Laker Airways v Department of Trade [1977] QB 643

Facts:

  • After the issue of the first policy guidance in form of a Command Paper, the Civil Aviation Authority considered an application by the plaintiffs, privately owned air service operators, for a licence to operate a cheap passenger known as Skytrain between London and New York
  • The Authority rejected objections and granted the plaintiffs a 10-year licence to begin on January 1, 1973
  • Before Skytrain could operate over United State territory a permit had to be obtained from the United States Civil Aeronautics Board under the Bermuda Agreement 1946
  • The United States board did not until June 1973 forward its recommendation for the President's signature that the plaintiffs be given the necessary permit
  • The plaintiffs brought an action quia timet against the Department of Trade for two declarations were ultra cires and that the department was not entitled to cancel the designation

Issue:
  • Whether the Crown had the right or discretion to withdraw the designation under the treaty and that its exercise could not be questioned in legal proceedings

Held:
  • Dismissing the appeal, they held that although the Secretary of State was entitled to reverse the previous policy of encouraging some competition between airlines, he acted beyond his powers in formulating the new policy by the procedure of "guidance"

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