Tarangau Game Fishing Charters Pty Ltd v Eagle Yachts Pty Ltd - [2017] QSC 306

SUPREME COURT OF QUEENSLAND

CITATION:

Tarangau Game Fishing Charters Pty Ltd v Eagle Yachts Pty Ltd & Anor [2017] QSC 306

PARTIES:

TARANGAU GAME FISHING CHARTERS PTY LTD

ACN 120 602 440

(plaintiff)

v

EAGLE YACHTS PTY LTD ACN 108 311 404

(first defendant)

and

BY WINDDOWN, INC

(second defendant)

FILE NO/S:

No 9201 of 2010

DIVISION:

Trial

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

14 December 2017

DELIVERED AT:

Brisbane

HEARING DATE:

15 May 2017 to 26 May 2017

JUDGE:

Atkinson J

ORDERS:

1. The court orders that the first defendant pay the plaintiff:

$1,933,900 together with interest pursuant to s 47 of the Supreme Court Act 1995 from 22 July 2006 until the date of judgment.

2. The court orders that the second defendant pay the plaintiff:

$1,239,919 together with interest pursuant to s 47 of the Supreme Court Act 1995 from 7 March 2016 until the date of judgment.

CATCHWORDS:

SALE OF GOODS – SALE OF GOODS LEGISLATION – ACTIONS FOR BREACH OF CONTRACT – REMEDIES OF BUYER – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where the yacht was purchased for use in deep sea fishing – whether the yacht was fit for its intended purpose – whether the yacht was of merchantable quality

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – TERMINOLOGY – CONSUMER – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where the yacht was purchased for use in deep sea fishing – where the plaintiff intended to use the boat for personal use and for commercial charter – whether the plaintiff falls within the meaning of “consumer” under the Trade Practices Act 1974 (Cth) – whether the vessel was acquired for the purpose of resupply

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where the plaintiff signed a warranty card provided by the second defendant upon purchasing the yacht – where the second defendant offered to repair the yacht in accordance with the warranty upon the discovery of the defects – where four experts gave evidence about the extent of the delamination and other defects – where the plaintiff’s experts considered that the repair offer was inadequate to repair the defects – where the opinion of the plaintiff’s three experts differed significantly from the expert of the second defendant - whether the second defendant breached the terms of the warranty

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – WHERE ECONOMIC OR FINANCIAL LOSS – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where four experts gave evidence about the extent of the delamination and other defects – where the plaintiff alleged the yacht was not built in accordance with the plans – where the plaintiff alleged the second defendant did not follow proper boat building processes in manufacturing the yacht – whether the second defendant manufacturer owed a duty of care to the plaintiff

Civil Liability Act 2002 (NSW) s 34, s 35
Civil Liability Act 2003 (Qld) s 30, s 31
Sale of Goods Act 1923 (NSW) s 19(1), s 19(2)
Trade Practices Act 1974 (Cth) s 4B, s 71, s 74B, s 74D, s 74G

ABN AMRO Bank NV (ARBN 84 079 478 612) and Others v Bathurst Regional Council and Others (2014) 99 ACSR 336, cited
Australian Competition and Consumer Commission v Valve Corp (No 3) (2016) 337 ALR 647; [2016] FCA 196, cited
Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387, cited
Baldry v Marshall [1925] 1 KB 260, cited
Brambles v Commissioner of Taxation (1993) 179 CLR 15, cited
Bunnings Group Ltd v Laminex Group Ltd (2006) 153 FCR 479, cited
Carlton International PLC & Anor v Crawford Freight Services Ltd & Ors (1997) 78 FCR 302, cited
Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56, cited
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, cited
Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575, cited
East River Steamship Corporation v Transamerica Delaval, Inc, 476 U.S. 858,106 S.Ct. 2295 (1986), cited
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, cited
Involnert Management Inc v Aprilgrange Ltd & Ors [2015] 2 CLC 307; [2015] EWHC 2225 (Comm), cited
Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221, cited
Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd as trustee for the G & M Geldard Family Trust (2013) 1 Qd R 319; [2012] QCA 315, cited
Regie Nationale des Usines Renault SA v Zhang (Zhang) (2002) 210 CLR 491, cited
Scandinavian Trading Tanker Co. A.B. v Flota Petrolera Ecuatoriana (“The Scarptrade”) [1983] 2 AC 694, cited
Shaw v Shaw [1954] 2 QB 429, cited
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272, cited
The “Ruapehu” (1925) 21 Ll L Rep 310, cited
Tiara Condominium Association v Marsh & McLennan, 110 So.3d 399 (Fla. 2013), cited
Tre Cavalli Pty Ltd v Berry Rural Cooperative Society Ltd [2013] NSWCA 235, cited
Vautin v BY Winddown Inc [2016] FCA 632, cited
Webb Distributors (Aust) Pty Ltd v Victoria (1993) 179 CLR 15, cited

COUNSEL:

D O’Sullivan QC with D Turner for the plaintiff

S Anderson for the first defendant

S Seefeld for the second defendant

SOLICITORS:

AJ & Co for the plaintiff

JHK Legal for the first defendant

Norton Rose Fulbright Australia for the second defendant

In July 2006, the plaintiff, Tarangau Game Fishing Charters Pty Ltd (“Tarangau”), purchased a yacht, namely a Bertram 570 Flybridge Cruiser (“Bertram 570”), from the first defendant, Eagle Yachts Pty Ltd (“Eagle Yachts”). The Bertram 570 was designed and manufactured by the second defendant, now called BY Winddown, Inc (“Bertram”). The Bertram 570 was a fibreglass yacht and, well within its expected lifetime, the fibreglass started to delaminate and then other defects were discovered. This led to a dispute between the parties and eventually this litigation, where the issues at first broadened but by the end of the trial had become somewhat narrower. It is the issues as found in the pleadings filed by leave during and after the trial[1] (the final versions of which I shall refer to as the claim, the statement of claim, the first defendant’s defence, the second defendant’s defence, the reply to the first defendant’s defence, and the reply to the second defendant’s defence); and the consolidated statement of issues in dispute and not in dispute which govern the matters to be determined in this decision.
[1] The third amended claim; the fifth amended statement of claim; third further amended defence of the first defendant; further amended defence of the second defendant to the fifth amended statement of claim; reply to the third further amended defence of the first defendant; and reply of the plaintiff to the amended defence of the second defendant to the fifth amended statement of claim.
It is first useful to narrate the facts and matters not in dispute. Some of the matters which were hotly contested during the evidence were no longer in issue by the end of the trial.
Facts not in dispute
The Bertram 570 purchased by Tarangau was manufactured in about July 2004 by Bertram.[2] Bertram was a corporation incorporated in the United States of America and thus a foreign corporation within the meaning of the Trade Practices Act 1974 (“TPA”).[3] Bertram designed and built a variety of yachts some of which were designed and built for use in the open water at sea, specifically sporting fishing yachts.[4] Bertram manufactured Bertram yachts in the United States of America which were sold worldwide through a network of dealers.[5] The Bertram 570, the subject of this litigation, is described as a 57.12 foot Bertram 570 Flybridge Cruiser having motor numbers (P) CLX00571(S) CLX 00570 and bearing the manufacturer’s Hull Identification Number US-BERX7019G405.[6]
[2]     Statement of claim paragraph 5; first defendant’s defence paragraph 4; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 4.
[3]     List of facts and matters not in issue paragraph 3.
[4]     Statement of claim paragraph 3; first defendant’s defence paragraph 2, second defendant’s defence paragraph 1, list of facts and matters not in issue paragraph 5.
[5]     Statement of claim paragraph 3; first defendant’s defence paragraph 2; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 3.
[6]     Statement of claim paragraph 5; first defendant’s defence paragraph 4; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 4.
By a contract dated 9 March 2004 Bertram sold the Bertram 570 (pre-manufacture) to Azure Yachts Pty Ltd (“Azure Yachts”).[7] Then in November 2004 the benefit of that contract of sale was assigned from Azure Yachts to Eagle Yachts. Eagle Yachts paid the balance of the purchase price under the contract and the Bertram 570 was delivered into its possession.[8] Prior to May 2005, Azure Yachts was Bertram’s dealer for selling, servicing and promoting Bertram Yachts in Australia. On 9 May 2005, Bertram and Eagle Yachts entered into a dealer agreement under which Bertram appointed Eagle Yachts as its exclusive dealer in Australia to sell, service and promote Bertram Yachts in Australia.[9] Pursuant to that dealer agreement, Bertram from time to time sold yachts manufactured by Bertram to Eagle Yachts in order for Eagle Yachts to resell to members of the public in Australia. As Eagle Yachts was engaged in the business of selling yachts, it was a trading corporation within the meaning of the TPA.[10] Eagle Yachts acquired the Bertram 570 from Bertram for the purpose of re-selling it to the public in Australia and Bertram supplied the Bertram 570 to Eagle Yachts in trade and commerce.[11]
[7]     Statement of claim paragraph 6; first defendant’s defence paragraph 5; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 6.
[8]     Statement of claim paragraph 7; first defendant’s defence paragraph 6; second defendant’s defence paragraph 5; list of facts and matters not in issue paragraph 7.
[9]     Statement of claim paragraph 4; first defendant’s defence paragraph 3; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraphs 8, 9.
[10]   Statement of claim paragraph 2; first defendant’s defence paragraph 1; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 1.
[11] Statement of claim paragraph 7; first defendant’s defence paragraph 6; second defendant’s defence paragraph 5.
On 17 September 2005, SW Booth and Associates produced a preliminary survey report in respect of the Bertram 570.[12]
[12] List of facts and matters not in issue paragraph 11.
In late May 2006, Eagle Yachts displayed the Bertram 570 for sale at a boat show at Sanctuary Cove[13] which was attended by Daniel Choi Hing Wong, who became the director of Tarangau when it was incorporated.[14] It is common ground between Tarangau and Eagle Yachts that Mr Wong inspected the Bertram 570 and Bradley Rodgers, the Sales Manager – East Coast of Eagle Yachts,[15] told him that the yacht was a “Bertram 570 Flybridge Cruiser”.[16] Mr Wong told Mr Rodgers that he was looking to buy a boat that could be used both as a recreational fishing boat and as a commercial fishing boat for charter. Mr Rodgers told Mr Wong that he could put him in touch with a surveyor and a naval architect.[17] Mr Rodgers was, as Mr Wong knew, not a naval surveyor or naval architect.[18]
[13]   Statement of claim paragraph 8; first defendant’s defence paragraph 7; second defendant’s defence paragraph 1.
[14]   List of facts and matters not in issue paragraph 12.
[15] Statement of claim paragraph 2; first defendant’s defence paragraph 1; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 2.
[16]   Statement of claim paragraph 9; first defendant’s defence paragraph 8.
[17]   List of facts and matters not in issue paragraph 13.
[18]   List of facts and matters not in issue paragraphs 14, 15.
Tarangau alleged that in signing the contract on its behalf, Mr Wong relied on the description of the Bertram 570[19] whereas Eagle Yachts did not admit Mr Wong’s state of mind and said that Mr Wong inspected the Bertram 570 prior to purchase.[20] In early June 2006, Mr Wong inspected the Bertram 570 for a second time, this time at Marina Mirage, on the Gold Coast.[21] Tarangau alleged that the defects in the Bertram 570 were not revealed on that inspection and were not such as would be revealed upon the inspection Mr Wong made.[22]
[19] Statement of claim paragraph 15.
[20] First defendant’s defence paragraph 14.
[21] List of facts and matters not in issue paragraph 16.
[22] Statement of claim paragraph 27; first defendant’s defence paragraph 26; second defendant’s defence paragraph 11B; reply to the first defendant’s defence paragraph 1.
On about 4 July 2006, Tarangau entered into an agreement in writing with Eagle Yachts for the purchase of the Bertram 570 for the sum of $2,200,000 (“the contract”).[23] The contract had been prepared by Eagle Yachts and provided to Mr Wong on about 3 July 2006.[24] The yacht was described in the contract as a “Bertram 570 Flybridge Cruiser”.[25] Clause 1.2 of the contract provided:
“The offer of the Purchaser is accepted by the Dealer when:
(a)     this contract is signed by the Dealer Principal or an authorised Sales   Representative; and
(b)     notice of the acceptance is given by the Purchaser. This Contract will                    then be binding on both parties.”[26]
[23]   Statement of claim paragraph 10; first defendant’s defence paragraph 9; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 17; but see also statement of claim paragraphs 16, 17; first defendant’s defence paragraphs 15, 16; second defendant’s defence paragraph 1.
[24]   Statement of claim paragraphs 12, 13; first defendant’s defence paragraph 11, 12; second defendant’s defence paragraph 1.
[25]   Statement of claim paragraph 14; first defendant’s defence paragraph 13; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 19.
[26]   Statement of claim paragraph 11; first defendant’s defence paragraph 10; second defendant’s defence paragraph 1; list of facts and matters not in issue paragraph 18.
On 6 July 2006, Tarangau was incorporated.[27] Mr Wong has been its director at all material times.[28] Eagle Yachts supplied the Bertram 570 to Tarangau in the course of its business as exclusive dealer in Bertram yachts.[29] Yachts of the kind of the Bertram 570 are commonly acquired or purchased by members of the public for the purpose of sailing in the open sea.[30]
[27]   Statement of claim paragraph 1; first defendant’s defence paragraph 1; second defendant’s defence paragraph 2; list of facts and matters not in issue paragraph 22.
[28]   List of facts and matters not in issue paragraph. 23.
[29]   List of facts and matters not in issue paragraph 20.
[30]   List of facts and matters not in issue paragraph 21.
In Sydney on 22 July 2006, Mr Wong signed a second contract on behalf of Tarangau for the purchase of the Bertram 570 from Eagle Yachts. Mr Wong signed a warranty card and Bertram gave a written warranty to Tarangau in respect of the Bertram 570. That is referred to in these reasons as the express warranty. The express warranty was set out in a document headed “Bertram Yacht Inc. Limited Warranty (USA)”. The express warranty constituted a contract. By the express warranty, Bertram warranted, so far as is presently relevant, that it would repair or replace defects in the hull of the Bertram 570 and its other fibreglass structural components for a period of five years.[31]
[31] List of facts and matters not in issue paragraph 24.
On 27 July 2006 the signed warranty card and typed warranty terms were sent to Bertram by Eagle Yachts. The law governing the express warranty is the law of Florida in the United States of America.[32]
[32] List of facts and matters not in issue paragraphs 25, 26.
The Bertram 570 was delivered to Tarangau at Jones Wharf in Sydney.[33] On 29 and 30 July 2006 Eagle Yachts sailed the Bertram 570 from Sydney to the Gold Coast without incident to deliver the vessel to Tarangau. The Bertram 570 was then sailed to Brisbane.[34]
[33] List of facts and matters not in issue paragraph 24.
[34] List of facts and matters not in issue paragraph 27.
It is common ground between Eagle Yachts and Tarangau that the Bertram 570 was registered in Queensland as a recreational yacht. Tarangau sailed the Bertram 570 for more than 1,000 miles and the Bertram 570 recorded over 450 hours of engine use after being acquired by Tarangau.[35]
[35] List of facts and matters not in issue paragraph 28.
In late 2006, KPS Maritime Pty Ltd (“KPS”) was engaged by Tarangau to conduct a commercial survey.[36]
[36] List of facts and matters not in issue paragraph 29.
In the period September to December 2007, the Bertram 570 sailed to Lizard Island on an extensive trip.[37]
[37] List of facts and matters not in issue paragraph 30.
In July 2008, Navsafe Marine Pty Ltd (“Navsafe”) replaced KPS for commercial survey work. On 15 October 2008 Mr Blundell of Navsafe inspected the Bertram 570 and requested the involvement of Andrew Harvey of Nekton International Pty Ltd (“Nekton”). Between 15 and 18 October 2008, Mr Harvey inspected the Bertram 570. On 20 October 2008, Mr Blundell of Navsafe provided a letter to Mr Wong asserting that he had found serious structural defects in the Bertram 570.[38]
[38] List of facts and matters not in issue paragraphs 31-34.
On 11 November 2008 Tarangau, by its solicitors, gave notice to Bertram, pursuant to the express warranty, of the defective condition of the hull of the Bertram 570 and invited Bertram to appoint a marine surveyor to undertake an inspection of the vessel. This notice was contained in a facsimile dated 11 November 2008 from McCullough Robertson to Bertram.[39]
[39] List of facts and matters not in issue paragraph 35.
On 19 December 2008, Mr Harvey of Nekton delivered a report concluding that the vessel had serious structural defects and it was not economic to repair it.[40] By email dated 13 January 2009, Tarangau provided Bertram with a copy of its expert report identifying the structural failures in the Bertram 570’s hull and its fibreglass structural components.[41]
[40] List of facts and matters not in issue paragraph 36.
[41] List of facts and matters not in issue paragraph 37.
On 5 March 2009, Bertram inspected the Bertram 570. It subsequently prepared survey and repair reports concluding that the defects were repairable and on 31 March 2009 Bertram sent a repair offer to Tarangau. On 8 April 2009, Bertram provided its survey and repair reports to Tarangau. On 4 June 2009, Tarangau rejected Bertram’s offer to repair asserting that it did not address the existing defects in the vessel.[42]
[42] List of facts and matters not in issue paragraphs 38-42.
On 13 July 2009, Mr Harvey of Nekton produced a report as to proposed repairs to the vessel. That report was sent to Bertram on 15 July 2009.[43]
[43] List of facts and matters not in issue paragraphs 43-44.
Defects to the vessel

