Trevor v Nelson Training Services Limited HC Nelson M42/00

[2001] NZHC 727

IN THE HIGH COURT OF NEW ZEALAND
NELSON REGISTRY M42/00

BETWEEN GEOFFREY TREVOR & MICHAEL WAYNE JOHNS
Appellants

AND NELSON TRAINING SERVICES LIMITED
First Respondent

AND TRUCK SERVICES CENTRE LIMITED
Second Respondent

M 12/01

BETWEEN TRUCK SERVICES CENTRE LIMITED
Appellant

AND NELSON TRAINING SERVICES LIMITED
First Respondent

AND GEOFFREY TREVOR & MICHAEL WAYNE JOHNS
Second Respondent

Hearing: 7 August 2001

Appearances: E J Tait for G T & M W Johns
G P Barkle for Nelson Training Services Ltd
A J D Bamford for Truck Services Centre Ltd

Judgment: 9 August 2001

JUDGMENT OF DOOGUE J

Solicitors:
Malley & Co, Christchurch, for G T & M W Johns
Fletcher Vautier Moore, Nelson, for Nelson Training Services Ltd
Rout Milner Fitchett, Nelson, for Truck Services Centre Ltd

Introduction

[1] Nelson Training Services Ltd (“Nelson Training”) was found by the District Court to have purchased the vessel “Chrisara” from Messrs G.T. and M.W. Johns (“the Johns”) under a written agreement dated 17 April 1996 for $105,000. A Mr C B and Mrs S H Atkins were the sole directors and shareholders of Nelson Training. Prior to completion of that contract Truck Services Centre Ltd (“Truck Services”) inspected the 1966 Cummins diesel engine and its associated gearbox in the “Chrisara” for Nelson Training. A clean bill of health was given to the engine and gearbox. Within an hour of the “Chrisara” commencing its first voyage under its new ownership there were significant problems with the engine and the gearbox. The District Court found that the Johns breached a warranty provision in the agreement with Nelson Training that the “Chrisara” was seaworthy and in good working order and condition. The District Court also found that Truck Services failed to carry out the inspection of the diesel engine and gearbox to the requisite standard. As a result, damages amounting to $45,099.33 together with interest and costs were awarded to Nelson Training against both the Johns and Truck Services. The Judge refused to make any order for contribution between those parties. The Johns and Truck Services now appeal against the District Court judgment of 5 December 2000.

Background to Appeal

[2] Having regard to the issues and points on appeal, it is unnecessary to traverse the facts and the judgment under appeal in great detail. Mr and Mrs Atkins had previously owned a fishing vessel. Mr Atkins held a coastal skipper’s ticket and a second class diesel trawler engineer’s ticket. They wanted to buy a suitable vessel for their company. In early April 1996 they saw an advertisement relating to the “Chrisara” describing it as a 39 foot length overall Pelin-style flybridge cruiser made of steel with a 280 hp turbo Cummins engine. They were interested. They telephoned one of the Johns and discussed it. They went from their home at Tapawera to Picton a few days later to look at the vessel. They went out in the vessel. There was discussion about the engine that went into no great detail. Mr Atkins told one of the Johns that he wanted an appropriately qualified engineer to do a report on the condition of the engineering as he had no experience with that type of engine. Mr Johns told him that Truck Services were the local agents for Cummins Motors and had looked at the particular engine in the past. The engine was said to have done some 4,650 hours.

[3] These discussions led to the agreement dated 17 April 1996 between the Johns, who were of Christchurch, and Mr and Mrs Atkins. The agreement did not refer to Nelson Training. It provided for the purchase of the vessel for $105,000 inclusive of GST and contained the following significant provisions:

Clause 4 provided that possession and completion of the contract would be effected at Picton within seven days of the satisfaction of the condition in clause 5.

