H.H. Judge Richard Seymour Q. C. :
- These consolidated actions are concerned with the purchase of a yacht. The boat in question, to which I shall refer in this judgment as “the Yacht”, was of a type manufactured by a Swedish company, Malo Yachts AB (“Malo”). The Defendant, Mr. Olle Andersson, carries on business at Salterns Marina, Poole in Dorset under the style “Nordic Marine”. He deals in the products of Malo. The Claimants, Mr. and Mrs. Royston Clegg, reside at Guernsey in the Channel Islands, but Mr. Clegg is engaged in the insurance market in London. He is executive chairman of a company called Clegg Gifford & Co. Ltd. and he is involved with a number of other insurance companies, called, respectively, Tradex Insurance Co. Ltd., Tradex Underwriting Agencies Plc, Tradex Direct Dealing Ltd. and Tradex Claims Management Ltd. Mr. Clegg has been interested in sailing since about 1980. Over the last twenty years or so he has owned seven boats. Towards the end of 1999 he and his wife became interested in the possibility of purchasing a new yacht. Thus began the tale which has led to these actions.
- Malo, as I understand it, produces yachts to various standard designs. One of those designs, and that with which this action is concerned, is known as “Malo 42”. The “42” in the designation indicates that yachts to the Malo 42 design are nominally of 42 feet in length, although in the standard specification put before me the length was specified as 13.15 metres. The standard specification also included:-
“Draught 1,95m *
Displacement 13,8 ton
Ballast (encapsulated lead keel) 5,5 ton…..
* Also available in a shallow draft version.”
- Mr. and Mrs. Clegg were interested in purchasing a shallow draught version of a Malo 42. A “shallow draught” version of a yacht is, it seems, sometimes called a yacht with “a shoal draught keel”. In the standard Malo 42 the hull, including the fin below the hull properly so called, is moulded out of glass reinforced plastic and lead is then inserted as ballast into the hull. With the shallow draught version of the Malo 42 the fin part of the glass reinforced plastic hull is, as it were, cut off part way down, so that only the top part is moulded out of glass reinforced plastic. Onto this truncated fin is bolted a lead casting. That casting constitutes the ballast as well as the bottom of the keel. While, so it appears, something over one hundred Malo 42s in standard configuration had been manufactured prior to the end of 1999, up to that date only one Malo 42 with a shallow draught keel had been made.
- By an agreement (“the Contract”) in writing in the form of a standard form of order used by Mr. Andersson completed in typescript and signed by both Mr. and Mrs. Clegg and by Mr. Andersson, Mr. and Mrs. Clegg agreed to purchase and Mr. Andersson agreed to sell what was described in the Contract as:-
“…one new Malo Yachts 42, in accordance with the general conditions listed overleaf and in accordance with the manufacturers standard specifications and including extras as listed overleaf at
£236,000 (TWOHUNDREDTHIRTYSIXTHOUSANDPOUNDS) excluding V.A.T.”
The date typed on the Contract was 2 December 1999. The signatures of Mr. and Mrs. Clegg were each dated 7 December 1999. The signature of Mr. Andersson was dated 10 December 1999. One of the extras listed was a shoal draught keel. There were other extras, including a generator and a washing machine. From a quotation dated 17 November 1999 given by Mr. Andersson to Mr. Clegg, it appears that the extra cost of the shoal keel option was £2,575 exclusive of Value Added Tax. None of the other terms of the Contract is material for the purposes of this action. However, it is material to record that as part of the overall arrangement for the purchase of the Yacht it was understood between the parties that Mr. and Mrs. Clegg would make the Yacht available to Mr. Andersson for exhibition at the Southampton Boat Show in September 2000, and Mr. Andersson would provide berthing for the Yacht free of charge until 31 March 2001. The intention of Mr. and Mrs. Clegg was to call the Yacht, when delivered, “Absolutely So”, the name given to at least one of the yachts owned previously by Mr. and Mrs. Clegg. That name, or a version of it, appears in some of the correspondence to which I must refer later in this judgment.
Discovery that the Yacht was overweight
- Mr. Andersson’s evidence in cross-examination was that the Yacht was delivered to his premises by road on or about 25 July 2000. He told me that it was not obvious to him when the Yacht was delivered that there was anything wrong with the keel. However, when the Yacht was put into the water and the tanks were filled, it seemed to him that the Yacht was lying lower in the water than it should. He reported this to Malo by telephone. Mr. Andersson told me that this was on 10 or 11 August 2000. According to the evidence in chief of Mr. Hans Leander, who is Malo’s designer, it was on 10 August 2000. Mr. Andersson was asked by Mr. Leander to undertake some measurements, which he did, of the freeboard of the Yacht and he reported the results to Malo. Malo made some investigations and discovered that the foundry at which the lead casting which formed the bottom of the keel had been made had charged for a greater quantity of lead in making the casting than would have been expected. The excess was some 607 kilogrammes. Mr. Andersson told me that this had been reported to him by Mr. Leander on 10 or 11 August 2000. Mr. Leander in cross-examination was doubtful that he would have obtained the information as to the amount of lead mentioned in the invoice from the foundry as early as 10 or 11 August 2000. He thought it would have been rather later, perhaps in September 2000, but before 5 September 2000. Mr. Leander told me that the effect of the excess quantity of lead was to increase the size of the casting in all dimensions by some 6-8 millimetres. The maximum width of the casting was some 500 millimetres, so, Mr. Leander told me, the excess dimensions were not immediately obvious to the eye.
Delivery of the Yacht and use thereafter in August 2000
- The Yacht was delivered to Mr. and Mrs. Clegg on 12 August 2000 at Mr Andersson’s premises in Poole. It is common ground between Mr. Clegg and Mr. Andersson that on that occasion something was said about the fact that the Yacht was lying lower in the water than it should have been by reference to the waterline marked on the hull.
- Mr. Andersson said in evidence that he told Mr. Clegg on the morning of 12 August 2000 what Malo had said to him about there being too much lead in the keel. He also said that he told Mr. Clegg that anything which was wrong with the keel would be corrected free of charge under warranty. Save for an error in stating the date of the conversation as 11 August 2000, Mr. Andersson’s pleaded case in the Defence and Counterclaim in the main action corresponded with his evidence. At paragraph 4 of the Reply and Defence to Counterclaim it was pleaded on behalf of Mr. and Mrs. Clegg in relation to that case:-
“It is admitted and averred that the Defendant notified the Claimants (who would have become aware of the very significantly heavier keel in any event) on or about 11th August 2000 of the fact that the keel on the boat as supplied was very significantly heavier than the specifications had provided for. The Claimants were not aware and were not made aware by the Defendant of the potential problems and dangers which were associated with the extra weight and the different size and shape of a keel.”
On the parties’ respective statements of case there thus seemed to be little between them as to the relevant conversation.
