Helicopter Aerial Surveys Pty Ltd v Bradford Marine Pty Ltd
[2020] FCCA 3238
•30 November 2020
Federal Circuit Court of Australia
Helicopter Aerial Surveys Pty Ltd v Bradford Marine Pty Ltd [2020] FCCA 3238
File number(s): BRG 71 of 2019 Judgment of: JUDGE VASTA Date of judgment: 30 November 2020 Catchwords: Admiralty – jurisdiction law and practice
CONSUMER LAW – consumer protection
Contract – damages – where owner of a vessel sought maintenance/repairs to the vessel – contract partly in writing, partly oral and partly by conduct – where repairs were not completed properly – where the owner paid for remediation works by another contractor – whether respondent had breached contract – whether there was contributory negligence – whether a third party was a concurrent wrongdoer – whether time of repairs was too remote from time of remediation works – causation
Tort – duty of care – negligence – damages for negligence and/or breach of contract – calculation of interest – lump sum awarded pursuant to s.76(3)(d) of the FCCA Act 1999 (Cth)
Legislation: Civil Liability Act 2003 (QLD) s 30
Federal Circuit Court of Australia Act 1999 (Cth) s 76
Cases cited: Yates v Mobile Marine Repairs Pty Ltd and Anor [2007] NSWSC 1463 Number of paragraphs: 184 Date of last submission/s: 18 November 2020 Date of hearing: 16-18 November 2020 Place: Brisbane Solicitor for the Applicants: Mr Marinac Counsel for the Respondent: Mr Tan ORDERS
BRG 71 of 2019 BETWEEN: HELICOPTER AERIAL SURVEYS PTY LTD
First Applicant
BARRY EDWARD JONES
Second Applicant
AND: BRADFORD MARINE PTY LTD
Respondent
order made by:
JUDGE VASTA
DATE OF ORDER:
30 November 2020
THE COURT ORDERS THAT:
1.The Respondent pay to the First Applicant the sum of $260,000.00, with costs to be taxed in accordance with the Federal Circuit Court Rules 2001 (Cth), unless otherwise agreed.
REASONS FOR JUDGMENT
JUDGE VASTA
The Mishima is a 24 m ship. It was built in Japan in 1987 and is constructed from steel. Because of this, it requires regular painting and maintenance. Different areas of the vessel need different types of paint. The vessel has been used primarily as a pleasure craft for a number of years by the Applicants, Helicopter Aerial Surveys Pty Ltd (“HAS”) and Barry Edward Jones (“the Applicant”), the sole director and shareholder of HAS.
In 2009, the Applicants caused the vessel to have maintenance works. The maintenance works mainly comprise the painting of the hull below the waterline (“HBWL”) and painting of the topside (every area above the waterline that is not the hull).
The Applicant testified that he considered the vessel to be on a four year dry docking cycle; that is, that maintenance would occur on the vessel, especially the HBWL, every 48 months. Having done maintenance works in 2009, those works were due to be done again in 2013. For a variety of reasons, the Applicant did not get around to making arrangements for the maintenance works until 2015.
The maintenance works were performed by the Respondent. The Respondent charged the Applicants over $200,000 for those maintenance works which were concluded in January 2016. Soon after the works were completed, the Applicant noticed areas that were not satisfactorily treated. He had the ship lifted out of water in August 2016 and noticed that the HBWL works were also not up to standard.
The Applicant paid another contractor, GT Mac, to rectify the HBWL works. This cost the Applicants $92,149.49. After this had occurred, the Applicant noticed corrosion seeping to the surface of other painted areas in the topside. The Applicant had the wooden areas removed so that the structures underneath could be looked at. The Applicant claims that the state of the structure of the vessel, once those wooden areas were removed, was as a result of the poor workmanship of the Respondent back in 2015.
GT Mac rectified those areas and the Applicants, in January 2020, paid $148,697.36 for those rectification works.
The Applicants have come to this Court, in its admiralty jurisdiction, claiming the sum of $240,846.85 with interest as damages in tort for negligence and/or breach of contract.
The vessel
The Applicants provided a model of the ship for use during the trial. The Court returned the model at the close of the trial but retained photographs. The four photographs are produced below.
The HBWL is represented by everything under the white perimeter line in the photos. If the boat is in the water, this area will be submerged. Because it is submerged, it will corrode and be a source of marine growth if it is not properly maintained. The protection applied to this area is known as “anti-fouling”.
The rest of the hull is painted blue on the model. The topsides are painted white. There is quite a deal of timber flooring and finishing in the topside. For proper maintenance, all of the timber must be removed. This exposes the superstructure of the vessel, which is also made of metal and must be properly maintained.
As is obvious, surfaces must be free from corrosion and any other foreign material, such as marine growth, before protective paint can be applied. If the surface is too corroded to be protected, it must be removed and replaced. This is known as “hot works” because there is a need for the use of welding to put replacement metal into the superstructure.
The arrangements for maintenance in 2015
The Applicant testified that he began to make enquiries in February 2015 as to whom may be suitable to conduct the maintenance works. The Respondent and Wicked Fabrication were recommended to the Applicant. Eventually, around 6 June 2015, the Applicant met with Martin Clark from the Respondent and Jason Carruth from Wicked Fabrication. The Respondent was in the business of preparing marine surfaces and then applying protective coatings to those services, whereas Wicked Fabrication (Wicked) was in the business of “hot works”.
The Applicant showed them around the vessel and the three men discussed the scope of work required, with particular reference to the steelwork to be conducted by Wicked and the surface preparation and coatings to be done by the Respondent.
The Respondent recommended using marine paints made by Jotun Marine (“Jotun”). The manager for Jotun, Mr Stonely, contacted the Applicant and advised that he was preparing a paint specification for the vessel. The Applicant was somewhat wary of dealing with Jotun because he had had a bad experience in the past with their products. In the end, the Applicant accepted that the Respondent would be using products from Jotun in the maintenance of the vessel. The specifications were received by the Applicant and the Respondent on 9 July 2015.
The Respondent sent a quote to the Applicant which is annexed to the affidavit of Mr Clark at MC-2:
Work Schedule / Estimate Costing for Mishima 2015 Refit
Cc Owner Mr Barry Jones
Dear Barry, thank you for the opportunity to work with you on your refit, below is a breakdown of scheduled work and estimated cost. Should you like to meet to discuss further feel free to call me.
Bradfords 1st Phase of Work
•Have Boat on location at Marina for needle gun work prior to sandblasting
•Mask up protection, windows etc
•Remove and store items
Bradfords 2nd Phase of Work
•Haul out of shed
•Sandblast to areas as per spec
•Painting using Jotun products as per spec to follow immediately after sandblasting
•Blast time using 2 sandblasters using speed garnet, estimated at 14 days
Bradfords 3rd Phase of Work
•Relocate vessel to hardstand for Antifoul using sea quantum Red
•Propspeed TBC –additional cost
•Replaced Anodes – additional cost
•Wash down/Detail
Estimates pricing for above works;
•Estimated Marina fees $14,222 – wet berth 2 weeks, haul out/return. shed hire
•Daily hardstand after leaving the shed rate $173.00
•Sandblast hull/topsides $18,500 includes labour and up to 7 tons of speed garnet, clean up and removal of waste
•Antifoul, topcoat paint and consumables estimate including scissor lift hire, scaffold $22,900
•Labour hours 720 hours @ discounted rate $60 Ph $43,300
Total Estimate $96,100
Regards
Martin Clark
…
Agreement
I Barry Jones accept the above estimate of $96,100 outline by Braford Marine for the scheduled [sic] of work above.