“5. THIS agreement is subject in all respects to the purchasers obtaining an engineering report on the state and condition of the vessel satisfactory to them in all respects within 10 days of the signing of this agreement and if such report is not obtained to the satisfaction of the purchasers in all respects either party shall be entitled by notice in writing to the other forthwith to cancel this agreement whereupon neither party shall have any claim against the other.

. . . .

7. THAT the vessel shall be at the sole risk of the purchaser as from the giving of possession.

. . . .

9. The vendors warrant and covenant with the purchasers that:

(a) the vessel hereby agreed to be sold is their own sole and exclusive property and on delivery of possession will pass to the purchaser free from any charge or encumbrance whatsoever.

(b) the vessel is seaworthy and in good working order and condition.

(c) the vendors will be responsible for all liabilities and expenses incurred in respect of the vessel and the operation thereof up to the time at which possession is given and taken and hereby undertake to indemnify the purchasers against any liability therefor.

. . . .

11. THAT the agreements, obligations and warranties of the parties hereto herein set forth insofar as the same have not been fulfilled at the time of completion of this transaction shall not merge with the giving and taking of title to and with delivery of the said fishing vessel and its chattels.”

[4] The agreement, which had been prepared by Nelson Training’s solicitors, was signed by Mr and Mrs Atkins, the Judge held as directors of Nelson Training, and was sent to the Johns, who also signed the agreement.

[5] The Atkins got in touch with Truck Services. Truck Services agreed to arrange for the engineering on the vessel to be checked. Willy DCJ held that the engineer involved had no direction or specific training in what was required in respect of marine engines. He accepted Mr Atkins’ evidence that the engineer said that he knew the particular engine and would give it a good going over and would find out if there were any problems. He further accepted Mr Atkins’ denial that the inspection was to be limited to a visual check.

[6] The evening after the inspection there was an oral report to Mr Atkins that the motor was good and ran very smoothly at cruising revolutions and the only fault the engineer could find was an exhaust leak. Mr Atkins insisted upon a written report. There was such a report, dated 18 April 1996. It referred to a visual check. It referred to the running of the engine up to 3,000 rpm. It said the engine was very responsive and ran very nicely. The report said that the slight leak of the exhaust on the port side should be attended to and that Mr Atkins may wish to get the top end of the engine checked and adjusted. Otherwise the report said the engine was visually in good condition.

[7] Upon this assessment the Atkins, for Nelson Training, went ahead and completed the agreement with the Johns, making payment on 23 April 1996 and taking possession of the “Chrisara” on 25 April 1996 with the intention of taking three days to sail the vessel round to Nelson.

[8] The subsequent events in respect of the engine and gearbox were disastrous. About an hour after leaving the Picton marina there was trouble with the engine when it was running at approximately 2,700-2,800 rpm. Water was added to the cooling system, oil was added to the gearbox. The Atkins prudently decided to remain at Ships Cove for the night and, when there were continuing problems the next morning, returned to Picton and made contact with a Mr Algie, a principal of Beach Road Marine Ltd. He found the gearbox to be empty of oil, no water in the header tank, and water mixed with the engine oil.

[9] As a result, advice was taken from both Mr Algie and a Mr Tony Shuttleworth. They both gave evidence that, because of the condition of the motor and gearbox, the vessel was not seaworthy and in good working order and condition and that the damage was not new.

[10] Messrs Algie and Shuttleworth also gave evidence, as did a Mr Cadell, an expert called for the Johns, that a proper inspection by Truck Services required a sea test. Messrs Algie and Shuttleworth said that a proper test would almost inevitably have ascertained the problems apparent with the particular Cummins motor.

[11] Mr Algie and Beach Road Marine Ltd were retained to make good the damage. The Atkins acted responsibly and on 8 May 1996 their solicitors wrote to the Johns and Truck Services advising of the problems and advising that they could arrange for their own experts to inspect the vessel at any time before Wednesday, 15 May, by having them contact Mr Algie. Notice was given that from that date it was intended to complete stripping and repairing the engine and gearbox.