The defects to the Bertram 570 which are not in issue between Tarangau and Bertram but which are denied or not admitted by Eagle Yachts are as follows:[44]
(1)     At least 6.18 per cent (as indicated by Mr Griffin in the second conclave report) of the total length of transverse tabbing of the transversal and longitudinal members is not securely bonded to the hull shell of the Bertram 570.
(2)     Transversals M3, M4, M5 and M6 have developed partial and total delamination and separation of the secondary bonding angle laminate from the hull shell outboard of L2. The delamination is progressive. The transversal frame M5 has developed delamination and cracking. Bulkhead P2 has developed cracking, bond failure and separation of the 5083-grade aluminium angle and there is a failure of the structural liner sole to transversal connection.
(3)     The port and starboard sides of the pulpit developed cracking and delamination at the connection to the deck.
(4)     The internal structural support for the pulpit and the grounding tackle developed cracking and delamination at the connection to the hull shell and deck.
(5)     The foredeck has developed structural failures in that there is excessive deflection from delamination of the foredeck composite structure between the forward foredeck hatch and the anchor locker hatch, and there had developed cracking at high stress areas around the forward foredeck hatch and the anchor locker hatch.
(6)     The Bertram 570’s cockpit sole had developed cracking. The cracking is indicative of excessive movement and instability of the cockpit structure. Further, the extended cockpit sole and floating cockpit sole failed to prevent water ingress into the lazarette and the machinery space or engine room.
[44]   List of facts and matters not in issue paragraphs 45-50.
The claim
The claim sought the following relief:
1.As against the first defendant, Eagle Yachts, damages for breach of terms implied in the contract pursuant to which it sold the Bertram 570 to Tarangau, such terms being implied by ss 19(1) and 19(2) of the Sale of Goods Act 1923 (NSW) (“SGA”) and s 71 of the Trade Practices Act 1974 (Cth) (“TPA”) as in force at the time of entry into the contract.
In particular, Tarangau claimed against Eagle Yachts:
(a)     $1,933,900.00 damages for breach of contract;
(b) interest pursuant to s 47 Supreme Court Act 1995 (Qld); and
(c)     costs.
2. As against the second defendant, Bertram, Tarangau claimed damages for breach of the warranty given by Bertram, compensation pursuant to each of ss 74B and 74D of the TPA, compensation pursuant to s 74G of the TPA and damages for negligence.
In particular, Tarangau claimed against Bertram:
(a)     $1,933,900.00, alternatively $1,239,919.00 or $852,950.00 (viz. the compensation         claimed in paragraph 38(e) of the statement of claim), damages for negligence;
(b)$1,933,900.00 compensation, alternatively $1,239,919.00 or $852,950.00 pursuant to each of sections 74B and 74D of the TPA;
(c) $1,933,900.00 compensation, alternatively $1,239,919.00 or $852,950.00 pursuant to s 74G of the TPA;
(d)     alternatively, $1,933,900.00 or $1, 239,919.00 or $852,950.00 damages                 for breach of contract;
(e) interest pursuant to section 47 Supreme Court Act 1995 (Qld); and
(f)     costs.
Issues in dispute
A number of issues remained in dispute between the parties and needed to be resolved. I have adjusted the numbering of the document provided by the parties at the end of the trial to delete reference to those issues which were no longer disputed. These do not precisely coincide with the matters left in dispute in the pleadings so I have also referred to the issues raised by the pleadings in the body of these reasons. During the course of these reasons I shall also deal with the issues in dispute as they arise for decision rather than seriatim. The issues in dispute were said by the parties to be:
1.Did Tarangau buy the Bertram 570 by description, namely “Bertram 570 Flybridge Cruiser”? (not in issue between Tarangau and Bertram)

2. Did Eagle Yachts deal in yachts of the description described in paragraph 1 above? (not in issue between Tarangau and Bertram)

3. Did Tarangau, expressly or by implication, prior to entering into the purchase contract on or about 6 July 2006, make known to Eagle Yachts that Tarangau was proposing to use the Bertram 570 for sailing and fishing in the open sea off the coast of Australia?

4. Was Tarangau’s proposed purpose (of using the Bertram 570 for sailing and fishing in the open sea off the coast of Australia) made known to Bertram, either expressly (by being communicated to Eagle Yachts) or by implication from the nature of the yacht and the uses for which such yachts are commonly acquired by members of the public?

Bertram says this issue should be replaced with:
What was Tarangau’s purpose for acquiring the Bertram 570?
Did Bertram have knowledge (whether expressly or impliedly) of Tarangau’s purpose in acquiring the Bertram 570 at the time it was purchased or at any time before then?
5.In acquiring the Bertram 570, was Tarangau acquiring it for the purpose of re- supply, such as to preclude Tarangau’s being a “consumer” within section 4B of the TPA?

Bertram says this issue should be replaced with:

In acquiring the Bertram 570, was Tarangau a ‘consumer’ within the meaning of section 4B of the TPA?

6. At the time of purchase, was the Bertram 570 not reasonably fit for the purpose of being used for fishing and sailing in the open sea off the coast of Australia, by reason of the matters pleaded in paragraph 26 of the statement of claim?

7. At the time of purchase, was the Bertram 570 not of merchantable quality, by reason of the matters pleaded in paragraph 26 of the statement of claim?

8. If they existed, were the defects in the Bertram 570 discoverable on a reasonable inspection of the Bertram 570 at the time of its purchase by Tarangau?

9. If they existed, did the defects in the Bertram 570 at the time of purchase have the consequences pleaded at paragraphs 28 and 29 of the statement of claim?

10. Did Bertram owe a duty of care to Tarangau to exercise reasonable skill and care in the manufacture of the Bertram 570?

Bertram says this issue should be replaced with:

Did Bertram as a matter of law owe a duty of care to Tarangau as pleaded in the statement of claim?

11. Is the existence of any duty of care owed by Bertram to Tarangau to be determined according to Australian law, or the law of the State of Florida?

Bertram says this issue should be replaced with:

Is the existence of any duty of care to be determined by reference to the lex loci delicti of the alleged tortious conduct?

If so, is the lex loci delicti of the alleged tortious conduct the State of Florida in the United States of America?

If so, what is the applicable law of the State of Florida?

12. Did Bertram breach its duty of care, in the manner alleged in paragraph 33 of the statement of claim?

13. What was the market value of the Bertram 570 at the time of delivery to Tarangau?

Bertram says this issue should be replaced with:

(a) What is the proper measure of Tarangau’s loss?

(b) Is the market value of the Bertram 570 relevant to the assessment of Tarangau’s loss? If so, what is the relevant date of the market value of the Bertram 570? Is it:

(i) at the time of delivery to Tarangau, namely 2006?

(ii) as at 2008?

(iii) as at the present date?

(c) What was the market value of the Bertram 570 as at the relevant date?

(d) Is the Bertram 570 beyond economic repair?

(i) If so:

(A) What is the estimated cost to repair the Bertram 570?

(B) What is the salvage value of the Bertram 570?

(ii) If not, what is the estimated cost to repair the Bertram 570?

(e) Is Tarangau entitled to the relief claimed, namely the market value of the Bertram 570 as at the date of delivery to Tarangau together with costs, as pleaded in the statement of claim?

14. Did Tarangau fail to mitigate its loss by reason of the matters pleaded in paragraph 38 of the first defendant’s defence?[45]
[45] Paragraph 38 of the First Defendant’s Defence was deleted in its final pleading.

15. Did Bertram fail to comply with the warranty (which it is admitted was contractually binding and governed by the law of Florida)? (see issue 17 for Bertram’s response to this issue).

16. Is Bertram liable, pursuant to section 74G of the TPA, to compensate Tarangau for the loss it suffered by reason of the failure of Bertram to comply with the warranty, as pleaded in the statement of claim?

