Rosshaven v Mitchell
[2004] QSC 8
•6 February 2004
SUPREME COURT OF QUEENSLAND
CITATION: Rosshaven v Mitchell [2004] QSC 008 PARTIES: ROSSHAVEN MARINE PTY LTD
ACN 010 615 719
(Plaintiff)
v
CRAIG GEOFFREY MITCHELL
(Defendant)
and
ARTHUR JOHNSON
(Defendant by counterclaim)FILE NO/S: S.131 of 2002 DIVISION: Trial PROCEEDING: Application for damages ORIGINATING COURT: Supreme Court DELIVERED ON: 6 February 2004 DELIVERED AT: Townsville HEARING DATE: 15-16 April 2003; 14-15 October 2003; 29 January 2004 JUDGES: Cullinane J ORDER: I give judgment for the plaintiff against the defendant on the claim in the sum of $4,463.91 being the amount claimed together with interest at the rate of 9% per annum from the 4th day of July 2001 until judgment.
I give judgment for the defendants on the counterclaim against the plaintiff on the counter-claim with costs to be assessed.
CATCHWORDS: CONTRACT LAW –CLAIM FOR DAMAGES – PERFORMANCE OF WORK TO SEA VESSEL – claim for damages for repairs carried out – counterclaim for breach of contract – counterclaim of ‘unseaworthiness of vessel – breach of contract – whether plaintiff liable under s.52 Trade Practices Act 1974. Trade Practices Act 1974 (Cth), s.52
Cable (1956) Ltd v Hutcherson Bros Pty Ltd (1969) 123 CLR 143
COUNSEL: A Moon for the plaintiff
There was no appearance for the defendantSOLICITORS: Connolly Suthers Lawyers for the plaintiff
The defendant acted on his own behalf
The plaintiff instituted proceedings in the Magistrates Court which have been transferred to the Supreme Court. In those proceedings it claims $3,739.90 being the balance of monies said to be due and owing under a contract to effect repairs to a vessel previously known as the M.V. Coral Reef and now known as the M.V. The Elizabeth.
The defendant has filed a defence and counterclaim and in response a reply and answer has been filed by the plaintiff. Leave has been given to amend both of these pleadings in the course of the trial.
At the outset of the trial I was informed by counsel who at that time appeared for the defendant that it was agreed that the defendant would have the carriage of the action against the plaintiff and the defendant by counterclaim (a principal of the plaintiff who is said to be liable as a participant in misleading and deceptive conduct under s.52 of the Trade Practices Act). I was also informed that the quantum of the plaintiff’s claim was agreed upon.
The substantive issues at the trial have been those raised in the defence and counterclaim and the reply and answer.
The defendant has in addition to the matters raised by way of counterclaim raised issues which deny the plaintiff’s right to recover.
After the second day of the hearing the trial was adjourned because of problems which had arisen with the pleadings and on the resumed hearing, Geoff Mitchell (Mitchell) the father of the defendant was given leave to appear on the defendant’s behalf.
Mitchell was the person who had all of the relevant dealings with the plaintiff on behalf of his son although in some instances these dealings occurred through one Brierley who had been appointed by Mitchell to act on his son’s behalf.
There have been considerable delays in bringing this matter to finality because of various difficulties which have arisen in the course of the trial and which have necessitated some adjournments of it.
Before turning to the relevant factual matters it is desirable if I set out the claims advanced by the defendant in the pleadings as ultimately amended.
The defendant claims in negligence and pursuant to section 52 of the Trade Practices Act. These claims are based upon certain representations pleaded in paragraphs 12, 15, 16 and 17 of the further amended defence and counterclaim. The effect of these representations is alleged in paragraph 28 to be that the plaintiff represented that the vessel could be made seaworthy by an expenditure of no more than $100,000 “or thereabouts”.
The defendant alleges that the vessel was not capable of economic repair. This is the clear effect of all of the evidence on this subject.
The defendant also alleges that the plaintiff and the defendant agreed that the plaintiff would carry out the works necessary to render the vessel seaworthy for a sum not exceeding $100,000 and claims damages for breach of contract. The defendant also alleges that the consideration under the contract to render the vessel seaworthy for a sum not exceeding $100,000 totally failed. There is thus some tension between the claims in negligence and under the Trade Practices Act and the claim in contract as the latter is based upon an agreement to perform the works for a sum not exceeding $100,000 while the former are based upon a representation that the works would be carried out for the sum of $100,000 “or thereabouts”.
