[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Civil Aviation Authority v Jet Services Ltd [2001] EWCA Civ 610 (1 May 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/610.html Cite as: [2001] EWCA Civ 610, [2001] 2 All ER (Comm) 769

[New search] [Printable RTF version] [Help]

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
ADMINISTRATIVE COURT
Longmore J.

		Royal Courts of Justice Strand, London, WC2A 2LL Tuesday 1st May 2001

LORD JUSTICE PETER GIBSON (giving the judgment of the court):

1. The issue raised by this appeal is whether the applicant, Jet Services Ltd. ("Jet"), is obliged to obtain an Air Travel Organiser's Licence ("ATOL") to carry on its business. That issue turns on the true construction of the phrase "make available flight accommodation" in s. 71 of the Civil Aviation Act 1982 ("the 1982 Act") and Reg. 3 of the Civil Aviation (Air Travel Organisers' Licensing) Regulations 1995 ("the 1995 Regulations"). The respondent, the Civil Aviation Authority ("the CAA"), gave a decision by letter dated 28 February 2000 that Jet's business involves making available flight accommodation and that therefore Jet could not lawfully pursue that business without obtaining an ATOL. Jet disagreed, and applied for judicial review of the CAA's decision. Longmore J. heard that application and on 6 December 2000 agreed with Jet. He quashed the decision and granted a declaration that Jet did not require an ATOL for its activities set out in the Schedule to the judge's order. The CAA now appeals with the permission of the judge.
2. The CAA was constituted by the Civil Aviation Act 1971, the provisions of which as amended were consolidated in the 1982 Act. It has among its functions that of "licensing the provision of accommodation in aircraft" (s. 3 (b) of the 1982 Act). The need for such licensing was perceived following a number of financial failures by tour operators providing package holidays in the 1950s and 1960s which left holiday-makers stranded abroad or with no flight to take them on the holiday for which they had paid. It is the CAA's duty to perform the functions conferred on it in the manner which it considers is best calculated to secure that British airlines provide air transport services which satisfy all substantial categories of public demand and to further the reasonable interests of users of air transport services (s. 4 (1)). By s. 71 (so far as material):

"Regulation of provision of accommodation in aircraft

(1) Provision may be made by regulations made by the Secretary of State for securing that a person does not in the United Kingdom -

(a) make available, as a principal or an agent, accommodation for the carriage of persons or cargo on flights in any part of the world, or

(b) hold himself out as a person who, either as a principal or an agent or without disclosing his capacity, may make such accommodation available,

unless he is the operator of the relevant aircraft or holds and complies with the terms of a licence issued in pursuance of the regulations or is exempted by or under the regulations from the need to hold such a licence.

(2) Regulations made by the Secretary of State for the purposes of subsection (1) above may contain such provisions as the Secretary of State, after consultation with the CAA, considers appropriate for those purposes and may, without prejudice to the generality of the preceding provisions of this subsection, include provision -

(a) as to the circumstances in which licences shall or shall not be issued in pursuance of the regulations;

(b) as to the terms of licences ....,

(c) for the variation, suspension and revocation of licences;

(d) ....;

(e) for imposing penalties for contraventions of the regulations ....;

(f) ...."

3. The 1995 Regulations were made pursuant to s. 71. They replaced earlier regulations and have themselves been amended by subsequent regulations made under s. 71 (see the Civil Aviation (Air Travel Organisers' Licensing) (Amendment) Regulations 1996 and the Civil Aviation (Air Travel Organisers' Licensing) (Second Amendment) Regulations 1997). The 1995 Regulations, as amended, include the following material provisions:

"Who may provide flight accommodation

3. (1) No person shall, in the United Kingdom, make available flight accommodation unless:

(a) he is the operator of the relevant aircraft when the flight is made (in these Regulations called "an operator");

(b) he holds a licence authorising him to do so, and the terms of the licence are complied with so far as they relate to the provision of that accommodation (in these Regulations called "a licence holder");

(c) he is acting as agent on behalf and with the authority of a disclosed identified principal who is a licence holder (in these Regulations called "an agent for a licence holder");

(d) he is a person who is exempted by the Authority under regulation 5 from the need to hold a licence (in these Regulations called "an exempted person"); or

(e) he is acting as a ticket provider.

