hours and a maintenance period of September to the end of March in the 2008/2009 season Tarom would in practice have been able to do checks on six aircraft and in the 2009/2010 season on six aircraft also. (In 2008/2009 twelve checks were done by Leeds and JAT and eight in 2009/2010. Tarom never managed to do more than nine in any contractual year.)

Mr Shah’s submission is encapsulated in the following observations at the hearing:

“Using a combination of Leeds and JAT allowed Jet2 to have their aircraft ready for flying throughout the summer season. If they had used Tarom only, then the aircraft maintenance would not have been completed in the winter time. Some aircraft would have had to be maintained during the summer flying season. That means that by using JAT and Leeds Jet2 was able to have all its aircraft generating revenue in the summer season, when it required them. Whereas if it had used Tarom there would have been difficulties in using all the aircraft in that period.”

Mr Thompson responds to this point citing the Agreement which specified that there was no maximum number of aircraft to be serviced each year. He submits that Mr Bucur when making his initial presentation to Jet2 did not suggest that 100,000 man hours would have to be equally spread throughout twelve months and was well aware, as proved the case, that with C-checks being carried out every other year that nine or ten would be the minimum requirement and indeed nine was the number of checks done in 2004/2005 and 2005/2006, albeit not confined to the winter season. Mr Thompson says that from 2004 Tarom encouraged Jet2 to believe that it could carry out all Jet2’s C-check requirements which with a fleet of twenty aircraft would mean nine or ten each year. Mr Thompson says that Tarom’s practical capacity (and hence its legal obligation) was ten C-checks per annum. Jet2 would also have had good reason to place its servicing requirements with one contractor. Multiple facilities would require an airline to provide extra equipment and to stock more than one pool of rotable parts, management to travel more and meet more personnel with the attendant extra time and cost. This would also mean that the airline would have to manage multiple sets of relationships and deal with more administration.

Jet2 had obtained an exceptionally attractive price from Tarom to carry out C-checks, the standards and requirement for which are the same whoever does them. During the period when the Agreement had functioned satisfactorily Jet2 preferred to deal with one contractor only. The perceived shortcomings of Tarom had caused considerable difficulty to Jet2 from 2006 onwards without giving Jet2 any rights of action which it wished to invoke. There were signs that Jet2 recognised that whatever its strict legal position, as its fixed hourly rate became ever less economic for Tarom, the contract was unlikely to operate satisfactorily. Thus in the spring of 2007 Jet2 recognised that any renegotiation would involve an increase in the man hourly rate perhaps to €32. One reason those negotiations did not progress was because Jet2 was able to establish a contractual relationship with JAT the existence of which improved its negotiating position with Tarom. By the summer of 2007 it was Jet2’s plan, which to some extent had been implemented, to stop placing work with Tarom and to use JAT and LBA instead. By September 2007 those plans were well in hand but JAT was still to some extent an unknown quantity and Jet2 was in a position, because of its past experience with Tarom, to resume cooperation with it without much difficulty. The price was still very important for the reasons set out by Jet2’s witnesses but there were also practical considerations in reverting to Tarom as well as very real concerns about the company’s performance in respects which had not been previously been acted upon as breaches of contract.

There are practical advantages in sticking to one contractor but the negotiating benefit of having more than one, and the value of knowing that another option was available if Tarom’s performance or attitude caused commercial difficulties, would have been apparent by September 2007. JAT would not have been a reliable alternative unless given at least some work each year. Further Jet2 would have been cautious in its dealings with Tarom given its experience of that company’s contractual performance –which had been unsatisfactory without attracting claims for breach of contract.

I accept the evidence that Jet2 set up the LBA C-check capability only as a result of what it saw as problems caused by Tarom and that throughout it saw this facility as “an unwanted and totally unexpected distraction”. The LBA facility was one that Jet2 did not wish to keep, at least as regards its ability to do C-checks, and it would have ceased to do this work as soon as was reasonably practicable.