Please note: Any additional work outside this schedule should be confirmed by both parties with Martin Clark or Heath Butcher (onsite Supervisor) and will be charged out at the discounted hourly rate + consumables
I also agree to make a deposit of $15,000 to begin works with progress payments as invoiced
The final payment due on completion of the vessel prior returning to the water.
Date 31/07/2015
Signed (Barry Jones)
Signed (Martin Clark)
Bradford Marine
As can be seen from the email, the Applicant agreed to the quotation on 31 July 2015.
Even though the Applicant was somewhat apprehensive about using the Jotun products, once the ship was hauled from the water and the Applicant could see the HBWL, he saw that the area was in sound condition and that the Jotun product, which had been applied in 2009, had done its job.
In August 2015, the Applicant had a conversation with Mr Clark and Mr Stonely about his concern that the surface preparation and the application of the Jotun products should be strictly in accordance with the manufacturer’s instructions and specifications. The Applicant testified that Mr Stonely responded by saying that he was “going to look after it and ensure a good job”.
While it is arguable as to whether it was a part of the written contract, both the Applicant and the Respondent agreed that the “contract” between them included a term that the painting would be done according to the Jotun specifications.
The actual works
I will talk more about the works and some specific aspects of them later in these reasons. The works were conducted at shed 58 at the Gold Coast City Marina (“GCCM”). The Respondent has its premises at this location.
The Applicant arranged his own employee to do the carpentry works. At one stage, there was another employee, who did work on part of the electrical system, who also assisted in the carpentry work, but his time on the carpentry work was less than day. The job of the carpentry employee was to remove all of the wooden structures.
Once that was accomplished, the job, that had to be undertaken by the Respondent, was bigger than had been expected at the time that the Applicant and Respondent had made their agreement on 31 July 2015. This was accepted quite readily by the Applicant and it was the reason why the Applicant continued to pay invoices to the Respondent even though the invoiced amount exceeded, by over double, the amount in the agreement.
The total amount paid by the Applicant to the Respondent was $207,959.52 spread over five payments, with the final one being 6 January 2016.
The Applicant was often at the premises during the works and describes himself as “attending as regularly as he could”. He said that, during these visits, he did notice work practices of the Respondent which he did not consider to be proper. He did take photographs during these periods.
The Applicant said that he made complaints to Mr Clark during the course of the maintenance works and that Mr Clark would constantly tell him that the work was “work in progress” and that it would all be solved as it was finished.
Eventually, the ship was ready to be put back in the water. However, the waterline had not been marked (and it could not until the boat had been in the water). To ascertain the waterline, the boat was loaded with fuel, freshwater and ballast. The loaded waterline was then marked accordingly for painting. There was then an attempt to lift the boat out of the water so that it could be painted, however, the boat was too heavy for the lift.
The Applicant decided to take the boat on a trip to Sydney to use the additional fuel and freshwater and thereby lightening the vessel so that it could be lifted upon its return. Inclement weather forced the Applicant to change his mind and so instead he took the boat from Southport to Brisbane. He berthed at the Rivergate Marina on 2 January 2016.
January – October 2016
The Applicant testified that he began to notice a number of areas of the superstructure and bulwarks showing signs of poor paintwork. The Applicant took at least 80 photographs of the areas that showed the problems.
The Applicant wrote an email to Mr Clark on 8 January 2016 which read:
Hi Marty
We aborted the voyage south. The weather in the Hunter region was atrocious and I turned left at the Seaway to Brisbane. We are at Rivergate Marina at the moment pending a longer term arrangement. We have two options to sift out, Rivergate and Ben Schooley has surfaced and we can come out at The yard, I have some major problems with the paint job. The last two weeks at GCCM more time was wasted that [sic] anything achieved. Some days no one turned up, other days one or two and gone by lunch time. No one at your office. The painters said they had run out of Oyster White and couldn't do anything. On inspection, they have actually used stark appliance white to paint over parts of the superstructure. It looks like shit. There are three sections that would total about 4 or 5 sq m. You said they were going to repaint the fore part (above the windlass) but you didn't say that it was going to match the washing machine. Its dead set appliance white. Either Jotun have provided the wrong colour match, or your guys are colour blind. There also remains a large amount of over spray/splash runs and similar. Plus the hull patches. I will be in Sydney from Saturday and I am not sure when I can get back to the boat. However I need to have something in place to rectify a very expensive and poor result paint job Cheers Barry
The Applicant spoke to other persons in the boating maintenance industry just to ensure that his initial reactions were justified. His plan was still to have the boat lifted from the water in Brisbane so that the waterline could be marked. He wrote again to Mr Clark saying that there was a need for himself and Mr Clark to have a joint inspection.
It would seem that, because of the need of the Applicant to get back to his business, he did not follow up on these issues regarding the vessel until late May/early June 2016. At that time he went to the premises of the Respondent and showed to Mr Clark and to David Hanton, the business manager of the Respondent, several hundred photographs of the defective paintwork.
Eventually, there was an inspection of the vessel by the Applicant and Mr Clark. The Applicant said that Mr Clark admitted that there were some issues with the paintwork. He said that there was a tentative agreement that the vessel should go back to the Respondent after it had been lifted out of the water in Brisbane and the waterline reset. GT Mac had been tasked with resetting the waterline.
Mr Clark’s recollection was that he realised that there would have to be rectification works. He said that he contacted GT Mac and asked them to perform the rectification works and to charge that to the Respondent.
The ship was not lifted out of the water until 21 August 2016. Once it was lifted out of the water, the Applicant said that it was immediately obvious that there was a problem with the antifouling coating below the waterline. The Applicant took quite a number of photographs of the HBWL.
GT Mac, through its principal, Ben McIntosh, arranged for the ship to be housed in a superyacht shed so that the works could be performed. At this time, it was not known why the antifouling had not been successful. The Applicant believed, at that time, that it could have had something to do with the actual paint, given his previous dealings with Jotun.
The Applicant arranged for an expert, Eric Burgaty, to conduct an independent inspection of the vessel and its paint coatings. Because of this, it was easier for all of the rectification works to be conducted in this shed rather than to put the vessel back in the water and sail it to the Gold Coast and to the premises of the Respondent.
In the meantime, it would seem that GT Mac did make some rectifications to the top side as per the instructions from the Respondent. On 27 September 2016, the Respondent paid GT Mac the sum of $5252.54 for rectification works carried out on the vessel. Mr Clark said that the Applicant was happy with what had been done and, as far as he was concerned, the Respondent had now completed all of the matters of rectification for which they were responsible.
At the end of August 2016, Mr Clark and Mr Stonely met with the Applicant. Mr Clark put forward that the cause of the failure of the painting was electrolysis. The Applicant rejected this as a viable explanation, given that there had never been any sign previously that electrolysis affected the antifouling.
GT Mac then rectified the antifouling and the HBWL maintenance works. GT Mac completed those works in September 2016. The Applicant transferred $50,000 to GT Mac on 16 September 2016. On 11 October 2016, the Applicant transferred the remaining $42,149.49 to GT Mac in satisfaction of the invoice.