- Mr. Clegg’s evidence in paragraph 8 of his witness statement dated 8 March 2002 was somewhat different from the case set out in the Reply and Defence to Counterclaim. What he said was that:-
“Mr. Andersson told me that when I came back with the Vessel he would lift it out of the water and repaint the waterline. He said he would move it up a bit because it appeared to be low in the water. He joked about the amount of gear I must have had on board. There was no mention at that stage of the extra keel weight.”
Mr. Clegg’s evidence was that he used the Yacht during the two weeks or so following delivery, although not as much as he had hoped because of problems unrelated to the weight of the keel. In cross-examination he told me that he was unable to take the Yacht out at all until about 16 August 2000. After that day’s sailing he returned the Yacht to Mr. Andersson for further work to be done. That took three or four days. Then Mr. Clegg sailed the Yacht with his wife and family on board on a cruise lasting about eight days to Falmouth, Alderney and back to Poole. At paragraph 13 of his witness statement dated 8 March 2002 he said:-
“On one of the trips in that period Mr. Andersson told me for the first time, rather nonchalantly, that the yard had added 1,000 kgms too much weight to the keel when it was being cast and this was why the Vessel was lying too low in the water. He told me he had only recently been told this by the yard in Sweden although it now transpires it was the day before completion and payment of the final amount and he wanted to get back to them to find out what their solution was. I cannot remember the exact details now but I think he told me that either the mould had split or the sides were not formed together properly, as a result of which when the hot metal was poured in too much of it was poured.”
In cross-examination Mr. Clegg told me that this conversation took place after he had brought the Yacht back after the day’s sailing on 16 August 2000.
Contact between Mr. Clegg and Mr. Andersson 28 August 2000 to 6 March 2001
- On his return from the cruise to Falmouth and Alderney Mr. Clegg wrote a letter to Mr. Andersson dated 28 August 2000. In the letter Mr. Clegg dealt with a number of issues concerning the Yacht, most of them to do with items of equipment fitted in it. However, the letter did contain this passage in relation to the weight of the keel:-
“I have now returned home. Good sailing but a long list of problems! I have to say I think your quality control in this instance was sadly lacking. I know it was a “rush job” but it indicates to me the yard as well paid a little less attention than they should have done. I hope you will convey my concerns to them.
What also concerns me is the extra weight in the keel and the “casual” way this was mentioned after completion. I will need to know when this information was communicated to you by the yard and why such a fundamental point was not advised to me in writing immediately if prior to completion. Can you please have the yard fax to me the revised specification and new draft measurements bearing in mind the additional weight. What effect does this have on the EU weight requirements and would this effect a resale? I do not have the expertise and for this reason I would like an independent surveyor to be appointed. Hopefully we can agree on an expert perhaps appointed by the “British Marine Industry”. Do you wish me to contact them or will you?”
What, from the terms of his letter, Mr. Clegg seemed at that time to be interested in being told was the implications of the weight of the keel being greater than had been anticipated. Mr. Clegg told me in cross-examination that, having sailed the Yacht in the period from about 20 August 2000 to about 28 August 2000, he did like it, and did tell Mr. Andersson that he liked it. He also told me that when considering the possibilities as to what to do about the weight of the keel in discussions with Mr. Andersson at the beginning of September 2000 one of the options identified was not to do anything at all. Mr. Andersson told me in cross-examination that after Mr. Clegg brought the Yacht back from the cruise to which I have referred he himself undertook stability, or inclining, tests the results of which he communicated to Malo. It appeared at that time that the Yacht as a whole weighed about 1000 kilogrammes more than the weight of a standard Malo 42. As I understand it, all that could be deduced from the type of tests which Mr. Andersson undertook and the calculations which Malo made based on the results of those tests was the total weight of the Yacht. As it now appears, the excess in weight of the Yacht over a standard Malo 42 comprised as to 607 kilogrammes, or thereabouts, the excess lead contained in the casting of the shoal draught keel, and as to the balance the weight of items of equipment, in particular, the generator and the washing machine, which Mr. and Mrs. Clegg had required but which were not included as standard on a Malo 42. Mr. Andersson said that when he told Mr. Clegg that the weight of the keel would be corrected, Mr. Clegg told him that he rather liked the Yacht as it was and he would like Mr. Andersson to find out the implications of leaving the Yacht as it was. That evidence seems to be confirmed by the terms of Mr. Clegg’s letter dated 28 August 2000 from which I have quoted.
- Mr. Andersson replied to Mr. Clegg’s letter dated 28 August 2000 in a letter dated 2 September 2000. That letter dealt with all of the matters set out in Mr. Clegg’s letter dated 28 August 2000. The part which is material for present purposes was in these terms:-
We have carried out a new stability test on the boat and Malo’s designer has recalculated the stability to accurately establish the ballast needed for this actual boat in its real-life trim. The result of these calculations show that the boat has too much righting moment (essentially too much stability). This will effect not only the static waterline and sailing performance but also the rig loads, which have been calculated for a boat with less righting moment. To correct this the keel needs to be reduced in size/weight and Malo are sending two of their staff over to us next week with a view to effect this correction. The end result will be a boat approximately 1000Kg lighter and with the same, or greater stability as a boat with standard keel. She will also float 40mm higher when at rest.
To confirm the new and correct stability, Malo Yachts propose to instruct IMSI, the CE certification agency in question, to carry out new and independent stability tests and to issue an updated CE-certificate for your boat. This should then cover your requirement for an independent survey as well as Malo’s wish to know that the stability is correct on this particular boat.”
In that letter Mr. Andersson made it clear that the tests carried out by himself and the calculations carried out by Mr. Leander to which he referred indicated that the amount of the excess weight of the Yacht as compared with a standard Malo 42 not only affected how low the Yacht sat in the water, but also its sailing performance and the rig loads. He made clear that the view of Malo, at least, was that the situation required to be remedied by reduction of the weight of the keel. What was being proposed was to reduce the weight of the Yacht to that of a standard Malo 42. Had that been done it would have compensated not only for the effect of the overweight lead casting, but also for the effect of the weight of the additional equipment installed on the Yacht. The method by which it was proposed that the requisite reduction in weight would be effected was by shaving off the keel as cast the appropriate weight of lead.
- Mr. Clegg in his turn replied to Mr. Andersson’s letter dated 2 September 2000 in a letter dated 4 September 2000. What he said was:-
“I have asked John Caten-Kamp [in fact Mr. Katenkamp spells his name as I have indicated] to contact you as I would like an independent opinion/advice on the keel as to the merits of keeping the weight as opposed to just removing 1000 kilos. He will be in contact with you. Surely we can leave any decisions to after the boat show now?”
It is plain from the terms of that letter that what at that time Mr. Clegg was interested in was ascertaining whether, contrary to the advice of Malo in the light of the tests which had been carried out, it would be practicable and safe to sail the Yacht in its then existing condition. The significance of the reference to the boat show was, as I have indicated, that Mr. Clegg had agreed to lend the Yacht to Mr. Andersson for the purposes of exhibiting it at the Southampton Boat Show.