[12] The Johns did not take advantage of the opportunity to inspect the engine and gearbox before stripping down. A representative of Truck Services did so. Complaints were later made by both the Johns and Truck Services that the engine was unavailable to them for inspection. However, any default in that regard was their own.

[13] Mr Algie made enquiries of the Cummins agents as to the cost of spare parts. He then calculated the cost of repairing the engine and the gearbox, on the basis of what he was told, at an all-in price of $31,136.47. That figure was not challenged in cross-examination.

[14] Mr Algie was given a quote by Cummins that it would cost at least $20,000 exclusive of transport costs and any required work on gearbox for them to rebuild the motor. That price appeared to be greater than Mr Algie’s estimate. The alternative was a replacement engine, and that was what occurred as a Caterpillar engine could be purchased along with a gearbox for $17,661.99. The ultimate total cost relating to the replacement of the Cummins engine with the Caterpillar engine and gearbox and the experts’ reports relating to the litigation was $45,019.33. This was the sum for which the judgment was given.

[15] The claim in the District Court was commenced promptly on 12 July 1996. There was an amended statement of claim in May 1998. The briefs of Messrs Algie and Shuttleworth together with photographs were filed and served on the Johns and Truck Services on 12 July 1999. The case was set down for hearing on 15 and 16 September 1999. A first adjournment and then two further adjournments were granted at the request of the Johns and Truck Services. It was not until 31 August and 1, 12 and 13 September 2000 that the proceeding was ultimately able to be heard.

[16] A day and a half after the commencement of the hearing, by which time the Judge had heard the evidence of Messrs Atkins and Algie, the Judge indicated, entirely without prejudice to the possible outcome of the proceeding, that he thought the parties should at least be exploring the prospect of settlement, given that there were likely to be further days of hearing and having regard to the quantum of the claim involved. Some complaint is made about that on behalf of the Johns, but in the context of the history of the proceeding it was a step that any responsible Judge would have been likely to take.

[17] Two further matters arose during the course of the hearing which have given rise to complaint on the part of the Johns in particular but with support on one by Truck Services.

[18] The Johns sought to amend their defence on 1 September 2000, the second day of hearing, to allege that the agreement between the Johns and the Atkins had been concluded orally prior to the written agreement. This had not been the subject-matter of the defence or of the briefs of evidence supplied on behalf of the Johns. The Judge understandably refused to permit such a fundamental change to the nature of the dispute, which had been in existence for over four years. It would have led necessarily to an adjournment and the case recommencing on a different basis.

[19] On 12 September, after the case was part heard, the Johns sought to call evidence from three witnesses whose briefs had not been made available to Nelson Training and the Atkins prior to 11 September, notwithstanding earlier directions as to the exchange of briefs. The proposed evidence is not before this Court as there has been no attempt to have it introduced in this Court. However, I am informed from the Bar that at least in part the evidence related to the issue of betterment upon which it is accepted for the Johns and Truck Services that the onus was on those parties. For the evidence to have been permitted to be led at that time would again have inevitably given rise to the need for an adjournment and the probability of the recalling of the witnesses Algie and Shuttleworth. Understandably, the Judge refused to permit the evidence to be led.

[20] One further matter arose during the course of the proceeding that must be mentioned. When there was a challenge as to who was the proper plaintiff or plaintiffs in respect of the claims against the Johns and Truck Services, the Judge made plain that he would be prepared to amend the pleadings to enable the Atkins to be the plaintiffs. Issue has been taken with this approach, given the different view in respect of the amendment of the statement of defence of the Johns. As I indicated to counsel during argument, I saw as little merit in this point as in the earlier points just traversed, particularly when no prejudice could be claimed on the part of the Johns or Tractor Services.