The invoice is annexure BJ-50 to the affidavit of the Applicant. The invoice describes the work done to the HBWL and to the top sides.
The Respondent continued to deny any liability for the HBWL inadequacies. The cause of the failure of the antifouling relied upon by the Respondent was electrolysis. On 1 September 2016, Mr Clark sent an email to the Applicant giving another excuse as to why the antifouling failed. This excuse was that there was an antifoul other than Seaquantum used. The Respondent said that this other antifouling was not compatible.
The Applicant did have the electrical aspects of the vessel checked and these tests did rule out that electrolysis had any part to play in the failure of the antifouling.
Notwithstanding that GT Mac had completed the rectification works on the HBWL and had done some work to the top sides, the Applicant still noticed that severe corrosion was appearing in areas where there was the timber coverings over the metal bulwarks.
This needed further investigation.
The second remediation
Mr McIntosh said that he observed that in many places, both above and below the waterline, the surface did not appear to have been properly prepared for painting with the effect that rusting was occurring beneath the surface of the paint.
Mr McIntosh said that at the conclusion of the first round of rectification works, it was clear to him that further works were necessary. Mr McIntosh provided a quote to the Applicant on 18 October 2018.
Mr McIntosh said that the vessel was hauled out at his premises on 11 November 2019. He said that he was contracted to undertake some routine maintenance activities on the vessel as well as remediating the work that had been previously done by the Respondent.
He said that he prepared two invoices; the first invoice was for this standard maintenance work, whilst the second invoice was to conduct the remediation work stemming from the works done by the Respondent back in 2015. Mr McIntosh said that he made every effort to distinguish between remediation work and maintenance work but that there were some items where his judgement was required. He said that on those occasions, he was conservative in his estimates and allocated those costs to the maintenance work.
The total of the remediation works were $148,697.36. Mr McIntosh testified that this final figure represents less than the true cost of remediation works. He said that the major reason that the costs were so high, was that when the timber was removed, the rust and corrosion underneath were far greater than had been initially anticipated.
The Experts
Both the Applicant and the Respondent relied upon experts. The Applicant relied upon Mr Burgaty, a paint chemist, and Mr Haig, a materials scientist. The Respondent relied upon Mr Ballantyne, a naval architect, and Mr Stanyon, a marine surveyor.
As will become clear, there is a consensus of opinion that electrolysis was not the cause of the failure, nor was any incompatibility of paint. The cause of the failure seems to be inadequate preparation of the surface and improper application of the paint.
Mr Burgaty
Mr Burgaty provided a report and gave evidence to the Court. In summary, Mr Burgaty said that the most striking part of the vessel was the delamination and failure of the underwater antifouling system. He said that there were areas where the coating had been delaminated from the hull and had started to rust. The sides of the hull above the waterline, painted blue, showed patched areas and orange peel through the coating. The top superstructure that was painted white, showed rust stains, runs in the paintwork, bubbling in the coating, missed areas, corrosion and rusting showing through the paintwork.
Mr Burgaty concentrated on the specifications given by Jotun. Mr Burgaty was critical of the specifications in that he felt that there should have been a greater water pressure specified for the initial wash of the hull and that there should have been a specification for stripe painting in areas where it was unsuitable for spray-painting.
Mr Burgaty spoke of the standard forms, or records, that must be used by persons who are applying paint. First of all, there is a daily inspection report which records prevailing weather conditions, air and substrate temperatures, dew points and surface preparation. Secondly, there is another form for recording surface condition at the time of application. This form needs to record that the surface is free of dust and oil and contaminants, free of flash rusting, free of sharp edges and free of weld slag. Lastly, there is another form which should include details of all coatings applied which includes substrate material, product name, batch number, percentage thinner, wet film thickness, method of application, adhesion testing and date and time applied.
All of these records are essential so that, if there is some problem, it is very easy to look at the records to see whether there was some aspect as to the manner of preparation and application that could have caused the problem.
In this case, there were no forms and records produced by the Respondent. This will feature quite largely later in these reasons.
With respect to the hull, Mr Burgaty was able to see that there were areas where green algae was left on the hull and this was painted over. Mr Burgaty said that it was obvious that the hull was not prepared in accordance with the specification. If there had been appropriate water blasting and sandblasting, the surface would have been prepared in such a way that would severely minimise these problems. Because there were no records, Mr Burgaty could not categorically say that there was no high-pressure water blasting or sandblasting but indicated that the discovery of algae on the hull was telling.
Mr Burgaty took samples of the paint, especially in areas where the paint had started flaking off the surface, and gave them to Mr Haig for his analysis. Mr Burgaty said that he could see areas where paint had obviously been painted over layers of rust. Mr Burgaty said that the antifouling had been applied over areas with marine growth, other paints and where water was dripping down the hull.
Mr Burgaty said that there had been a failure by the applicator (the Respondent) to adequately prepare and apply the paint. He said there had been a failure to keep proper records. Mr Burgaty was critical of Jotun because he believed that representatives of Jotun were supposed to be supervising the painting. He said if they were doing their job properly, those representatives should have picked up on these areas.
Mr Burgaty said that all corroded areas needed to have the corrosion removed and sandblasted back to bare metal and the specified paint system reinstated. He said that effective areas need to be suitably prepared to the standard specified by the paint manufacturer and repainted to that same specification.
There was very little cross examination of Mr Burgaty. Mr Burgaty said, in answer to questions in cross examination that the specifications given by Jotun were inadequate but that those specifications needed to be read in conjunction with the application guide. He said that, in his opinion, Jotun failed in their supervisory role.
Mr Haig
Mr Haig did not actually inspect the boat but looked at the paint samples given to him by Mr Burgaty.
Mr Haig said that none of the samples taken from the area of the HBWL showed that the full system of nominated coating layers been applied. He said that there should have been a primer, followed by ES Gray, followed by Ultra S light red and finally, Ultra S dark red.
Mr Haig said that one of the samples showed an adherent layer of rust on the underside of the flakes and another sample showed an adherent layer of marine fouling on the underside of the flakes. He said that, in all samples, there was overwhelming evidence of poor adhesion of the multilayered flakes. Mr Haig said that this showed that the surface was not properly prepared.
On the analysis made by Mr Haig, the final layer of ultra S dark red was either not applied or it was not properly mixed for application. He said that the thickness of this layer was substantially below the required 100 µm; in some cases the thickness was as little as 20 µm. He said that there was a significant variation in film thickness that was due to the rough paint surface to which they were applied; that is, being thicker in the valleys and thinner over the peaks.
Mr Haig also looked at the painting to the rest of the superstructure and the topsides. He had access to a number of photographs as well. His comments in relation to these areas mirrored much of what he had said about the HBWL; that is that there was a failure to adopt suitable preparation and painting techniques at these problem locations.
In cross examination, Mr Haig conceded that his role was simply to do the analytical work for Mr Burgaty. He reiterated that Mr Burgaty was the lead investigator and he was simply the analyst.
Mr Ballantyne
Mr Ballantyne inspected the vessel in 2019. He spoke of factors that can adversely affect the paint coatings. Poor application is the main culprit. In this regard, Mr Ballantyne was extremely critical of the fact that there were no records kept.
