Edwards v Ensign Ship Brokers Pty Ltd & Anor [2014] QCAT 391

CITATION: Edwards v Ensign Ship Brokers Pty Ltd & Anor [2014] QCAT 391 PARTIES: Michael Edwards (Applicant) v Ensign Ship Brokers Pty Ltd (First Respondent) Spirit Marine International Pty Ltd (Second Respondent) APPLICATION NUMBER: MCDO215-14 MATTER TYPE: Other minor civil disputes matters HEARING DATE: 14 May 2014 HEARD AT: Southport DECISION OF: Adjudicator Trueman DELIVERED ON: 24 July 2014 DELIVERED AT: Southport ORDERS MADE: 1. That the claim is dismissed. CATCHWORDS: Consumer claim – purchase of Beneteau yacht – where alleged mainsail and mast not fit for purpose - claim for the cost of replacement mast and mainsail – warranty Queensland Civil & Administrative Tribunal Act 2009 (Qld) Queensland Civil & Administrative Tribunal Rules 2009 (Qld) Competition and Consumer Act 2010 (Cth) APPEARANCES and REPRESENTATION (if any): APPLICANT: Michael Edwards FIRST RESPONDENT: Tony Ross, Director of Ensign Ship Brokers Pty Ltd SECOND RESPONDENT: Lee Randall, Director Spirit Marine International Pty Ltd -- 1 of 10 -- 2 REASONS FOR DECISION [1] Mr Edwards dream was to retire and spend his days sailing the Broadwater on the Gold Coast in his new yacht. He purchased a brand new Beneteau Oceanis 40 Sailing yacht which was handed over to him in November 2011. He claims that the battened mainsail and furling mast that were supplied with the yacht are not “fit for purpose” and represent a “serious safety issue”. He alleges that the mainsail and mast have become damaged and broken beyond repair and should be replaced under warranty. He claims from the boat broker and the warranty repairer the costs for replacing the mainsail and mast with a standard mast and battened main sail at a cost of $23,927.07. [2] The First Respondent was the broker who sold the yacht to Mr Edwards. The Company was represented by its Director, Mr Ross. He claims that the mainsail and mast have not failed and that they are fit for purpose. He stated that the yacht in question has sold more than 800 of them with the “exact same mast with same battens and same sail combinations in use” and that there have never been any problems with the mast and sails. [3] The Second Respondent is the Company who undertakes warranty repairs on the Gold Coast on behalf of Beneteau. The Company was represented by its Director Mr Randall. He claims that he is not a proper respondent to the application. He stated that his company was not incorporated at the time Mr Edwards bought his yacht. He said his Company was not in operation until 18 June 2012 and therefore did not exist at the time of the contract for the purchase of the yacht. [4] Both Respondents deny liability and their evidence suggests that they both believe, effectively, that the problem with the mast and acknowledged sail damage has been caused as a direct result of Mr Edward’s inability to sail the yacht, which has resulted in effect to a misuse and incorrect technique that has directly caused the damages. EVIDENCE [5] Mr Edwards seeks an order from the tribunal that the respondents pay to him the sum of $23,927.07 for the costs of rectification works to replace the existing furling mast and vertical battened furling main sail with a standard mast and battened main sail. He provided two quotations1, one from Allyacht Spars Australia for the mast component replacement cost of $21731.07 and a quotation from Evolution Sails for $2190.00 for the cost of converting and modifying the sails from a roller furling mainsail to a batten sails including cost for a boom bag. [6] Mr Edwards stated that he believed that the furling mast and vertical battened furling main sail that were installed on the yacht were not “fit for their intended purpose, was not of appropriate size or thickness and was not supplied and fitted to the yacht that was consistent with the sail makers specifications and that each were not compatible with each other.” [7] Mr Edwards purchased the yacht under contract by way of an Agreement of sale dated 21 April 20112. The total contract price was $308,775.00. He 1 In a bundle of attachments filed with original claim. 