17. Did Bertram discharge any obligations owed to Tarangau under the warranty by any offer made by Bertram to undertake repairs pursuant to the Bertram warranty?

In addition Bertram said that these issues also remained in dispute:

18. Is the secondary bonding on the Bertram 570 inadequate? If so:

(a) Where has inadequate secondary bonding been identified on the Bertram 570?

(b) To what extent is each identified secondary bonding inadequate?

(c) What is the cause of each identified secondary bonding inadequacy?

(d) What is the consequence of each identified secondary bonding inadequacy?

19. What percentage of the total length of the transverse tabbing (of the transversal and longitudinal members) is not securely bonded to the hull shell of the Bertram 570?

20. Were there departures from the design of the Bertram 570? If so:

(a) Were those departures as identified in “Attachment A” to the Expert’s Conclave Report dated 27 July 2016?

(b) What is the consequence of those departures?

21. Is bulkhead P1 watertight?

22. Do the transversal frames show any stress cracking? If so:

(a) Which transversal frames show stress cracking?

(b) To what extent do the transversal frames show stress cracking?

(c) What is the cause of the transversal frames stress cracking?

(d) What is the consequence of the transervsal frames cracking?

23. Was the pulpit damaged? If so:

(a) What was the cause of the damage to the pulpit?

(b) What is the consequence of the damage to the pulpit?

Analysis

These issues traverse some common factual and legal areas and will be dealt with in the course of these reasons. It is useful to group them under a number of headings:
• Acquisition of the Bertram 570;
• Condition of the Bertram 570 on manufacture, at purchase, and thereafter;
• Liability of Eagle Yachts for the condition of the Bertram 570 at purchase;
• Liability of Eagle Yachts and Bertram under the TPA;
• Liability of Bertram under the express warranty;
• Duty of care owed to Tarangau by Bertram; and
• Damages recoverable by the plaintiff.
Acquisition of the Bertram 570
The agreed facts regarding the purchase of the Bertram 570 by Tarangau are set out in [3] to [12] of these reasons.
Three witnesses gave evidence as to the circumstances of the purchase of the Bertram 570: Mr Wong, Christopher Pritchard and Mr Rodgers. Each of them endeavoured to give his evidence as honestly as possible. Any variations in their evidence appeared entirely explicable by the passage of time and the different perspectives each of them brought to their role. Unless otherwise indicated, I was able to accept their evidence as honest and reliable.
Mr Wong was born and grew up in Rabaul in Papua New Guinea and was educated in Brisbane. In Papua New Guinea he worked in a very successful family bakery and biscuit factory business. He also worked briefly in the tourism industry. In Papua New Guinea he owned a recreational 23 foot fishing boat. Mr Wong had not only owned his own relatively small recreational fishing boat but had been involved in game fishing both for recreation and in tournaments in boats belonging to friends. From that experience he knew that Bertram boats had a good reputation as game fishing boats.
In 1986, Mr Wong and his family moved to South East Queensland where he built and operated another successful biscuit factory. He sold that business in June 2006. In 2005, while he was negotiating the sale of his biscuit factory, Mr Wong considered that he would like to buy a fishing boat that could be also used as a commercial charter boat. He discussed this possibility with Mr Pritchard. Mr Wong had met Mr Pritchard in 1998 when Mr Pritchard was managing a fishing tackle shop in Brisbane and Mr Wong was a frequent customer buying fishing gear. The Wong and Pritchard families had known each other in Rabaul in Papua New Guinea.
Mr Wong attended a boat show at Sanctuary Cove in May 2006 with Mr Pritchard. When he went there Mr Wong had no firm idea of what he would like to buy, although he did have in mind to look at a Bertram boat or a Riviera boat. At the Bertram stand, there were two boats: a Bertram 510 which was 51 feet long and a Bertram 570 which was 57 feet in length. At the Bertram stand he spoke to two employees of Eagle Yachts, Mr Rodgers and David Sullivan.
Mr Rodgers had commenced working in sales for Eagle Yachts in January 2005. He had acquired a Master 5 skipper’s ticket in 1991 which allowed him to skipper a commercial vessel up to 24 metres (approximately 78.74 feet).
At the Bertram stand at the Sanctuary Cove boat show, Mr Wong and Mr Pritchard looked first at the Bertram 510 and then at the Bertram 570. They walked all over the publicly accessible areas of those two boats. Mr Wong told Mr Rodgers that he was looking for a boat to go off-shore game fishing with the possibility of doing some charter work as well. Mr Rodgers told Mr Wong that Eagle Yachts wished to re-establish the Bertram brand in Australia because it was well known as the maker of open sea big game fishing vessels. The particular Bertram 570 that Mr Wong saw on the stand, which was described as a demonstrator model, had already had modifications done to it to make it even more suitable for big game fishing, such as a game chair, outriggers and all the necessary electronics, bait-well and water making facilities. These extra modifications, as well as its larger size, distinguished it from the Bertram 510.
Mr Rodgers told Mr Wong that it was easier to put the Bertram 570 into commercial survey in Queensland than in New South Wales. Mr Rodgers pointed out to Mr Pritchard various features of the Bertram 570 which would make it easier to get it into commercial survey. He also assured Mr Pritchard that the superstructure was strong enough for a tuna tower to be added. Mr Wong and Mr Pritchard were informed by Mr Rodgers that Eagle Yachts’ employees had brought the Bertram 570 up from Sydney through very heavy seas and that it had handled very well and that they were able to travel at high speed in those conditions.
Mr Wong saw a brochure about the Bertram 570 provided by Eagle Yachts before he purchased it. Amongst other things the brochure said “This Bertram 570 is battle ready. With a beautifully crafted Release game chair, this boat is also fitted with an oversized transom door with coaming gate to cope with your tournament class deep-water catch. A versatile bait & tackle centre with sink, salt and fresh water faucets, cutting board, top loading freezer and circulating bait-well to enhance your fishing.” It also listed a number of options which were included as well those which were detailed as standard specifications. Those options related to the cockpit, the flybridge, the engine room, the hull, the décor and electronics. The sale price was listed at $2.2 million plus GST.
On 31 May 2006, Mr Rodgers sent an email to Mr Wong about arranging a suitable time in the following week to view the Bertram 510 and Bertram 570 again. With regard to putting the boats into commercial survey he added “Just to let you know I have been speaking with our company head regarding the survey issue with the Bertram range and he stated that we could not guarantee a vessel going into survey but can assist a surveyor by supplying all documentation relevant to putting a Bertram into current Queensland survey.” Mr Rodgers also suggested that he knew a number of people that register “their boat (not in survey) in their company name and are able to claim a lot of expenses through their business” and that this might be a viable option for Mr Wong.
Mr Wong then inspected the two vessels at Marina Mirage with Mr Rodgers. Mr Rodgers told Mr Wong that Eagle Yachts had a survey report from a marine surveyor from New South Wales.
On 9 June 2006 Mr Rodgers sent Mr Wong an email regarding the cost of installing extra options on the Bertram 510 so that it had some similar modifications to the Bertram 570. With regard to putting the vessel into survey, he said that exact figures were unknown at this stage but an allowance of around $200,000 would be close to the figure. Mr Rodgers agreed in his evidence that it was common for the owner of a large, expensive fishing boat to wish to make the vessel available for charter. That requires the boat to be put into commercial survey.
On 21 June 2006, Mr Rodgers sent Mr Wong a copy of a survey report said to be for the Bertram 570 to qualify for commercial survey in New South Wales. This survey report was done by SW Booth and Associates. In the facsimile transmission from Mr Rodgers also said “Please note that the regulations for Queensland are not as stringent and therefore a lot of the items indicated would be obsolete.” The attached report from SW Booth and Associates was dated 17 September 2005. Contrary to the suggestion that it dealt with the requirements for commercial survey in New South Wales, the report said that its purpose was to compile a work list for the vessel to enter USL 2C/1E survey through the Queensland Transport system. The survey showed a large number of items that needed to be attended to for the vessel to be put into commercial survey. It did not however identify any defects in the vessel. Mr Rodgers told Mr Wong that Eagle Yachts would be able to assist by obtaining the plans and drawings from Bertram that would be required for a surveyor to undertake the survey process.
Apparently pages 5 and 6 of the survey report were missing and Mr Rodgers told Mr Wong by email of 29 June 2006 that he had sent the missing pages to Mr Pritchard. Mr Rodgers also said that the Bertram 570 was leaving the Gold Coast for Sydney on the following Saturday and then onto a ship for Perth. He said he was letting Mr Wong know this in case he wished to make an offer on this boat prior to its leaving the Gold Coast and then Mr Rodgers would stop the transportation of the vessel. He also informed Mr Wong in that email that another Bertram 570 was arriving in Brisbane in early August 2006 with similar specifications but valued at more than $1 million more than the price of the Bertram 570 which Mr Wong had been shown.
On Sunday 2 July 2006, Mr Wong phoned Mr Rodgers and then sent an email saying “Further to our telephone conversation, this morning, I confirm that I would like to make an offer of $2 million plus GST for the 570 demonstrator.”
On 3 July 2006, Mr Rodgers sent a facsimile to Mr Wong attaching a standard boating industry association contract to purchase the Bertram 570 which was by then at the Jones Bay Wharf in Sydney. He said Eagle Yachts required a deposit of $100,000 by 4 July 2006 with the remainder of the purchase price to be paid before the Bertram 570 headed back north to Queensland. Mr Wong signed the contract to purchase for $2,200,000 on 4 July 2006. It was said that it became binding when signed by the dealer. Annexure A to the contract set out various options which were included, such as those which made it particularly suitable for deep sea game fishing.
On 22 July 2006, at the Jones Bay Wharf in Sydney, Mr Wong, who had flown down to Sydney to take delivery of the Bertram 570, signed another contract to purchase the Bertram 570. In that contract the purchaser was said to be Daniel Wong or nominee and the nominee was said to be Tarangau Game Fishing Charters Pty Ltd as trustee for the Tarangau Trust. Mr Wong’s evidence was that this was done on the advice of his accountants. The purchase price was again said to be $2,200,000 with a deposit of $100,000 having been paid on 4 July 2006 leaving a total amount owing of $2,100,000. It was signed as accepted by Eagle Yachts on 26 July 2006. In all other respects the conditions of sale and options attached were the same as the contract which had been signed on 4 July 2006.