Mr Ballantyne pointed to fertilizers in the water having a detrimental effect on the paint. He also said that physical damage caused by floating rubbish and flotsam can damage the underwater area as well. He also said the bacteria in the water can have an effect on the paint. Mr Ballantyne spoke of poor welding and electrical procedures, which is also known as electrolysis, can also have an effect on the paint.
In Mr Ballantyne’s opinion, he said that it would not be unexpected that antifouling would be 15 to 25% delaminated in 13 months given the use of the vessel and the fact that it was moored in the Brisbane and Gold Coast areas for most of that time. He also said that the evidence of corrosion, seen in September 2018, would not be uncommon.
In his evidence, Mr Ballantyne placed a majority of the blame at the feet of the Applicant because the Applicant did not have a project manager supervising this whole process. Mr Ballantyne said that when the Respondent and Wicked were working on the vessel at the same time, there needed to be someone independent overseeing the project.
At the end of this evidence, I asked Mr Ballantyne about the need for a project manager when you have engaged professional persons to undertake tasks for you. The following exchange appears at page 148 of the transcript:-
JUDGE VASTA: Okay. But that you’re saying, as an owner, you have to have someone there to keep an eye on them. Why, because you just can’t trust these people?---
MR BALLANTYNE: Well, no, that it’s not about – well, partly about it’s about trust. It’s about, well, hang on, because, quite often, the – if there’s time constraints on the job and they want the boat moved, you know, I will give you an example. You know, that on the Mishima three – through – they did three weeks in the shed, I think it was 2016. Then they brought it outside to do the external painting. Why would you do that?
JUDGE VASTA: Well - - -?---
MR BALLANTYNE: You know, that’s just – that seems silly to me. If I – if it was my boat, I would say leave it in the shed for the painting because I know full well, if you bring it out of the shed, the paint application is not going to be great. So it’s not really as good as what it should be.
And a little later on:-
JUDGE VASTA: It just strikes me as incredible that I would have to keep someone there when I leave it with professional people to maintain something and they say, yes, we will paint it or we will do this. I have to have someone there with them to make sure that they are honest?---
MR BALLANTYNE: Yes. As – but I can tell you that’s what happens when ..... or Pacific Tug are painting their boats, their superintendents are there. And they’re not applicators, they’re not paint suppliers, but they’re the owners of the boat and they are there.
JUDGE VASTA: Okay. And that’s because you can’t trust anyone?---
MR BALLANTYNE: It’s an – as I said, it’s the one area that you have to be really careful of. Because the last thing you need when you’re operating a commercial vessel is having to come out because the antifouling has fallen off.
Mr Stanyon
Mr Stanyon said that the above water line hull sides, the internal bulwarks and foredeck all had problems because all of the rust was not removed before applying paint. He said that the upper deck air-conditioning deck and side deck drain as well as the sun warming frame displayed that there was virtually no preparation done to this area before paint was applied. He noted that there was a complete lack of adhesion on the side deck drain over the previous paint.
As far as the HBWL was concerned, Mr Stanyon said that the failure has been between the two coats of antifouling that the Respondent applied. He said that there was a lack of adhesion between the two coats and that there was nothing to indicate that paint quality, compatibility or suitability had played any part.
In his opinion, Mr Stanyon said at the Respondent was not in a position to coordinate the work required to fully prepare an area for optimal surface preparation. He considered that limited removal and replacement of corroded steel, pipework phalanges and bolts had contributed to the defects in the painting of this vessel. He said that there were many areas that were not sufficiently stripped back or cut away and replaced with new steel.
Tellingly, Mr Stanyon said that “timber deck mouldings and trims were not removed for inspection or preparation with the result that there had been rust left in place. This is migrated into the newly painted areas or has been painted over”.
Mr Stanyon said that the Applicant himself was partly to blame because he had not allowed the proper access to these areas by the Respondent. He later conceded that his source of information about the Applicant was what the Mr Clark had told him and not from any independent source.
Mr Stanyon was also of the view that the Applicant should have had a project manager to ensure that the tasks were undertaken properly.
In his cross examination, Mr Stanyon said that if the timber had been removed and the preparation of the underlying metal areas had been done properly, there would not be any of the trouble that is depicted in the photographs. It was then pointed out to Mr Stanyon that the timber had, in fact, been removed and that there was nothing in the way of the Respondent having proper access to all of these affected areas.
To say that Mr Stanyon was quite surprised about this new information, would be an understatement. He said that it would change his opinion. His other assumptions that the Applicant denied access to the Respondent was totally based upon what the Respondent had told him. Again he conceded that if this information were incorrect, his opinion as to liability would be affected.
The issues
The evidence of Mr Ballantyne was of very limited use. He gave possibilities or theories rather than conclusions after investigations. His evidence was hypothetical rather than empirical. The other experts all looked at the actual vessel or paint and made observations of what they observed and gave reasoned opinions as to what has occurred. I have relied on the evidence of Mr Burgaty, Mr Haig and Mr Stanyon.
As to the remediation works that were conducted in 2016, it seems to me that there can only be one conclusion as to why these paint works failed; and that is that there was a failure to properly prepare the surfaces for painting and/or inadequate care or skill in the application of the paint.
As to the remediation works that were carried out in late 2019, it seems to me that the issue is a little more difficult. Whilst many of the faults were seen at the time of the 2016 remediation works, it was around two years before Mr McIntosh gave a quotation to fix these problems and then a further 13 months before those works got underway.
The Respondent claims that the effluxion of time has, at the very least, exacerbated the faults in the preparation and application of the painting. The Respondent claims that, because there is a need for constant maintenance, some of these faults would have occurred in any event and therefore, causation between the works in 2015 and the remediation in 2019 cannot be proven.
The Respondent also claims that the Applicant was contributorily negligent because he did not appoint a project manager and that he gave directions to the Respondent that were partly responsible for the inadequate preparation of the surface.
The Respondent also claims that Jotun was a concurrent wrongdoer in that Jotun should have supervised the Respondent and failed to do so.
All in all, the Respondent submits, with respect to the 2016 remediation works, that the contributory negligence of the Applicant should be assessed at 100%. Alternatively, if that submission is partly or fully unsuccessful, then the amount of liability that would be attributed to the Respondent should be then discounted by 50% because Jotun should be also 50% responsible.
With respect to the 2019 remediation works, the Respondent submits that causation cannot be proved and that those remediation works were too remote in time for liability to be attributed to it. If that submission is unsuccessful, then the same reasoning with regard to contributory negligence and the concurrent wrongdoing of Jotun would still apply to the 2019 remediation works, according to the Respondent.
Jotun as a concurrent wrongdoer
The background to this issue is that the Applicant originally joined Jotun as a Second Respondent. The Statement of Claim details the alleged wrongdoing by Jotun. The Applicant discontinued the proceedings against Jotun on 31 January 2020.
On 6 March 2020, the Applicant applied to the court for leave to amend the Statement of Claim so that the quantum of the second rectification works could be added to the claim. I made the order allowing the Applicant to do this that same day. On 12 March 2020, the Applicant filed his amended Statement of Claim.
Notwithstanding that the Applicant had already discontinued the proceedings against Jotun, the Statement of Claim still alleged that Jotun was also responsible. The Statement of Claim still alleged that the repair contract included terms that Jotun would supervise the coating and antifouling and that Jotun would ensure that it was a good job. It was also alleged that Jotun failed to ensure that the Respondent prepared the surfaces accordingly and failed to ensure that the Respondent complied with the specifications.