- In another letter dated 4 September 2000 to Mr. Andersson Mr. Clegg wrote:-
“I appreciate that you want to get moving with things but I really do not see the urgency before the Boat show. I would like to explore all avenues and have professional advice before I decide.
Please submit all the necessary calculations and I will take up all the advice I need. Photographs of the keel would be helpful if the boat is lifted to enable the Yard to inspect.
I personally do not think it will make much difference at the boat show and it will give me time to discuss this with others.”
- The letters dated 4 September 2000 which I have quoted in the preceding two paragraphs seem to have been sent to Mr. Andersson by facsimile transmission. Mr. Andersson replied to them by a letter dated also 4 September 2000. The material part of that letter read:-
“Regarding the keel, Malo Yachts have, following their various investigations, decided that the keel needs to be adjusted to its correct weight in order that stability corresponds with figures against which the rigging dimensions have been calculated. In this respect, I therefore think we do not have any choice, although it is important to stress that the boat will be re-measured and new CE documentation issued to assure that the boat has no less stability than a standard Malo 42.
Malo Yachts have also now arranged for the work to be carried out before the boat show – this is the main reason I have been trying to get in touch with you. They have already sent the tools and materials needed for the job and two of their boat builders are going to arrive here tomorrow morning to carry out the work.”
Thus in that letter Mr. Andersson made clear that the advice of Malo was unequivocal that the weight of the keel of the Yacht needed to be reduced and mentioned the particular reason why there seemed to be no option but to do that as the need for the stability of the Yacht to correspond with the figures against which the rigging dimensions had been calculated. Mr. Andersson and Mr. Leander both told me that before any work was done the intention was that the two technicians from Malo would carry out further stability tests to calculate exactly how much lead should be removed from the keel of the Yacht. Mr. Leander also told me that the technicians had with them the patterns for the keel so as to be able to maintain its correct shape during the process of reducing its weight to the ballast weight of a standard Malo 42, which was the operation which he said was contemplated at that time. It seems, therefore, that there may have been some uncertainty on the part of Malo as to whether what would be done was simply to remove the excess weight from the keel, or whether advantage would be taken of the opportunity afforded by the need to do work on the keel to compensate also for the weight of the additional items of equipment installed on the Yacht as compared with a standard Malo 42. In the event this uncertainty did not prove of significance.
- The letter dated 4 September 2000 written by Mr. Andersson to Mr. Clegg from which I have quoted in the preceding paragraph appears to have been sent by facsimile transmission on 5 September 2000. Receipt of the transmission was acknowledged by Mr. Clegg in a letter dated 5 September 2000. That letter included the following:-
“Until yesterday evening I was not aware anyone from Malo was coming over. I have not pressurised anyone to rectify the keel preferring to seek both professional and legal advice. You must appreciate that on such a fundamental matter I listen to my professional advisors.
It is highly commendable that Malo have reacted so quickly but I didn’t request it and most certainly do not wish them to carry out any remedial work without my Advisors having approved the revised calculations, the methodology and checked their ability to carry out such work. After all 1000 kg is a lot of weight to take off.
Surely the sensible approach is to wait until after the Southampton Boat Show but in the meantime supply me/my advisors with
(A) Copies of the existing drawings/calculations together with copies of the CE Certificate and Lloyds certificates/EU equivalent issued on the present certification
(B) The drawings/calculations of what exactly is now proposed.
I cannot understand given the fact that the keel was manufactured in early 2000 from I was told an existing mould (that you had manufactured a previous 42 shoal draught) that such an error could have been made and not noticed subsequently. You said that the sub-contractor charged by weight! Why was the information not communicated to me earlier and in fact left until after the handover and transfer of funds?
I can assure you I am not deliberately trying to be obstinate but with a £250,000 investment I am entitled to be informed of what went wrong, why it was not discovered.
Authority to proceed with the work is unlikely to be given in the immediate future as I am very busy and do not have the time for an indepth meeting with my advisors. So it really is a waste of time the Malo staff waiting for a decision.
Hopefully, I will be able to speak to John Caten Kamp tomorrow & thereafterwards yourselves.”
The terms of that letter seem to me to indicate that Mr. Clegg was unpersuaded at that time that any remedial work at all to the Yacht was required.
- Mr. Andersson returned to the fray with a response dated 5 September 2000. The material part of that letter was in these terms:-
“I am very sorry you feel we are trying to rush the job to get it done before the show. I should make it clear that it doesn’t matter at all as far as the show is concerned, but Malo offered to send two of their staff to come and carry out the required work and I could see no reason to delay this further, so I accepted this. These two men are now here and the special tools etc. which they need have arrived today at lunchtime.
In the meantime, I have also spoken to John Katenkamp and explained to him what we propose to do. I have informed him that we really do not have a choice, except adjusting the keel so as to achieve a righting moment which will not exceed the maximum calculated for the rig which is fitted to the boat.
I have also explained to Mr. Katenkamp that the documentation for your boat will be corrected to include the changes we are making, and in view of the fact that yours is the only 42 with shallow draught keel which has a CE-certificate, this design will be lodged as being the standard design for a shoal-draught 42. In other words, were we to get an order for another shoal-draught 42, she will be built to the specifications of your boat after the proposed keel modifications. Original drawings which are required by law to be kept at the yard for a period of some 10 years, and which will be kept by the official “Notified Body”, will all be showing this special design.
In view of the fact that Malo have reacted so quickly and positively to our request for help to put you [sic] problem right, I feel it would be both unfair to them and a terrible waist [sic] of time and money not to proceed with the work now. I hope you will agree with this and I would be most grateful if you could contact me so we can discuss any outstanding issues.”
- Mr. Clegg did not respond to Mr. Andersson’s letter dated 5 September 2000. He told me in cross-examination that at the time that letter was written shaving the keel was not the only option available. Another option was to replace the lead casting bolted to the keel. Mr. Andersson told me that replacing the lead casting would have been more expensive than shaving the keel, but not vastly so. The particular reason why he did not favour it was that it would probably have been necessary to remove interior fittings to get at the bolts which secured the lead casting to the hull, and the result in practical terms would not have been different.
- Mr. Andersson wrote a further letter dated 8 September 2000. That letter included this paragraph which is relevant to the matters with which this action is concerned:-
“Having spoken to John Katenkamp after you were in touch with him earlier this week, we did not lift the boat to carry out any alterations to the keel. I understand from Mr. Katenkamp that you would prefer to leave the keel as it is and for us to re-calculate the rigging and stability accordingly. The intention in this case would again be to issue a new CE-certificate to reflect the changes from the standard boat and also to cover all legal requirements. We obviously come back to you with further information following further tests carried out by IMSI, the Notified body.”