(2) No person shall, in the United Kingdom, hold himself out as a person who may make available flight accommodation unless:

(a) (i) he is entitled to make available that accommodation as an operator, a licence holder, an agent for a licence holder or an exempted person; or

(ii) he is capable of supplying a valid ticket in accordance with regulation 4 for any flight accommodation in respect of which he holds himself out as being able to make available; and

(b) at all times in the course of holding himself out as a person who may make available flight accommodation, he discloses the capacity in which he is entitled to make that accommodation available.

Provision of accommodation, acceptance of payment and provision of receipt

4. (1) A person acting in his capacity as a licence holder shall not accept payment in respect of the making available of flight accommodation unless he supplies, by the specified method, to the person from whom such payment is accepted, an ATOL receipt or an ATOL confirmation invoice.

(2) (a) A person acting in his capacity as the agent of a licence holder shall not accept payment in respect of the making available of flight accommodation unless he supplies, by the specified method, to the person from whom such payment is accepted, an ATOL receipt or an ATOL confirmation invoice.

(b) Where such a person supplies an ATOL receipt, he shall, by the specified method, notify the licence holder on whose behalf he is acting. Such notification shall include sufficient information to enable the licence holder to issue an ATOL confirmation invoice. Upon receipt of the ATOL confirmation invoice from the licence holder, the agent shall forward it by the specified method to the person to whom he supplied the relevant ATOL receipt.

(3) A person acting as a ticket provider shall not make available flight accommodation except to a person who he has reasonable grounds for believing will be the end user of that flight accommodation.

....

Power to exempt

5. The Authority may by an instrument in writing exempt from the need to hold a licence any person or any class or description of persons specified in the instrument ...."

4. By reg. 1 (2), as amended:

""end user" means a person who either makes use of flight accommodation for travel in person or who, without accepting any payment, provides it to another person who uses that flight accommodation for travel in person;

"flight accommodation" means accommodation for the carriage of a person on a flight by an aircraft (whether or not registered in the United Kingdom) in any part of the world;

"the specified method" means:

(a) in the case of a document required to be given to a person from whom payment is accepted and who is present, by handing the required document to him in person at the time such payment is made; and

(b) in any other case, by sending the required document by post or by some other means no less expeditious as soon as reasonably practicable and in any event not later than the following working day;

"a ticket provider" means a person who, in respect of the making available of flight accommodation, supplies to the person from whom payment is accepted a valid ticket either before accepting payment or, following acceptance of the payment, by the specified method; ..."

5. The terms "an ATOL receipt" and "an ATOL confirmation invoice" are also defined in reg. 1 (2), in each case as a document which complies with requirements published from time to time by the CAA for such a document.
6. Reg. 6 gives the CAA a wide discretion when granting a licence; for example, it allows the CAA to impose such conditions as it thinks fit (reg. 6 (1)(a)(ii)). But the CAA is required to refuse to grant a licence if not satisfied that the applicant for a licence is a fit person to make available flight accommodation (reg. 6(2)(a)), and it may refuse a licence if not satisfied that the resources of the applicant and the financial arrangements made by him are adequate for discharging his actual and potential obligations in respect of any activities in which he is or may be expected to engage if granted the licence (reg. 6 (2)(b)). By reg. 7 the CAA may revoke, suspend or vary a licence on similar grounds.
7. By reg. 15 (2):

"A person who contravenes the provisions of regulations 3, 4 or 14 shall be guilty of an offence and shall be liable on summary conviction to a fine of an amount not exceeding the statutory maximum or on conviction on indictment to a fine or imprisonment for a term not exceeding 2 years or both."