In relation to the claims based upon the representation and the claim that the consideration has wholly failed, the defendant seeks to recover the monies paid to the plaintiff in respect of the works carried out on the vessel. What is striking about the defendant’s case in this regard is that he paid some $300,000 to the plaintiff in accordance with invoices rendered and seeks to recover this amount.
Initially the defendant claimed in relation to the alleged breach of contract what were described as “reliance” damages which it was said were in the same sum as the claims in negligence and under the Trade Practices Act. In his final pleading the defendant claims damages for breach of contract upon two bases. The first is that as a consequence of the plaintiff’s failure to perform its obligations under the contract to render the vessel seaworthy it will cost the defendant a further $200,000 to complete the works. Damages were also claimed upon the basis that had the works been carried out in accordance with the contract alleged, the vessel would have had its value increased by some $350,000 rather than, as is alleged, a nil value. The claim for “reliance” damages is maintained as an alternative.
In addition to seeking to recover the monies actually paid to the plaintiff the defendant seeks to recover the sum of $24,428.52 which it is said were monies expended by the defendant subsequent to taking possession of the vessel. No evidence however was led in respect of this claim.
There is no claim that the plaintiff negligently performed the works which it did perform, nor is it a case in which any other breach of duty by the plaintiff to the defendant resulting in losses to the defendant is alleged.
The claims advanced by the defendant are limited to claims based upon losses said to flow from the representation that the vessel could be rendered seaworthy for no more than $100,000 “or thereabouts” and from a failure to perform a contractual undertaking to render the vessel seaworthy for no more than $100,000.
As I have said, all of the relevant dealings and conversations were had between representatives of the plaintiff and Mitchell rather than the defendant and in some cases were had with Brierley who had been engaged by Mitchell.
Mitchell was a member of the navy for many years. He became aware that the vessel, the subject of the proceedings was for sale. At that time it was known as the M.V. Coral Reef and later its name was changed to the M.V. Elizabeth. The vessel is a wooden vessel of some 28.86 metres in length and was constructed during World War II. There is evidence which suggests it was a general purposes navy vessel and may also have been used as a mine sweeper.
Mitchell became very attached to the idea of restoring the vessel. He planned to have work done on the vessel in Townsville and then to take it to Sydney where further work would be carried out. He intended that the vessel would be used primarily for family trips around Sydney Harbour and adjacent waters. His attachment to this idea and determination to make it a reality explains much of what occurred in this case.
The vessel was in very bad condition. All those who spoke of its condition at the time or provided a report about it agreed on this. It seems that for many years it had been moored in Ross Creek and there is some evidence which suggests that on one occasion whilst moored, it sank in the course of a period of bad weather.
When Mitchell became aware of the vessel being advertised for sale, he contacted one Bartlett, a marine surveyor in Townsville, and asked him to have a look at the vessel as he was thinking of buying it. Bartlett was already familiar with the vessel. He provided a report to Mitchell dated 5th July 2000 (Exhibit 2.) After sending this report there was a conversation between them in which I am satisfied Bartlett told Mitchell that the vessel was not worth purchasing.
Following this, Mitchell contacted Brierley who was a charter skipper based in Townsville. Shortly after contacting him Mitchell came to Townsville where, with Brierley’s assistance, he made certain enquiries about the vessel and what might be able to be done with it. This involved visiting certain shipyards.
Brierley took Mitchell to the vessel and I am satisfied he arranged for an inspection by one Dewing who conducts a shipbuilding and repair business in Townsville.
Dewing was called as a witness by the plaintiff. He made it clear to Mitchell that he was not interested in undertaking the repair of the vessel. In evidence before me he suggested that an expenditure of some $500,000 would only be a starting point to put the vessel in good order.
It was during this visit that Brierley and Mitchell went to the plaintiff’s premises and spoke to one Brian Healey who was the plaintiff’s yard manager at the time. Mitchell’s interest at this time was to know whether the vessel could be hauled out of the water on the plaintiff’s travel lift facility. Healy was given a copy of Bartlett’s report by Mitchell and Brierley.