Also on 22 July 2006, Mr Wong signed what is referred to on it as a Bertram warranty card. He signed it for Tarangau. That warranty card provided as follows:
“I have received a copy of and have read the Bertram Yacht Warranty and understood that the said Warranty becomes effective upon receipt by Bertram Yacht, Inc. of this Warranty Card, completed and signed. I understand that there is no other Warranty by Bertram Yacht, Inc. applicable to the above described boat purchased by me.”
There does not appear to have been any “above described boat”. The warranty card also provides “This warranty does not apply to commercial/charter boats.” Mr Wong’s evidence was that he was not given the Bertram yacht warranty at the time but was given the warranty card to sign by Mr Rodgers and he did so. Mr Rodgers did not give evidence of having a clear memory of providing the warranty to Mr Wong. Although nothing turns on it, it appears that Mr Wong was not provided with the warranty until 29 October 2008 when it was faxed to him.
A tax invoice was produced by Eagle Yachts dated 21 July 2006 for the sale of the Bertram 570 to Mr Wong showing that $2,200,000 had been paid in full. It provided that the settlement date was 4 July 2006.
On 22 July 2006, the Bertram 570 was sailed from Sydney heading to Queensland. On board was Mr Wong and his partner, Mr Pritchard, Mr Rodgers and a Mr Whitehead who was a skipper. As at that date neither Mr Wong nor Mr Pritchard had the necessary licence to operate a commercial charter boat. To do so, a coxswain’s licence is required. Mr Wong enrolled himself, Mr Pritchard and Andrew Yeh in a coxswain’s course at the Australian Maritime College after he purchased the Bertram 570. Mr Pritchard had given notice at the business where he worked so that he could take up employment with Tarangau.
On 27 July 2006, Mr Rodgers of Eagle Yachts sent to Bertram by facsimile transmission an unsigned copy of the Bertram warranty, a signed copy of a Caterpillar engine warranty signed by Mr Wong, and an unsigned copy of a Kohler warranty. As previously mentioned, there was no evidence that Mr Wong had seen the Bertram warranty at or around this time.
After July 2006, the Bertram 570 was berthed at Marina Mirage and Mr Rodgers provided tuition to both Mr Wong and Mr Pritchard about sailing the Bertram 570.
The Bertram 570 was registered by the Tarangau Trust as a recreational vessel in Queensland. Without registration, it would have been illegal to use it. It appeared from Mr Wong’s answers in cross-examination that he was required to certify that the vessel was seaworthy when it was first registered. Thereafter he renewed the registration annually simply by paying the relevant registration fee.
After he purchased the boat on behalf of Tarangau, Mr Wong employed Mr Pritchard to assist him in the business of chartering the Bertram 570. At no time did he consider bare boat chartering the vessel. As Mr Pritchard explained in his evidence, it was always to be chartered with a skipper, crew and equipment.
After Tarangau purchased the Bertram 570, Mr Wong engaged KPS Marine Surveyors (“KPS”) to assist him to try to get the Bertram 570 into commercial survey. KPS had been recommended to him by Mr Rodgers.
In September 2006, KPS sent its fee proposal estimate for $22,080 to carry out an assessment in order to be able to issue a certificate of compliance. Mr Wong accepted the fee proposal on 4 December 2006. In December 2006, KPS asked Bertram for the plans of the vessel so it could get the vessel into commercial survey.
Sometime in early 2007, Mr Lockyer from KPS told Mr Wong that he was not confident that he would be able to get the Bertram 570 into commercial survey. In an email from KPS on 5 March 2007, KPS said that they had received only some drawings from Bertram which showed that some of the forward bottom laminate, rudder and propeller shafting were not compliant with the relevant Australian standard or the Uniform Shipping Law (“USL”). They spoke of the difficulty in obtaining any detailed drawings from Bertram. On 6 March 2007, Mr Lockyer from KPS told Mr Pritchard on behalf of Tarangau that the structure and engineering met their compliance requirements in only a few areas. Mr Lockyer did not suggest the vessel was unfit; merely that it did not meet their particular construction standards.
On 3 May 2007, KPS sent a copy of the “hull shell scantlings assessment” to Mr Wong. That assessment dated 17 April 2007 was prepared by KPS by Mr D Matchett, a naval architect. The summary at the end of the report provided:
“The following areas will need to be rectified in order to comply with USL regulations for commercial use:
1.     Inner Skin thickness will be issued as a non-compliance, being only 74% as thick as the Outer Skin.
2.     The Topside section between Frames P1 to M1 forward (bow area), below the sheer line and above the chine Port and Starboard must be decreased in panel size so that the maximum unsupported height between stringers is no more than 1157mm as per Fig 1.
3.     Watertight Bulkheads P2 and P3 must be decreased in panel size to less than 1400mm of unsupported length by the use of vertical stringers running the full height of the panel as per Fig. 2.
4.     The Collision Bulkhead must be altered to fulfil the criteria specified in the calculations above and Fig. 3. This may require alterations to the cabin and bunk arrangement in the forward cabin.”
On 4 May 2007, Mr Matchett provided an inconclusive report on the rudder and shafting. That was because of insufficient information received from Bertram. A further report by KPS dated 14 June 2007 dealt with the necessary amendments to the bilge, fire and fuel systems.
On 4 September 2007, Mr Lockyer informed Mr Wong that testing of the shell laminate had been carried out. A report by Structural Testing Services (“STS”) said that the bottom shell laminate was suitable for commercial service. It does appear from that report, however, that the three samples of laminate supplied to STS for mechanical testing were of uneven thickness.
Mr Wong took the Bertram 570 to Lizard Island in October 2007 for a game fishing trip and later to a fishing competition in Mooloolaba. Mr Wong and Mr Pritchard were questioned extensively, particularly in cross-examination by Eagle Yachts, about the treatment of the boat both during his trip to Lizard Island and during subsequent flooding of the Brisbane River in an endeavour to suggest, as was then pleaded, that somehow the treatment of the boat under his ownership was responsible for the defects found in the Bertram 570. However this allegation was dropped by the end of the trial and the evidence is therefore irrelevant to any matter that needs to be decided, except to say that I was satisfied from the evidence that Mr Wong and any one employed with or by him were completely blameless in causing or contributing to any defects which manifested themselves in the Bertram 570.
On 5 February 2008, KPS wrote to Mr Pritchard of Tarangau setting out a list of the outstanding issues which needed to be addressed.
On 30 May 2008, Mr Lockyer from KPS inspected the Bertram 570 and gave a report to Tarangau about what needed to be done to put the vessel into commercial survey.
On 18 July 2008, Mr Pritchard from Tarangau sent an email to Mr Rodgers telling him that Tarangau had engaged the services of a new surveyor, Toby Blundell of Navsafe. He asked Mr Rodgers of Eagle Yachts to release any information requested by Mr Blundell or employees of Navsafe.
On 23 July 2008, KPS informed one of its contractors by an email copied to Mr Wong that Tarangau was no longer pursuing commercial registration and so the work proposed to be done should be cancelled. In fact, Mr Wong had decided to continue to seek commercial survey but to replace KPS with Navsafe.
On 14 August 2008, Navsafe wrote to Bertram by email seeking copies of the drawings and documentation relating to the Bertram 570 so that they could determine whether the vessel as built met and complied with the USL Code or another recognised standard for construction, safety, stability and design rather than them having to undertake reverse engineering and destructive testing.
On 22 September 2008, Mr Wong contacted Mr Rodgers by email frustrated by the lack of progress in having the Bertram 570 brought into commercial survey and the lack of information provided by Bertram. He wrote:
“As discussed on the telephone, it would be very much appreciated if you can urgently communicate with Bertram to release the information and specifications requested by Toby Blundell of Navsafe, who have taken over from KPS. I do not know what Bertram gave to KPS when I paid for Nick Lockyer of KPS to visit Bertram last year. KPS did release some information, but it seems that what they have released are either incorrect, inaccurate or not pertinent. I have now owned the boat for over two years and I am totally frustrated with trying to get the vessel into survey.
As well as the loss of opportunity, there is also the high cost of carrying staff who have had a futile attempt in getting the vessel into survey.
All I am asking is for some cooperation from Bertram to supply the necessary information to facilitate this process.”
Discovery of defects in the Bertram 570
On 20 October 2008, Toby Blundell, the director of Navsafe, provided a preliminary report to Tarangau saying that he had attended the Bertram 570 on 15 October 2008 to begin the preliminary compliance inspections with the intent of issuing a certificate of compliance for survey for commercial ship registration application purposes on the satisfactory outcome of the inspections. He said the agreed process was for Navsafe to inspect the reasonably accessible areas of the ship and provide a list of items or issues that in Navsafe’s opinion would require additional work or upgrade to ensure compliance with the USL code and the National Standard for Commercial Vessels prior to any compliances being issued.
However, Mr Blundell reported that the inspection was temporarily suspended to allow further discussions and consultation following the discovery of what he considered to be structural defects within the internal hull framework. Mr Blundell said that in his opinion delamination of the fibre reinforced material, secondary bonding connections between the hull laminate and several of the structural transverse frames was evident. He said that the defects were discovered by visual inspection on entering the forward, lower accommodation cabin and underfloor tank space. He expressed his concern to the ship’s representatives regarding this discovery and arranged to engage Navsafe’s preferred accredited ship designer Mr Andrew Harvey of Nekton to re-attend the ship with Mr Blundell on 17 October 2008 for his professional opinion. As a result Mr Blundell recommended that the ship not be operated in the short term until further investigation had taken place because determination of how or when the defects appeared in the structure or if there was any likelihood that the defects would propagate was unclear.
Mr Harvey described the problem to Mr Pritchard as being “catastrophic delamination”. Mr Harvey told Tarangau’s employees that the extent of the delamination suggested that it was a manufacturing problem. Mr Harvey produced a preliminary inspection and condition report on 21 October 2008.
As previously noted, Mr Wong did not receive the Bertram warranty until 28 October 2008.
On Mr Wong’s instructions, Tarangau’s solicitors, McCullough Robertson, sent a letter on 11 November 2008 to the General Manager of Bertram and to Mr Rodgers at Eagle Yachts. The letter to Eagle Yachts said inter alia:
“During a recent inspection of the internal hull of the vessel, severe delamination of the hull was identified by both a marine surveyor and a naval architect. In their opinions the delamination is as a result of defective workmanship or materials, the responsibility of Bertram as manufacturer. The defects are so severe that the vessel cannot be used for any purpose, either private or commercial and is in effect a complete write off.
The purpose of this letter is to not only provide notice of defective condition of the hull pursuant to the hull warranty but also that our client requires to be fully compensated in respect of the purchase price, costs ‘thrown away’ and lost revenue as a result of the defective condition of the vessel.
A full report in respect of the defective condition of the hull is currently being prepared on behalf of our client and a copy will be forwarded to you when complete. In the meantime, our client invites you to appoint your own marine surveyor to undertake an inspection of the vessel. Our client requires that inspection to take place within the next ten days.”
A copy of the letter to Bertram was enclosed with the letter to Eagle Yachts. The letter to Bertram enclosed a copy of the letter to Eagle Yachts and the offer which had been extended to Eagle Yachts in respect of the appointment and inspection of the vessel by its own marine surveyor was extended to Bertram. Furthermore it said that the notice of the defects operated in the same manner as outlined in the letter to Eagle Yachts.
Mr Harvey undertook a further inspection of the Bertram 570 on 15 November 2008 and, as a result, produced a comprehensive inspection and condition report with annexures which was released on 19 December 2008 (“Harvey Report 1”). Mr Harvey is a naval architect with a degree in engineering specialising in naval architecture with honours from the Australian Maritime College. He is accredited with Marine Safety Queensland as a ship designer, including the design of fibre reinforced plastic materials. He has been entrusted with involvement in the design and construction of vessels for Australian customs, the Australian Federal Police and a number of other agencies.
Essentially Harvey Report 1 found that the Bertram 570 had structural failures, had non-structural failures, had failures which indicated potential structural failures, had locations where defects might exist or be hidden and that could not be investigated without interfering with the vessel’s structure surfaces or fittings, had not been constructed to the design, plans and specifications provided by the manufacturer and that the vessel should not be operated or used for its intended purpose, that is it should not be used for private pleasure or commercial purposes in its present condition as the known structural defects made the vessel unseaworthy. The report also concluded “The cost of repairs and inspections, requiring the removal of the structural liner sole, fuel tanks and associated equipment, with the integration of the deck construction, structural liner sole and hull construction would indicate that the repair of the vessel to a recognised standard to be uneconomical.” The report further concluded that the vessel had a limited resale value in its current condition and that market knowledge of the vessel’s defects would render it saleable only for salvage.
After he read Harvey Report 1, Mr Wong only used the Bertram 570 when it was necessary to move it on two occasions when there was a flood in the Brisbane River.
On 13 January 2009, Tarangau’s legal representatives provided a copy of Harvey Report 1 by email to Mr Allen, who acted on behalf of Bertram, and to Mr Rodgers. The email again invited them to inspect the Bertram 570.
On 31 March 2009, Bertram’s Florida lawyers replied to that email informing Tarangau’s legal representatives that they had obtained the survey report conducted by Bertram’s representatives on Tarangau’s Bertram 570. It said that in general Bertram did identify items that needed to be repaired some of which were covered by the warranty and others that would be excluded from warranty coverage but that Bertram was still willing to repair as a “customer courtesy”. It said that no items were identified that would render the vessel “uninsurable” or “unseaworthy” and that each of the repairs could be carried out in a non-invasive manner. It then purported to put conditions on the disclosure of its report.
Bertram’s inspection report shows that the inspection was carried out on 5 March 2009 by Don Flippen who was described as the director of a customer support group for Bertram and Chuck Mooney who was described as the process engineer for Bertram. Neither gave evidence. I was informed that Mr Flippen had a major heart attack immediately before the trial, although no medical evidence was ever provided as to his unavailability to give evidence, and Mr Mooney’s whereabouts were unknown. Neither was able to be cross-examined. This inevitably affects the weight which can be given to the report and the efficacy of their inspection. The summary of the report was as follows:
“During this inspection and in consideration of its scope, we undertook and identify the following issues:
Structural issues called to our attention via the owner’s survey (Nekton, International, Consultant Naval Architects and Maritime Engineering Queensland, Australia) and dated; December 19, 2008. Also issue involving structure that we discovered and noted during our inspection dated March 5, 2008 which is also included in this report. The issue are: some loose tabbing in the forward bilge area, a loose tab in the engine room air box, starboard side, delamination of skin coat in the foredeck and fly-bridge and an area in the Lazarette area around a PVC Drain tube.
We have also undertaken to identify some of the non-structural issue highlighted in the Nekton survey but not currently covered under the Bertram warranty i.e. Pulpit cracks, other gel-crazing throughout the vessel (foredeck, side-decks, cockpit and fly-bridge area), missing drain for the rope locker, clouded lenses for all the bow hatches, stained/discolored gel-coat on the bridge brawl area, misadjusted helm pod articulating console and gel-cracks in the cockpit area and stress cracks in the fairing compound of the engine room stringers. All areas not currently covered under the Bertram Yacht Limited Warranty for structure but will be repaired as a courtesy to the owner.
It is our opinion that the vessel is repairable and not as the December 29, 2008 survey by Nekton International indicates ‘un-repairable’. The issues inspected and or discovered by the Bertram team were minor in nature and easily repaired. We did not see any issue which would warrant disassembling the boat in order to examine any and all hidden structure.” (errors in original)
After some negotiation about the conditions imposed upon the release of the Bertram 570 survey report it was eventually sent to Tarangau’s legal representatives on 8 April 2009 together with a document said to be Bertram’s repair procedures, dated 18 March 2009.
On 27 April 2009, Mr Rodgers enquired of Mr Flippen about the outcome of Mr Wong’s complaint. Mr Flippen replied that Bertram’s plan was to repair the Bertram 570 but they had not received the go-ahead from Mr Wong.
On 4 June 2009, in response to a further email from Bertram’s legal representatives, Tarangau’s legal representatives sent Bertram’s legal representatives an email on 4 June 2009 saying:
“Unfortunately, Bertram’s response to the defects identified by Andrew Harvey is not considered sufficient. Furthermore, the suggested repairs by Bertram do not give my client any confidence on the boat’s manufacturing defects being fully rectified.
Andrew Harvey is currently preparing a response to the report prepared by Bertram and as soon as that is to hand I will send you a copy.
As a means of unlocking the impasse, can I suggest the appointment of an independent expert. In that regard, Russell Behan of Marine Matters is held by the marine industry in Queensland in high regard. Alternatively, you might want to suggest an alternative person.”
The Nekton report in response to the Bertram report was released on 13 July 2009 (“Harvey Report 2”).