- Mr. Clegg did not respond to Mr. Andersson’s letter dated 8 September 2000 either. One might have expected him to have done so if Mr. Andersson’s understanding as set out in the letter concerning Mr. Clegg’s wishes, namely for calculations as to stability and rigging loads to be undertaken on the basis of the existing weight of the keel of the Yacht, was incorrect. Mr. Clegg told me in cross-examination that at the time he received the letter dated 8 September 2000 it was his intention to keep the Yacht. As he put it, he had not accepted the Yacht, but he had paid for it. Mr. Clegg said that he was expecting Malo in the period September to December 2000 to be undertaking calculations and preparing a methodology for modifying the keel of the Yacht for his consideration with Mr. Katenkamp. He himself took no steps to obtain any advice as to the suitability of the Yacht with the keel with which it had been delivered, or as to other options which could have been considered. He certainly did not seek to press for the replacement of the existing lead keel with a new casting, which might have been a way of remedying any perceived difficulty with the keel of the Yacht. Meanwhile various personal possessions of Mr. Clegg and members of his family remained on the Yacht.
- There seems to have been no communication between Mr. Clegg and Mr. Andersson in the period between about 8 September 2000 and about 13 January 2001. Mr. Clegg wrote to Mr. Andersson a letter dated 13 January 2001 which included this paragraph:-
“We really must get cracking on the o/s keel question. Do you now have all of the calculations, certificates etc? My timetable is to be able to move the boat early May to Portugal/GIB and I would like to be sailing and testing during end of March/April. So it doesn’t leave too much time for the experts to pontificate!”
- Mr. Andersson replied to Mr. Clegg’s letter dated 13 January 2001 in a letter dated 19 January 2001. The material part of that letter read as follows:-
“Unfortunately, and despite endless efforts to get someone to assist us in carrying out the new stability measurements, we have not yet got any new calculations. Following your fax, I have again been in touch with Sweden and with the RYA here in the UK (they are IMSI’s representatives here). As I had not been able to get in touch with the person in charge of RCD measurements, Malo Yachts have decided to send a Swedish measurer across to carry out the stability test. Again we have had a problem with this, since the person who does IMSI’s work in Sweden has been unobtainable the last few days. The silly thing about all of this is that the work probably only takes one hour! When I last spoke to Malo before they closed for the weekend, they were still trying to get this person to fly over here this weekend.
However, I have just now – 17.00 – had a phone call from the RYA and they now say they will contact me on Monday with a view to coming down here to do the measurements for us. So we will have to wait and see who can get here first.
The test figures we are after is to have our own tests confirmed by an independent authority and to enable us to properly evaluate the boats stability performance in its current state. (I think it is fair to say that I still believe you would have a better performing boat if we were to have corrected the keel to its originally intended weight.) Any way, I sincerely hope someone will be able to carry out these tests at long last.”
The tests which Mr. Andersson envisaged were thus tests to determine how the Yacht in unmodified condition would perform, not tests designed to evaluate any particular remedial solution. Mr. Clegg did not reply to the letter dated 19 January 2001. He certainly did not indicate that Mr. Andersson’s understanding as to the calculations which he, Mr. Clegg, was awaiting was in error.
- Mr. Michael Beggs undertook inclining, or stability, tests on the Yacht on 29 January 2001. He sent the results in the form of a spreadsheet to Mr. Andersson under cover of a letter dated 29 January 2001. Mr. Andersson sent the results of the inclining tests to Malo for its consideration. Mr. Leander undertook an analysis of the results of Mr. Begg’s stability tests and prepared four graphs which he sent to Mr. Andersson under cover of a facsimile transmission dated 12 February 2001. After he had heard from Malo Mr. Andersson wrote to Mr. Clegg on 14 February 2001 enclosing copies of the graphs prepared by Mr. Leander. About those graphs he said in his letter:-
This graph shows the stability of the boat in its current state as measured.
This graph shows the stability after adjustments for position and weight of stowed items etc. and gives a corrected stability measurement using the same method as that used in the CE-certification of the yacht (STIX 63,7).
The resulting stability exceeds by a large margin that which was intended for the boat (which is already very stiff in its standard configuration) and would compromise the boat’s performance as far as sea-keeping, dryness, rolling, speed etc is concerned.
According to Selden [the manufacturers of the rigging], it would not be possible to modify the rig to safely cope with these loads in the long run and therefore modifications are needed as outlined below.
This graph shows the result of one alternative course of action and which would still leave the boat with considerably more stability than the standard boat and would include
a) reducing the keel weight by 450Kg and
b) modifying the rig so it is safe with the extra stability.
In this case, you would end up with a non-standard boat with a non-standard rig and which would not perform as well as standard Malo 42.
The graph shows the result of reducing the weight in the keel by 800Kg. This would result in a boat that has identical stability to that of the standard boat up to 38-40 degrees of heel.
This modification would not require any alterations to the rigging and you would end up with a boat that performs exactly the same as a standard boat (except the small amount of extra lee way always associated with reduced draught).
Having looked at the various reports and discussed the results with Malo’s designer and with Lars Olsson, Malo’s owner, I feel the option of reducing the keel weight by 800Kg is the only correct way forward. Not only would this give you a better performing boat for your own use, it would also give you a “standard” shoal draught version of the 42 which would not be too different, were you to sell her some time in the future.
In fact, having had the opportunity to correct the boats stability taking into account the extra equipment such as In-mast furling, the extra forestay, generator and washing machine, the boat will be closer to perfect than would normally be possible to achieve with the standard keel.”
What had by this time been done was plainly to calculate the optimum reduction in weight to produce the best performance of the Yacht with the actual extra equipment aboard. The weight reduction proposed in Graph 4 exceeded by some 200 kilogrammes the excess weight resulting from the error in the casting of the lead keel, but was some 200 kilogrammes less than the total by which the weight of the Yacht exceeded the weight of a standard Malo 42. Mr. Andersson told me that the solution of reducing the weight of the Yacht by 800 kilogrammes would produce a perfect answer so far as the relationship between the stability of the Yacht and its rigging was concerned.
- Mr. Clegg replied to Mr. Andersson’s letter dated 14 February 2001 in a letter dated the next day. The material part of that letter read:-
“As you know my intention has always been to employ professional advice before I make a decision. However, it rather looks as if the only option is [sic] available to me is to take the 800 Kg off the keel. Can you please therefore, get Malo to send to me the plans of the keel and their methodology in removing the weight. I wish to discuss this with a naval architect initially who will advise me.
I have also instructed Blake-Turner & Co. Solicitors to protect my interests should it be necessary to obtain warranties etc from Malo. They will be writing to you shortly. I assume you have authority to act on behalf of Malo in Sweden.”
What, from the terms of the letter, Mr. Clegg seems to have been contemplating at the time he wrote it was accepting the advice of Malo and Mr. Andersson as to reducing the weight of the keel by 800 kilogrammes, possibly with a warranty of some sort from Malo.