These considerations seem to me the most important ones although I bear the others mentioned in mind. Ultimately the decisions about which contractor to use for a C-check would have involved estimates and judgments about a variety of these considerations and no doubt others not identified or arising only as the Agreement ran its course. I see no point in reaching specific conclusions on submissions about quite minor points which would in the real world have played little part in these broad commercial decisions taken from time to time in the light of particular, and perhaps unforeseen, circumstances then prevailing. The evidence of Jet2, while entirely honest seems to me to present too optimistic an assessment of its willingness to entrust so much of the work to Tarom. Doing the best I can, I conclude that in the season 2007/2008 Jet2 would have required Tarom to service five aircraft, three of those which were in fact carried out by LBA and two by JAT. There would have been no purpose in the years 2008/2009 and 2009/2010 for Jet2 to have any C-checks carried out by LBA. For reasons that I have given I believe that the relationship with JAT would have been maintained and as a result it would have serviced aircraft. The work placed with Tarom would have been limited to that demonstrably within its capacity. Again, doing the best I can I conclude that in 2008/2009 Tarom would have serviced eight aircraft leaving four for JAT and in 2009/2010 six aircraft leaving two for JAT.

The parties identified thirteen items of disagreement arising from the schedules prepared by Jet2 in support of its damages claim. I will take the thirteen issues in the order in which they appear on the “Agreed List of Issues on Quantum”.

Jet2 claims hangarage costs incurred for the specific purpose of C-checks. Jet2 moved its base from Bournemouth to Leeds in late 2005 and rented a space in Hangar 4 in effect from May 2006 to April 2011. The lease for Hangar 4 was for about half the building at an annual rent of £200,000. Jet2 needed a second bay for C-checks and says that it rented the remainder of the hangar on an ad hoc basis solely for this purpose. That arrangement was formalised in a second lease from October 2009 until April 2011 at an annual rent of £150,000. For the 2007/2008 season costs have been allocated according to days spent by the aircraft in the hangar based on a total of additional hangar costs of £200,000. For the 2008/2009 and 2009/2010 seasons Jet2 apportions the hangarage and facilities costs on the basis of how this was done in the contemporaneous management reports.

Tarom submits that the hangar was leased by Jet2 to do line maintenance and payments under the lease were due whether or not the company carried out C-checks or conventional line maintenance. Tarom also argues that the apportionment of hangarage costs to C-checks was an accounting exercise undertaken internally to ensure that all costs were accounted for. That does not make those costs legally recoverable as damages. Essentially Mr Shah says that the costs claimed are overhead costs not referable to any breach of contract. He also identifies an error as regards the last three aircraft in the 2009/2010 season. The figure applied to each aircraft is very large. This is apparently because in the final year only three C-checks were done partly because the backlog from the period prior to termination of the Agreement was finally being cleared. Jet2 have allocated the entire cost for the rent in the relevant period to the three aircraft. Mr Thompson accepted the logic of this point to the extent of conceding an argument that the figures for 2009/2010 can properly be reduced. He concedes that 50% of them should be struck from the claim.

Mr Shah argues that the second bay taken by the Claimants in the summer of 2007 was to deal with the consequence of delays by Tarom which are not the subject of claims for breach of contract by Jet2. (Perhaps -but presumably at some point the second bay would not have been used for that purpose any more but for post termination C-checks.)

Mr White of Jet2 explains at Paragraph 31 of his witness statement that costs are allocated according to days spent by the aircraft in the hangar based on a total cost of £200,000 payable under the “Multiflight” facility. This is a reference to the first lease of a hangar taken without regard to the need for post-termination C-checks. Further Mr Menzies of Jet2 when referring to this period at Paragraph 45 of his witness statement says “for the C-checks we were able to rent a second bay as required”. There is no indication of what this additional rental cost, which would appear to be that attributable to C-checks made necessary by termination of the Agreement, was. It does not appear to be documented. So for the 2007/2008 season while the Claimant would be entitled to recover hangarage costs attributable to the C-checks for which damages are recoverable this should not be calculated by reference to the £200,000, a previously incurred overhead payable anyway, but by reference to the additional costs referred to by Mr Menzies.

Mr White and Mr Goulding gave evidence about apportionment of hangarage costs in the 2008/2009 and 2009/2010 seasons but it is unclear from this and from those passages in the management reports shown to me whether the hangarage costs are based only on the later lease taken out essentially for relevant C-check work at a rent of £150,000 p.a. from October 2009 until April 2011. If the apportionments are based on that £150,000 per annum then these are referable exclusively to additional C-check work which Jet2 carried out as a result of termination of the Agreement. The entire cost of this rent would however only be recoverable if the additional space was used exclusively for relevant C-check work. Mr Shah submits that there was no evidence that every single C-check carried out at Leeds was done in the additional ad hoc space which was taken.