Mr Wong said he was able to maintain insurance on the Bertram 570 until the end of 2014 but has not been able to insure it since then.
On 10 March 2010, Mr Rodgers sent an email to Mr Wong asking if Bertram had worked out “a scenario to assist” with the issues that Mr Wong had had with the Bertram 570. Mr Wong’s reply on 12 March 2010 told Mr Rodgers that he had not been using his boat as he was not even allowed to move it from its berth. He said it was a “constructive total loss”. He said that Bertram had refused to assist him so he had been left with no alternative but to pursue legal recourse through the courts. Mr Wong said to Mr Rodgers that, as vendor of the boat and agent for Bertram, Mr Wong would encourage him to find a solution. The boat was a total loss and Mr Wong said he was seeking reimbursement of all monies expended by him in the purchase and the money thrown away as a result of the fact that the vessel could never be used.
To this Mr Rodgers replied on 16 March 2010 saying that he had spoken with Bertram who advised him that they did make an offer to make repairs to assist in selling the vessel. He said that their offer was made in September 2009 and they had not received any response.
On 30 March 2010 Mr Wong sent an email back to Mr Rodgers telling him that the offer from Bertram was completely inadequate and ignored all the expert advice that the boat was a total loss. He said anything short of full compensation and reimbursement of the thrown away costs for the boat would not be considered. That last response was sent on legal advice from Mr Wong’s solicitors.
Mr Harvey undertook a further inspection on 29 October 2012. He then produced a third report on 22 November 2012 (“Harvey Report 3”) which referred to new structural failures in the vessel consisting of partial and total delamination and separation of the secondary bonding angle laminate at the P1 bulkhead.
Mr Lyons made his first report on 22 November 2012 (“Lyons Report 1”). Mr Lyons is a senior engineer with about 30 years’ experience. He graduated with a Bachelor of Engineering with Honours from the University of New South Wales in 1987. Since that time he has developed special expertise and interest in composite materials, particularly fibre reinforced plastics. He is a Fellow of the Royal Institution of Naval Architects and Marine Engineers and a Member of Engineers Australia. He lectures in yacht design at the School of Mechanical and Manufacturing Engineering at the University of New South Wales. He also has significant practical experience as a yachtsman having been awarded an Australian sports medal for sailing as a result of his work in yachting.
Mr Lyons produced two other reports: a report of 4 March 2016 (“Lyons Report 2”) and a report of 1 May 2016 (“Lyons Report 3”). He also prepared and explained a display board showing samples of all the secondary bonding which was cut out of the Bertram 570 during destructive testing carried out in 2016 (“Lyons display board”).
The third expert called by the plaintiff was Mr Wright. He is a principal designer and the managing director of Norman R Wright & Sons (Queensland) Pty Ltd and Norman R Wright & Sons (Design) Pty Ltd. He is a very experienced shipwright. He began his career as an apprentice and has been building boats for approximately 46 years. He provided two reports to the court. The first report was dated 26 August 2014 (“Wright Report 1”) and the second produced on 7 March 2016 (“Wright Report 2”).
All of the experts called by Tarangau gave their evidence in a careful and measured way demonstrating the depth of their knowledge and experience. All of them were considered by me to be entirely reliable in their observations and opinions.
Unfortunately this can be contrasted to the knowledge and experience of the only expert called by Bertram, Lloyd Griffin III. Mr Griffin has a degree in economics and business administration and became the operations manager for a shipyard in North Carolina. However, between 1996 and 2008, he owned a business which designed and built custom made stainless steel and copper range hoods. In 2008 he undertook a six week course of study with the Chapman School of Seamanship in Florida obtaining a marine survey certificate. He has some experience in building boats and during oral evidence said that he had undertaken an apprenticeship as a boat builder. He produced three reports. The first dated 9 May 2013 (“Griffin Report 1”), the second dated 21 April 2016 (“Griffin Report 2”) and the third dated 20 May 2017 (“Griffin Report 3”). Mr Griffin lacked the qualifications, knowledge and experience enjoyed by each of the plaintiff’s experts. His lack of judgment was exhibited when he expressed the opinion that the Bertram 570 was seaworthy as it could float. I was not able to rely on his observations and opinions unless they coincided with an observation made or an opinion expressed by one of Tarangau’s experts. No evidence was called by Bertram which provided a factual basis for the assumptions he made.
Condition of the Bertram 570
Boat building is a highly specialised business. The process involves skilled design, building to that design, quality control and the remedying of any defects. As Mr Wright, an experienced shipwright, said in his evidence:
“As a builder and as a designer, I know how important it is that whoever builds your design follows your plan exactly because they have been calculated from a set of rules, whether it be Det Norske Veritas rules, Lloyd’s rules, APS rules, ABYC rules. They are there for a reason. People just don’t sit back and dream up those rules to design a structure that’s got to go fast through heavy seas.”
A vessel which is expected to be taken far off-shore for deep sea big game fishing must be sufficiently strong to withstand any predictable seas or winds so that the lives of its crew and passengers are not put at risk.
The plans and specifications for the design of the Bertram 570 which are Exhibits 2 and 3 in these proceedings are detailed and comprehensive. The boat, as built, did not conform to those plans and specifications in numerous ways. No justification for the disconformities was ever provided in evidence by Bertram.
The plans show that the Bertram 570’s hull is made from 12 layers of fibre reinforced plastic or glass fibre reinforced resin plastic, commonly known as fibreglass, laid up into a mould. There is a hull lamination schedule set out on the plans showing the precise glass weight, percentage of fibre, layer weight and thickness of each layer, as well as precisely where the layer is to go.
After the hull is laminated, transversal and longitudinal members are laid across the hull to strengthen the hull and the transversals provide part of the base for the liner sole. These are referred to as structural members. There are 14 transversals (from forward (front) to aft (back)), P1, M1, M2, M3, M4, M5, M6, P2, M7 (P3), M8, M9, M10 (P4), M11 and P5. There are four longitudinals, L1 and L2 on each side of the boat, starboard and port. Each of the members is attached to the hull using layers of fibreglass. A structural liner sole sits above those members to create a base for the cabin. It too is meant to be attached to the hull and to the transversals with layers of fibreglass to provide strength and stability.
An analysis of the plans and specifications, as well as the expert evidence led, fully supports a finding that these are the following disconformities from the plans, as submitted by Tarangau:
(1)     the bonding on the hull side of the structural liner sole is inadequate.[46] The plans require that the structural liner sole be fully bonded to the hull side.[47] This requires that the structural liner sole be bonded above and below (one must laminate the underside and the topside of the connection between the structural liner sole and the hull shell). It is uncontroversial that the structural liner sole was bonded in some places above, but in no places below, although Mr Griffin attempted without success to assert that the lamination above was complete. The fact that the necessary work has not been done greatly diminishes the strength of the vessel;[48]
(2)     the deep floor frames (sometimes also referred to as the ring frame) have been cut out below the minimum specified height at M2, M3, M4, M5 and M6, thereby reducing the structural strength of the vessel.[49] These cut outs cause a weakening of the hull structure and high point loading where the deep floor frames terminate on the hull shell;[50]
(3)     none of the observable transversal frames at M2, M3, M4, M5 and M6 have the required edge capping, with the consequence that the strength of the transversals is greatly diminished;[51]
(4)     the plan at Exhibit 3 permitted the attachment of the cabin sole to the deep floor frames by the use of aluminium angles together with the use of a bonding material called Plexus. This alternative method of construction specified secondary bonding on both sides of the cabin sole using two aluminium angles, one on either side. As constructed, however, there are no angles at all on the hull side.[52] Further, Plexus was not used. Instead, silicon sealant was used. Silicon sealant is not a bonding product.[53] Accordingly, the deep floor frame is not attached to the cabin sole as it should be;[54]
(5)     bulkhead P1 is not watertight because a non-watertight hatch has been inserted.[55] This is a major concern for flooding and safety;[56]
(6)     the limber holes in the transversal deep floor frames are not capped. There is no capping at M2, M3, M4, M5 and M6, and at the aft peak lazarette. This greatly diminishes the strength of the transversal deep floor frame;[57] and
(7)     the transversals are not fully bonded to the hull, resulting in greatly diminished strength.[58]
[46] Conclave Report, non-conformance with Bertram design, item 8 (Plaintiffs’ Experts column); Attachment A, item 8.
[47] Conclave Report; Attachment A, item 8; Exhibit 2, note 7; Exhibit 3, note 1.
[48] Conclave Report; Attachment A, item 8.
[49] Conclave Report, non-conformance with Bertram design, item 5 (Plaintiffs’ Experts column).
[50] Conclave Report, Attachment A, item 5.
[51] Conclave Report, non-conformance with Bertram design, items 2 and 6 (Plaintiffs’ Experts column); Attachment A, items 2 and 6.
[52] Conclave Report, non-conformance with Bertram design, items 3 and 4 (Plaintiffs’ Experts column).
[53] Conclave Report, Attachment A, item 4.
[54] Conclave Report, Attachment A, item 3.
[55] Conclave Report, non-conformance with Bertram design, item 1 (Plaintiffs’ Experts column).
[56] Conclave Report, Attachment A, item 1.
[57] Conclave Report, non-conformance with Bertram design, item 7 (Plaintiffs’ Experts column); Attachment A, item 7.
[58] Conclave Report, non-conformance with Bertram design, item 9 (Plaintiffs’ Experts column); Attachment A, item 9; Exhibit 3, note 1.
The only evidence called by Bertram contrary to the evidence which I have accepted, was deeply unsatisfactory. Mr Griffin expressed the opinion in the Conclave Report that all departures from the design should have been approved by Bertram engineers at the time of manufacture and assumed that such approvals would have been obtained although not documented on any amendment of the plans. There was no evidence to support the suggestion that any departures from the design had been approved. Such evidence, if it existed, would have been readily available to Bertram and the failure to produce any such evidence suggests that there was none which supported a contention that the disconformities from the plans were approved by engineers. The effect of the disconformities was that there was gross departure from the plans and from good boat building practice.
I accept the opinion expressed by Mr Wright in Wright Report 2 that the disconformities are serious and are sufficient to render the vessel unsafe and unseaworthy. The serious latent defects existed from the time of manufacture and therefore existed at the time of sale to Tarangau. That meant that, as alleged in the statement of claim, at the point of manufacture the transversal and longitudinal members were not securely bonded to the hull shell and the structural liner sole was not securely bonded to the transversals and the hull shell. There were fundamental defects in the vessel’s hull and other fibreglass structural components.
In addition to the disconformities there were manufacturing defects which were latent at the time of sale but which manifested themselves whilst in Tarangau’s ownership. In particular, there was a failure of secondary bonding of the fibreglass layers to create a strong hull and strong attachment of the structural members to the hull shell.
As set out earlier, the plans had within them a hull lamination schedule setting out which layer of fibreglass was to be attached next. When each layer is attached it must bond to the previous layer so that both a mechanical and a chemical (or secondary) bond creates strong fibreglass for the hull material. The window of time within which the fibreglass can be layered without sanding is typically between 24 and 72 hours. Seventy-two hours was explained by Mr Wright to be the “extreme limit”. The practice at his boat building yard is to sand the material if the period of time exceeds 36 hours. In Mr Wright’s opinion, which I accept, a vessel the size of the Bertram 570 could not be fully laid up within a window of 72 hours, so sanding would be required to create a sufficient secondary bond. It is an essential step in order to achieve adequate secondary bonding.
Mr Wright explained secondary bonding in this way in his evidence:
“A secondary bond is defined as the practice of bonding fresh material to a cured or partially cured laminate and in the case of the vessel, the fresh material is considered the structural member in question and the partially cured laminate is the hull shell inner surface; further, a secondary bond is a resin or glue based bond made between separate laminates, other than by mechanical fastenings, and where peel plies are not used, the joining surfaces shall be sanded back, and be dust free, clean and dry and where applicable Styrene wiping may be used to reactivate the laminates for bonding; whilst acetone should not be used for this purpose as it may degrade the resulting bond strength. Secondary bonds shall be commenced with a wet resin coat and layers of fibre reinforcement of the requisite type be laid down wet on wet and the laminate be built up accordingly and as specified without voids or resin starved or rich zones, the emphasis being on a high fibre content with minimum resin content consistent with a fully filled matrix; preferably, but not exclusively, the abutting layers of the cured or partially cured surface and the secondary bond of the joint shall be chopped, strand mat.”
Mr Wright explained the inability to lay up the vessel within 72 hours in his evidence-in-chief as follows:
“[This is] a mould and within that mould, there’s approximately 12 laminates of glass to go into that mould, which takes a team a fair while to do. Once that laminating is complete, the next job to do is to put the longitudinals in; that would be what you know as L1 and L2, both on the port and starboard sides. You would normally have a crew of about four people per side putting in those longitudinals. That would take about three days in itself. So technically, you could get away without sanding the secondary bond for the longitudinals; however, by the time you get around to putting the transverse deep floor frames in, you would definitely be outside the window and you would have to stop and what we call grind the hull out, which is literally sand the whole interior of the laminated surfaces at that time to create a bond for all future work.”
He estimated that putting in the deep floor frames would take two teams at least a week. There was no evidence called by Bertram to refute any of that evidence. In its submissions it said that none of the experts called by the plaintiff were involved in the construction of the vessel so could not speak to this issue. This is a plainly inadequate response because I am satisfied that inferences as to the manufacturing process can be drawn from the demonstrated results of that process. Both mechanical bonding and chemical bonding of the fibreglass layers are necessary to create a strong material with adequate bond peel strength. Bond strength is created by the adhesion between the bonded surfaces so that the fibreglass does not start to delaminate, that is, where the layers separate and can potentially be peeled off.
Mr Lyons’ evidence readily persuaded me that the cause of the delamination in the Bertram 570 in this case was a lack of necessary secondary bonding arising from poor surface preparation. I accept the evidence of Mr Lyons helpfully set out in the submissions of Tarangau. In Lyons Report 1, Mr Lyons recorded the following observations and opinions, which I accept, that:
1.It is not acceptable to find any secondary bond failures in a vessel such as the Bertram 570. They are all instances which should be classified as structural defects requiring repair.
2.The steps that Bertram ought to have taken, but manifestly did not, in undertaking secondary bonding form part of the corpus of fundamental glass reinforced plastic boat building knowledge, and steps to ensure adequate secondary bonding should form part of the builder’s quality control programme.
3.The steps recommended by applicable literature in the absence of peel ply (that is precleaning and surface abrasion) have not been followed. The extensive secondary bond failures identified by Mr Lyons are clear evidence that the applicable work process was not followed during the Bertram 570’s construction.
4.Mr Lyons extracted one piece of secondary bond flange laminate from the forward starboard face of the P1 bulkhead by easily snapping it off. It came away very easily as there was no bond at all holding it in place. The appearance of this piece prior to its removal was identical to all other identified sites of failed secondary bonds between the hull shell inner surface and the structural members throughout the Bertram 570. Its “glassy” appearance confirmed the lack of bonding, as does the fact that the chopped strand mat side of the bonding ply was not applied along the bond line.
5.The underlying cause of the structural defects was faulty manufacturing procedure in particular, the absence of correct surface preparation processes to ensure good secondary bonding of the hull shell inner surface to structural components, and poor laminating practice.
6.The faulty manufacture originates from the date of the original construction.
After Mr Lyons produced Lyons Report 1, he undertook further extensive testing of the fibreglass hull of the Bertram 570.
Mr Lyons took samples from the most highly loaded parts of the vessel, namely the hull bottom shell below the port and starboard chines in the forward half. The samples are shown on a display board which is Exhibit 64. On 29 February 2016 he extracted 10 samples. Also attached to the display board is a copy of the plan of the Bertram 570 showing precisely where the samples were taken from. It also shows where five samples were peeled off on 29 October 2012 referred to in his report of 22 November 2012. In addition the display board contains four samples taken by Mr Nolan Head of Norman R Wright & Sons on 2 March 2016. All of those samples are referred to in the Lyons Report 2.
Samples were taken from the most highly loaded parts of the vessel because inadequate secondary bonding in this region would have the most critical structural ramifications. This region is below the structural liner sole and is exposed to the slamming loads exerted by the sea on to the bottom of the vessel as it travels at speed into oncoming waves.