- Mr. Andersson in his turn replied to Mr. Clegg’s letter dated 15 February 2001 in a letter dated 16 February 2001. The relevant part of Mr. Andersson’s letter was in these terms:-
“Thank you for your fax of 15/2/01. I have spoken to Malo Yachts and sent them a copy of your fax. As requested, they will prepare and send us the information regarding the keel modification and assist in any way we wish including supplying any written confirmation and/or authorisation.
Although I personally feel the best, and correct way forward would be to remove 800Kg, you could still opt for the alternative that reduces weight by 450Kg, and which includes some changes to the rigging, should you so prefer – this should ultimately be your choice and I do not wish you to feel I have decided this for you.”
- Mr. Leander told me that Malo already had a drawing of a Malo 42 with a shoal draught keel. He prepared a drawing of the proposed modifications to the Yacht. Those drawings were sent to Mr. Andersson. Mr. Andersson sent copies on to Mr. Clegg under cover of a letter dated 1 March 2001. Nothing further happened before 6 March 2001.
Blake-Turner & Co.’s letter dated 6 March 2001
- Mr. Clegg’s solicitors, Messrs. Blake-Turner & Co., did not make contact with Mr. Andersson until they wrote to him a letter dated 6 March 2001. That letter was in these terms:-
“ “Absolutely So”
We are instructed by Mr. and Mrs. R.W. Clegg of Castle Carey, Guernsey, Channel Islands GY1 1UX, who on 7 December 1999 entered into a contract with you for the supply by you to our clients of a new Malo yacht 42 upon the terms and subject to the conditions of a contract of that date.
The additional equipment required and ordered included, among other things, a shoal draught keel. You acknowledged in your letter to our clients of 26 November 1999 the importance and cost of this shoal draught keel.
In the summer of last year our clients took provisional delivery of the vessel for the purpose of sea trials. Those sea trials identified a number of difficulties and in particular Mr. Clegg wrote to you on 28 August expressing concern at the way that extra weight in the keel had been casually mentioned when our client collected the vessel. You have acknowledged to our client that you did know about the problem with the keel on Friday 10 August, the day before the vessel was handed over.
Our instructions are that the vessel has been constructed incorrectly. The stability tests which were carried out and described by you in your letter of 2 September to our client, Mr. Clegg, indicate that in fact the keel is 1000 kg heavier than it should have been. You will know that our client has appointed Mr. John Katen-kamp as a ships surveyor to assist him in this matter and our client has been corresponding with you since September.
Immediately following the sea trials, when it was clear that there was something drastically wrong, the vessel was returned to your guard and to your custody, where it has been ever since awaiting detailed calculations and suggestions from you. These were not produced until 14 February and immediately afterwards our clients asked this firm to advise them.
We have advised our clients that as the boat has not yet been perfected and delivered as such, and as the sea trials produced the very matters about which complaint is now made, our clients are entitled to reject the boat and they do so. Please confirm that arrangements can be made for our clients to collect such personal effects as there may be on or around the vessel.
Our clients, having rejected, are also entitled to sue for damages and we are calculating those with our clients and will give you notice of them in due course.”
Matters occurring after 6 March 2001 in relation to the Yacht
- In a letter dated 16 March 2001 Mr. Clegg wrote to Mr. Andersson as follows:-
“Please let me know when I am likely to receive a response to my Solicitors letters.
In the meantime I am being chased to register the vessel which obviously I will not do if we decide to reject it.”
Mr. Clegg told me in cross-examination that he had in fact sought, through an agent, to register the Yacht in Guernsey. That application had not been withdrawn, but he supposed that it must have been rejected because the authorities in Guernsey had not been supplied with paperwork which needed to be produced in support of an application for registration of a yacht.
- Under cover of a letter dated 25 March 2001 to Mr. Andersson Mr. Clegg sent to Mr. Andersson a two page document setting out what were called “Scenarios”. All contemplated the making by Mr. Andersson of some payment to Mr. and Mrs. Clegg. The second contemplated, amongst other things, the provision of a new keel for the Yacht and the payment of a sum calculated as £95,250. In the covering letter Mr. Clegg envisaged that he might choose that option.
- Mr. Clegg told me in cross-examination that he has since August 2000 insured the Yacht and he continues to do so. When asked why he had done this he said that he could not just abandon the Yacht and that he had insured it not least because it was a term of the loan which he obtained in order to fund part of the purchase price that he should insure the Yacht.
The Claims made in this action
- In this action Mr. and Mrs. Clegg allege that the delivery of the Yacht with a keel weighing, as it is pleaded, 1000 kilogrammes more than it should have, was a breach of the Contract entitling them to reject the Yacht and to recover the purchase price, put at £251,718.49. There is also a claim for damages. The elements in the damages claim are pleaded thus:-
“(2.1) The loss of two seasons’ sailing, which the Claimants put at: £20,000.00
(2.2) Lost interest on the capital sum, which the Claimants put at: £10,000.00
(2.3) Professional fees, including surveyors and ships architects: £2,500.00
(2.4) Insurance of the Vessel: £500.00
(2.5) Mooring fees and registration fees: £3,750.00
(2.6) Transport and storage of the Claimants’s own goods £1,000.00”
- Consolidated with the main action have been two actions commenced in the Bow County Court. One of those actions has been settled. In the other Mr. Clegg claims production by Mr. Andersson of final accounts, export and Value Added Tax documentation relating to the Yacht, repayment of an alleged agreed overpayment of the purchase price of the Yacht of £4,850, and interest on the latter sum. It would seem that the claim for final accounts, export and Value Added Tax documentation can only succeed on the basis that it is found in the main action that Mr. and Mrs. Clegg either were not entitled to, or did not in fact, reject the Yacht. If they were entitled to, and did, reject the Yacht it would seem that they would be entitled to repayment of the whole of what they actually paid, whether originally overpayment was made or not, and the question of final accounts, export and Value Added Tax documentation would cease to be of any relevance. There is no pleaded claim in the Particulars of Claim in the main action for damages on the footing that the condition of the Yacht as delivered by Mr. Andersson did amount to a breach of the Contract, but not one entitling Mr. and Mrs. Clegg to reject the Yacht, or that if there was a breach of the Contract prima facie entitling Mr. and Mrs. Clegg to reject the Yacht they did not in fact do so. In the Reply and Defence to Counterclaim, however, it is pleaded at paragraph 44 that:-
“If, which is denied, the right to reject the vessel has been lost, the Claimants are entitled to set off any berthing costs against the damages which the Defendant is liable to pay the Claimants and the Claimants are, further, not liable for such costs until the proper remedial works, if such works are possible, have been conducted by the Defendant on the vessel.”