I conclude ,on the material available, that Jet2 can recover something for hangarage costs unless, which is not the case, all the additional C-check work resulting from termination of the Agreement could have been accommodated without cost in the existing space. In the 2007/2008 season there were apparently additional ad hoc rental costs but it is unclear how much these were. For part of the second and for all the third relevant seasons it appears that a lease had been taken of the remainder of the hangar solely for relevant C-check work. The uncertainties in the nature of the claim and the evidence deployed in support of it by Jet 2 incline me to caution as does the fact that it is for the Claimant to prove damage. If this issue cannot be agreed there may be a need for further evidence and submissions, which might well be on the basis of the costs being paid by Jet2 in any event.

Jet2 claims within the labour costs of doing its own C-checks at Leeds the costs not only of contractors but of permanent salaried staff. The Civil Aviation Authority requires 50% of those engaged on C-checks to be from the responsible company’s permanent staff. Jet2 brought in permanent staff to LBA for this purpose and filled the gaps by hiring contractors. Permanent staff (because they are generally cheaper than contractors) comprised some 28% of the labour costs claimed.

Mr Shah submits that the permanent staff costs are not recoverable because Jet2 would have had to pay them anyway. The exercise of apportioning the cost of permanent staff to a particular C-check is an internal management exercise that does not make the costs recoverable in law.

Mr Thompson responds that Tarom is getting a bargain by paying only the cost of the permanent staff and not that of the contractors who had to be hired to replace them in other locations.

It is not suggested that the evidence of Jet2 that contractors were hired to replace permanent staff at other locations so that they could be seconded to LBA is wrong. One would not in the ordinary way allow the costs of permanent staff but in these special circumstances, where there is a particular need to use a proportion of such staff who are directly replaced by contract staff in their usual locations, that item should be part of the damages recovered by Jet2.

Tarom contends that it has no idea whether the hours claimed for Leeds are correct since these are based on timesheets and other documents not disclosed. Tarom cannot evaluate from invoices alone whether the hours claimed on them are correct. Mr Shah points to a discrepancy between the hours claimed for Leeds and those for which Tarom would have been likely to claim for the same work. He submits by reference to the calculations in Appendix G of the Agreement that Leeds is apparently taking longer to do relatively standard tasks specified in the manuals than Tarom would have done.

Mr Thompson responds by pointing to the fact that the discrepancy which is between 130,490 and 116,190 hours is only 12% which he submits is attributable to the bargaining skills of Mr Meeson when negotiating the Agreement and its schedules and not to overcharging by Jet2. Mr Thompson also rejects criticism of the lack of detail on a worksheet in October 2007 by pointing out that at that time only one aircraft was being serviced and there would have been no need to allocate the costs between the several on the line. Mr Thompson also draws attention to the fact that Mr Goulding gave detailed evidence about these issues and what he said about the process was not challenged in cross-examination.

I reject the criticisms by each side of the other’s approach. It would have been immensely expensive and time consuming for Jet2 to have conducted a more detailed exercise in support of this aspect of the claim. Similar difficulties would have arisen if Mr Shah had sought to cross-examine in detail on timesheets and other documents each individual one of which represents a very small aspect of the case. Jet2 has to prove its case but on the basis of material that can be reasonably made available. Mr Shah’s discrepancy argument relates to a 12% differential some of which I accept would be attributable to the fact that Tarom committed itself, in order to get Jet2’s business, to stringent terms. The point is nonetheless an indication that there may be a degree of optimism in the hours claimed and I will reduce the claim by half the notional discrepancy that is to say 6%.

This item was abandoned by Tarom.

Jet2’s calculation of the cost of doing C-checks at Leeds does not include the cost of materials, consumables and replacement parts. Tarom submits that this is wrong and exaggerates the difference between what it actually cost Jet2 to service its fleet and what Tarom would have charged to do so. Jet2 says that since it has not included in the first part of the sum its own cost of materials it is fair to remove from the second part of that sum an amount representing that element of the price that Jet2 would have had to pay Tarom for materials had Tarom done the checks instead.