2 In a bundle of attachments filed with original claim. -- 2 of 10 -- 3 said the yacht was purchased after “working all my life it was my desire to purchase a yacht and regularly sail during my retirement”. He said he sailed the boat regularly, “weekly or almost weekly, typically I sail the boat each weekend on each Saturday and Sunday.” [8] Mr Edwards provided a copy of the Contract and stated that Schedule 2 of the contract contained standard options descriptions and equipment that a buyer would be supplied with by the seller under the terms of the contract. He referred to Schedule 3 that set out the authorised variations and non- standard extras to be purchased under the terms of the contract and that the contract also specified Vendor and Purchasers obligations. The contract also included at paragraph 7 – Warranty. The warranty stated: “7.1 The purchaser hereby agrees that the boat, the subject of this agreement is sold subject to no warranties or guarantees other than the Master Builders Standard Warranty and any and all warranties for parts, materials and equipment capable of and which have assigned to the Purchaser(which shall be undertaken and managed by the Vendor and the Vendor reserves the right to use outside contractors and/or its own employees who are authorized by the Master Builder to complete tasks necessary and in order to fulfil this contract) and the Purchaser further agrees that the Purchaser in entering into this contract has not relied on any inducement, representation or statement made by or on behalf of the Vendor in purchasing of the boat and that there are no implied conditions or warranties herein (other than by law) and that there are no collateral contracts in connection herewith (except as may be in writing and signed by a Director of the Vendor). 7.2 The Purchaser accepts that all approved warranty work is to be undertaken and completed at the Vendor’s address as in A of Schedule 1 unless otherwise approved and/or advised in writing to the purchaser by the Vendor. All warranty requests or notifications from the Purchaser for warranty work are to be advised in writing to the purchaser by the Vendor. At which time the Vendor will make representations to the Master Builder for approval of same such work. No work is to be deemed warranty without the express and specific approval in writing of the vendor and Master Builder. No warranty work costs or any expense whatsoever is to be entered into by the Purchaser without specific approval in writing from the Vendor and Master Builder. If Vendor and Master Builder approval is not given for so called warranty work all expenses, costs and parts will be deemed to be the total responsibility of the Purchaser with no claim whatsoever to the Vendor or Master Builder.” [9] The general warranty (covering parts and labour) stated that the conditions were: “The warranty is valid for 3 years, started from the date of delivery and is strictly limited, at the sole builder’s direction to the free replacement or repair of any parts which have been recognized as being defective by its technical departments. No indemnity whatsoever shall be paid in connection thereto however by derogation at what is said here – above. The warranty is limited to one year with respect to: boats being used for professional purposes, including but not limited to charter sailing schools, fishing or workboats, boats build for competition, specifically when equipped and or conceived for racing, one design boats, parts that rapidly deteriorate due to wear and tear, including but not limited to sails, running rigging, battens, external decorations, cushions, hull bottom protection.” -- 3 of 10 -- 4 CLAIM AGAINST ENSIGN SHIP BROKERS PTY LTD [10] Mr Edwards said that his claim against the First Respondent, Ensign was two-fold. Firstly because Ensign was the Vendor in the Contract and secondly because Ensign was responsible for fitting out the yacht that he purchased under the terms of the contract. [11] Mr Edwards claimed that the concerns with the mast and sail occurred immediately after he took delivery of the yacht and he made Ensign aware of the problems. He said that he told Ensign that he believed that the mast and sail were contrary to sail makers specifications and that as an experienced and competent supplier of sailing yachts that Ensign knew or ought to have known that the sail and mast provided were not compatible with each other and were not fit for their intended purpose. [12] Mr Edwards said that the mast was manufactured by Z Spars and the sail manufactured by Elvstrom. He said he measured the thickness of the sail and batten and it was 13.54mm whereas the mast on the boat only had a gap of 12.54mm. He said that because of this the sail constantly jams in the mast slot because the sail is too thick and contrary to the sail makers specifications. [13] Mr Edwards provided a copy of the sail makers’ specifications3 and said contact was made to Z Spars in the UK regarding the sail issue. The email dated 7 January 20144 provides that “Z Spars do not recommend the use of any battens on the mainsail when used with in mast reefing, the slot size can not be made large enough