- The terms of paragraph 44 of the Reply and Defence to Counterclaim reflect the fact that there is a counterclaim by Mr. Andersson for berthing fees which it is alleged he had to pay in respect of the Yacht in relation to the period 1 April 2001 to about 18 December 2001 when the Yacht was lifted out of the water to permit inspection by Mr. Barry Deakin, an expert engineer appointed on behalf of Mr. and Mrs. Clegg for the purposes of this action. The self-same claim is also relied on as a defence to the claim for the return of the alleged overpayment of the purchase price of the Yacht, which it is admitted was in fact £5,769.87. There is, however, no prayer in the Defence and Counterclaim for any relief.
- The principal points pleaded in the Defence and Counterclaim in the main action are that the Contract was governed by the provisions of Sale of Goods Act 1979, that the weight of the keel formed no part of the description of the Yacht for the purposes of Sale of Goods Act 1979 s.13, and, notwithstanding the extra weight of the keel, the Yacht as delivered was of satisfactory quality for the purposes of Sale of Goods Act 1979 s. 14. It is pleaded that, alternatively, if Mr. and Mrs. Clegg ever had any right to reject the Yacht, such right had been lost by 6 March 2001, the date of the purported rejection. The particular matters relied on in support of that plea are that Mr. and Mrs. Clegg knew about the heavy keel at the time of taking delivery, they then sailed the Yacht in August 2000 and had a reasonable opportunity to examine the Yacht, they left personal possessions on the Yacht at the end of August 2000 and:-
“…gave a series of instructions for the modification and improvement of the vessel and for the commissioning of extras. The Claimants gave instructions and directions to the Defendant as to how he was to deal with the issue of the keel. The position between the parties was that the Claimant needed time, not to decide whether or not to reject the vessel, but to decide whether to keep the keel as it was or to have it lightened at the Defendant’s expense. This decision the Claimants would make when the technical report was to hand. The technical report was commissioned not for purposes of ascertaining whether the vessel was in conformity with the contract but for the purpose of the Claimants’ decision whether or not to lighten the keel. In January 2001 the Claimants expressed their continuing intention to take the vessel to Portugal and Gibraltar, after the technicians had reported, thus representing to the Defendant that, whether or not the keel was to be lightened, they were treating the vessel as their property and would be sailing her away.”
It is pleaded that in reliance on those representations Mr. Andersson acted to his detriment in carrying out various snagging works on the Yacht, in incurring costs berthing the Yacht, and in neglecting to take legal advice as to whether he was in a position as against Malo to reject the Yacht himself. It is also pleaded that by what they said and did Mr. and Mrs. Clegg accepted the Yacht for the purposes of Sale of Goods Act 1979 s. 35, or waived any breach of condition or elected to treat it as a breach of warranty. At paragraph 12 of the Defence and Counterclaim it is pleaded that Mr. and Mrs. Clegg “have failed to mitigate or have caused or aggravated the damages of which they complain”.
The Expert evidence
- I have already mentioned Mr. Barry Deakin, who was instructed for the purposes of this action on behalf of Mr. and Mrs. Clegg. Mr. Duncan Saunders was instructed as an expert on behalf of Mr. Andersson. Mr. Deakin and Mr. Saunders both prepared reports for the purposes of the action which contained the evidence which each respectively intended to give in chief. However, subsequent to the preparation of the reports, and in the light of the fact that the reports revealed a substantial coincidence of view between Mr. Deakin and Mr. Saunders, they prepared a joint statement of the matters about which they were agreed and about which they disagreed. For the purposes of this judgment it is sufficient to set out that joint statement, and to consider the evidence given in relation to the matters with which it dealt, and some others. It is not necessary to refer to the separate reports of Mr. Deakin and Mr. Saunders. The material part of the joint statement reads as follows:-
“Issues upon which we agree:
1. The yacht was delivered with a keel heavier than designed.
2. The increased keel weight would have an adverse effect on speed, fuel efficiency, rig safety, freeboard, and safe capacity.
3.The increased keel weight would have effects on handling, rig efficiency and sailing performance, but these would not necessarily be adverse.
4. The increased rig loads were considered unacceptable by the rig designers.
5. Malo Yachts offered to modify the keel in August 2000. The removal of 1000kg is referred to in correspondence, but it is unclear to us whether that was the precise intention or an approximate reference to the amount of lead to be removed. It is now clear that the foundry records and the design value of the keel weight differed by 607kg.
6. If 1000kg of lead had been removed the error would not have been rectified satisfactorily.
7. The owners’ claim that removal of lead from the keel would have adverse effects on the directional stability was not correct.
8. Following an inclining experiment to measure the stability, Malo Yachts offered two alternatives for modification in February 2001. The first of these, to remove 450kg from the keel and strengthen the rig was offered but not recommended by Malo Yachts. This option would have produced a yacht with non-standard design characteristics and therefore would not have been appropriate.
9. The second option, to remove 800kg from the keel, would have produced the design stability characteristics with a keel shape closely matching that designed, and thus rectified the situation satisfactorily.
10. Shaving the keel, if carried out efficiently by experienced technicians, would not be detrimental to the value of the yacht.
Issues upon which we do not agree:
1. Barry Deakin considers that, because the increased rig loads were unacceptable to the rig designers, the yacht was not fit for the purpose as delivered. Duncan Saunders does not agree with this statement.
2. The owners rejected the offer to modify the keel in August 2000, and requested technical advice. Barry Deakin considers that, in the absence of adequate details regarding the proposal by Malo Yachts, their decision was justified. Duncan Saunders does not agree with this statement.”
Although called as witnesses of fact, both Mr. Andersson and Mr. Leander were cross-examined as to matters of an expert character. Mr. Andersson told me that he has been involved in sailing since the age of about 4 years (he is now 48) and he had run businesses connected with sailing. He thus seems to me to be qualified by experience to express views on the matters of an expert character about which he was asked. Mr. Leander, as I have said, is Malo’s designer, and his evidence was that he has been involved in boat design for over twenty years. He too seems to me to be qualified to express views about the matters of an expert character concerning which he was asked.
- Mr. Deakin, Mr. Saunders and Mr. Leander all agreed that if the option of reducing the weight of the keel of the Yacht by 800 kilogrammes had been adopted, rather than the reduction of the weight of the Yacht by 1000 kilogrammes, the difference in performance in terms of speed, fuel efficiency and the like of the additional 200 kilogrammes weight of the first option as compared with the second would be so small as not to be measurable in the open sea when the Yacht was in use. That was the position of Mr. Leander, and seemed to be that of Mr. Deakin, in relation to the performance of the Yacht in its condition as delivered, that is to say, with a keel some 607 kilogrammes in excess of the intended weight. Mr. Deakin explained that the keel as cast was, as Mr. Leander subsequently said when he came to give evidence, some millimetres wider than it should have been. He also said that it was about 25 millimetres deeper. Mr. Deakin, Mr. Saunders and Mr. Andersson agreed that the stability of the Yacht with 800 kilogrammes removed from the keel, as compared with a standard deep draught Malo 42, was identical up to 38 degrees of heel and that thereafter the Yacht so modified would have slightly less stability. However, Mr. Andersson told me that in practice one would not expect a yacht to heel more than 38 degrees. He said that rig designers only calculate the performance of rigs up to a heel of 30 degrees.
