DETENTION AND SALE OF AIRCRAFT FOR UNPAID AIRPORT CHARGES (Hansard, 19 July 1968)

§ Mr. Corfield
I beg to move Amendment No. 19, in page 10, line 22, 1904 leave out 'twenty-eight' and insert 'fifty-six'.
The purpose of the Amendment is clear. It is designed to ensure that there is plenty of time between the impounding of aircraft and any question of sale. Twenty-eight days does not seem to us to be enough. I know that that is the sort of period which is specified in many Acts of Parliament, and one could argue till the cows come home whether it should be 21, 28 or 56 days. There can be no hard and fast right or wrong.
Nevertheless, 28 days seems to us to be dangerously short, for a number of reasons. The chief reason is that I am not happy, nor are many people in the air transport world, that we have yet completely got the mechanism for ensuring that all possible rights in aircraft are registered and can be checked at any time and at short notice.
If one is to exercise the power of sale, whether of land under a straightforward mortgage, or under a chattel mortgage such as that with which we are dealing, it is essential that one knows what prior interests there are in the chattel or land. This is tightly tied up in connection with land under the Land Registration Act. But we are here dealing with an entirely new provision and we must ensure that we have it right.
I had tabled an Amendment to draw attention to the necessity of a claim being registered before it could be recovered and have priority over any of the debts in respect of which an aircraft might be sold, but that Amendment was not selected. Until we are absolutely certain that it is possible to ensure, at short notice, that all possible interests in the aeroplane are known before the question of its sale arises, we should extend the time. Aeroplanes are curious machines from the point of view of the number of interests that can exist—what with wet and dry leases, chattel mortgages and so on—and it is vital that we get this matter clear.

§ Mr. Burden
I urge the Minister to accept the Amendment in view of the drastic action which is represented by this power to sell an aircraft in default of the payment of airport charges. This could involve the sale of an aircraft costing £2 million to £3 million for the default of airport charges worth, perhaps, several hundreds of £s or a few thousand.
1905 It is essential that, before any such action is taken, every effort is made to ensure that those who might have a claim on the aircraft, such as the lessors or mortgagors, have an opportunity of intervening. Extending the time scale from 28 days to 56 days would not cause undue hardship to an aerodrome authority, but it would ensure that no injustice was done to those who might have a vital interest in the aircraft.
When the Minister considers this proposal I urge him to remember that, to ascertain the rights of people or companies in aircraft, it might be desirable to establish a register of British aircraft which would indicate whether any rights of ownership or proprietary rights existed.

§ Mr. William Rodgers
As the hon. Member for Gloucestershire, South (Mr. Corfield) pointed out, there is no hard and fast right or wrong in this matter. The question is to find the right number of days to serve the purpose we have in mind. On the clear understanding that no precedent is being set, and in a spirit of good will, I accept the Amendment.

§ Mr. Onslow
I beg to move Amendment 20, in line 29, leave out paragraph (a).
Would it be convenient, Mr. Speaker, to discuss the following Amendment-No. 21, in line 33, leave out from 'authority' to 'sufficient' in line 34—at the same time?

§ Mr. Speaker
If that is the wish of the House.

§ Mr. Onslow
Encouraged by the Minister's acceptance of the last Amendment, I move this one recalling that the point in question was argued at considerable length in Committee. It appears that, as drafted, the provision means that a man who wishes to recover an aircraft detained by an aerodrome authority must satisfy the two conditions set out in the Clause. They are, first, that he must … dispute that the charges, or any of them, are due … and, secondly, he must give … to the authority, pending the determination of the dispute, sufficient security for the payment of the charges which are alleged to be due. 1906 I find it difficult to understand why these two conditions should be in the provision. I can envisage circumstances arising in which a man might find it impossible to satisfy one of them; somebody with an interest or claiming an interest in an aircraft might not be able to say to the aerodrome authority, "I dispute that the charges are due" because he might have no knowledge of the background to the charges. Indeed, he might not be interested in disputing the charges, accepting that they are due, since they may have been incurred by somebody else.
It appears that, as drafted, the provision means that dispute is essential before deposit can be made. If this is not so, I fail to understand why the Clause is worded in this way. I also fail to see— anticipating the Minister's reply—why this series of Amendments would weaken the provision, since this part of the Clause would read, if my proposal were accepted: An aerodrome authority shall not detain, or continue to detain, an aircraft under this section by reason of any alleged default in the payment of airport charges if the operator of the aircraft or any other person claiming an interest therein … gives to the authority … sufficient security for the payment of the charges which are alleged to be due. This is a crystally clear situation and does not involve the question of whether or not any charges are disputed. The charges can then be recovered. The words which I propose to leave out are an unnecessary barrier, remembering that people with interests in aircraft may not have been involved in the non-payment of charges which have been incurred, and not paid, by those responsible for their payment. I hope that, precedent or not, the Minister will accept the Amendment.