The issue is complex to explain without the reader having the relevant documents laid out in front of him or her. Essentially under the Agreement Jet2 paid for each C-check a fixed price determined in advance of induction of the aircraft on the basis of the RFS and Appendix G plus extra amounts after release of the aircraft. 50% of the fixed price was payable in advance of induction and the remainder paid before the return of the aircraft on completion of the C-check. Both payment elements contained amounts directly attributable to cost of material in the form of percentage uplifts and allowance and, for charges after release of the aircraft, actual cost of materials.

As Jet2 bore the cost of materials for C-checks done at LBA it did not isolate that cost from that of its regular operations. Jet2 has assumed that the costs of the materials would have been the same whether the C-checks were carried out by Tarom or Jet2 because the same materials would have been used for the same tasks at the same times. Thus Jet2 has made the same deduction in fixing its LBA costs as it would have had to pay if Tarom had carried out the relevant C-checks.

Mr Shah responds that there is no evidence that the percentage uplifts under the Agreement and Appendix G represent the actual cost of material. Further he submits that even if one adopts a contractual approach there are flaws in Mr Thompson’s reasoning. The argument about the interaction of the contractual provisions although complex is succinctly set out in the written submissions of Counsel and in the transcript of what they said at the hearing.

It is appropriate for Jet2 to deduct the cost of materials but in the ordinary way the court would expect it to produce evidence of what that actually was. There are many reasons why the cost of materials identified in a contract may not produce a fair result if applied in another context. The cost formula may be the result of negotiating strength by one of the parties. The formula may indeed be accepted to be beneficial to one party but offset by detriments in other areas of the contract. Jet2’s well intentioned approach seems to be flawed and the relevant deduction should be the best estimate of the actual cost of these materials.

These issues involve two questions. First, is it a fair assumption that in respect of aircraft checks undertaken by JAT Tarom would have taken on average the same man hours for Additional Work as JAT in fact took (1,540 hours on average, i.e. US$40,060)? Secondly is it a fair assumption that in respect of aircraft checks undertaken by JAT Tarom would have charged the same for materials used in Additional Work (in excess of the NRC allowance) as JAT did, so that both these amounts can be omitted from the calculation of damages?

These two issues, and 9 and 10 which follow, arise because Tarom disputes the assumption made by Jet2 that Additional Work in various categories would have taken Tarom the same number of hours to carry out as JAT in fact took. As the C-checks are carried out under a standardised procedure one would generally expect the hours taken for Additional Work to be similar whether the contractor was JAT, Tarom or someone else. Further given the complexities of departing from that assumption I would expect the arguments to justify it to be convincing.

Mr Shah relies upon one answer from Mr White given in evidence that the figures would have been higher had the work gone to Tarom based on past experience. I do not accept that as being a sufficient basis for reaching the conclusion about Additional Work. Further an analysis carried out and explained by Mr White in re-examination suggests that Jet2 has assumed that Tarom would have charged nearly US$10,000 more on average than it actually did during the course of the Agreement. There is thus little evidence to support the position put forward by Tarom and some corroboration that what one would assume to be a sensible approach is indeed a fair one. I therefore conclude that the assumptions referred to in issues 7 and 8 are fair ones (as they are indeed in respect of issues 9 and 10).

In 2008/2009 and 2009/2010 Jet2 undertook an interior update project on its B737 fleet while they were in the hangar for C-checks. On the basis of a presentation made by Tarom in 2004 before the Agreement was signed and of its work on aircraft interiors while the parties were working together, Jet2 contends that Tarom would have carried out all this interior work. Mr Bucur has said in his witness statement that Tarom might not have performed all this work. The issue before the parties is how much of this work Tarom would indeed have carried out. In essence Jet2 says that the work cost US$500,000 but if Tarom had done it, it would have cost US$351,000. As a result there is a claim of some US$150,000. Mr Shah accepts the majority of this but suggests it be reduced to two thirds. As Mr Thompson put it, I am “left with a rather arbitrary exercise of trying to work out what most if not all of US$150,000 is”. I will therefore split the difference and set a figure of US$100,000.

There are two questions. First would Jet2’s aircraft have spent the same period of time in maintenance during the seasons 2007/2008, 2008/2009 and 2009/2010 if they had gone to Tarom as they spent at Leeds and JAT? Secondly if performing maintenance at Leeds and JAT reduced the period of time in maintenance has Jet2 benefited as a result?