to accommodate the extra material thickness that battens create.” The email further states that a copy of the photos regarding the sail and mast damage were sent to France and they have suggested “that the mast will have been stressed beyond an acceptable level and should be replaced.” [14] Mr Edwards said he consulted other experts and that he received an email dated 15 February 20145 from Matthjias Klemm, a rigging specialist, for US Spars Inc in Florida in the USA, he said, “we do not recommend sails with vertical battens for our in mast furling spars.” Mr Edwards said he undertook his own research and on the Z Spars website it is noted that “we do not recommend sails with vertical battens for our in-mast furling spars.” Mr Edwards claims an “inescapable inference that the sails and the mast on the yacht were incompatible.” [15] Mr Edwards complained that when the yacht was handed over to him that Ensign had failed to conduct any sea trials of the yacht despite him requesting numerous times those trials occur. He claims that had a sea trial been conducted it would have become obvious to Ensign that the yacht had problems with the sail and the mast. [16] Mr Edwards said the sail and mast are unsafe as their incompatibility renders the sail to inevitably jam. 3 Page 28 in bundle of documents filed with original claim. 4 Page 62 in bundle of documents filed with original claim. 5 Page 63 in bundle of documents filed with original claim. -- 4 of 10 -- 5 CLAIM AGAINST SPIRIT MARINE INTERNATIONAL PTY LTD [17] Mr Edwards said he claimed against Spirit Marine International as they emailed him on 3 February 20146 and advised that they are the company that will honour any “warranty issues that relate to Beneteau Yachts based in Queensland”. LEGISLATION [18] The tribunal has jurisdiction to hear and decide a minor civil dispute.7 [19] The tribunal can hear and determine a claim arising out of a contract between a consumer and a trader.8 In this case Mr Edwards is the consumer. A trader is defined as a person who in trade or commerce carries on a business of supplying goods or providing services.9 The respondents are both traders. [20] Consumer legislation provides that any goods that are supplied by a trader to a consumer are guaranteed that the goods are reasonably fit for any disclosed purpose.10 EVIDENCE [21] Mr Edwards made a claim under warranty for the yacht on 6 January 201411. In his claim he alleged problems with the continuing jamming of the Elvstrom battened furling sail in the Z Spar Furling mast. He claims that the problem has existed since taking delivery of the yacht in November 2011. He claims that when the yacht was handed over to him there were not specific furling and unfurling instructions given to him. He stated that the sail had “jammed to the extent it jumped out of the furling mast”. He provided many photos of the jammed sail.12 A response was provided to Mr Edwards on 10 February 201413. The warranty response included letters from Beneteau After sales and from Mr Gilbert, Chairman of Z Spar. The response claims: a. “That the yacht is outside of its mast and componentry warranty period b. No damage of this type has been documented or noted in thousands of units manufactured and matched c. The damage sustained can be and is attributed to severe aft loading pressure on the sail and furling equipment d. Neither manufacturer has attributed the damage to any batten on the sail and have been adamant that both parties specifically matched these products”. 6 Page 36 in bundle of documents filed with original claim. 7 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 11. 8 Ibid s 12(4)(b). 9 Ibid Schedule 3. 10 Competition and Consumer Act 2010 (Cth) s 55. 11 Pages 37-40 in bundle of documents filed with original claim. 12 Pages 41-43 in bundle of documents filed with original claim. 13 Page 47 in bundle of documents filed with original claim. -- 5 of 10 -- 6 [22] The response from the manufacturers was sent from Spirit Marine. They state that the damage to the yacht should be “processed through the normal insurance channels.” [23] The evidence of all parties was clear and unequivocal, the photos14 and evidence prove that the mast and sail are damaged beyond repair and need replacing. [24] It is not disputed that the yacht was sold by Ensign in 2011. Mr Randall worked for Ensign at the time the yacht was sold to Mr Edwards. Ensign no longer acts as agent for the sale of Beneteau yachts. Mr Randall is the Director of Spirit Marine International. Spirit Marine International undertakes warranty work on behalf of the Master Builder Warranty. [25] Spirit Marine International Pty Ltd is a company