The Respondent submits that they are entitled to rely upon those aspects in the pleading to show that Jotun is a concurrent wrongdoer. The questions that the Respondent asked of the Applicant’s expert witness, Mr Burgaty, all went to the opinion of Mr Burgaty that Jotun failed in their supervisory role.
There was certainly a contract between Jotun and the Respondent. There was certainly a contract between the Applicant and the Respondent. However, there is quite a deal of doubt as to whether there was a contract between Jotun and the Applicant.
The Respondent relies upon paragraphs in the initial affidavit of the Applicant. The Applicant was initially reluctant to use products from Jotun because of his previous dealings with their products back in 2009. However, the Applicant gave evidence that it was Mr Clark who, in detailing what he would do in conducting the maintenance works, said that he would be using products from Jotun.
The Applicant said that he spoke to Mr Stonely and voiced his concerns about what had occurred in 2009. At paragraph 29 of the first affidavit, the Applicant said “I recall Mr Stonely saying in response to my concerns words to the effect that he was going to look after it and ensure a good job”.
At paragraph 30 of that same affidavit, the Applicant said that
Mr Stonely’s words were in accordance with my understanding of Jotun’s role in supervising the work to be done by Bradford Marine, that is:
(a)Ensuring the surface preparation was done effectively to ensure a clean and suitable surface for the application of the Jotun products,
(b)Ensuring the correct products were applied in accordance with the paint specification that had been prepared by Mr Stonely,
(c)Ensuring that the products were applied by Bradford Marine in accordance with Jotun’s instructions and specifications, and
(d)Ensuring that the coatings were periodically checked for compliance with the Technical Specification dated 9 July 2015, including the film thickness, the correct proportion of thinners, the number of coats and overall quality of finish and workmanship.
The Respondent contends that paragraphs 29 and 30 can be construed as constituting a contract between the Applicant and Jotun. Unfortunately, there was no evidence from any representative of Jotun for such a proposition to be put to them.
Applicability of Yates
The Respondent relies upon an authority of Yates v Mobile Marine Repairs Pty Ltd and Anor [2007] NSWSC 1463. In that case, the plaintiff, Mr Yates, owned a boat that was fitted with two large MAN engines. The first defendant was Mobile Marine Repairs and the second defendant was MAN Marine Australia. The second defendant manufactured the engines that were on boat of Mr Yates and the first defendant was the authorised agent for the second defendant. The first defendant repaired the engines but did so negligently and the engines were extensively damaged.
One of the questions that the NSW Supreme Court had to determine was whether the second defendant was a party to the repair contract. The evidence in that case was that there had been constant trouble with the engines that the first defendant repaired, however more trouble would arise after such repairs. A representative of the second defendant contacted the plaintiff to say that they had taken over as the MAN dealer for the east coast of Australia.
A representative of the first defendant continued to affect repairs upon the engines and would tell the plaintiff that the second defendant had approved the repairs. The plaintiff said that the representative of the second defendant later contacted him and said that the second defendant was prepared to fix the engines if the plaintiff paid half the cost. The first defendant continued to affect repairs upon the engines.
The first defendant ultimately advised that he would need to rebuild the engines “in situ”. The plaintiff went to a number of other experts who told him to reject the “in situ” repair offer and to replace the engines so as to protect the value of the vessel. The plaintiff did replace the engines.
The plaintiff received two offers from the second respondent to sell him new engines at cost price but the plaintiff refused the offer because he had lost confidence in the ability of the defendants to give him proper service. The plaintiff bought new engines from another engine maker.
The Court concluded that the conversation, in which the representative from the second defendant said that the second defendant was prepared to fix the engines if the plaintiff paid half the cost, constituted a contract. The Court found that the first defendant was not a party to that contract. The Court found that it was a term of that contract that the second defendant would procure that the work performed would be carried out with reasonable skill and diligence. The fact that the work was not carried out by the first defendant, or its subcontractor, with reasonable skill and diligence did not relieve the second defendant from liability to the plaintiff for breach of contract.
The Respondent in this case submits that Yates (Supra) is on all fours with the present matter. With the greatest of respect, I disagree. In Yates (Supra), the Court said that the conversation occurred in the context of repeated insistence by the plaintiff that the second defendant was responsible, under warranty, for doing repairs to the rust and the paintwork of the engines. The representative of the second defendant was speaking to his principles about the extent to which the second defendant would accept responsibility. The second defendant was denying that the repair and repaint work fell within the warranty. In that context, the representative’s statement that the second defendant was prepared to do the repairs if the plaintiff was prepared to pay half the cost, could only be interpreted as a compromise offer by the second defendant.
The situation in this case is quite different. The Respondent was not the agent for Jotun. Jotun did not give a separate warranty to that of the Respondent. Jotun was never acting independently of the Respondent. The only conversation that was had between the representative of Jotun (Mr Stonely) and the Applicant was that he (Mr Stonely) was “going to look after it and ensure a good job”.
This was not a separate contract between the Applicant and Jotun; it was a reassurance that Mr Stonely would ensure that Jotun’s role in what the Respondent did was going to be looked after so that a good job was done. But more importantly, the conversation between the Applicant and Mr Stonely does not indicate that there has been any acceptance by Jotun of a contractual obligation that was separate to the contract between the Applicant and the Respondent.
There was no consideration between Jotun and the Applicant. The Applicant was to pay the Respondent for the work that was done and for the cost of Jotun products. Jotun supplied its products to the Respondent and not the Applicant.
Finding as to a contract between the Applicant and Jotun and the pleadings of the Respondent
For those reasons, I do not find that there was a contract between Jotun and the Applicant. There has not been put into evidence any contract between Jotun and the Respondent, but it appears that Jotun was a subcontractor, used by the Respondent, to fulfil the Respondent’s contractual obligation to the Applicant.
In such a situation, the Respondent bears the responsibility for the fulfilment of the contract. If the subcontractor (in this case Jotun) has caused the Respondent to be unable to properly fulfil its contractual obligations, then the Respondent has its remedies against the subcontractor. But that has nothing to do with the Applicant. The Respondent was able, at any time after 31 January 2020, to join Jotun as a third party, but chose not to do so.
Section 30 of the Civil Liability Act 2003 (QLD) defines a concurrent wrongdoer in these terms:-
30 WHO IS A CONCURRENT WRONGDOER
(1)A concurrent wrongdoer, in relation to a claim, is a person who is 1 of 2 or more persons whose acts or omissions caused, independently of each other, the loss or damage that is the subject of the claim.
(2)For this part, it does not matter that a concurrent wrongdoer is insolvent, is being wound up, has ceased to exist or has died.
In its pleadings, the Respondent has pleaded that Jotun is a concurrent wrongdoer, in this manner:-
The Second Respondent is a concurrent wrongdoer within the meaning of section 30 of the Civil Liability Act 2003 (Qld), as:
(i)The products used by the First Respondent were provided by the Second Respondent;
(ii)The specifications for the application of the products were provided by the Second Respondent;
(iii)The Second Respondent was responsible for taking the blast profile measurements, paint readings and painting the epoxy of the Vessel; and
(iv)Any loss and damage alleged to have been suffered by the Applicants’ was as a result of:
(A) Faulty products being provided to the First Respondent; and/or
(B) Incorrect specifications being provided to the First Respondent; and/or
(C) The Second Respondent conduct in performing its contracted role
On the evidence before me, it could not be said that there was any fault with the products provided by Jotun. None of the expert witnesses attested to there being any problem with those products and there were no submissions made to me, by either the Applicant or the Respondent, that the products supplied by Jotun were faulty.