§ Mr. William Rodgers
As the hon. Member for Woking (Mr. Onslow) said, this matter was fully discussed in Committee. I assure him that I have read the OFFICIAL REPORT of the Committee discussion fully before approaching the subject today.
As is fully understood, the Amendment would expressly prevent an aerodrome authority from taking action, even in cases where there was no dispute about the charges. The Bill, as drafted, appears to me to be adequate for any possible circumstances which one can envisage arising. The hon. Gentleman said that 1907 there should not be an unnecessary barrier. There is no such barrier. He said that dispute was essential before deposit may be made, but that is not the case.
There is nothing in the Bill to prevent an owner or interested party from making a voluntary arrangement with the aerodrome authority for the release of an aircraft by the deposit of security, if the aerodrome authority is agreeable. We must have some sense of proportion in this matter or we will run into a situation of bureaucracy which I am sure that hon. Gentlemen opposite would not find acceptable. The aerodrome authority concerned will wish to get its charges. It will have no wish to detain aircraft unnecessarily. I believe that, in practice, agreement will be reached in any foreseeable circumstances. I must, therefore, resist the Amendment.

§ Mr. Burden
Before the hon. Gentleman sits down, perhaps he can clarify one point. It might, in some circumstances, be desirable, without there being a dispute, to get a bond from, say, a small company which flies in and out of London Airport, in case there might be a default. In other words, cash on account. Would this provision stop such action being taken?

§ Mr. Rodgers
I see no reason why any voluntary arrangement should not be reached. I am new to this subject and the hon. Gentleman is well experienced in it, but I assume that the great majority of those who own and operate aircraft are as responsible as anyone else and that reasonable men will get together and reach reasonable solutions.

§ Mr. Corfield
That is not sufficient answer. We should be reasonable in this House in the first place. We have the curious situation that, in order to have the right to say to an aerodrome authority which is detaining one's aircraft, "You must release it", one not only has to put down adequate security but must dispute the charges.
There can be a multitude of interests and rights in aircraft. Subsection (2) says: An aerodrome authority shall not detain … an aircraft … if the operator of the aircraft or any other person claiming an interest therein …". 1908 Surely the hon. Gentleman can visualise the situation in which a person operating the aircraft under charter or some kind of lease owes money to the aerodrome authority in respect of landing charges. The aircraft is impounded. But then someone with some other interest in the aircraft decides that he wants to release it and he puts down a security. He may have no knowledge of the dealings between the charterer, the lessee and the aerodrome authority or of the grounds of the claim. Equally, when he goes to the aerodrome authority—and I agree that we would not expect it to be unreasonable—it might reasonably say, "What proof have we of your claim?" One could, therefore, have a long negotiation because the authority might reasonably say that it should not part with the aircraft on the basis of security given by the claimant until it is sure not merely that he has an interest but that it overrides the interests of the persons from whom the charges are due.
This is an important point and it is no answer to say that we are relying on people behaving reasonably unless we show that we are behaving reasonably. The word "and" here is patently unreasonable. No case has been made out for making it obligatory, when enforcing a right against the aerodrome authority to release one's aircraft, that one should both dispute the charges and give reasonable security. We should be concerned with the rights of the individual as well as with the powers of the aerodrome authorities.
The Minister of State is making the wrong approach and the word "and" has in no way been justified. If we must have paragraph (a), the word "or" should be substituted for "and". It is astonishing that the word "and" should still be retained after all the arguments put against it. I am not often conceited about my own arguments but the hon. Gentleman has not punched one single hole through them. Until he is able to, we cannot be happy with the situation.