[21] The judgment under appeal can be briefly summarised in the following way:

1. The factual background already outlined was traversed in greater detail.

2. There was a careful and detailed analysis of the evidence.

3. Willy DCJ found that, having regard to the provisions of clause 11 of the written agreement, the Johns could not escape from the provisions of clause 9(b) of the agreement. In the Judge’s view it was clear beyond any doubt that for the reasons given by Messrs Algie and Shuttleworth neither the engine nor the gearbox of the vessel “Chrisara” were seaworthy and in good working order and condition on 17 April 1996. He preferred the evidence of the experts called on behalf of Nelson Training and was satisfied beyond any doubt that the defects in the engine were long-standing.

4. The Judge accepted that Truck Services’ engineer lacked the experience and training necessary to make a proper inspection of the engine and such inspection as he did make did not comply with the standard of reasonable care and skill required in the circumstances. He noted that the case for Nelson Training against Truck Services was reinforced by the evidence of Mr Cadell, the expert witness called on behalf of the Johns.

5. Willy DCJ was satisfied that the cost of repairs to the Cummins diesel engine and gearbox were greater than the cost of the purchase of the reconditioned engine and that Nelson Training had therefore mitigated its loss.

6. The Judge was satisfied that the concept of betterment had little application to the facts of the case when the cost of repairs was greater than the cost of a reconditioned engine. Thus Nelson Training took the cheapest of the options available to it and the minimum required to put the boat in a seaworthy condition. The fact that Nelson Training thus had a better engine than it might otherwise have had was not regarded by the Judge as of any great significance. The Judge was not satisfied that Nelson Training had been put into a better position than it would have been if the breach of contract had not occurred and declined to discount the damages claim.

7. Willy DCJ was satisfied that Mr and Mrs Atkins had contracted on behalf of Nelson Training as an undisclosed principal with both the Johns and Truck Services but that if there was any doubt about the matter he would have granted leave for them to be added as plaintiffs as one way or another either Nelson Training or the Atkins were entitled to judgment against the Johns and Truck Services.

8. The Judge reserved the issue of apportionment between the Johns and Truck Services for further argument. There is no appeal in respect of the ultimate outcome of his decision on that issue.

The Appeals

[22] The Johns and Truck Services have jointly pursued some points and severally others. I will comment briefly on some of the procedural points already touched upon and then deal in more detail with those points that have some relation to the merits of the litigation.

[23] Both the Johns and Truck Services have complained about the prejudice to them in respect of the preparation of their case because certain of the parts of the Cummins motor went missing. The Judge was satisfied that that was accidental and in any event it was some months after the advice to them of 8 May 1996. It appears that a representative of Truck Services inspected the vessel on 13 May 1996. Mr Shuttleworth inspected the engine in early June, when it was complete. Mr Algie’s evidence was that it was not until some time in September that some parts were found to be missing. There was not even a request by the Johns or Truck Services that the engine be kept in safe keeping pending the completion of the dispute, let alone any offer to pay for the cost of that. The engine and gearbox were kept in a locked yard at Beach Road Marine and were not in the possession of Nelson Training. There is simply no merit in this point.

[24] Secondly, both the Johns and Truck Services complain about the refusal of the Judge to permit evidence of experts whose evidence had never been exchanged being led on the recommencement of the hearing on 12 September 2000. To the extent that this is a ruling in the course of trial, it is not appealable in any event. To the extent that it could be treated as an interlocutory application to overcome the earlier procedural ruling as to the exchange of briefs, it would be an interlocutory order coming within the interlocutory order appeal requirements of the District Courts Act 1947 and cannot be part of this appeal. In any event, to the extent to which the evidence related to betterment, it related to something upon which the onus was upon the Johns and Truck Services. Given the history of the proceeding, the briefs should have been made available long before the trial date of 31 August 1999, and not proffered during a fortuitous adjournment mid-trial. To the extent that the evidence arose out of the evidence of Messrs Algie and Shuttleworth, their briefs had been available from July 1999. Thus, regardless of the strict legal position, the Judge was faced with an unmeritorious, late application to lead evidence in respect of a part-heard matter where the evidence should have been exchanged long before. To have granted the application would have inevitably prejudiced Nelson Training, led to an adjournment, and added even further to the disproportionate cost of the proceedings in respect of the quantum of the claim. As neither the Johns nor Truck Services have chosen to endeavour to adduce the evidence in this Court, it is clear that in any event it could not be regarded as determinative in any respect of the issues for the District Court.