The vessel was able to be hauled out of the water and this occurred on 15th July.
It was intended at that time that the vessel be kept in the travel lift for a short period so that an inspection might take place. However the then owner of the vessel asked that the vessel remain in the yard so that interested purchasers might inspect it.
Healy and one Johnson, (a principal of the firm, and who is the defendant by election on the counterclaim) had a look at the vessel after it had been removed from the water. Both gave evidence of its very poor condition. Healy described its condition at page 336:
Well, what were you able to observe?—There was severe worm attack in the keel and severe worm attack in part of the keelson. there was severe worm or rust and corrosion attack on the keel shoe. the rudder was seized in position. the starboard side midship’s low down near the keel had – had severe impact damage at some period of time and it was now full of concrete and polyester bog. the starboard at the water line and above had – the engine room had – had severe impact for the period of time it had been covered in plywood to allow the vessel to remain afloat. there was severe worm attack in several areas around the stern posts and there was where the copper sheeting had deteriorated, there was worm attack at those points.
Following this inspection and Mitchell’s return to Sydney, there was a conversation involving Healy and Johnson on behalf of the plaintiff and Brierley on behalf of the defendant (these were all in Townsville), and Mitchell who was on the telephone in Sydney.
Mitchell was interested in ascertaining what the cost would be of getting the vessel into a condition to enable it to be taken to Sydney.
Healy says that he told Mitchell about the poor condition of the vessel, describing it in some detail. Johnson says that he told Mitchell that it would cost $100,000 just to get the vessel back into the water and floating again and that a restoration of the vessel would cost in excess of half a million dollars. Healy gave evidence that Johnson told Mitchell these things. Brierley gave evidence that Johnson referred to the cost of $100,000 just to get the vessel back into the water and said that Johnson told Mitchell he could not say how much it would cost to restore the vessel but it was “a great deal of money”. Mitchell denies he was told these things.
It appears that following this discussion Mitchell indicated to Brierley that he would probably not proceed with the purchase of the vessel and Brierley later told this to Mitchell.
The next contact was towards the end of August when Brierley requested Healy to provide a price for the repairs required to be done to the vessel to take it to Sydney. After Healy told Brierley that this was a fairly large undertaking and gave him a quote of some $3,500 to $4,500 for doing so, Brierley said that Mitchell was not prepared to pay that amount and the list would not be required.
In September 2000, Mitchell called Healy and told him that he was coming to Townsville on 23rd September to inspect the vessel. He asked Healy to prepare a list of work which would be required for the purposes of carrying out a full inspection of the vessel so as to enable him to have some idea of the work which would be required. The vessel had a lot of rubbish and debris and was full of mud and items of broken equipment which would all have to be removed. Healy, who at that time was about to go on holidays and would not be in Townsville on the 23rd September, prepared an estimate of the work required for these purposes (see Exhibit 1). The plaintiff was authorised to commence those works.
I am satisfied that in his dealings with Healy and also in his later conversations with Johnson, Mitchell made it clear that he was interested in having only the minimum work necessary done to enable the vessel to travel to Sydney where further works would be carried out.
On 23rd September Mitchell came to Townsville and met with Johnson and other employees of the plaintiff. Brierley was also present.
The defendant had purchased the vessel on the 11th September 2000 for some $29,000.
When Mitchell arrived on 23rd September this was the first time Johnson had met him although he had spoken to him on the telephone.
Mitchell had made it clear that he was coming to Townsville and he wished to pursue the question of the vessel’s being put in repair to enable it to be taken to Sydney. According to Johnson and one Eichenbrunner, an employee of the defendant, a meeting first took place beside the vessel in which Johnson told Mitchell that he did not think that his proposal was viable and that it was not too late for him to withdraw having spent the purchase price and the amount which had been charged to the defendant for the work that had been done to that time.
Mitchell denies any such conversation and says that he does not recall any meeting beside the vessel.
I am satisfied that in discussions with Johnson on 23rd September, Mitchell made it clear that he wished to go ahead with the repair of the vessel to enable it to be taken to Sydney.