Whilst there was some criticism of the specifications made by Mr Burgaty, the evidence before me was that if the Respondent had actually complied with all of the specifications, this problem would not have arisen. This is why the records were so important; they may have been some independent evidence as to the compliance (or otherwise) of the Respondent to the specifications. As it is, the evidence of Mr Burgaty and Mr Haig, and to a lesser extent Mr Ballantyne and Mr Stanyon, is that those specifications, with regard to surface preparation and application, were not followed.
As I have previously found, there was no contract between the Applicant and Jotun.
All of the matters identified by the Respondent, in their pleadings as to the particulars of Jotun’s concurrent wrongdoing, have not been made out. This means that any reliance by the Respondent that Jotun was a concurrent wrongdoer, must fail.
Contributory negligence
The Respondent claims that the Applicant failed to appoint a project manager. The project manager, it is claimed, would have ensured the compliance by the Respondent with the specifications of Jotun and managed the different teams of personnel who were working on the vessel at the same time.
The Respondent also claims that the Applicant gave instructions which were followed by the Respondent, despite recommendations to the contrary, which then were partly responsible for the failure to prepare the surface and/or apply the paint coatings.
Project Manager
As previously noted, both Mr Ballantyne and Mr Stanyon said that the Applicant should have had a project manager to supervise all of the works done on the vessel.
The facts are that the Applicant had a carpenter working on the boat. His job was to remove all of the wooden fixtures to enable access to the steel superstructure. At one stage, another employee of the Applicant was doing some work on part of the electrical system. When that employee had finished their task, that employee helped the carpenter. The Applicant estimated that this would have been for no more than four hours.
Whilst the carpenter worked for quite some time, the Applicant gave evidence that he (the carpenter) did not get in the way of either the Respondent or Wicked. This evidence was not challenged and there was no evidence given by either Mr Clark, Mr Hanton or Mr Carruth (the manager of Wicked) that there was any issue with the carpenter disturbing the operations of either the Respondent or Wicked.
It was put, in final submissions, that there was more than one person working for the Applicant because the Applicant use the word “carpenters” in his affidavit. I do not see that this is of any issue considering the context in which the word was used and the fact that there are many grammatical errors in that affidavit. When the Applicant was asked about this aspect, he was adamant as to his evidence which was not truly challenged.
The importance of this is that the Respondent was attempting to paint a picture that there were myriad people working on the vessel at the one time without any coordinated effort. I do not accept this submission.
I accept the evidence of the Applicant as to who was working on the vessel directly for the Applicant and when that occurred. I also accept the evidence of the Applicant that he had a conversation with both Mr Clark and Mr Carruth, before the works even started, as to their scope and the need for the two companies to work cooperatively.
I accept the evidence of Mr Carruth that he has worked for many years with the Respondent and that they have a professional relationship. He said that his crew worked around the crew of the Respondent whilst they were working on the boat at the same time. He said that the crews were used to doing this. He did not give any evidence that there were any difficulties with Wicked working on the vessel at the same time as the Respondent.
I do not accept that there was any need for a project manager. In reality, there were only two work crews working on the boat simultaneously. Those were crews that were professional and had worked in this manner many times before. Before the works began, neither Mr Clark nor Mr Carruth ever suggested that there would be any problem with what they were both going to do, such that a project manager would be needed.
The reasoning, given by Mr Ballantyne, that a project manager was needed because an owner could not trust a contractor to do the right thing, is a sad indictment upon the professionalism of persons in the marine industry, especially in the repairs and maintenance field. It flies in the face of the faith that is needed when completing any form of agreement.
Without more evidence that would impugn the professionalism of people working in this industry, I cannot accept that, if an owner of a vessel contracts with a repairer to do maintenance works, it will be necessary for the owner to have someone “looking over the shoulder” of the repairer to make sure that he does what he said that he will do. The repairer must “live or die” on his professionalism and his undertaking to do the work he is contracted to do. He cannot escape the consequences of his failure by claiming that the owner should have been watching him to make sure that he lived up to his promises.
Instructions of the Applicant
The Respondent attempted to also paint a picture that the Applicant was wanting to have the maintenance works done in the cheapest manner possible and that he was displaying an attitude of “near enough is good enough as long as it is cheap”.
To this end, the Respondent pointed to particular directions given by the Applicant to the Respondent.
The first direction relied upon by the Respondent was in respect to the HBWL. Mr Clark said that he recommended to the Applicant that the whole of the HBWL be sandblasted entirely. Mr Clark said that the Applicant refused to do so and did not accept that recommendation because it would cost an extra $20,000.
The Respondent relies upon other non-particularised directions that Mr Clark, and to a lesser extent Mr Carruth, allege that the Applicant gave. The gist of this evidence is that the Applicant prioritised the saving of costs and, when shown areas that needed attention, told the contractors to ignore that area.
The second direction relied upon by the Respondent was the moving of the vessel from shed 58. The Respondent claims that the Applicant told the Respondent to have the vessel moved from under the cover of the shed as soon as possible. The purported reason for this direction was to save money in shed rental fees. The Respondent claims that the vessel was moved out from the shed prior to the Respondent completing all of the works required to be done under cover and this exposed the vessel to the elements without sufficient protection. Mr Ballantyne referenced this incident in the passage of his evidence quoted earlier in these Reasons.
Credibility
The Applicant denies that he gave such instructions. The Respondent, in final submissions, said that the evidence of Mr Clark (and to a lesser extent, Mr Hanton and Mr Carruth) should be preferred to that of the Applicant. The Respondent bases this submission on the fact that, during his evidence, the Applicant admitted that he provided, to his solicitors, a document in which he had “whited out” three words.
This incident is somewhat bizarre. In the third affidavit of the Applicant, filed 9 November 2020, the Applicant annexes an email that he sent to his carpenter on 28 July 2015. This email is annexure BJ-56. The third last paragraph of the email reads as follows:-
Bradford’s have advised me that they have allocated a project supervisor, who will provide more specific instructions if needed. Name is Heath?
The reason for the annexure is explained by the Applicant, in the affidavit, as being that,
I have consulted with my files and identified a number of items of communication which I received or sent in relation to the works on Mishima, and which were not attached to either of my previous affidavits. They are as follows:
And the first item identified is that particular email.
Nothing actually turns on this email and it has little, to no, relevance to this matter. However, in the orders that I made of 6 March 2020, which allow the Applicant to amend his Statement of Claim, I also made orders for further discovery. On 21 April 2020, the solicitors for the Applicant sent to the solicitors for the Respondent a number of documents.
One of those documents was this same email that has later been reproduced at annexure BJ-56 to the third affidavit of the Applicant. However, this email, which was given to the Respondent by way of discovery, does not have the words “Name is Heath?” in that third last paragraph.
The Applicant was asked about this during his cross examination. When confronted with the two emails, it was put to the Applicant that he had “doctored” the email. The Applicant explained that he whited out the words “Name is Heath?” He said that he did this because “I was trying to correlate with emails from Bradford’s and it wasn’t-wasn’t falling into place. So I wasn’t sure of the name”.