To this Tarangau said that if, which it denied, Florida law governs its claim in negligence, then it admitted that that is an accurate statement of the law of Florida.[219]
[219] Reply to the second defendant’s defence para 4A.
In paragraph 33 of the statement of claim, Tarangau alleged that Bertram breached its duty of care owed to Tarangau by:
(a)     failing to securely bond the hull shell and the transverse and       longitudinal structural members;
(b)     failing to properly prepare the surface of the hull shell before applying the adhesive resin (so as to bond the transversal and longitudinal members to the hull shell) in such a way as to achieve lasting adhesion;
(c)     failing to securely bond the structural liner sole to the transversals and to the hull shell;
(d)     failing to adequately achieve bonding which contributed to the failure of other structural components of the Bertram 570;
Particulars
(i)The particulars relied on in (d) include the pulpit and foredeck and area of the anchor locker and cockpit sole which were inadequate due to poor design and/or construction detailing, specifically inadequate connection laminates between pulpit and hull/deck, small corner radii at connections leading to high stress concentrations in all itemised areas, hard spots where there is an abrupt change in the stiffness of two connected structural elements, poor gelcoat application that is intolerant of surface stresses, poor yard detail, particularly poor laminating practice, excessive gap bridging by sealant between assembled mouldings leading to cracking of sealants and loss of watertight integrity as well as generally, a contribution from those factors at (a) and (b).
(e)     departing from the design of the Bertram 570, such that it was incapable of performing as designed;
Particulars
(ii)     The particulars relied on in (e) include:
(A)The lack of complete bonding of the internal transverse and longitudinal members to the hull shell. Complete bonding is shown on the design drawing but there are failure of the bonds between the M3, M4, M5 and M6 transversals and the hull shell outboard of the longitudinal L2.
(B)Inadequately bonded and fastened 5083-grade aluminium angle used to secure structural liner sole to floor at bulkhead P2.
(C)Watertight bulkhead P1 is not watertight.
(D)Structural liner sole not fully bonded to the transversals and hull shell.
(E)Transversals in way of the forward WC and shower sump region structural liner sole have been removed.
(F)Hull bottom strakes are concave in the bilge rather than filled with flush hull shell laminate continuing over them.
(G)Hatch fitted in watertight bulkhead P1 is not a suitably rated watertight bulkhead.
(H)Unsealed cutaways and penetrations in foam cored and timer panels not in accordance with standard GRP boatbuilding practice.
(I)Bertram departed from the design of the 570 Flybridge Cruiser in the respects identified in the document styled ‘Experts’ Conclave Report 27 July 2016’ at Annexure A, pages 16 to 19, items 1 to 9 inclusive.
(f)constructing the structure of the Bertram 570 in such a way that contributed to other parts of the yacht not being able to contain normal movement and flexure within the intent of the design.
(iii)The particulars relied in with respect to (f) are those set out in (a) – (c).
All of these allegations were denied by Bertram.[220]
[220] Second defendant’s defence paras 11A, 11D, 11E, 11F, 12 and 13.
Tarangau alleged that all of these breaches led to the defects and the consequences of the defects referred to in its statement of claim.[221] This was denied by Bertram.[222]
[221] Statement of claim paras 28, 29 and 34.
[222] Second defendant’s defence paras 11A and 13A.
Bertram’s submissions
As a threshold issue on Tarangau negligence claim, Bertram submitted that its liability, if any, to Tarangau must be determined by the application of foreign law. All of the alleged negligent acts or omissions of Bertram in Tarangau’s claim occurred in the State of Florida in the United States of America (if at all). Tarangau’s claim in negligence is thus, it was submitted, governed by Florida law as the lex loci delicti.
In the present case, the location of the alleged negligent acts by Bertram is, it was submitted by Bertram, unequivocal. All of the acts of defective design and/or construction of the vessel alleged in the statement of claim occurred in the US State of Florida. The losses alleged in the statement of claim were felt by Tarangau in Australia. Nevertheless, the place of the alleged tort was Florida. Once it is accepted that the alleged negligent acts of Bertram took place in Florida, the law governing Tarangau’s claim in negligence is the law of Florida.
As to the application of the law of Florida to the negligence claim in this case, the only evidence before the Court is the expert legal opinion of Mr von Spiegelfeld:
“Florida law is very clear on the issue of recoverable damages in a matter where the purchaser of a product asserts that the product is defective and the defect has damaged only the product, as opposed to causing personal injury or third party damages. Under Florida law, as set forth in the case of Tiara Condominium Association v Marsh & McLennan, 110 So.3d 399 (Fla. 2013), citing and adopting East River Steamship Corporation v Transamerica Delaval, Inc, 476 U.S. 858,106 S.Ct. 2295 (1986) adopts the doctrine of Economic Loss Rule. Pursuant to the Economic Loss Rule, a manufacturer of a product, who issues a warranty, cannot be sued in tort for a defect in the property that does not damage anything other than itself, which is true whether there is privity between the owner of the product and the manufacturer or not.”
It was submitted by Bertram that Mr von Spiegelfeld’s opinion as to the law in Florida is based on the decision of the Supreme Court of the United States in East River Steamship Corporation v Transamerica Delaval, Inc.[223] Given the centrality of this judgment in the United States as to the liability of product manufacturers in negligence for pure economic loss, while not binding, it was submitted that in this court the decision of the Supreme Court in East River Steamship may be illustrative of the preferred approach to be taken in a negligence claim against a product manufacturer for pure economic loss.[224]
[223] East River Steamship Corporation v Transamerica Delaval, Inc, 476 U.S. 858,106 S.Ct. 2295 (1986).
[224] Of note, East River Steamship was referred to by the High Court in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185 at [121] per Crennan, Bell and Keane JJ.
East River Steamship was a case brought by the charterers of supertankers against the manufacturer of defective turbines that were the main propulsion units of those vessels. The charterers alleged negligence by the manufacturer and sought damages for the cost of repair to the turbines and lost income while the ships were out of service. The defendant manufacturer had sought summary judgment on the basis that the plaintiff’s claim was not cognizable in tort.
In unanimously upholding the defendant’s motion, and after considering preceding cases, the Supreme Court stated:[225]
“We realize that the damage may be qualitative, occurring through gradual deterioration or internal breakage. Or it may be calamitous …But either way, since by definition no person or other property is damaged, the resulting loss is purely economic. Even when the harm to the product itself occurs through an abrupt, accident‐like event, the resulting loss due to repair costs, decreased value, and lost profits is essentially the failure of the purchaser to receive the benefit of its bargain – traditionally the core concern of contract law.”

The Supreme Court went on to state:
“…we adopt an approach similar to Seely and hold that a manufacturer in a commercial relationship has no duty under either a negligence or strict products-liability theory to prevent a product from injuring itself. [226]
…When a product injures only itself the reasons for imposing a tort duty are weak and those for leaving the party to its contractual remedies are strong.[227]
… Damage to a product itself is most naturally understood as a warranty claim. [228]
… Recovery on a warranty theory would give the charterers their repair costs and lost profits, and would place them in the position they would have been in had the turbines functioned properly …Thus, both the nature of the injury itself and the resulting damages indicate that it is more natural to think of injury to a product itself in terms of warranty.[229]
[225] East River Steamship Corporation at 870.
[226] East River Steamship Corporation at 871.
[227] East River Steamship Corporation at 871.
[228] East River Steamship Corporation at 872.
[229] East River Steamship Corporation at 873 to 874.