that was registered for ABN on 18 June 2012. The company was not in existence at the time that Mr Edwards contracted to purchase his yacht with Ensign. Mr Randall stated that he should not be a respondent to the claim and has no contractual agreement or relationship with Mr Edwards. He says he has no responsibility for the warranty obligations under the contract. He claims that not withstanding the fact that he should not be a party to the claim he provided evidence to the tribunal as the sales agent who sold the yacht to Mr Edwards. Mr Randall said that Mr Edwards claim has no merit as the “spars, running rigging and sails are restricted to a twelve month warranty only.” [26] Mr Ross gave oral evidence and filed an affidavit sworn on 13 May 2014.15 He deposed in his affidavit that Ensign believe that the mast and sail are a “matched set” supplied by Beneteau France. He states the Mr Edwards selected the option of the sail and mast and that Ensign did not recommend what to choose. He said that Mr Edwards was “well read on the furling mast subject and was opinionated throughout the order and commissioning.” The sail was supplied as part of a completed product supplies by Beneteau France. The sail and mast had been developed exclusively for the yacht. He claimed that the “damage is partly due to wear and tear as the issue at hand occurred some 25 months after delivery”. Further, he said that “the continued misuse and incorrect technique are primarily to blame for this end result.” Mr Ross said that the photos and evidence proved that the wear and tear shown and that he discussed with Mr Edwards that the damage was as a result of misuse. [27] Mr Ross claimed that the photographic evidence in fact “proved that the sail and battens fit as Beneteau designed”. He said that the photos suggest that “the batten is not at parallel with the mast as they should be during the furling process; this is due to various adjustment inputs required by the operator at each and every use.” [28] Mr Ross said that he had strongly denied that the mast and sail was unfit for purpose and provided evidence that suggested Mr Edwards did not have the requisite level of skill in sailing the yacht and caused damage and failures due to his own misuse. He said that his company replaced parts for Mr Edwards that were not covered by warranty but as a gesture of good 14 Pages 59 in bundle of documents filed with original claim. 15 Exhibit 2. -- 6 of 10 -- 7 faith and client relations. He said that the parts that were replaced were damaged due to Mr Edwards causing the damage. [29] Mr Ross said that in a 15 month period he replaced several broken battens, he believed broke due to misuse, either from sail flogging or being wound around at incorrect angle. He replaced the Out haul cars that are directly linked to the furling operations and damaged due to incorrect gybe action or most likely from mainsail flogging while being furled. He said that it was this very action that would set in place the current damages. He said he also replaced the running block at the mast. He claimed that while not impossible to fail, seen in conjunction with the other events, likely caused due to sail and ropes whipping around. He said he also replaced the genoa lead blocks, which was very rare and for two to be damaged on the same vessel was extremely unusual. He claims that it would not occur unless the yacht had been caught in a big storm. He said that this damage usually happens with the Genoa is not pulled on quickly enough through a tack. He said that it was likely to happen if the yacht was sailed “shorthanded”, as Mr Edwards sailed the yacht on his own. [30] Mr Ross aid that the damaged parts that he replaced on Mr Edwards yacht suggests and demonstrates that the “vessels sailing components have not been used with due care.” [31] Mr Ross said that in fact Mr Edwards has conceded that when the main out haul car failed “he was furling in the main and the sail was flogging a bit.” He said Mr Edwards emailed16 to confirm the incident on 20 March 2012. Mr Edwards provide photo of the failed main out haul car and in a further email on 20 March 201217 stated he was sailing his yacht…”the wind was very strong reaching 35 knots at times…” A further email from Mr Edwards suggests that on 13 April 29012 he said that he had “damaged the sails on the yacht, they required repairs and he needed a sail maker for repairs”.18 [32] Mr Ross provided an email from Mr Herve Roth from Beneteau19 confirming that Mr Loic Gilbert from Z.Spars had also looked at the damaged track car and had formed the view that they “were unable to explain how the truck had been lifted up from