A discussion then took place in Johnson’s office. It is on this occasion that the defendant claims that the representation relied upon was made and the contract sued upon was concluded.
Johnson denies that any such representations were made and his evidence is supported by Brierley(see Exhibit 25) (Brierley was unable to give evidence orally and his evidence was given by means of some technology which functioned by Brierley typing an answer and a voice reading that from a screen.) Johnson also denies that any contractual undertaking to make the vessel seaworthy for no more than $100,000 was entered into by the plaintiff and indeed says that no agreement to render the vessel “seaworthy” was entered into by the plaintiff. Brierley says that he does not recall the word “seaworthy” being used in these discussions.
According to Johnson, Mitchell wanted to get some idea of the works to be done and the costs of it. Johnson says that he made it clear that he could not give accurate estimates and that this was Healy’s job. He says that he told Mitchell that it would not be possible to know what works might be required until the vessel was able to be fully inspected. He prepared some pages of calculations (Exhibit 3) making it clear that the figures were “broad-brush” figures for works to get the basic repairs under way. The four pages contained certain alternatives which according to Johnson were intended to indicate what might be done by way of approaching the repairs necessary.
Mitchell gave evidence which was generally in accordance with what is pleaded in the defence and counterclaim. He said in evidence:
“Yes I then instructed - well, I instructed Mr Johnson that based on what I’d seen and had discussed with him, that he should go ahead and to repair the vessel, replace half of the keel and the steel shoe and make whatever other repairs necessary to the hull and internal planking to make the boat seaworthy to go back to Sydney.”
Mitchell’s evidence was that this was based on the options which had been provided to him in Exhibit 3 and that Johnson had made it clear that such works could be done for no more than $100,000.
According to Johnson, Mitchell instructed him to complete the works that were already underway following the instructions which had been given to Healy and to start the replanking and internal structure repair process.
What is said to be a contract was signed (Exhibit 5). This does not describe the works in any way and is a contract in standard form which the plaintiff uses. It is the defendant’s case that the contract was partly oral and partly in writing with the nature of the work being orally agreed upon. The plaintiff says that the contract was to perform such works as were agreed upon from time to time at the rates currently charged by the plaintiff for such works. As will be seen, Exhibit 5 contains an acknowledgement on the part of the defendant that he knows what the plaintiff’s current rates are and agrees to pay for the works in accordance with them.
According to Johnson and Healy as the initial work was performed, other works which should be performed were identified and these were submitted to Mitchell who would decide whether such works would or would not be carried out. This extended to what planking should be removed. According to Healy on a number of occasions Mitchell refused to have the work suggested carried out or required that it be carried out in a different way. He gave evidence of a number of instances in which he says this occurred. He says that Mitchell refused to have a general fastening of the planks carried out and rejected a recommendation that cobbler pegs be inserted where there had been erosion around nails and instead required some other method to be adopted. These recommendations were made, according to Healy, by him to Brierley. Brierley says he passed them on to Mitchell who refused to have these works performed. Mitchell denies this. It would also seem that Sutherland (another employee of the plaintiff) made similar suggestions which were refused. Healy also says that Mitchell refused to replace the motor on the vessel notwithstanding advice from a contractor engaged by the plaintiff that it was unable to be repaired. Mitchell instead arranged for the motor to be sent to an expert in Coolangatta with, it would seem, a view to it being reconditioned. Ultimately a motor of a different kind came back and this was installed in the vessel. Healy also says that initially there was a refusal to replace the whole shoe but this was subsequently accepted. Healy also suggested that there were major sections of the keel which Mitchell did not originally agree to have repaired but about which he ultimately changed his mind. The effect of Healy’s evidence is that there were many occasions on which Mitchell rejected a suggestion that works be done.
Healy also says that there were areas in the engine room where it was not possible to ascertain the position of what he described as the inner skin unless major outside planking was taken off and that Mitchell refused to allow this to be done. Mitchell denies this.
On the account given by Healy and by Johnson the contract was one to perform only such works as were specifically agreed upon between the parties and was not a contract to produce a result – namely to render the vessel seaworthy. This, according to their evidence was the case with the initial works identified and agreed to on 23rd September and then with all further works which were carried out. Invoices were submitted for all works performed at the usual rates changed by the plaintiff.