8. The CAA regards those who, in its view, make available flight accommodation as falling into four categories. First, there is the fully bonded category covering those who provide inclusive tour packages based on scheduled or charter flights or sell seats on charter flights. They are required to put up a bond of 10 to 15% of turnover. Second, there is the scheduled bonded category, covering those who sell seats on scheduled flights. They are required to put up a bond of 10% of turnover. Third, there is the agency category, covering scheduled airline agents who buy tickets from airlines and sell direct to the public and through travel agents. They are not considered by the CAA as ticket providers because the tickets are not issued immediately. They are normally required to provide a bond of £10,000. Fourth, there is the trade category, which the CAA subdivides into two. One comprises contracting brokers, who buy flight accommodation and sell it on to other ATOL holders. The other comprises payment collecting brokers. Mr. Clover, for the CAA, in his Witness Statement describes this sub-category in this way:

"These ATOL holders are part of the arrangement where flight accommodation is passed down the chain from airline to end user customer. They act as intermediary between two other ATOL holders or between an ATOL holder and an airline. The two other ATOL holders (or ATOL holder and airline) are in contract with one another for the flight accommodation but the purchase money is passed from Buyer ATOL holder to Payment Collecting Broker ATOL holder to Seller ATOL holder/Airline."

9. The CAA requires a bond of £10,000 from a broker in the trade category, who would also be required to satisfy the CAA of his financial strength by meeting certain published criteria and to pay a fee of £665 plus 9.95p per passenger or seat licensed.
10. Prior to the hearing before the judge the CAA treated those whom it calls "commission brokers" as not being persons who make available flight accommodation. Commission brokers act as introducers of buyers and sellers of flight accommodation for a commission, but the purchase price for the flight accommodation does not pass through the commission brokers' accounts. In the course of argument at that hearing the CAA indicated a change of mind and said that commission brokers should be treated as making available flight accommodation.
11. Should the ATOL holder fail financially, the bond moneys are used to provide refunds and bring back those stranded abroad. If the bond moneys are not sufficient, recourse can be had to the Air Travel Trust, the borrowings of which are guaranteed by the Government.
12. The CAA considers that Jet is a payment collecting broker making available flight accommodation. Its activities, which the judge found was the way Jet was then doing business on the uncontested evidence of Stephen Dale, Jet's Managing Director, were summarised in the Schedule to the judge's order in this way:

"(1) [Jet] is retained to represent and act on behalf of travel organisers seeking to purchase flight accommodation (the "buyers").

(2) In all cases the prospective sellers of the flight accommodation (the "sellers") are aircraft operators or ATOL holders and the prospective buyers are ATOL holders. [Jet] does not act on behalf of passengers.

(3) [Jet] seeks the flight accommodation on behalf of the buyer and negotiates the price of the purchase but, thereafter, the contract or charter is concluded directly between the seller and the buyer. Jet has no authority to conclude the contract.

(4) After the making of the contract or charter at (3) above, [Jet] receives from the Buyers

(i) commission;

(ii) a sum equal to the price to be paid to the sellers which after deduction of the commission is transmitted to the sellers.

(5) Passengers who subsequently purchase the flight accommodation enjoy the benefit of the protection afforded by the buyers' ATOL and bond."

13. Jet's standard contract with a travel organiser ("the Principal") on whose behalf it is engaged contains the following terms:

"4 Grant

4.1 The Principal appoints [Jet] as its non-exclusive agent for the location of and the negotiation of the price for Flight Accommodation for the Term upon the Conditions

4.2 [Jet] is authorised to seek in the market Flight Accommodation and to negotiate prices and terms acceptable to the Principal for the purchase of Flight Accommodation but for the avoidance of doubt [Jet] is not authorised under this agreement to enter into legally binding agreement on behalf of the Principal for the purchase of Flight Accommodation."

14. By clause 3.4 "Flight Accommodation is defined as "passenger flight seat accommodation on charter flights in accordance with the Principal's requirements notified to [Jet] from time to time during the Term". "The Term" is the period of the agency.
15. "The Conditions" are standard conditions of Jet. By Condition 2:

"[Jet's] obligations

[Jet] agrees with the Principal that it will during the Term use its reasonable endeavours:

2.1 accept instructions to seek in the market Flight Accommodation communicated to [Jet] from time to time by the Principal and to negotiate the price and payment terms therefor on behalf of the Principal

2.2 In negotiating the price and terms upon which the Principal may purchase Flight Accommodation inform the seller of the fact that [Jet] is acting as agent of the Principal in the negotiations and that [Jet] does not have authority to bind the Principal to a legally binding contract for such purchase."