The judgment of the Supreme Court of the United States in East River Steamship Corporation makes its position plain that the liability of product manufacturers for pure economic loss is the province of contract (ie the warranty) and not negligence. Further, and as Mr von Spiegelfeld notes, following Tiara Condominium Association v Marsh & McLennan,[230] the Supreme Court of Florida has adopted that approach for pure economic loss in the products liability context.
[230] Tiara Condominium Association v Marsh & McLennan, 110 So.3d 399 (Fla. 2013).
Bertram submitted that in the event this court is not persuaded that the law of Florida applies to defeat the negligence claim against Bertram, then it is submitted that Tarangau’s negligence claim also fails under Australian law. Specifically, Bertram submitted that no duty of care arose between Bertram and Tarangau. Establishing such a duty of care is, of course, a necessary element of Tarangau’s claim in negligence.
Tarangau’s submissions
Tarangau submitted that there was no evidence before the court establishing that the negligent acts or omissions in the course of manufacture happened in Florida.
Tarangau submitted that there are contrary indications. In Vautin v BY Winddown, Inc (No 2),[231] Rares J made the following findings of fact:
“[24] Bertram’s solicitor gave evidence on information and belief based on what a former vice-president of Bertram and Florida resident, Donald Jones, told him. Mr Jones said that:
He had retired in 2014;
Bertram’s office was in Florida;
All of Bertram’s personnel, including builders, were located in Florida or elsewhere in the United States.”
[231] [2016] FCA 1235.
Tarangau submitted that Bertram bears the onus[232] and was in a position to lead evidence on this issue but chose not to do so. It failed to establish that the negligent acts or omissions occurred in Florida. This disposed, it was submitted, of Bertram’s contention that the claim is governed by Florida law, and it is not necessary to canvass conflict of law principles. The governing law is presumed to be that of Queensland.[233]
[232] Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491, 518-519.
[233] Neilson v Overseas Projects Corp of Victoria (2005) 223 CLR 331, 372.
Consideration
In Regie Nationale des Usines Renault SA v Zhang,[234] the High Court held that the law governing a claim in relation to a tort committed in another country is the lex loci delicti, the law of the place of the alleged wrong. The High Court held:[235]
“The submission by the Renault companies is that the reasoning and conclusion in Pfeiffer that the substantive law for the determination of rights and liabilities in respect of intra-Australian torts is the lex loci delicti should be extended to foreign torts, despite the absence of the significant factor of federal considerations, and that this should be without the addition of any ‘flexible exception’. That submission should be accepted.”
[234] Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491.
[235] Zhang at 515 and 520 at [75] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.
In Dow Jones & Co Inc v Gutnick,[236] Gleeson CJ, McHugh, Gummow and Hayne JJ held:
“locating the place of commission of a tort is not always easy … In the end the question is ‘where in substance did this cause of action arise’? In cases, like trespass or negligence, where some quality of the defendant’s conduct is critical, it will usually be very important to look to where the defendant acted, not to where the consequences of the conduct were felt.”
[236] Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 606, [43] per Gleeson CJ, McHugh, Gummow and Hayne JJ.
It is uncontroversial in this case that Bertram issued the warranty for the vessel.[237] Further, it is clear on the evidence that Tarangau, by Mr Wong, completed the Bertram warranty card, returned it to Bertram and thereby became the beneficiary of a five year warranty in respect of the vessel’s hull and structural components. The only damage claimed in this matter is to the vessel itself. In those circumstances, Mr von Spiegelfeld’s summary above makes it plain that, pursuant to the economic loss rule, the law of Florida is that Bertram cannot be sued in tort for defects in the vessel that do not damage anything other than itself. This is so even in the event that the defects to the vessel caused a risk of injury.
[237] Exhibit 73.
Tarangau’s argument that Bertram failed to prove that the vessel was constructed in Florida can be relatively easily disposed of. The reference to a finding made in Vautin v BY Winddown, Inc (No 2) on the evidence led in that case is irrelevant to the determination of the facts on the evidence led in this case.
It was an agreed fact that the country of manufacture was the United States of America.[238] Mr Campagnuolo’s cross-examination by Tarangau’s counsel proceeded on the factual basis that the place of manufacture of the Bertram 570 was in Miami, Florida and it was never suggested to him that it was manufactured anywhere else. So Tarangau’s submission is not supported by the evidence in this case. The law of Florida is the lex loci delicti. The law of Florida does not admit of any tortious liability in the factual situation of this case and so Tarangau has no claim in negligence against Bertram.
Loss to the plaintiff
[238] List of facts and matters not in issue paragraph 3.
Eagle Yachts
Tarangau alleged that by reason of Eagle Yachts’ breaches of contract, Tarangau has suffered the following loss:[239]
(a) loss of the market value of the Bertram 570 would have had if it had conformed to the contract $2,200,000
less the market value of the Bertram 570 at time of delivery: $266,100
$1,933,900
[239] Statement of claim paras 37, 51.
Tarangau also claimed interest pursuant to s 47 of the Supreme Court Act 1995 and costs.
The measure of damages for the sale of a product which is not fit for its purpose or not of merchantable quality at common law as codified in sale of goods legislation is:[240]
“The measure is the market price of goods at the contractual time for delivery, less the contract price (if the latter has not been paid to the seller). This is the amount of money theoretically needed to put the promisee in the position that would have been achieved if the contract had been performed.”
[240] Clark v Macourt [2013] HCA 56 at [28]; (2013) 233 CLR 1 at 12.
Accordingly, Tarangau’s entitlement to damages is the difference between actual market value of the Bertram 570 and the actual price paid. As against Eagle Yachts, Tarangau is entitled to damages in the sum of $1,933,900 plus interest pursuant to the Supreme Court Act.
Bertram
Tarangau’s claim against Bertram was:
(a)     $1,933,900 alternatively $1,239,919 or $852,950, damages for negligence;
(b) $1,933,900 compensation, alternatively $1,239,919 or $852,950 pursuant to each of sections 74B and 74D of the TPA;
(c) $1,933,900 compensation, alternatively $1,239,919 or $852,950 pursuant to s 74G of the TPA;
(d)     Alternatively, $1,933,900 or $1,239,919 or $852,950 damages for breach of contract;
(e) Interest pursuant to s 47 of the Supreme Court Act 1995 (Qld); and
(f)      costs.
Tarangau was successful in its claim for damages for breach of contract so I will consider what damages should be awarded under paragraph (d).
Tarangau’s submissions
It was submitted that the appropriate measure of damage on the claim as against Bertram under the express warranty is the repair costs put forward by Mr Wright, whose evidence would be accepted.
The argument of Bertram that loss should be assessed as at 8 April or 4 June 2009 as the dates of breach of the express warranty is misconceived.[241] The express warranty imposed a continuing contractual obligation on Bertram. In the case of failure to perform a continuing contractual obligation, every daily breach gives rise to a separate cause of action.[242] Thus, there was an ongoing breach of the express warranty by Bertram every day upon which it failed to honour its obligation until expiry of the express warranty in 2011. When the warranty expired, Bertram had an accrued obligation to repair the vessel. That obligation has been quantified as at 2016 by Mr Wright. The measure of damages is his repair costs at the date of Wright Report 2, plus interest from that date.
[241] Outline of Submissions of the second defendant para 161-164.
[242] Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221; Shaw v Shaw [1954] 2 QB 429.
In these circumstances, there is no sound reason in principle as to why quantum would not be assessed on the basis of the assessment of Mr Wright.
Bertram’s submissions
Bertram submitted that if Tarangau’s claim under the warranty for breach of contract is established then arguably the breach occurred by the second defendant on either:
(a)8 April 2009 when the alleged insufficient repair offer was made by Bertram to Tarangau; or
(b)4 June 2009, when Tarangau refused the offer of repair as inadequate.
It was submitted that the measure of damages for the alleged breach of contract outlined above, is the difference between the market value of the yacht (fully functional and completely repaired) as at either 8 April 2009 or 4 June 2009 and the market value of the yacht in its actual condition as at those dates (noting that the valuation dates will depend upon when the alleged breach of contract is found to have occurred).
It is further submitted that the diminution in value of the yacht (notwithstanding any alleged defects), is a relevant consideration for the assessment of damages.
On the other hand, the cost of repairing the yacht as at the date of trial is not a relevant consideration for determining the appropriate measure of damages in relation to the warranty claim. Such a consideration is more akin to assessment for purposes of orders for specific performance (for example, orders to repair the yacht at the present time). Specific performance is only available if damages are an inadequate remedy.
Tarangau has the onus of proof in respect of a claim for contract damages. Presently, there is no evidence before the Court in respect of the valuation of the yacht as at 2009 in either a repaired or unrepaired state.
It was submitted that neither the purchase price of the yacht or the cost of performing repairs has any direct connection the value of the yacht at the relevant times.
Measure of damages under breach of contract/warranty
Damages for breach of contract should be such as to put Tarangau in the position that it would have been if the warranty contract had been performed. The principle to be applied to the assessment of damages for breach of contract has been confirmed by the High Court in Clark v Macourt.[243] Hayne J set out the applicable principle about which there was no dispute:[244]
“a plaintiff who sues for breach of contract is to be awarded as damages ‘that sum of money which will put the party who has been injured … in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation’.[245] … when a contract has been breached, the position in which the plaintiff is to be put, by an award of damages, is the position in which the plaintiff would have been if the contract had been performed.[246]
[243] (2013) 253 CLR 1, 6; [2013] HCA 56.
[244] At [7], p 6.
[245] Livingstone v Rawyards Coal Co (1880) LR 5 App Cas 25 at 39.
[246] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at 286 [13]. See also Robinson v Harman (1848) 1 Ex 850 at 855 [154 ER 363 at 365].