Such an arrangement, if accepted, is inconsistent with a contract of the kind pleaded by the defendant.
It is true that the plaintiff knew the aim which the defendant sought to achieve, namely to place the vessel in such a condition as would enable it to be sailed to Sydney and it is also true that it was the plaintiff through Healy who identified works which he recommended be carried out to achieve this end.
However the fact that one contracting party knows the aim sought to be achieved by the other contracting party in having works carried out, and that that person plays a role in identifying for the other party what works should be carried out to achieve that purpose will not be sufficient to make the contract a contract to produce a result. See Cable (1956) Ltd v Hutcherson Bros Pty Ltd (1969) 123 CLR 143.
The defendant through Mitchell’s brother took possession of the vehicle in March 2000 and it left Townsville under the control of Captain Swannell on the 26th day of March 2000.
The evidence is a little unclear as to the circumstances in which the vessel came to pass from the plaintiff to the defendant. There is some evidence which suggests that Mitchell’s brother told the plaintiff that no more work was to be carried out on it. On the other hand, counsel for the plaintiff was at some pains to point out that at this time all of the works which Mitchell had approved had been done.
Mitchell engaged Bartlett in March 2001 to inspect the vessel in order to see whether it was in a suitable condition to be sailed to Sydney. Bartlett produced a report of 20.3.01 (Exhibit 23) which outlined equipment which was necessary and works to be done. After some trials he was asked to prepare a further report. There was some urgency about this. It seems that the report was required for insurance purposes. There is a hand-written report (Exhibit 11) and a subsequent typed report (Exhibit 24) dated 26.3.01. In each Bartlett expressed the view that the vessel was in a satisfactory condition to be taken to Sydney “in favourable weather conditions with competent skipper and crew.”
Mitchell said in cross-examination that he relied upon Bartlett’s advice that the vessel was safe to take to Sydney.
Bartlett says that Swannell was made aware of his report. Swannell denies this but I am satisfied that he was given the report.
I will return to the question of what occurred to the vessel in the course of the journey and the suggested cause of this.
As I have said, at the time the vessel was taken possession of by the defendant the plaintiff had rendered invoices to the defendant in the sum of about $300,000 and these had been paid. Whilst Mitchell complained at a point when the invoices delivered to him had reached $160,000 that some charges were excessive, no where in the evidence is there any suggestion that Mitchell or the defendant or anyone on the defendant’s behalf asserted to the plaintiff that the plaintiff had no right to receive any more than $100,000 in accordance with the agreement that had been entered into between them.
In his cross-examination Mitchell gave evidence which in my view is inconsistent with the contract alleged, although it is not inconsistent with the representation sued upon.
At page 205 in the course of cross-examination by counsel for the plaintiff of Mitchell as to why some $300,000 was paid the following questions and answers appear:
“And when you – when you got up to a hundred thousand dollars, you kept paying or your son kept paying and you’re aware of this-----?—Correct, yes.
-----kept paying the invoices?—That’s correct.
So, when you were making payments, for instance, in excess of $100,000, you were no longer, were you, relying on the fact that – as you put it – you’ve been told that it could be done for less than $100,000?— I was relying on that fact.
You knew by then, it couldn’t, didn’t you?-- I – due you to other items being found in the course of the repair, as we – we did agree that the estimate could be slightly higher when the repairs starts work – the repair work started to take place, could be. As it turned out, there were certain items that we mutually agreed to replace and repair for safety reasons.
So you’re saying that the case is not that it would be made – so you were told that it could – would be made seaworthy for no more than $100,000, you’re saying it was the case that it could exceed $100,000?—that was qualified by Mr Johnson – that is evidence – that we agreed that $100,000 would be the limit, but quite reasonable if – when the repairs started in earnest – I mean, the repairs had been underway for some months.
Yes?—That there was possibility that certain items, such as the fuel tanks, were found to be corroded. Now, they had holes in-----
HIS HONOUR: But do you say there was a discussion about this?—When Mr Johnson and I first discussed the repair quote, which was to not exceed a hundred thousand dollars, it was fairly pointed out – and it is in evidence – that there could be items in this project that could – relating to safety purposes, to be addressed. And in fact, there were four items addressed by the shipyard mutually agreed by me on behalf of my son, the fuel tanks, fresh water tanks, the painting in the engine room that Mr Healy said had to be done and there were other items – a few other items which I have identified in my evidence that-----
Furthermore the difference between the parties on the subject of whether the plaintiff agreed to produce a result rather than carry out certain specifically agreed upon works significantly narrowed when Mitchell cross-examined both Johnson and Healy.