- Mr. Deakin agreed in his evidence that in commenting on the value of the Yacht if 800 kilogrammes were removed from the keel his perspective was that of a technical man. In other words, he could not think of any reason from a technical point of view why shaving 800 kilogrammes off the keel, if competently done, should affect the value. Mr. Saunders, who seemed to have more experience of dealing in yachts, explained to me that a shoal draught yacht always had a more limited market than a deep draught yacht, because a shoal draught yacht involved making compromises between the sailing performance and the ability to enter shallower waters. Most people, he told me, are not willing to make those compromises in sailing performance. So far as whether the Yacht with a shaved keel would be less valuable than if it did not have a shaved keel, his view was that there would be no difference. As to whether the Yacht in the condition delivered was less valuable than if the keel had been of the weight contemplated, his opinion was that this was so only to the extent of the cost of shaving the keel to bring the weight of the keel to that envisaged.
- No one gave evidence before me that the consequence of leaving the keel of the Yacht unmodified was that it would be unsafe to sail. The evidence of Mr. Andersson and Mr. Leander was that sailing the Yacht with the existing rig and an unmodified keel was not unsafe. Mr. Leander told that it would reduce the factor of safety of the rig, but the factor of safety was of the order of 2.5. He told me that the service life of the rig would be reduced if the keel of the Yacht was not modified. That corresponded with the evidence of Mr. Andersson, who explained to me that the service life of the rig, theoretically measured in miles, would be of the order of ten or twenty years anyway, even if the keel of the Yacht was not modified.
The law – the submissions of the parties
- At its most straightforward, the case for Mr. and Mrs. Clegg seemed to be that it was a condition of the Contract that the weight of the keel of the Yacht as delivered should be 5.5 tons, that there was a breach of that condition, and as a result of that breach of condition they were entitled to, and did, reject the Yacht. As he elaborated the case of Mr. and Mrs. Clegg in his closing submissions, Mr. Jonathan Rich, who appeared as Counsel on their behalf, explained that they relied upon the ballast weight indicated in the specification of a Malo 42, which he submitted was to be treated as incorporated into the Contract, as the term of which it was contended that Mr. Andersson was in breach. He indicated that Mr. and Mrs. Clegg also contended that the supply of the Yacht with an incorrect keel weight amounted to a breach of the term implied by virtue of Sale of Goods Act 1979 s.13 that in a contract for sale of goods by description the goods delivered should correspond with the contract description, and a breach of the term implied by virtue of Sale of Goods Act 1979 s.14 that the goods supplied under the contract should be of satisfactory quality. Neither of the terms which Mr. Rich contended should be implied under the provisions of Sale of Goods Act 1979 were mentioned in terms in the Particulars of Claim in the main action. Mr. Rich accepted in answer to a question from me that, in order for Mr. and Mrs. Clegg to have a right to reject the Yacht for breach of a term of the Contract it was essential that the term of which there had been a breach should be a condition, and not merely a warranty. He submitted that all of the terms upon which Mr. and Mrs. Clegg sought to rely were conditions.
- By Sale of Goods Act 1979 s. 13(1) and (1A), as amended by Sale and Supply of Goods Act 1994, it is provided as follows:-
“(1) Where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description.
(1A) As regards England and Wales and Northern Ireland, the term implied by subsection (1) is a condition.”
- The material provisions of Sale of Goods Act 1979 s.14, as amended by Sale and Supply of Goods Act 1994, for present purposes are:-
“(2) Where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality.
(2A) For the purposes of this Act, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all other relevant circumstances.
(2B) For the purposes of this Act, the quality of goods includes their state and condition and the following (among others) are in appropriate cases aspects of the quality of goods –
(a) fitness for all purposes for which goods of the kind in question are commonly supplied,
(b) appearance and finish,
(c) freedom from minor defects,
(d) safety, and
(6) As regards England and Wales and Northern Ireland, the terms implied by subsections (2) and (3) above are conditions.”
- In its essentials, the primary case for Mr. Andersson was that it was not a term of the Contract at all that the weight of the keel of the Yacht should be 5.5 tons. If there were such a term, it was not a condition but only a warranty, so that there was in any event no right to reject the Yacht, but only a right to damages in the event of a breach of the term. Alternatively, if originally the term contended for was a condition, Mr. and Mrs. Clegg had, by their conduct elected to treat the breach complained of as a breach of warranty only. In any event Mr. and Mrs. Clegg had, by their words and conduct intimated that they accepted the Yacht, or had acted in a manner inconsistent with the ownership of the seller. As at 6 March 2001 it was in any event too late to reject the Yacht. An unpleaded argument advanced at trial on behalf of Mr. Andersson was that the offers made to remedy the excess weight in the keel amounted to a fresh tender of a yacht which would have complied with the Contract. Another unpleaded argument advanced at trial was that by writing in the terms which he did in his letters dated, respectively 16 and 25 March 2001, indicating that no decision to reject the Yacht had irrevocably been made, Mr. Clegg had lost the right to reject or had rendered the notice of rejection ineffective. The pleaded argument in relation to estoppel by representation was not pursued at trial.
- Mrs. Helene Pines Richman, who appeared as Counsel on behalf of Mr. Andersson, drew to my attention the provisions of Sale of Goods Act 1979 s.35, as amended by Sale and Supply of Goods Act 1994. For present purposes the material sub-sections of that section are these:-
“(1) The buyer is deemed to have accepted the goods subject to subsection (2) below –
(a) when he intimates to the seller that he has accepted them, or
(b) when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller.
(2) Where goods are delivered to the buyer, and he has not previously examined them, he is not deemed to have accepted them under subsection (1) above until he has had a reasonable opportunity of examining them for the purpose –
(a) of ascertaining whether they are in conformity with the contract, …
(4) The buyer is also deemed to have accepted the goods when after the lapse of a reasonable time he retains them without intimating to the seller that he has rejected them.
(5) The questions that are material in determining for the purposes of subsection (4) above whether a reasonable time has elapsed include whether the buyer has had a reasonable opportunity of examining the goods for the purpose mentioned in subsection (2) above.
(6) The buyer is not by virtue of this section deemed to have accepted the goods merely because –
(a) he asks for, or agrees to, their repair by or under an arrangement with the seller,…”
- Mrs. Pines Richman also drew to my attention the terms of Sale of Goods Act 1979 s.11, as amended by Sale and Supply of Goods Act 1994. The relevant provisions of that section for present purposes are:-
“(2) Where a contract of sale is subject to a condition to be fulfilled by the seller, the buyer may waive the condition, or may elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated.
(3) Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repudiated, or a warranty, the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract; and a stipulation may be a condition though called a warranty in the contract.