16. Condition 3 sets out the procedure to be followed by Jet. On Jet locating the flight accommodation required by the Principal at the best price obtainable, Jet is to notify the Principal, and, if the price is acceptable to the Principal, it will notify Jet to that effect, whereupon Jet will confirm that to the seller strictly on a subject to contract basis, requesting the seller to issue a charter contract or schedule (where a charter contract between the seller and the Principal already exists) for signature by the Principal. If the Principal wishes to proceed with the transaction it will sign the charter contract or schedule and send it to Jet for onward transmission to the seller. The Principal is required, on or before the working day immediately prior to the day on which the seller is entitled to receive payment from the Principal, to pay to Jet the sum to be paid to the seller together with Jet's commission. By Condition 3.5 Jet upon receipt of the payment from the Principal is required to hold that sum in its client account at its bank and to remit the payment to the seller after the deduction of its commission.
17. In the Witness Statement of Mr. Dale he stated that the money paid to Jet by the Principal for onward transmission to the seller is placed in a special account and segregated from Jet's own funds, including its commission.
18. After considerable correspondence between the parties, the CAA wrote to Jet on 28 February 2000 in the following terms:

"In view of the importance of settling this matter for the industry the Authority has sought the advice of Leading Counsel. Counsel's advice is that your client is "making available flight accommodation" for the purposes of Regulation 3 of the 1995 Regulations. The wording of the Regulations is intended to encompass more than one entity making available flight accommodation in a particular case. A broker who takes payment for flight accommodation from a buyer and passes that payment on to a seller of flight accommodation is making available flight accommodation to the buyer. The fact that the seller is also making that flight accommodation available and is in fact providing that flight accommodation is irrelevant.

In the Authority's view the Court when construing Regulation 3 should have regard to the purpose of the statutory scheme which is the protection of air travellers. If a broker receives and holds customers' money for however short a time and is unlicensed, then there is a break in the system of protection. If such a broker failed while holding buyers' money the buyer would either have to pay for the flight accommodation twice, putting a strain on his financial position, or the seller will not supply the flight accommodation. If the buyer is a small tour operator who has made significant payments to a broker the need to find a similar amount to secure the flights it had booked may cause it to fail. That tour operator's bond may not be sufficient in the peak season to meet all claims. The default of an unlicensed broker in the peak season might therefore have the effect of causing a string of failures which result in calls on the reserve Air Travel Trust Fund which backs up individual bonds. Any failures inevitably cause inconvenience to the public.

Accordingly, having taken all of your arguments on behalf of your client into account and having sought the advice of Leading Counsel, the CAA's decision is that Jet Services require a licence under Regulation 3(1) of the 1995 Regulations."

19. That was the decision which Jet by these judicial review proceedings challenged. Collins J. gave permission to move for judicial review. Hence the hearing before Longmore J.
20. In his judgment the judge rejected an argument for Jet that the phrase "make available flight accommodation" is confined to persons contractually responsible for providing such accommodation. But he accepted Jet's submission that subject to any relevant exemptions the phrase only applies to persons on the supply or provision side of the contractual relationship between purchasers and suppliers or providers of flight accommodation. He said (para. 22):

"The concept of making flight accommodation available is inapt to apply to those persons who assist and act for those to whom the accommodation is made available. It is true that Jet's principals make the flight accommodation available to others but Jet's functions have by then taken place. Even if their function is not exhausted, the most Jet does is to assist or facilitate its principals, who are themselves ATOL licensees, to make the accommodation available to those others. They do not themselves make it available at all."

21. The judge found further support in reg. 4(2)(a). He said that on the basis contended for by the CAA, that provision would require Jet not to accept payment unless it supplied an ATOL receipt or an ATOL confirmation invoice to the person making the payment who on the CAA's standard form documentation is the purchaser of the flight accommodation. The judge said on the facts the purchaser was Jet's own principal and that to supply such documents was a nonsensical or purposeless thing to do as on no view does Jet supply flight accommodation to its principal. The judge said (in para. 23):

"This confirms that the Regulations are looking to the provision of the accommodation and not to any assistance given to the person to whom the accommodation is provided."