These issues are developed in Mr Bucur’s witness statement between Paragraphs 30 and 46. Tarom relies on the fact that under clause 4.6 of the Agreement it was required to work five and a half working days a week but JAT had to work 24 hours a day, seven days a week. By reference to Jet2’s maintenance plans and other documents Mr Shah submits that Tarom would have taken longer than the combination of Leeds and JAT. Jet2 in effect had three concurrent maintenance lines rather than the two which Tarom would have had available most of the time. Mr Bucur’s evidence was that if the aircraft had been sent to Tarom the time spent in maintenance would have been longer and the maintenance season would therefore have lasted longer. Tarom say that Jet2 has obtained the financial benefit of this which should be reflected in the damages. Mr Bucur produced a table to demonstrate his view but accepted in cross-examination that the relevant figures were no more than a starting point for negotiation which would have ended up with a figure less attractive to Tarom.

In general Jet2 did not dispute that performing maintenance at Leeds and JAT in the three seasons probably did reduce the maintenance periods but it contends that this produced no financial benefit. Mr White of Jet2 was cross-examined on the issue and said that there was no direct link between maintenance time and revenue because of its interaction with Jet2’s flying schedule which was highly seasonal. Jet2 sought to maximise the number of aircraft available in the peak summer season but completion of maintenance early in the winter would result only in aircraft being parked until needed.

There is no reason to doubt Mr Shah’s summary of the evidence that if Tarom had been asked to do all the aircraft in the following three seasons this could not have been completed in the October to March period. It seems however that Jet2 would only suffer economic disadvantage if the effect of Tarom taking longer would have led to a backlog piling into the summer season.

The starting point is that the work went to JAT and LBA because Tarom had repudiated the contract. There is, in the normal way, no reason for a party seeking to mitigate its damage by taking the only reasonable options available to have to account to the contract breaker for any windfall that results. On the other hand if the overall loss suffered by the Claimant has been reduced by financial benefits in the course of mitigation this should be brought into account. There is no doubt that Jet2 suffered lower downtime using JAT and LBA than it would have done had Tarom carried out the checks. However the financial benefit if any to Jet2 is nebulous and does not seem to me to justify any of the approaches put forward by Mr Shah. He seeks either a proportion of the actual revenue generated by the Jet2 fleet based on the additional days the fleet was able to fly, the cost of hiring a replacement aircraft which it might otherwise have needed if Jet2’s aircraft were in maintenance or alternatively a proportion of the profit per aircraft based on Jet2’s accounts. The first of those options seems to me the only one which could reflect any benefit fairly. But it could only do this if there were evidence of the additional days the fleet was able to fly due to reduced maintenance downtime and a shorter maintenance season. That remains speculation. In the absence of developed evidence on the point I decline to make an adjustment for it, particularly in circumstances where it is arguable that at least some of the additional maintenance time Jet2 would have incurred using Tarom may have been caused by breaches of the Agreement.

When refusing permission to appeal on 18 May 2012 in an order placed in the hearing bundles by the parties, Lord Justice Rix adds at the end of his first Paragraph “nor I suppose can it be excluded that good as the terms of the Agreement were from Jet2’s point of view, commercially speaking a renegotiation might or would ultimately have borne fruit”. Mr Shah has sought to rely upon this observation, Mr Thompson to contend that when assessing damages it is a legally inadmissible consideration. I disagree. This is a case where, until Jet2 did a deal with JAT it was actively considering renegotiation and an increased price for Tarom. Moreover it is common for companies to renegotiate contracts which bear so hard upon the other party that performance becomes commercially unrealistic whatever the potential rights and damages. I have however not considered the matter separately when assessing what might have happened had the contract run its course, given the many other circumstances and uncertainties which I have had to take into account in what, as I have said before, is necessarily an unsatisfactory and artificial exercise.

I shall be grateful if Counsel will let me have, a draft order and a list of corrections of the usual kind, both preferably agreed, and a note of any matters which the parties wish to raise at the hand down of this judgment not less than 72 hours before the hearing takes place. I shall be particularly grateful for corrections of mathematical errors and those arising from a misreading of the schedules as these are not always clear.

Finally I repeat my thanks to Counsel and the solicitors for preparing and presenting so ably and attractively a substantial number of complex and not obviously spellbinding legal and factual issues.