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The Secretary of State for Trade.
9th April 1980
"Even where.....the Appeal turns on a question of fact, the Court has to bear in mind.....its duty..
and the Court must reconsider the materials before the Judge, with such other materials as it may have decided to admit. The Court must then make up its own mind, not disregarding the judgement appealed from but carefully weighing and considering it, and not shrinking from over-ruling it if on full consideration it comes to the conclusion that it is
(per Lindley M.R. in Coghlan v. Cumberland (1898) 1 CH 704).
wrong
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III. Reasons why the CAA's Decision is Wrong.
The CAA's decisions were wrong, and misconceived because in part they were based on false premises, and in part made ignoring important evidence. They were therefore bad in law. particular:
In
(1) The CAA attached totally disproportionate weight to the sole reason it gave for its decision ("BCAL's (DC10) aircraft size is better tailored to the needs of the route at its present stage of development" (paragraph 154) than Cathay's B747 aircraft, and would more quickly therefore enable daily flights to compete with British Airways Board's ("BA") proposed daily service of a single B747): it fell into error by concentrating on imagined short-term advantages and thereby lost sight of the wood for the trees:
(2) The CAA completely failed to realise that the use of DC10's was advantageous only in the very short term (if at all, in view of the actual traffic profile on the route referred to below) and that thereafter the B747 would have substantial advantages over the DC10 for the rest of the 10 year period of the licence:
(3) The CAA, by "basing its decision on the assumption that any new service it licenses should be capable of operating profitably without such rights", (i.e. traffic rights in the Gulf) (paragraph 145) approached its decision on a totally false premise. It thereby fell into error of law by deliberately ignoring important material evidence, namely that Cathay already held such rights and hence (unlike BCAL) would in practice be able to take advantage of them, thereby (a) effectively reducing the London/ Hong Kong passenger capacity of the B747 aircraft if necessary, and (b) bolstering the economic viability of the total route, an important consideration under Section 3 of the Statute of which the CAA accordingly unlawfully failed to take account. A B747 with 140 passengers carried to or from an intermediate destination has the same end-to-end seat capacity as a DC10, whilst the intermediate passengers at the same time generate income for minimal extra overheads. The existence of the intermediate rights
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