22. The judge further agreed with Jet's submission that the concept of "making available" presupposes that the person who makes the flight accommodation available must be someone who can actually dispose of the flight accommodation, and that assisting in the acquisition of flight accommodation without having any power of disposal over it cannot be making that accommodation available.
23. The judge then noted that Jet's custody of its principal's money appears to have been the determinant factor in the CAA's conclusion that Jet required a licence. That, the judge said, was in his view a matter of limited, if any, weight, and the CAA took an immaterial matter into consideration.
24. The judge mentioned the CAA's change of mind about commission brokers; but he said that the fact that commission brokers did not receive the purchase price into their own account was not a relevant distinction of commission brokers from payment collecting brokers, and that neither made available flight accommodation.
25. The judge accordingly quashed the CAA's decision and granted the declaration the terms of which we have outlined.
26. Mr. Richard McManus Q.C. for the CAA submits that the judge misconstrued reg. 3(1) of the 1995 Regulations and that on the facts set out in the Schedule to the Order Jet does "make available flight accommodation" and so needs a licence. He says that Jet is "involved in the provision of flight accommodation to a buyer who is an ATOL holder," the Principal, and that Jet is "part of the contractual chain through its holding of purchase moneys". He says that Jet "deals in seats on charter flights." He asserts that Jet is "the effective cause" of the Principal buying the flight accommodation. He points out that if Jet failed to make payment to the seller of the flight accommodation, unless someone else made payment, the flight accommodation would not be provided to passengers.
27. Mr. McManus submits that the process of paying for the flight accommodation, and accounting for and protecting that payment, is at the heart of the legislative framework. In support of that submission Mr. McManus gives two examples. One is the exception in reg. 3 (1)(e) for ticket providers. He says that the reason for that exception is that such persons introduce little or no risk in the overall process of providing the accommodation to the passenger because even if they did not pass on the price which they received, the accommodation would still be provided by the airline pursuant to the valid ticket provided by the ticket holder. The other example is the exception for an agent for a disclosed and identified principal who makes flight accommodation available in that capacity. Mr. McManus says that the reason for that is that there is similarly little risk to the passenger if the agent does not pass on the price, as the disclosed and identified principal is bound to protect the passenger's money.
28. Mr. McManus further points to reg. 6 (2)(b) as illustrating that the emphasis on the financing of the price of the flight accommodation is central to the licensing process itself. He argues that the legislative framework seeks to ensure the financial security of those persons through whom the price passes except where non-payment of the price would not prejudice the ultimate provision of the flight accommodation to the passenger.
29. Finally he submits that "make available flight accommodation" has a wide meaning because of the breadth of the language used, the statutory context (by which he means the legislative framework to which we have just referred), the decision of this court in Jet Travel Ltd. v Slade Travel Agency [1983] Comm LR 244, the manifest purpose to protect the public as far as possible from the failure of firms who make available flight accommodation, and the legislative history of reg. 3 (1). He says that the effect of the judge's decision is to make the regulatory scheme a voluntary one for intermediaries like Jet, who by drafting appropriate contractual provisions can, if the judge is right, escape regulation.
30. We are not able to accept these submissions, essentially for the reasons given by the judge and supported by Mr. Michael Crane Q.C. for Jet.
31. We start with the language of the 1995 Regulations. It is not in dispute that the words "make available flight accommodation" should be given their natural and ordinary meaning in their context, having regard to the obvious legislative purpose of providing protection for passengers who have paid for flight accommodation. But that purpose was capable of being effected in a number of different ways. The particular method chosen was to require the licensing of those who "make available flight accommodation". The CAA was empowered by regs. 6 and 7 to refuse or revoke licences, having regard to the resources of the person concerned and the adequacy of the financial arrangements made by him for discharging his obligations. What was not done was to define those who needed licences by reference to their participation in the handling of money paid for flight accommodation, whether that money was paid directly by the end user or by a tour operator who purchases flight accommodation and makes it available to the end user. If a person who participates in the handling of such money is required to have a licence, it has to be because such person makes available flight accommodation rather than because he handles such money. To put it another way, the 1995 Regulations are not drafted in such a manner as to regulate those who handle such money but to regulate those who make available flight accommodation.