[25] Both the Johns and Truck Services have complained about the Judge’s decision upholding Nelson Training’s case that the Atkins contracted on its behalf as undisclosed principals. As the Judge found, their arguments had no merit whatever. He made a specific finding that Nelson Training purchased the “Chrisara” for its business purposes. The very fact that it brought the proceedings in respect of the vessel showed that it affirmed the contracts. The evidence was clear that neither the Johns nor Truck Services were concerned with whether they were dealing with Nelson Training or Mr and Mrs Atkins, and nothing to point to Mr Atkins’ identity inducing either contract. In any event, the Judge would have been fully entitled, if he had reached a different conclusion as to the position of Nelson Training, to have substituted the Atkins as plaintiffs and made clear he would have done so. If this appeal was going to turn on that totally meritless point, I would be prepared to do the same, as this Court has the same powers as the District Court in that regard: s 76(3) District Courts Act 1947.

[26] As already noted, the Johns have also made some complaint about the Judge’s refusal to permit them to amend their statement of defence to allege that there was no written agreement with Nelson Training but a prior oral agreement with the Atkins. Like the effort to adduce evidence at the last minute, that application was also doomed to failure, given the history of and the consequences for the particular litigation. In any event, the order was an interlocutory order and does not fall under the present appeal.

[27] I now go on to deal with the points of appeal which touch upon the merits of the judgment under appeal, dealing first with those common to both the Johns and Truck Services and then those involving their separate interests.

Betterment

[28] Both the Johns and Truck Services submitted to the Judge that the damages award should have been reduced because of betterment. The submissions for Truck Services are predicated also upon the proposition that the concept forms part of the issue of mitigation of damages and that in the circumstances of this case the Judge should have reduced the damages in any event to a lesser sum than that awarded.

[29] The submissions are based upon a number of premises which include:

1. The Cummins engine was 30 years old.

2. It had a finite life, although the extent of that was the subject of dispute.

3. It had a very limited value on the market given its age.

4. The Caterpillar engine was a very much newer and better motor, with only 440 hours running time, and worth some $25,000, as opposed to the few hundred dollars that the Cummins was worth.

5. The market value of vessels of the particular type had dropped substantially from April 1996 to the date of hearing, the drop being of the order of 20% to 25%.

6. The evidence of a witness from the Cummins engine agency was that the parts required for repairs at the time of hearing were of the value of $13,623.63.

7. There was evidence available that with a reasonable allowance for labour the cost of repairs taking such part costs was of the order of $16,000, or perhaps less.

[30] For the Johns reference was also made to the fact that Nelson Training had put the vessel back on to the market at a price substantially above that at which it was purchased. I regard that element as totally irrelevant as there was evidence that monies other than those relating to the engine had been spent upon the vessel and the asking price had in any event come from a marine broker upon whom Nelson Training was relying.

[31] On the issue of mitigation the case for the Johns and Truck Services might have more significance if Mr Algie had been cross-examined in reliance upon the material now relied upon in argument. However, he was not. The Judge was accordingly fully entitled to deal with the matter in relation to mitigation upon the evidence of Mr Algie, reflecting, as it did, the position in 1996 and not the position in 2000. When there was no cross-examination of Mr Algie, it cannot be suggested that the cost of reconditioning the Cummins motor be at the level now propounded.