At the end of his evidence, I asked the Applicant about this aspect:-
HIS HONOUR: All right. I’ve just got a question here because I don’t know that I really understood this aspect of your testimony. You talked about that email where the name – the phrase or words, “name is Heath?”, and you said that you whited that out and that was – I’m trying to work out when did you white that out?---
MR JONES: It was – it goes back to when I was going through the affidavits and I realised that we had only put in one page of their quotation and there was two pages to it. The quotation of 15 July and the second page of the quotation says that they had appointed a supervisor for the project and his name was – now, I can’t remember the name – and I realised then that we hadn’t actually attached that page and they didn’t have it in their folio even though it should be on their records. And the issue came up project manager – project manager, which only, for the first time, came up a year ago. And I was going to rely on that, being not as smart as I thought, relying on the fact that they said they had a supervisor who was going to supervise the job. So when I was going through my – this stuff for discovery and all that I thought I would just delete – redact that name because when they see that name – Heath whatever it was – they might realise that they had said, “We’re going to have a supervisor for the job” and it was probably something silly but I thought at the time I was being smart that we might be able to show (makes sound) they said they were going to have a supervisor and they wouldn’t twig on it until now.
HIS HONOUR: But you tell your solicitors about that? I mean, be careful, I don’t want to go through it, but had you told anyone that, “Hey. Look, you know, this I’ve given you I’ve actually whited it out”, or is that something you just kept to yourself?---
MR JONES: No. I did it and thought not more about it; it was bunched with all the documents and when the time came to hand it in I just grabbed everything and sent it in. I did mention to the solicitor about – they had said there was a supervisor – they were going to have a supervisor but nothing about the rest of it, and I actually forgot about it.
HIS HONOUR: But you’ve given another affidavit where you actually have given this same email, but you haven’t whited it out?---
MR JONES: Yes. That had already gone in. I didn’t think that they would have picked that up.
The Respondent submits that this evidence shows that the Applicant was a dishonest witness and therefore I would not accept him as a witness of credit or reliability. Therefore, the Respondent submitted that the Applicant’s denials that he gave those instructions to the Respondent, could not be accepted.
However, I watched Mr Jones very carefully during his evidence. He was an honest witness and, in the main, a reliable witness. He had many opportunities to “gild the lily” and he refused to take them. He made appropriate concessions but remained firm on the major aspects of his evidence. More importantly, much of his evidence was corroborated by the documentary evidence that was created at the time.
Notwithstanding his rather convoluted, and somewhat peculiar, explanation as to the whiting out of the three words in the email, there is nothing in his actions that really speak of any form of attempt to deceive. The true email was annexed to his affidavit, but as I have previously noted, it is of no moment in any event.
This can be contrasted with the evidence of Mr Clark. Mr Clark was evasive during his cross examination and very rarely answered the question that was asked. His retorts to the questions asked were mainly non-responsive and could be seen as attempts to obfuscate the issue that was being discussed. Many of his explanations were simply nonsensical.
The biggest mark against the credibility and reliability of Mr Clark was the failure to produce any painting records. Mr Clark testified that the Respondent did keep painting records but he cannot explain where they have gone. The only inferences open to me are that the painting records would show that the Respondent did not comply with the specifications in the preparation of the surface or in the application of the paints, or that the Respondent simply didn’t keep the records and Mr Clark has told the Court a deliberate untruth.
I am hesitant to draw the latter inference simply because a judicial finding that a person has perjuriously given evidence, will stay with that person and cling to him like the metaphorical albatross around his neck. But in drawing the former inference, it still leads to a conclusion that the Respondent has deliberately hidden evidence from this Court because it is not helpful to their cause.
For all of these reasons, I do not accept the evidence of Mr Clark as being either truthful or reliable where it conflicts with the evidence of the Applicant.
Discussion about the claims against the applicant
Credibility is just one of the factors to bear in mind when assessing the claims that the Applicant had given instructions that were deleterious to the proper maintenance of the vessel wall were against the advice of Mr Clark and others. I have also looked at the circumstances in which these “instructions” were given as well as the inherent probability or otherwise of such instructions.
Mr Clark gave evidence that the Applicant ignored his advice to sandblast the whole of the HBWL because it would be $20,000 cheaper not to sandblast but to instead just spot blast. The evidence of Mr McIntosh was that it was cheaper to sandblast rather than spot blast. This evidence was not challenged. Tellingly, in cross examination, Mr Clark resiled from any suggestion that giving the HBWL a full sandblast would be more expensive than simply spot blasting.
I accept the evidence of the Applicant when he said that Mr Clark had never spoken to him about fully sandblasting the HBWL. I accept the evidence of the Applicant that his instructions to the Respondent was along the lines of “you are the experts and you are best equipped to tell me what is needed”. And more importantly, as it was actually cheaper to fully sandblast the hull than to spot blast sections of it, there would be no reason to have such a conversation.
I also reject any suggestion that the Applicant told the Respondent that they should just ignore any troubled areas. This would be totally contrary to what the Applicant was attempting to do by asking the Respondent to affect repairs in the first place. After seeing the Applicant in the witness box, I cannot accept that he would give any such instructions.
But if he had given such instructions, it would be expected that this would be the first matter that would be raised by the Respondent when the Applicant made his complaints. One would have thought that, when the Applicant made his first complaints in January 2016, the Respondent would have answered straight away with words to the effect of “what did you expect when you told us to ignore those areas and simply paint over the rust”.
If the Applicant had given such instructions, when the boat was taken out of the water in August 2016, and the state of the HBWL was noticed, again one would have expected the Respondent to say to the Applicant, words to the effect of “what did you expect to happen when you ignored our advice to give the whole HBWL a sandblast”.
In a similar vein, when the Applicant made his complaints to the Respondent in 2016, there was no response by the Respondent to the effect that “this is your fault because you did not give us a project manager”. Instead, the Respondent, through Mr Clark, made excuses that the fault lay in electrolysis and incompatibility of the paint.
Realistically, it is extremely hard to accept that any professional painter would have followed instructions of the sort that Mr Clark is now attempting to say that the Applicant gave. And the last word on this subject comes from the Respondent’s own witness, Mr Stanyon who gave the following evidence in answer to my questions at the end of his testimony:
JUDGE VASTA: If, you know, it really were that Mr Jones said, “Don’t bother with that. Just paint over the rust.” I don’t know that we would actually be here?---
MR STANYON: Well, that’s right. If areas were seen to be not ready or not worthy of paint, yes, you either don’t do it or you agree to do it properly.
JUDGE VASTA: Yes, and that’s the – the point here with all of these things, if there had been insufficient preparation, there should have been some notice given to Mr Jones, “Well, you know, we’re” - - -?---
MR STANYON: Totally agree, yes.
JUDGE VASTA: To put it as Mr Tan says, you’re putting lipstick on a pig, it might look pretty but it’s still a pig underneath?---
MR STANYON: I mean, if I was the painter, I wouldn’t go anywhere near a surface that wasn’t ready for my services.
JUDGE VASTA: Yes?---
MR STANYON: You know, you paint that and in six months it looks like you have done a poor job.
There was no evidence that Mr Clark, or anyone else, ever verbally gave the Applicant any notice of the consequences of such ludicrous instructions, let alone put it in writing, as would be expected. I accept the Applicant when he gave evidence that he did not instruct any person, on behalf of the Respondent, or anyone else, to ignore any troubled areas on the vessel.