the track..the track is generously proportioned for the boom and for the record is the same track that was used on the Oceanis 473..obviously the track suffered from an effort not in conformity with its intended use and I maintain that something mishandling happen.” [33] Mr Ross provided a report from Beneteau regarding the problems identified by Mr Edwards. Mr Thierry Couthier stated in a report dated 7 May 2014 that: “this innovating main sail furling system on the Oceanis range from 40 feet up to 50 feet... both Zspar the mast manufacture and Elstrom the sail maker have worked closely together to develop the best product which complies with all the technical specifications to give satisfaction to the owners. These products are designed to work together and as a proof of good design we have sold over 800 Oceanis equipped with this system and we have never recorded any issue with this mast damage that has occurred on this Oceanis 40#901.” 16 Annexure ESB2/2 of Affidavit of Tony Ross sworn 13 May 2014. 17 Annexure ESB2/7 of Affidavit of Tony Ross sworn 13 May 2014. 18 Annexure ESB2/8 of Affidavit of Tony Ross sworn 13 May 2014. 19 Annexure ESB2/8 of Affidavit of Tony Ross sworn 13 May 2014. -- 7 of 10 -- 8 [34] Mr Ross provided evidence from Mr Florian Coroller, the person who was in charge of delivering the yacht to Mr Edwards. In his signed statement20 he stated that Mr Edwards was instructed by him how to use all aspects of the boat including “the unfurling and furling of the inmast furler including instructions on proper use of the out haul and inhaul lines.” He claims that he gave particular attention to instructing Mr Edwards on how to use the yacht and in particular the electrical winch. He stated that “we went through the process of furling and unfurling the main sail with particular importance on the need to have the boom at 90 degrees to the mast and to have even load on both lines whilst undertaking this activity”. He noted that “many times during different visits on his boat for different activities, I’ve noticed that main sail furling blocks were broken or shackle bent under the tension put in the circuit by the electrical use.” He noted that he went thought the process many times and that despite Mr Edwards being given lessons and instruction on how to use the electrical winch and how to furl and unfurl the sails the yacht suffered broken or bent shackles. [35] Mr Ross provided evidence from Mr Remi Gerbeeaud from Z Spars Sails21 who provided some evidence on 1 February 2014 regarding his opinion on what may have caused the damage to the sails from four photos22 that were supplied to him by Mr Ross taken by Mr Edwards. He states that the photos indicate that the “furling foil with the sail was ¾ furled and passed thought the mast groove. Due to the diameter of the sail with the furling foil the mast is dead and cannot be repaired, must be replaced….we have never had such damage on the Oceanis 31,34,37.4046 equipped with fully batten furling sail”. [36] Mr Gerbeaud wrote to Mr Ross and stated that in his opinion “your customer has not used properly his furling mast….the unfurling line was probably put on a winch (certainly electric) and sail was unfurled without checking what he was doing.. to deform the mast section you need huge load… at one moment the main sail was blocked and the customer forced on the winch to unfurl the main sail.” He further states “looking at the mainsail photo 4 I am surprised to see many stripes going from clew to luff.. this means that the main sail was not tensioned properly by the main halyard.” FINDINGS [37] The reports from the both the rigging expert and Beneteau state that the damage has occurred due to “loose and uneven furling of the sail and lack of halyard tension”. The report states that this has caused the sail to become too large within the mast tube and resultant damage. [38] Ensign conceded that they had replaced some parts on the yacht for Mr Edwards. Their explanation for the replacement parts were as a “gesture of good faith and client relationship/retention”. I accept that evidence and find that the parts replaced by Ensign, which included broken battens, damaged outhaul cars, damaged turning mast block and damaged genoa lead blocks. I find that these parts were replaced not due to them being faulty parts but 20 Annexure ESB6/1 of Affidavit of Tony Ross sworn 13 May 2014. 21 Annexure ESB8/1 of Affidavit of Tony Ross sworn 13 May 2014. 