[32] The Judge fully traversed the relevant principles relating to the subject-matter of betterment, with particular emphasis upon the decision of this Court in J & B Caldwell Ltd v Logan House Retirement Home Ltd [1999] 2 NZLR 99, 105. The Judge also cited from other relevant cases which it is unnecessary to traverse here.

[33] The bottom line in the present case was that to mitigate its damages, and thus to save Johns and Truck Services from a greater claim, Nelson Training adopted what the Judge found was the cheaper course of purchasing the Caterpillar engine rather than having the Cummins engine reconditioned. To that extent there was no other choice available to Nelson Training, and it was in much the same position as claimants in other cases where there has been no deduction for betterment: see Harbutt’s “Plasticine” Ltd v Wayne Tank and Pump Co Ltd [1965] 1 QB 447, and Bacon v Cooper (Metals) Ltd [1982] 1 All ER 397.

[34] Not only was this not a case where betterment was of itself appropriate but there was in any event no evidence from which the Judge was entitled to make any determination as to the appropriate betterment. Neither the Johns nor Truck Services adduced evidence as to betterment. There was no evidence before the District Court from which the Judge could infer betterment. It is clear the Caterpillar engine was a better one than the Cummins. However, the Judge was entitled to find as he did that there was no evidence from which he should conclude that Nelson Training had been put back into a better position than it would have been if the breaches of contract had not occurred. He was satisfied that if the Cummins motor had been fully reconditioned, the more expensive course, it would have had a life of between 15,000 and 20,000 hours compared with its then 4,650 hours.

[35] It is easy to understand that the respective appellants should feel that Nelson Training is better off because of their respective breaches of contract than it would otherwise have been. However, for the reasons already traversed, it was not only open to the Judge to find as he did but virtually inevitable that he should do so. It is not a case of Nelson Training benefiting itself at the expense of the Johns and Truck Services but rather receiving a possible consequential benefit simply because it had to mitigate the loss that was suffered as a result of the breaches of contract. There was nothing that called for any finding of betterment.

[36] This point of appeal fails.

The Johns Did Not Warrant the Condition of the Cummins Motor and Gearbox

[37] It is submitted for the Johns that Nelson Training were relying upon Truck Services so far as the mechanical reliability of the motor and gearbox were concerned. There was, it is said, no reliance on the Johns. Therefore it is submitted that, having regard to the provisions of clauses 5 and 7 of the agreement, it cannot have been the intention of the parties that clause 9(b) would apply to the motor and gearbox: see paragraph [3] above. It is submitted that the true intent of the parties was that the warranty contained within clause 9(b) would apply only to the hull and structure of the vessel and would not go to mechanical issues. It was noted that the contract was drawn up by Nelson Training’s solicitors and that the Johns had no legal input into it.

[38] Willy DCJ could see no such ambiguity in the contract. He read it as being abundantly clear that by virtue of clause 11 of the agreement as the warranty contained in clause 9(b) had not been fulfilled at the time of completion of contract then it did not merge with giving and taking of title. In approaching the agreement in that way he adopted authority which is not challenged. He held that it would be contrary to the plain meaning of the document to single out the provisions of clause 9(b) and say that that obligation ceased to have any effect once the purchaser obtained an apparently satisfactory report on the engineering of the vessel. He noted that the test in clause 9(b) was not whether the purchaser obtained a satisfactory report upon the engine and gearbox but whether at the time the contract was entered into the vessel was seaworthy and in good working order and condition. He found that it was plain, upon the evidence that he accepted, that the vessel was not seaworthy or in good working order and condition at the time of sale and there was the breach of contract entitling Nelson Training to damages.