32. The Secretary of State when drafting the 1995 Regulations might well have thought it unnecessary to require the licensing of those buyers' agents like Jet who handle money provided by an ATOL holder tour operator purchasing flight accommodation for transmission to the seller of that accommodation. We say that for three reasons. First, we have already drawn attention to the powers of the CAA to refuse or revoke licences, taking into account an applicant's or existing licence holder's resources and financial arrangements, and to its power to impose conditions. Jet rightly accepts that the CAA in the exercise of its powers would be entitled to take into account the fact that flight fees were being passed by an ATOL holder to a non-ATOL holder. Second, it is recognised in trust law that money paid for a specific purpose and not mixed with the payee's own money but put into a special account may be subject to a Quistclose trust (see Quistclose Investments Ltd. v Rolls Razor Ltd. [1970] AC 567 and Carreras Ltd. v Freeman Matthews Ltd. [1985] Ch 207). As such the money so paid is not the property of the payee and so does not go to creditors of the payee on the insolvency of the payee. Although this point was not pursued before the judge and not taken by Mr. Crane before us, when put to Mr. McManus, he had no answer to it. Third, even if Jet did not pass on the Principal's money to the seller and became insolvent, the passengers would not be left without protection, as if they have paid the Principal, they would have the benefit of the fact that he is an ATOL holder and of the bond which he provided. Accordingly, it cannot be said that to construe the 1995 Regulations as not requiring an intermediary in Jet's position to hold an ATOL runs counter to or defeats the statutory purpose.
33. We turn to the ordinary and natural meaning of "make available flight accommodation". We accept that the language is wide and general and is not limited to, for example, a sale. Its width was no doubt deliberate to bring within its ambit tour operators who supply package holidays involving air travel when the airline actually supplies the flight accommodation involved. "Make available flight accommodation" means to put that accommodation at the disposal of the person to whom it is made available. But to our minds one cannot make flight accommodation available, in its ordinary connotation, without having the ability to provide it or the right to dispose of it. The airline which has the accommodation on its aircraft can by selling that accommodation make it available to a purchaser. The tour operator who buys the accommodation can then make it available to its customers through the package holiday it sells. There is nothing in the 1982 Act or the 1995 Regulations which suggests that a different connotation should be given to the words. On the contrary one sees a number of references to the provision of flight accommodation, which suggest that it was thought to be the same as making available flight accommodation (see s. 3 (b) and the heading to s. 71 of the 1982 Act and reg. 3 (1)(b) and the heading to reg. 4 of the 1995 Regulations).
34. We accept that those who are excepted or exempted from having to hold an ATOL must be persons who are considered to make flight accommodation available. Thus the ticket provider who sells a flight ticket to an end user thereby does make flight accommodation available as does the agent for a disclosed and identified principal performing that activity. But whatever the underlying rationale for those exceptions, a person cannot come within reg. 3 (1) unless he makes flight accommodation available.
35. Like the judge we find it impossible to see how the activities of Jet amount to making available flight accommodation. Jet's functions are limited to two. One is the finding of the flight accommodation and the negotiation of terms on which the seller, typically the airline, is willing to make it available to the Principal, typically a tour operator. True it is that the Principal in turn makes available the flight accommodation, which it purchases if it contracts with the seller, to end users. But Jet is not concerned with that aspect of the Principal's business. It is concerned only in relation to the purchase of the flight accommodation and then not as a person who contracts with the seller or who otherwise acquires any ability to provide or right to dispose of the flight accommodation. Mr. McManus said that there was no reason why Jet could not itself purchase the flight accommodation. We do not agree. That would be in breach of its contract with the Principal and it is far from certain that the seller would be prepared to contract with Jet as distinct from its disclosed principal. In any event that is not the way that Jet conducts its business. Jet's second function, as the person who passes to the seller the Principal's payment for flight accommodation which the Principal has contracted to buy, is purely ministerial. Jet is the conduit through which the Principal pays the seller. Again Jet performs that function with no ability to provide or right to dispose of the flight accommodation. The Principal as buyer cannot be said to be making available flight accommodation. It would be very surprising if Jet as agent of the Principal in performing Jet's limited functions which assist the Principal as purchaser and which the Principal might well have performed himself could be said to be making available flight accommodation. The position would of course be different if Jet itself purchased the flight accommodation and sold it to the Principal.