§ Mr. Corfield
I beg to move Amendment No. 22, in page 11, line 15 after 'shall', insert: be paid into court and provided the court is satisfied as to the accuracy of each of the amounts claimed shall'. 1909 The proceeds of a sale are to be paid out in the order set out in subsection (5). There are two objections to leaving this entirely to the selling authority, which is the aerodrome authority, and not to the courts. First, the aerodrome authority will probably have no means of judging the accurancy of the claim under the various headings of paragraphs (a), (b), (c) and (d) of subsection (5). Secondly, it will certainly have no means of judging the priority of other interests. This is a matter very much for the courts.
Since the aerodrome authority has to take the matter to the court before a sale can take place, it would be better if the purchase money were paid into the court. By all means let us have a directive in the Bill as to the order in which claims are to be met. But it is asking too much of the aerodrome authority to make it responsible for checking the amounts of the claims and their validity.
This is not only putting an unnecessary and unreasonable burden on the aerodrome authority. It is putting in the hands of a body which is not constituted for this purpose powers which could well have a very drastic and unjust effect on individuals with claims which perhaps should have been considered as priority or which have unjustifiably been cut down in amount by an authority not qualified to judge.

§ Mr. Rodgers
I have looked at this. It is an awkward legal point but, after the full discussion in Standing Committee, which I have read, I am not satisfied that any change is required, bearing in mind all the factors involved and having consulted the judicial authorities.

§ Mr. Maxwell-Hyslop
I am not happy about this. This is properly a judicial function. We went into it at considerable length in Committee. It is not really for an aerodrome authority to determine priorities of this kind. It is established as an administrative unit and not as a judicial unit, and just to brush the matter off as something he has looked at does not get rid of the fact for the hon. Gentleman that this is a judicial rather than an administrative function. One wonders in what light he looked at it if he decided that it was an administrative rather than a judicial function. But 1910 this is typical of the rather superficial manner in which many points of principle put during the passage of the Bill have been brushed under the carpet.

§ Mr. Onslow
I beg to move Amendment No. 24, in page 11, line 29, at end insert: (e) in payment of any other airport charges incurred at any other aerodrome in the United Kingdom in respect either of that aircraft or of any other aircraft of which the person in default is the operator and which the court, upon the application of the owner or manager of such other aerodrome, finds to be due. This is a small Amendment which covers a point which has not been previously discussed. Under subsection (5) of the Clause, certain priorities are laid down for disposing of the proceeds of a forced sale of an aircraft. One of the parties who has been omitted from the list—I suspect inadvertently—is the aerodrome authority other than the detaining authority where charges in respect of aircraft seized and detained may nevertheless be due.
The Minister will probably readily take the point that, if it is right to seize and sell an aircraft at one airfield in respect of charges which have not been paid by the operator of that aircraft, there should be some means of safeguarding the position of other airport authorities which may suddenly be in the position of having no possibility of claiming money due as a result of the enforced sale although they may be owed more than the authority which has carried out the sale and recouped its losses.
If the Minister concedes this point, it will be of some value in improving the Clause, although I admit that we have a long-stop operation because our Amendments may go back to the other House which may take another view if the Minister is not feeling very forthcoming over this matter.

§ Mr. William Rodgers
This is a new point, but I am surprised that the hon. Member for Woking (Mr. Onslow) who, with his colleagues, has been very concerned about the whole framework of the Clause, is anxious to extend the powers in it in such a wide way. The effect of the Amendment would be to give persons with no connection with the actual 1911 charges on the aircraft priority over other creditors. Even if the Amendment were not defective in its drafting, I would have to ask the House to reject it.

§ Mr. Burden
I beg to move Amendment No. 25, in page 11, line 34, after "extends", insert (in so far as its sale is reasonably necessary either to cover the payments set out in the preceding subsection or to secure the best price that can reasonably be obtained in accordance with subsection (4) of this section) ".

