TNAG-0870-FCO40-1080-Air-services-between-Hong-Kong-and-the-UK-1979 — Page 101

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Mr Gardine. Letostning

AIR SERVICES:

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LONDON-HONG KONG M~ Cortazni o

to his comments and

letto of 22 June before

allowing the DOT to foceed.

1. In view of the unsatisfactory response to the questions raised at the meeting last Tuesday as to the alleged legal ground for the Secretary of State for Trade's refusal to give directions correcting the inequality built into the C.A.A's remit in this matter, I have written to the Department of Trade solicitors to try to extract further details (copy letter attached).

2.

7/8

However, in his letter of 22 June to Mr Steele, Mr Cortazzi indicated probable disagreement by FCO ministers as to the policy being adopted, as well as curiosity as to the legal difficulty.

If,

as at present seems to be the case, there is no real legal difficulty over the power to give directions (though this is still subject to what the Department of Trɛde can dredge up) the battle will presumably turn to the policy to be adopted.

3. It is not for me to advise as to policy but I do doubt whether the suggestion made at last Tuesday's meeting that we wait until after the C.A.A. hearings was a sound one. The argument was that this would enable the evidence to come out and that if it became clear that C.P.A. were at a disadvantage the injustice could then be remedied by directions.

4. In my view this would be a most unwise basis on which to proceed. On principle it is better to avert injustice rather than let it happen and then hope to remedy it. Secondly, although evidence is objective its selection and use is usually orientated to a particular purpose and changing the ground❤ rules after a case has been heard may not achieve the same effect as hearing the evidence on that different basis. Further, a reasoned decision on particular evidence creates a prejudice which may be harder to overcome than persuading a tribunal to accept a case advanced on the basis of a clean slate. Fourthly, if there were to be an appeal to the Secretary of State from the C.A.A's findings he might, quite properly, feel inhibited about making a change in the rules on which the determination is to be based when such a change could have been made before the hearing. If he did change the basis after the hearing by the C.A.A. there would no doubt be a howl of protest by the other airlines involved and quite possibly a stampede to the courts or the uropean Commission on Human Rights.

5. Thus, it seems that on balance, since no prejudice would occur if the rules were changed to put the airlines on an equal footing while there would be obvious prejudice if one airline was at a disadvantage, it would be preferable to rectify the bias now. However, the arguments in this and the preceding two paragraphs are matters of policy and not for me to advance. No doubt you have the considerations well in mind in view of Mr. Cortazzi's letter and the failure of the Department of Trade to reply.

31 July 1979

co Hong Kong and General Dept

RESTRICTED

Richard Gardiner

• R K Gardiner

Legal Advisers