[39] For Nelson Training, it is submitted that if clause 9(b) is to be read subject to or as negated by clauses 5 and 7, then it would be of no effect. If clause 9(b) was to be subject to either or both clauses 5 and 7, or limited in any way as to the extent of the warranty, then, it was submitted, one would have expected the contract to say as much. Clause 5, it was submitted, was included for the benefit of Nelson Training for the purpose of deciding whether to go ahead with the purchase of the vessel. Correspondingly clause 7 was to provide when risk and responsibilities passed. However, clause 9(b) was a warranty that the vessel was seaworthy and in good working order and condition at the time the contract was entered into and clause 11 provided that the warranties did not merge upon title and possession. It is submitted for Nelson Training that the fact that the breach of the condition manifested itself within an hour of the first voyage of the vessel under its new ownership provided compelling and cogent evidence as to the breach of the agreement by the Johns.

[40] It is clear Willy DCJ was not only entitled but right in reaching the views that he did. He approached the construction of the clause not only in its documentary context but in the factual context of the dealings between the parties. To have limited clause 9(b) or clause 11 in the way submitted for the Johns would be to deny the clear language of the agreement. If the parties had intended any such limitation, one would have expected it to be clearly spelled out.

[41] This point of appeal fails.

Truck Services’ Liability

[42] It was submitted for Truck Services that even if it had undertaken a more complete assessment and sea trial of the vessel it is unlikely that many of the problems that subsequently became apparent would have been discovered. In other words, it is submitted that even if Truck Services had fulfilled its contractual obligations the engine still would have been given a clean bill of health.

[43] This submission is based upon the evidence of the expert called for the Johns, Mr Cadell. It involves a factual argument, that it was open to the District Court to find that the seizure of the front port cylinder occurred during the voyage by the Atkins after purchase on 25 April 1996. It is also submitted that it was possible that if Truck Services had undertaken all the tests that would usually have been performed the motor may not have exhibited any obvious problems and a clean bill of health could still have been given. Thus it is submitted that had Truck Services undertaken a full assessment and sea trial and discharged any duty owed to Nelson Training there would in all probability have been no obvious defects. The significant damage to the motor would not have been apparent on 18 April 1996 in the way that subsequently became clear.

[44] However, Mr Cadell noted in his evidence in chief the limitations of his evidence in that he had not seen and inspected the engine and its damaged parts soon after 25 April 1996. The Judge had seen and heard Mr Cadell and Messrs Algie and Shuttleworth. He had preferred the evidence under this head of Messrs Algie and Shuttleworth. He was entitled to do so. They had extensive experience. The Judge was entitled to find that the problems were long-standing and to the extent that certain of them were etched into the engine metal or otherwise clearly visible they were there to be seen. He was also entitled to accept as he did that the damage to the front port cylinder had to have occurred before 25 April 1996.

[45] However, apart from those parts of Mr Cadell’s evidence upon which Truck Services endeavour to rely, Mr Cadell said that it would be just unbelievable to try and carry out any tests on a marina without taking the boat out. The engineer who carried out the inspection was, as the Judge found, totally without experience in respect of the inspection of marine diesel engines. It was also apparent from the evidence of that engineer that even at the time of his inspection he had missed matters that were there to be seen. He should have seen rust marks on the header tank and that the vessel was not running on all cylinders. If he had put the motor and gearbox under load, as he should have done, it was almost inevitable that he would have experienced the problems that the Atkins experienced on 25 April 1996. He should have seen the faults that were there to be seen. He should have given the Atkins a negative report on the motor rather than the favourable one which was given.

[46] There is ample evidence to support the conclusions of the District Court Judge under this head. In any event there is no basis for this Court to set aside his factual determinations, based as they are on the evidence, when the submissions for Truck Services require speculation by this Court on premises not accepted by the District Court.

[47] This point of appeal fails.

Decision

[48] Both appeals are dismissed with costs and reasonable disbursements to Nelson Training. Nelson Training is entitled to one set of costs and disbursements for which the Johns and Truck Services are jointly and severally liable. Such costs are to be fixed in accordance with Category 2 and Column B of the Second and Third Schedules of the High Court Rules. In the event of any disagreement as to such costs and disbursements, they are to be fixed by the Registrar.