The Respondent claimed that the Applicant told the Respondent to move the vessel out of the shed before it was prudent to do so. At the time that the vessel was moved, the funnel top part of the vessel had been removed. This meant that the two main engine and generator exhaust areas were left open to the elements. This meant that if the vessel was rained upon, the rain would probably penetrate those systems.
The Applicant was not in Australia at the time that the vessel was moved out of shed 58. The Respondent relies upon an instruction that they claim the Applicant made “to get the vessel out of the shed as soon as possible so as to save money”. The Applicant gave evidence that he had spoken to Mr Clark in early September. Mr Clark had told him that the vessel would be ready to be removed from the shed on 21 September 2015. The Applicant accepted and noted this date.
The Applicant was overseas from at least 10 September 2015 and had made arrangements to return to Australia on 20 September 2015, so that he could be present when he thought that the boat would be ready for removal from the shed. He said that he had not put any pressure on anyone to remove the vessel any earlier because he would not have been able to have been in Australia to inspect the vessel before that time.
On Thursday, 17 September 2015, the Applicant sent an email to the Respondent in order to confirm that the vessel would be ready to leave the shed on Monday 21 September 2015. The email was in these terms:-
Hi David, Marty
Can you update me on the shift from shed to hard stand?
I understand we are waiting for the space to become available sometime on the hard stand about Friday.
Are we OK to move out on Monday a.m.?
Thanks
Barry
He received a response from Mr Hanton that same day which informed the Applicant that the vessel had already been removed from the shed. It was in these terms:-
Hi Barry, made a call to you yesterday but got the answer phone, wasn’t sure if you were back. Boat is now on hard stand and was moved first thing this morning. Weather it is raining here so we are completely clearing off what needs to come off the boat. Touch ups to follow. The stack has been completed and requires blasting and painting.
David Hanton
Business Manager
There was no evidence given by the Applicant that he received any such message from Mr Hanton. The evidence of Mr Hanton was that there was an email discussion between he and the Applicant about the moving of the vessel. It is quite clear that there was no discussion; Mr Hanton simply told the Applicant that the vessel had been moved.
It really is quite disingenuous of the Respondent to try and suggest that the Applicant was responsible for the movement of the vessel on 17 September 2015.
I accept the evidence of the Applicant when he says that he did not give any instruction for the boat to be moved before 21 September 2015 and that the date of 21 September 2015 was a date given to him by Mr Clark to which the Applicant simply agreed.
Conclusion as to contributory negligence
Having made the findings that I have made, I conclude that there was no contributory negligence by the Applicant.
Remoteness and effluxion of time
The Respondent submits that the remedial works undertaken in 2019 cannot be said to have a causal connection to whatever the Respondent did in 2015. But such a submission is contrary to the evidence of the Respondent’s own expert, Mr Stanyon.
Mr Stanyom clearly stated that the cause of the damage that he witnessed was the lack of preparation of the surface and the improper application of the paint. This was also the evidence of Mr Bugarty. Whilst Mr Ballantyne proffered that the effluxion of time may also be a factor, such evidence was vague and there was no aspect to the damage on the vessel that Mr Ballantyne could point to that was definitely as a result of the effluxion of time.
Having carefully listened to the evidence and reviewed all the expert reports, including that of Mr McIntosh, and the photos and video, I am of the view that the remediation works of 2019 were as a direct result of the manner in which the Respondent conducted the work in 2015.
Whilst it is true that there was a delay between the remedial works of 2016 and the quote given by Mr McIntosh in October 2018, I am satisfied that not all of the deficiencies were apparent until 2018 when the rust began to reveal itself to a far greater extent.
It is also true that there was a delay between October 2018 and the works commencing in November 2019. However, as I said during the course of the submissions to Counsel for the Respondent, it would need to be shown to me that there were areas that were replaced because the rust and corrosion had rendered those areas unsuitable for anything other than replacing, and that those areas may have been able to have been saved if the Applicant had authorised the works in October 2018, rather than 13 months later.
The problem with such an exercise is that the invoice for the 2019 remedial works did not include any “hot works”. So even if there were any areas where the corrosion had led to replacement of those areas in the superstructure, the Applicant had decided that if there were any hot works during the 2019 remedial works, these would not be part of any claim that he made against the Respondent.
I find that there is a direct causal link between the actions of the Respondent in 2015 and the remedial works conducted in November 2019.
Conclusion as to liability
I am satisfied that the Respondent is wholly responsible for the state of the vessel that caused the need for remedial works in 2016 and 2019.
This means that I accept that the Applicant and the Respondent had a contract for the Respondent to properly repair the vessel of the Applicant. The Respondent breached that contract by failing to properly repair the vessel. I also accept that the damage done to the vessel, that caused the need for GT Mac to conduct two lots of remediation works, was wholly due to the negligence of the Respondent.
Quantum
This matter comes before this Court pursuant to its Admiralty jurisdiction. The Applicant claimed damages for a breach of contract and/or alternatively, damages in tort, and/or alternatively damages for a breach of the Australian Consumer Protection Law. That last aspect was not pursued during the trial.
Because of its accrued jurisdiction, this Court has the power to adjudicate breaches of contract and tortious injuries and I have made the appropriate findings.
The claim that is made by the Applicants is a modest claim. It is for reimbursement of the money paid to GT Mac for the two lots of remediation work on the vessel plus interest. I would have been prepared to award damages for other hot works that needed to done on the vessel but the Applicant declined to make that claim. I would also have been prepared to award damages for loss of enjoyment of the vessel whilst it needed to undergo the repairs that would not have been needed if it weren’t for the breach of contract and/or negligence of the Respondent.
The Respondent made submissions on many of the line items in the invoice of the second lot of remediation works conducted by GT Mac. The Respondent argued that some of those items could have been ascribed as being “maintenance works” rather than “remediation works”. The Respondent also argued, at one stage, that GT Mac had somehow “double charged” for some items, however that claim was ultimately abandoned.
Having regard to the honesty of Mr McIntosh, and to the modest nature of the claim that the Applicant is making, I am not prepared to diminish the amount claimed in any way whatsoever.
Section 76 of the Federal Circuit Court of Australia Act 1999 (Cth) (“the FCC Act”) allows a judge to give interest at such a rate as the judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date on the cause of action arose on the date as of which judgement is entered. In this case, I am satisfied that an interest rate of roughly 5% should be awarded. I will, however, make an order pursuant to s.76(3)(d) and order a lump sum in lieu of such interest.
The Applicant paid $50,000 to GT Mac on 16 September 2016. The Applicant would have been awarded interest on that amount from that date until 30 November 2020.
The Applicant paid the sum of $42,149.49 on 11 October 2016. The Applicant would have been awarded interest on that amount from that date until 30 November 2020.
The Applicant paid the sum of $148,697.36 on or around 31 January 2020. The Applicant would have been awarded interest on that amount from that date until 30 November 2020.
In accordance with s.76(3)(d) of the FCC Act, I calculate the lump sum to be $260,000.
ORDER
I order judgment for the Applicants in the sum of $260,000, with costs to be taxed in accordance with the Federal Circuit Court Rules 2001 (Cth) unless otherwise agreed.
I certify that the preceding one hundred and eighty-four (184) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Vasta. Dated: 30 November 2020
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