§ Mr. Speaker
With this Amendment we can discuss Amendment No. 26, in line 40, at end to insert: but such equipment and stores shall be detained and sold only if the saleable value of the aircraft is likely to be less than the sum for which the operator is in default and if the removal of such equipment would affect the immediate operational efficiency of the impounded aircraft".

§ Mr. Burden
Subsection (6) of this Clause extends power of detention and sale in respect of an aircraft to any stores for use in connection with its operation (being equipment and stores carried in the aircraft) whether or not the property of the person who is its operator, and references to the aircraft in subsections (2) to (5) of this section include, except where the context otherwise requires, references to any such equipment and stores. The intention of these two Amendments is to ensure that the equipment and stores of the aircraft are necessary to ensure that sufficient money is available to cover the airport charges for which the aircraft is under disposal. When one takes into consideration the cost of most modern aircraft, there is no doubt that there would be available in the aircraft as it stands sufficient money to pay all reasonable charges. I am told that the usual accounting system of the airport authority ensures that payments of landing charges are made 30 days after they are incurred. In the disposal of an aircraft for payment of charges, very considerable sums are involved. There should be no powers given in the Bill which would enable moneys to be raised considerably in excess of the amount required for outstanding charges.
If an aircraft carries equipment and stores and by disposal of them the amount is merely increased and eventu- 1912 ally part of it has to be handed back to the owners of the aircraft, this seems a stupid thing to do. The subsection says: whether or not the property of the person who is its operator. It is provided that the authority may dispose, not only of the aircraft which is under the control of the operator, but of stores which may not be owned by the operator. This is a departure from English law which should be seriously considered.
It is analogous to the Minister buying a car from a friend and some time later taking it into the garage at which his friend had previously garaged the car, his friend being in default of garage fees. The car is then taken over by the garage owner and disposed of. In addition, in the back of the car there is a mink coat—I am sure that any friends of the hon. Gentleman would have a nice mink coat—and this, too, is disposed of to settle the costs of the garaging which have not been paid. This is utterly wrong and Amendment No. 25 is intended to deal with it.
It may be argued that there are certain equipment and stores aboard the aircraft which, if removed, would reduce its saleable value. It might be argued that the removal of an engine which was still on charge to one of the big engine manufacturers would immobilise the aircraft and considerably impair its sale-ability. It may be that this is why the Clause is so drafted.
If this is so, the Minister might like to give consideration to accepting Amendment No. 26. I believe that the terms of this Amendment are reasonable. I hope that the Minister will give it his serious consideration, as it would remove from the Clause the very objectionable feature that the Bill confers the right to dispose of property belonging to someone other than the owner or operator of the aircraft to raise the wind to pay the airport authority. If there could be some moderation of this by tying it down in the way I have suggested, it would go a long way.

§ Mr. William Rodgers
I have given these Amendments very serious consideration. I appreciate the point that the hon. Member for Gillingham (Mr. Burden) has in mind. The procedure is 1913 already very complicated. When I referred earlier to common sense and reasonableness, it was suggested that these characteristics were not to be found in the world of business, but I refuse to believe it. Even were it not for this consideration, alas, the Amendments are defective and would not improve the Bill even if there were virtue in their content.

§ Mr. Burden
The hon. Gentleman's remarks are cursory and abrupt. The House is entitled to a little more information as to why something cannot be done. The Bill will confer the right for an airport authority to sell something which does not belong to those who are in default.

§ Mr. Corfield
I must press the Minister about this. It is easy enough to say that in any case our Amendments are not drafted well enough to go into the Bill. Why not? We have not been told. In all other branches of the law we take care not to give to people with liens, chattel mortgages or other rights in property power to sell more than is necessary to cover the account. It is not good enough simply to say that all this must be left to people's reasonableness. I have not for a moment suggested that people will not be reasonable in business, but it is for the House of Commons, and the Government in particular, to set an example when preparing Bills.
It is not reasonable to give power to sell an aircraft and at the same time to sell whatever may be inside it, whether that be necessary to meet the account or not. It is not helping matters for the Minister to keep saying that he has given this or that matter consideration. He cannot have slept for weeks, judging by the amount of consideration which he tells us he has given to these questions. We have had no explanation of the reason why he has decided that he cannot accept the Amendment, either from a drafting point of view or from the legal point of view.