His Honour held that the measure of the plaintiff’s loss in that case was “the loss of the value of what the promisee would have received if the promise had been performed.”[247] The plaintiff should have received “the value of what should have been, but was not, delivered under the contract.”[248]
[247] At [10], p 7.
[248] At [13], p 8.
Crennan and Bell JJ held:[249]
“The applicable principle, confirmed in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd and traceable to Robinson v Harman, is that damages for breach of contract are to put the promisee, so far as money can do it, in the same situation as if the contract had been performed as promised. Different, even cumulative, heads of damage may be pleaded by a plaintiff, depending on the type of contract involved and the kinds of breach and damage occasioned, provided there is no double recovery.”
[249] At [26]-[27], p 11.
There is evidence before the court, in Wright Report 2, that the vessel can be restored to the position it ought to have been in if Bertram had performed its obligation under the warranty for $1,239,919 (as at 7 March 2016). The cost of the repairs which should have been carried out at the date of breach was $852,950 and usually damages are assessed as at the date of breach in the performance of the contract at the time that performance was promised. But a breach of warranty is a continuing breach and the breach led to further consequences to the condition of the vessel. Had the vessel been properly repaired in accordance with Bertram’s contractual duties under the warranty it would not have continued to deteriorate. The failure of Bertram to repair the vessel in accordance with its contractual duties has led to further damage for which Bertram must be held responsible. This is the loss sustained by Tarangau because of Bertram’s breach of warranty and therefore is the measure of damage which is appropriate to place it in the same position it would have been in if the contract found in the express warranty had been performed.[250]
[250] Robinson v Harman (1848) 1 EX 850 at 855 [154 EX 363 at 365]; Clark v Macourt [2013] HCA 56 at [106] per Keane J.
As against Bertram, Tarangau is entitled to be awarded damages in the sum of $1,239,919 and interest pursuant to s 47 of the Supreme Court Act from the date of that estimate of repair costs (7 March 2016) until the date of judgment.
Proportionate liability
As to proportionate liability, Eagle Yachts pleaded that the Civil Liability Act 2002 (NSW) applies to this claim.[251]
[251] First defendant’s defence para 54.
Eagle Yachts alleged[252] that the claim brought by Tarangau against it:
(a) is a claim for economic loss;
(b) arose from the alleged failure of Eagle Yachts to take reasonable care to ensure that the Bertram 570 complied with the implied terms that it was reasonably fit for its purpose and of merchantable quality.
[252] First defendant’s defence para 56.
Eagle Yachts alleged[253] the claims brought by Tarangau against Bertram are claims for economic loss and arose from the alleged failure of Bertram to take reasonable care in the design and construction of the Bertram 570. In fact, as I have found, Tarangau has succeeded against Bertram for the economic loss caused by Bertram’s breach of warranty.
[253] First defendant’s defence para 57.
Eagle Yachts alleged that as each of the defendants is alleged to have caused the damage or loss suffered by Tarangau, they are (in the event Tarangau’s case succeeds) concurrent wrongdoers within the meaning of s 34 of the Civil Liability Act.[254]
[254] First defendant’s defence paras 57 and 58.
Eagle Yachts alleged that it was not responsible for the design and manufacture of the Bertram 570 and any defects were manufacturing issues that it could not have identified prior to the sale of the Bertram 570 to Tarangau.[255]
[255] First defendant’s defence paras 60, 61, 25(h).
Further and in the alternative, Eagle Yachts alleged:[256]
(a) the Civil Liability Act 2003 (Qld) applies to this claim;
(b) it repeated and relied upon paragraphs 55 to 61 of its defence save that Bertram’s acts or omissions were an independent cause of Tarangau’s loss.[257]
[256] First defendant’s defence para 62.
[257] First defendant’s defence para 62.
Tarangau joined issue with those allegations.[258]
[258] Reply to first defendant’s defence para 6.
Eagle Yachts submitted that whether the Civil Liability Act of New South Wales or Queensland applies to this claim the result would be the same as their content and application are substantially the same.
In this case Eagle Yachts submitted that the court should apportion any damages to Bertram. It submitted that when considering this question the court should take into account that Eagle Yachts terminated its dealer agreement with Bertram in around 2013. The termination was due to not selling many boats over a period of time. It submitted that to the extent that the court finds that Bertram is responsible for any damage to Tarangau, it would be unjust to fail to apportion all liability to Eagle Yachts.
Consideration
Sections 34 and 35 of the Civil Liability Act (NSW) relevantly provide:
“34    Application of Part
(1)     This Part applies to the following claims (apportionable claims):
(a)a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury,
(b)a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 1987 for a contravention of section 42 of that Act (as in force before its repeal by the Fair Trading Amendment (Australian Consumer Law) Act 2010) or under the Australian Consumer Law (NSW) for a contravention of section 18 of that Law.
(1A)For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).
(2)In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.
(3)For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1).
…
(4)For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.
35     Proportionate liability for apportionable claims
(1)     In any proceedings involving an apportionable claim:
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss, and
(b)the court may give judgment against the defendant for not more than that amount.
(2)If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim:
(a)liability for the apportionable claim is to be determined in accordance with the provisions of this Part, and
(b)liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.
(3)In apportioning responsibility between defendants in the proceedings:
(a)the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law, and
(b)the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.
(4)This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.
(5)A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise.”
Sections 30 and 31 of the Civil Liability Act (Qld) provide:
“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 had died.
31     Proportionate liability for apportionable claims
(1)     In any proceeding involving an apportionable claim —
(a)the liability of a defendant who is a concurrent wrongdoer in relation to the claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just and equitable having regard to the extent of the defendant’s responsibility for the loss or damage; and
(b)judgment must not be given against the defendant for more than that amount in relation to the claim.
(2)If the proceeding involves both an apportionable claim and a claim that is not an apportionable claim —
(a)liability for the apportionable claim, to the extent it involves concurrent wrongdoers, is to be decided in accordance with this part; and
(b)liability for the other claim and the apportionable claim to the extent it is not provided for under paragraph (a), is to be decided in according with the legal rules, if any, that, apart from this part, are relevant.
(3)In apportioning responsibility between defendants in a proceeding the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceeding.
(4)This section applies to a proceeding in relation to an apportionable claim whether or not all concurrent wrongdoers are parties to the proceeding.”
In ABN AMRO Bank NV (ARBN 84 079 478 612) v Bathurst Regional Council[259] the Federal Court of Australia considered the application of the Civil Liability Act (NSW) to a contract claim and said:
[259] (2014) 99 ACSR 336 at 642.
“[1508]The question of apportionment of loss is a matter of judgment and discretion on which reasonable minds might differ.
[1509]In Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALR 529 at 532; 59 ALJR 492 at 493–4, the High Court stated, in context of contributory negligence, that:
A finding on a question of apportionment is a finding upon a ‘question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds’: British Fame (Owners) v Macgregor (Owners) [1943] AC 197 at 201; [1943] 1 All ER 33 at 35. Such a finding, if made by a judge, is not lightly reviewed.
[1510]Here, the primary judge assessed the correct questions, principally:
(1)the relative culpability of the conduct of each of LGFS, S&P and ABN Amro. In other words, the nature of each one’s wrongdoing and its seriousness relative to that of the others; and
(2)the relative importance of the conduct of each of those parties in causing the loss.”
The application of the provisions of the Queensland act was considered in Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd as trustee for the G & M Geldard Family Trust[260] where the court determined that to be a concurrent wrongdoer within the meaning of s 30 of the Civil Liability Act the acts must be independent of each other and must independently cause damage:
“… It follows that proof that an act or omission of a person other than a defendant was an independent cause of the claimed loss or damage is necessary before any occasion arises to consider whether or how a defendant’s liability should be limited under s 31. A plaintiff’s cause of action is complete without any evidence that there is a concurrent wrongdoer; the plaintiff is entitled to recover its proved loss in full from a defendant who is proved to be legally liable for that loss. If a defendant wishes to achieve a different result, the onus must be on the defendant to prove the necessary facts. As McDougall J explained in the paper cited earlier,[261] that conclusion is also suggested by the circumstance identified by Professor McDonald in an earlier paper[262] that in some cases the defendant will be in a better position than the plaintiff to identify concurrent wrongdoers, and by Kirby P’s observation in Platt v Nutt[263] that ‘… the general rule which obtains in our courts, namely that those who assert must prove’. It is necessary to add only a reference to s 32, which was discussed in the parties’ submissions. Subsection 32(1) imposes upon a claimant an obligation to claim against every person ‘the claimant has reasonable grounds to believe may be liable for the loss or damage’. If a concurrent wrongdoer contends that the claimant has failed to comply with that obligation, the concurrent wrongdoer may apply under s 32(4) for orders the court considers just and equitable ‘on … apportionment of damages proven to have been claimable’ and costs thrown away by the failure. These provisions are consistent with the trial judge’s conclusion that the onus lay upon the appellants to prove the facts necessary for any application of the legislation.[264]
[260] [2013] 1 Qd R 319.
[261] Justice Robert McDougall, “Proportionate Liability in Construction Litigation” (2006) 22 BCL 394, 400.
[262] B McDonald, “Proportionate Liability in Australia: The Devil in the Detail” (2005) 26 Aust Bar Review 29.
[263] (1988) 12 NSWLR 231 at 238.
[264] Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd [2013] 1 Qd R 319 at [61].
The submission that there is an apportionable claim under the Civil Liability Act must be rejected, because in order for there to be an apportionable claim, the court would in the first place need to make a finding that the claim against Eagle Yachts is one arising from a failure on its part to take reasonable care: Civil Liability Act 2002 (NSW), s 34(1). There is no basis for a finding that Eagle Yachts failed to take reasonable care. None of the information before it prior to the sale to Tarangau suggested that the vessel was defective. Indeed, such evidence as to the condition of the vessel as was before Eagle Yachts provided confidence that the vessel was sound.
Conclusion
Tarangau is entitled to succeed against Eagle Yachts for its breach of terms implied into the contract of sale that the Bertram 570 would be fit for its purpose and of merchantable quality. The measure of its loss is $1,933,900 together with interest pursuant to s 47 of the Supreme Court Act 1995 from 22 July 2006 until the date of judgment.
Tarangau is entitled to succeed against Bertram for its breach of the terms of the express warranty. The measure of damages is $1,239,919 together with interest pursuant to s 47 of the Supreme Court Act 1995 from 7 March 2016 until the date of judgment.
I shall hear the parties as to the precise form of orders and any consequential orders to be made and as to costs.

CITATION:	Tarangau Game Fishing Charters Pty Ltd v Eagle Yachts Pty Ltd & Anor [2017] QSC 306
PARTIES:	TARANGAU GAME FISHING CHARTERS PTY LTD ACN 120 602 440 (plaintiff) v EAGLE YACHTS PTY LTD ACN 108 311 404 (first defendant) and BY WINDDOWN, INC (second defendant)
FILE NO/S:	No 9201 of 2010
DIVISION:	Trial
PROCEEDING:	Trial
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	14 December 2017
DELIVERED AT:	Brisbane
HEARING DATE:	15 May 2017 to 26 May 2017
JUDGE:	Atkinson J
ORDERS:	1. The court orders that the first defendant pay the plaintiff: $1,933,900 together with interest pursuant to s 47 of the *Supreme Court Act* 1995 from 22 July 2006 until the date of judgment. 2. The court orders that the second defendant pay the plaintiff: $1,239,919 together with interest pursuant to s 47 of the *Supreme Court Act* 1995 from 7 March 2016 until the date of judgment.
CATCHWORDS:	SALE OF GOODS – SALE OF GOODS LEGISLATION – ACTIONS FOR BREACH OF CONTRACT – REMEDIES OF BUYER – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where the yacht was purchased for use in deep sea fishing – whether the yacht was fit for its intended purpose – whether the yacht was of merchantable quality TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – TERMINOLOGY – CONSUMER – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where the yacht was purchased for use in deep sea fishing – where the plaintiff intended to use the boat for personal use and for commercial charter – whether the plaintiff falls within the meaning of “consumer” under the Trade Practices Act 1974 (Cth) – whether the vessel was acquired for the purpose of resupply CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where the plaintiff signed a warranty card provided by the second defendant upon purchasing the yacht – where the second defendant offered to repair the yacht in accordance with the warranty upon the discovery of the defects – where four experts gave evidence about the extent of the delamination and other defects – where the plaintiff’s experts considered that the repair offer was inadequate to repair the defects – where the opinion of the plaintiff’s three experts differed significantly from the expert of the second defendant - whether the second defendant breached the terms of the warranty TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – WHERE ECONOMIC OR FINANCIAL LOSS – where the plaintiff purchased a yacht from the first defendant which was manufactured by the second defendant – where the yacht began to delaminate and then developed other structural defects well within its expected lifetime – where four experts gave evidence about the extent of the delamination and other defects – where the plaintiff alleged the yacht was not built in accordance with the plans – where the plaintiff alleged the second defendant did not follow proper boat building processes in manufacturing the yacht – whether the second defendant manufacturer owed a duty of care to the plaintiff Civil Liability Act 2002 (NSW) s 34, s 35 Civil Liability Act 2003 (Qld) s 30, s 31 Sale of Goods Act 1923 (NSW) s 19(1), s 19(2) Trade Practices Act 1974 (Cth) s 4B, s 71, s 74B, s 74D, s 74G ABN AMRO Bank NV (ARBN 84 079 478 612) and Others v Bathurst Regional Council and Others (2014) 99 ACSR 336, cited Australian Competition and Consumer Commission v Valve Corp (No 3) (2016) 337 ALR 647; [2016] FCA 196, cited Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387, cited Baldry v Marshall [1925] 1 KB 260, cited Brambles v Commissioner of Taxation (1993) 179 CLR 15, cited Bunnings Group Ltd v Laminex Group Ltd (2006) 153 FCR 479, cited Carlton International PLC & Anor v Crawford Freight Services Ltd & Ors (1997) 78 FCR 302, cited Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56, cited Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, cited Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575, cited East River Steamship Corporation v Transamerica Delaval, Inc, 476 U.S. 858,106 S.Ct. 2295 (1986), cited Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, cited Involnert Management Inc v Aprilgrange Ltd & Ors [2015] 2 CLC 307; [2015] EWHC 2225 (Comm), cited Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221, cited Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd as trustee for the G & M Geldard Family Trust (2013) 1 Qd R 319; [2012] QCA 315, cited Regie Nationale des Usines Renault SA v Zhang (Zhang) (2002) 210 CLR 491, cited Scandinavian Trading Tanker Co. A.B. v Flota Petrolera Ecuatoriana (“The Scarptrade”) [1983] 2 AC 694, cited Shaw v Shaw [1954] 2 QB 429, cited Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272, cited The “Ruapehu” (1925) 21 Ll L Rep 310, cited Tiara Condominium Association v Marsh & McLennan, 110 So.3d 399 (Fla. 2013), cited Tre Cavalli Pty Ltd v Berry Rural Cooperative Society Ltd [2013] NSWCA 235, cited Vautin v BY Winddown Inc [2016] FCA 632, cited Webb Distributors (Aust) Pty Ltd v Victoria (1993) 179 CLR 15, cited
COUNSEL:	D O’Sullivan QC with D Turner for the plaintiff S Anderson for the first defendant S Seefeld for the second defendant
SOLICITORS:	AJ & Co for the plaintiff JHK Legal for the first defendant Norton Rose Fulbright Australia for the second defendant