36. We do not accept that Jet deals in seats on charter flights or is the effective cause of the Principal's purchase of flight accommodation. In our judgment the highest Jet's activities can be put is to say that Jet assists the Principal in or facilitates the acquisition of flight accommodation. But such assistance or facilitation cannot be said to be making flight accommodation available to the Principal. Otherwise, as Mr. Crane pointed out, those who provide goods and services to aircraft operators and air travel organisers might equally be said to make flight accommodation available. Take the case of a bank which, on the instructions of a tour operator, purchases flight accommodation on behalf of its customer and remits money to the seller in settlement, or the case of solicitors, who are retained to negotiate a contract for the purchase of flight accommodation on behalf of its client, receive the purchase price into their client account and pay the seller on their client's instructions. If Jet is subject to reg. 3 (1) so must be the bank and the solicitors. In Jet Travel Ltd. v Slade Travel Agency Ltd. it was argued that unless making flight accommodation was limited to contracts with end users, activities such as the fitting of aircraft seats in an aircraft hull by a manufacturer or contractor or the grant by a lessor of a dry hull charter or lease to an operator would be included. This court robustly rejected that argument on the basis that the natural and ordinary meaning of the words "make available flight accommodation" did not embrace those activities. But nothing in that decision assists the CAA. On the contrary, for the like reasons we would reject the submission that the facilitative services provided by Jet fall within the natural and ordinary meaning of the words in question.
37. Mr. Crane submitted that making available flight accommodation is antithetical to the purchase or acquisition of that accommodation and that only the former activity has been regulated. We agree. When it was put to Mr. McManus that, if he was right, Jet was acting as agent on behalf of and with the authority of a disclosed identified licence holder and so was in any event within the exception of reg. 3 (1)(c), his response was to say that that provision only applied to a seller's agent. But to acknowledge that such a limitation is implicit in reg. 3 (1)(c) seems to us to support Mr. Crane's broad submission that reg. 3 (1) is only concerned with those selling flight accommodation. Certain it is that reg. 4 (2)(a) and (b) makes no sense if applicable to an agent in the position of Jet receiving money from its licence holder principal who has passed that money to Jet for transmission to the seller for the purchase of flight accommodation. Further the CAA's own documentation for ATOL receipts and ATOL confirmation invoices is quite inconsistent with such documents being supplied by agents of buyers who are ATOL holders to their principals.
38. We were taken by Mr. McManus to the predecessor regulations to the 1995 Regulations in support of his submission that the 1995 Regulations must be taken to require the licensing of buyers' agents like Jet. We intend no disrespect to him when we say that we did not find this excursus into the legislative history of the 1995 Regulations to be of assistance. His argument seemed to us to be dependent on the premise which he asserted that in the Civil Aviation (Air Travel Organisers' Licensing) Regulations 1972 "brokers" included agents for buyers of flight accommodation. That was challenged by Mr. Crane. We do not think that the resolution of that dispute would be helpful to the construction of the different wording of the provisions now to be found in the 1995 Regulations.
39. Nor can we accept Mr. McManus's criticism of the judge's conclusions as making a regulatory scheme voluntary. The suggestion appears to be that Jet should not be allowed to get away with conducting its business on the contractual terms which it has agreed with its principals. We do not agree. Everyone is entitled to carry on business as he chooses so long as he keeps within the law. For a person to be required to hold a licence it must be shown that the language of reg. 3 (1) applies to him. Given that contravention of the 1995 Regulations attracts penal sanctions, any doubt about the meaning of the regulations must be resolved in favour of Jet. But we regard the language of reg. 3 (1) as plain: Jet does not make available flight accommodation to anyone.
40. For these reasons we would dismiss this appeal.
ORDER: Appeal dismissed with costs assessed in the sum of £25,000 (inclusive of VAT) (Order does not form part of approved Judgment)