22 Annexure ESB4/2-5 of Affidavit of Tony Ross sworn 13 May 2014. -- 8 of 10 -- 9 due to the parts being damaged by Mr Edwards while sailing his yacht. The replacement of the broken battens may have been as a result of either age or misuse, damaged while the sails were flogging or wound in at the incorrect angle. The replacement of the outhaul cars is directly linked to the furling operations. I find that the damage caused to the outhaul cars likely to have occurred while Mr Edwards was incorrectly furling the sail and damage was caused due to the mainsail flogging. [39] Ensign stated that they have never before replaced outhaul cars on any other vessel and stated that the damage was caused directly by Mr Edwards and his failure to operate the yacht properly. I agree with their position on this point. The evidence supports a finding that the outhaul cars were damaged due to incorrect use and were not damaged as a result of a fault or failure of the part. [40] Ensign stated that the replacement of two genoa lead blocks on the same vessel was “extremely unusual” and I agree with that proposition. The yacht suffered damage to two genoa lead blocks which would have been caused by either misuse by incorrect use or damage by high winds and extreme weather. In the circumstances and based on the evidence I find that the damages to these parts was more likely than not caused by Mr Edwards failing to properly sail his yacht and damage caused during the tacking process. [41] Ensign said the parts that they replaced for Mr Edwards were damaged due to Mr Edwards sailing the yacht shorthanded and that he did not use due care. I agree with that proposition and find that this is the only explanation available to explain the damaged parts that were replaced. I cannot make any findings that the parts that were replaced were faulty or not fit for purpose. [42] The evidence of Mr Edwards was that he did sail the yacht in strong wind reaching “35 knots at times”23 and that while “furling in the main, the sail was flogging a bit”.24 Mr Edward was sailing his yacht in strong winds when “during the sail the mainsail foot outhaul car got pulled off the track.” 25 The expert evidence was that the outhaul car was pulled from the track must have been caused “from an effort not in conformity with its intended use.”26 [43] The expert evidence suggests that while furling a mainsail requires precise precaution like keeping the sail furling line and outhaul always slightly under tension for proper winding. The boom must be in the correct position and not too high or too low to prevent unwanted folds on the sail, otherwise this will create thickness of the sail when entering in the mast and the battens must remain parallel to the mast entrance. I accept that to sail single handed a 40 foot yacht with a furling main sail with electric winch would be difficult. I find that Mr Edwards sailed his yacht alone in high strong winds and that the sails were flogging. [44] The evidence of Mr Coroller, an employee of Ensign and the person who was in charge of delivering the yacht to Mr Edwards, was that he gave 23 Annexure ESB2/7 of affidavit of Tony Ross marked Exhibit 2. 24 Annexure ESB2/2 of affidavit of Tony Ross marked Exhibit 2. 25 Annexure ESB2/7 of affidavit of Tony Ross marked Exhibit 2. 26 Evidence of Herve Roth/Beneteau annexure ESB2/9 of affidavit of Tony Ross marked Exhibit 2. -- 9 of 10 -- 10 instruction to Mr Edwards on how to furl and unfurl the inmast furler and proper use of the outhaul and inhaul lines. He stated that many times during visits to the yacht for different activities he “noticed that the main sail furling blocks were broken or shackle bent under the tension put in the circuit by the electrical use.” 27 [45] I find that it is more likely than not that the damages caused to the yacht were damaged due to misuse by Mr Edwards. [46] The warranty period given by Beneteau clearly states that on items such as sails, and running rigging battens the warranty is strictly limited to one year28. In this case the warranty ceased in November 2012. [47] I find that the evidence presented to the tribunal by Mr Edwards does not convince me that the battened mainsail and furling mast that were supplied with the yacht are not fit for purpose. I find that the damages caused to the yacht were likely caused by the difficulties in Mr Edwards sailing such a large yacht with complex mainsail and mast components on his own without assistance. The claim for damages against both Ensign and Spirit Marine must therefore fail. [48] For the reasons articulated I find that the order I make to give effect to the decision I have made is as follows: ORDERS 1. That the claim is dismissed. 27 Annexure ESB6/1 of affidavit of Tony Ross marked Exhibit 2. 28 Contained in General warranty conditions –Parts & Labour warranty in Agreement for Sale. -- 10 of 10 --