At page 263, in the cross-examination of Johnson the following appears:
“All right. And what would happen as the additional works became obvious-----?—Initially, Mr Brierley would talk to Mr Mitchell and email or fax or phone and – and get approval and then when Mr Mitchell was present, which he did quite often afterwards, he would specifically look at items and approve it, such as the – the fuel tanks, the water tanks, the funnel, the new engine, the anchor winch, the bulwarks, the awning framing-----
…
MR MITCHELL: …. But what you’re saying is – is in essence, correct. There was communication between ourselves, primarily me and your Mr Healey, and I always asked the question, ‘Is it necessary for seaworthiness?’ and it was always, ‘Yes’, or ‘No.’ If it was a ‘No’, we wouldn’t do it. If it was a ‘Yes’, I’d approve it.”
Whilst Mitchell suggested in the passage set out above that his decision as to whether work suggested by Healy should be done was dependent in each case upon whether Healy advised him that the work was necessary or not necessary to place the vessel in a suitable condition to enable it to be taken to Sydney. Healy did not accept this in his cross-examination and there is no evidence of it from Mitchell. The very nature of some of the work suggested makes it difficult to accept such a claim and Healy rejected it in cross-examination by Mitchell.
I accept the evidence of Healy and of Johnson as to the nature of the dealings between the parties. That is, I accept that that only such works as were suggested to Mitchell and specifically authorised by him were carried out.
There is also a claim in contract based upon an implied term. There is in my view no basis for the implication of such a term in the light of the findings that I have made.
The claim in contract must fail then for each of the above reasons.
No claim based upon a failure of consideration can in these circumstances arise. The plaintiff performed such works as were requested of it.
So far as the alleged representation is concerned, the resolution of this issue turns upon an assessment of the witnesses.
It is clear, in my view, that Mitchell’s recall of events is faulty in certain respects and cannot be relied upon. Initially he was adamant that Healy was at the meeting on 23rd September and gave evidence of what Healy said and did. Late in cross-examination he accepted that Healy was not present. He also denied meeting Dewing or that Dewing inspected the vessel. It is clear that Dewing did inspect the vessel and there is a video in evidence of his doing so. I do not think that Mitchell has given a deliberately false account of events. I think it more likely that his recall of events is coloured by a refusal to accept the improvidence of the course of which he had set his heart and a tendency to believe that the predicament in which the defendant now finds himself must be the fault of the plaintiff. I am satisfied that there was a meting on 23rd September 2000 beside the vessel prior to the meeting in the boardroom. I accept the evidence of Johnson and Sutherland (an employee of the plaintiff) as to what was said by Johnson to Mitchell at that time. Whilst dealing with the question of credibility I should add that I also am satisfied that notwithstanding that later in the course of the work, he was told that the vessel needed refastening, Mitchell refused to have this done except where new planks were added and that he refused to have cobbler pegs fitted. I am satisfied that he refused to allow outer planking to be removed near the engine room to allow the inner skin to be inspected.
In respect of the conversations which took place involving Mitchell on the telephone and on 23rd September I accept the evidence of Johnson and Healy as to the conversation in which Mitchell was present telephonically (supported as it is in significant respects by Brierley’s evidence) and I accept Johnson’s account of what occurred in the meeting with Mitchell on 23rd September. Brierley provides significant support for this account. I am satisfied that no representation of the kind alleged was made and that instead Mitchell was told that it would not be possible to know what the cost of putting the vessel in a position to enable it to be taken to Sydney would be until such time as the vessel was fully inspected and the full extent of its condition able to be ascertained.
The claims based upon the representation pleaded much fail.
In the light of these findings the question of whether the vessel was seaworthy at the time the defendant took possession of it is not relevant. However it is desirable if I set out my findings on the subject since it is the plaintiff’s case that the plaintiff undertook to make the vessel seaworthy and in case the matter proceeds to an appeal.
Similarly because of the findings I have made, the cause of the vessel’s coming to grief on its trip to Sydney is not relevant. However the defendant relies upon this as furnishing some proof of the lack of seaworthiness of the vessel. It does not follow of course, that if there were other causes of the vessel taking in water and having to be taken into port that the vessel was seaworthy at the time it was taken possession of. It is desirable also if I set out my findings on this subject.
In the absence of any indications to the contrary I would take an undertaking to render the vessel seaworthy where it was known that the vessel was to be taken from Townsville to Sydney upon the completion of the works to be an undertaking that the vessel would be placed in such a condition of repair as to enable it to safely encounter those perils of the sea which it might be anticipated would or could be encountered in the course of such a journey.
Swannell left Townsville on 25th March and took the vessel into Gladstone in the early hours of the 29th March. The forecast and observations of wind and seas are before the court in the form of a report which was tendered through Fraser (Exhibit 21).
Swannell took the boat on to Middle Percy Island where he nudged it onto the beach in an attempt to have the bottom checked. Again it was not possible to establish where the water was entering.
When Swannell left Townsville on 25th March, weather conditions were good. The vessel took some water but this was not unexpected. It stopped at Funnell Bay on the night of the 25th.
On the 26th March the bilge pumps came on more frequently and the hull was flexing in the forward department. Weather conditions were not very different to those on the 25th. Swannell reduced the speed of the vessel and pulled into Scawfell Island. An inspection was not able to establish the source of the leak.
There was some deterioration in conditions on the next day but Swannell says that these could not be regarded as severe or heavy. The vessel was taking more water which appeared to be entering on the forward starboard side and also near the garboard. Some of the ballast was moved and water could be seen welling up at the garboard. The vessel anchored at Cape Townsend.
Swannell decided that it was unsafe to proceed further and took the boat in somewhat deteriorating conditions to Gladstone arriving in the early hours of the morning of 29th March. When the boat was able to be inspected Swannell says that he found rotten timbers at the front section of the hull and that some of the rovings came away easily.
So far as the cause of the entry of the water is concerned, I accept the evidence that the defendant placed ballast in the anchor locker against the hull planking and that this ballast was able to move in the course of the journey and that it did so as conditions became less favourable. Hamilton gave evidence that he heard banging in the area in the latter part of the voyage. Swannell says that he did not hear this but I accept what Hamilton says.
Emerick, a marine surveyor, gave evidence that he inspected the vessel in May 2001and saw ballast against the hull planking in this area. He expressed the opinion that it was because of its movement causing damage to the fasteners resulting in movement of the planks that permitted the entry of the water on the journey. There was cross-examination of Emerick by Mitchell about the presence of a board which was intended to protect the hull from the anchor chain and it was suggested that this would prevent the ballast coming into contact with the hull. Emerick says that when he inspected the vessel he did not see anything like this. Nor did he accept that a board which appears in one of the photos tendered would have that effect.
I accept Emerick’s evidence and am satisfied that the movement of the ballast was at least a cause of the entry of water. The evidence does not permit the conclusion that this was the only source.
So far as the seaworthiness of the vessel is concerned I am satisfied that it was not seaworthy at the time it left Townsville. Bartlett’s report was, as I have already said, qualified as to the circumstances in which the vessel might be safely sailed to Sydney. I am satisfied from the evidence of Dallow who was called by Mitchell that the primary cause of the lack of seaworthiness of the vessel was that the fasteners were in poor condition in a number of areas and had collapsed. This permitted the members to move under pressure and to become displaced. It also permitted movement of the bulkheads and other members. There were also decayed plankings and other problems but I am satisfied that the fastenings were the principal cause of the unseaworthiness of the vessel.
Dallow saw the vessel after it had taken in water on the journey but his evidence satisfies me that he was able to identify the underlying condition of the vessel.
I give judgment for the plaintiff against the defendant on the claim in the sum of $4,463.91 being the amount claimed together with interest at the rate of 9% per annum from the 4th day of July 2001 until judgment.
I give judgment for the defendants on the counter-claim against the plaintiff on the counter-claim with costs to be assessed.
Costs will be reserved.
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