(4) Subject to s. 35A below [not material], where a contract of sale is not severable and the buyer has accepted the goods or part of them, the breach of condition to be fulfilled on the part of the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is an express or implied term of the contract to that effect.”
- I shall come in due course to indicate my conclusions on the facts of this case, but Mrs. Pines Richman submitted that I could derive particular assistance from the approach adopted by Rougier J. in Bernstein v. Pamson Motors (Golders Green) Ltd.  2 All ER 220 to the issue how to determine what was a reasonable time after the lapse of which a buyer should be taken to have accepted goods for the purposes of Sale of Goods Act 1979 s. 35. In the case to which Mrs. Pines Richman referred Rougier J. was concerned with Sale of Goods Act 1979 s. 35 in its unamended form. At page 230 in the report Rougier J. expressed this view:-
“In my judgment, the nature of the particular defect, discovered ex post facto, and the speed with which it might have been discovered, are irrelevant to the concept of reasonable time in s 35 as drafted. That section seems to me to be directed solely to what is a reasonable practical interval in commercial terms between a buyer receiving the goods and his ability to send them back, taking into consideration from his point of view the nature of the goods and their function, and from the point of view of the seller the commercial desirability of being able to close his ledger reasonably soon after the transaction is complete. The complexity of the intended function of the goods is clearly of prime consideration here. What is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine.”
On the facts of the case Rougier J. held that the right to reject a motor car had been lost after the expiry of three weeks from the date of delivery during which the car had been driven 140 miles. Mrs. Pines Richman urged upon me that that analysis of the facts was also of assistance.
- Mr. Rich drew to my attention the fact that the decision of Rougier J. in Bernstein v. Pamson Motors (Golders Green) Ltd. has been the subject of adverse comment by Mr. F.M.B. Reynolds in an article in 104 Law Quarterly Review at page 18. There was there reference to an otherwise unreported decision of Russell J., as he then was, in M. & T. Hurst Consultants Ltd. v. Grange Motors (Brentwood) Ltd. in which it was apparently held that a right to reject a defective second-hand Rolls Royce had not been lost some four months after delivery. Mr. Rich also relied on one other English decision, that in Manifatture Tessile Laniera Wooltex v. J. B. Ashley Ltd.  2 Lloyd’s Rep 28, and three Canadian cases, respectively, Cork v. Greavette Boats Ltd.  4 DLR 202, Rafuse Motors Ltd. v. Mardo Construction Ltd. 41 DLR (2d) 340 and Burroughs Business Machines Ltd. v. Feed-Rite Mills (1962) Ltd. 41 DLR (3d) 303. The decision in Manifatture Tessile Laniera Wooltex v. J.B. Ashley Ltd. Mr. Rich relied on as illustrative of what was found to be a reasonable time within which the reject defective goods on the facts of that case. I think that ultimately Mr. Rich relied on the Canadian cases for the same purpose.
- Mrs. Pines Richman relied on the New Zealand case of Canterbury Seed Co. Ltd. v. J.G. Ward Farmers Association Ltd. (1895) 13 NZLR 96 as authority for the proposition that by seeking in his letter dated 25 March 2001 a reduction in the price of the Yacht Mr. Clegg intimated that he had accepted it. She also relied on an observation of Devlin J. in Kwei Tek Chao v. British Traders and Shippers Ltd.  2 QB 459 at pages 487-488 in support of her submission that Mr. and Mrs. Clegg had accepted the Yacht by raising finance to purchase it on the security of the Yacht itself.
- In support of her submission that Mr. Andersson’s offers to modify the keel of the Yacht amounted to a retender of the Yacht conforming with the requirements of the Contract as to ballast weight Mrs. Pines Richman relied on the decision of the Court of Appeal in Borrowman, Phillips & Co. v. Free & Hollis (1878) 4 QBD 500 and the decision of the House of Lords in Motor Oil Hellas (Corinth) Refineries SA v. Shipping Corporation of India  1 Lloyd’s Rep 391. However, she accepted that neither case supported the proposition that an offer to transform goods which did not conform with the requirements of the relevant contract of sale into goods which did conform amounted to a retender. She indicated that she was in fact inviting me to develop the common law in this respect.
- The remaining authorities to which Mrs. Pines Richman referred me were Tradax Export SA v. European Grain & Shipping Ltd.  2 Lloyd’s Rep 100 and Vargas Pena Afezteguia y Cia v. Peter Cremer GmbH  1 Lloyd’s Rep 394, each in support of her submission that as a result of the terms of Mr. Clegg’s letters respectively dated 16 and 25 March 2001 “not only was the right to reject lost as a result of inconsistent conduct, the notice of rejection itself was ineffective because it was inconsistent with the Claimants’ contemporaneous conduct”. The passages upon which Mrs. Pines Richman particularly relied are to be found in the judgment of Bingham J., as he then was, in the report of the former case at page 107. In the later case, a decision of Saville J., as he then was, reference was made with approval to one aspect of the comments of Bingham J. in the former case, namely the effect of a clear and unequivocal rejection. What Bingham J. said in the passages upon which Mrs. Pines Richman relied was:-
“A finding that the buyers clearly rejected the goods and claimed arbitration does not in my judgment conclude this question in their favour. It might emerge, as it did in Chapman v. Morton (1843) 11 M & W 534, that the buyers were saying one thing and doing another, so as to invalidate their written statements or throw doubt on the bona fides or the unequivocal nature of their rejection. Or they might act in such a way as to create an estoppel against themselves. Or they might enter into a new agreement with the sellers involving an express or implied withdrawal of their rejection or a retransfer of title to them. It does, however, seem to me quite plain that once the buyers have proved what, on its face, amounted to a clear and unequivocal rejection of the goods and claim for arbitration, it is for the sellers to prove, if they can, that the apparent effect of the buyers’ conduct was destroyed by other conduct having a different and inconsistent effect and not for the buyers to establish the negative case that they did nothing subsequently to disentitle themselves from asserting their rejection…
It follows from what I have said …that events after Aug. 12 were not irrelevant if they threw doubt on the bona fides of the rejection or showed a later agreement…”
Discussion and conclusions - liability
- Logically the first issues to be addressed are whether it was in fact a term of the Contract that the weight of the keel of the Yacht should be 5.5 tons, and, if so, whether that term was a condition or a warranty. It seems to me that by referring in the Contract to“ one new MALO YACHTS 42, in accordance with the general conditions listed overleaf and in accordance with the manufacturers standard specifications” the parties incorporated into the Contract the terms of the standard specification of Malo for a Malo 42. That standard specification, in my judgment, indicates that that which is set out in the specification which is affected by whether the option of a shallow draught version is taken up or not is simply the draught of the yacht, with the other qualities set out remaining the same whichever version one chooses. Thus it seems to me that, properly construed, it was a term of the Contract that the Yacht should have a ballast weight of 5.5 tons. That term, it seems to me, was not a condition, such that any infringement of it, no matter how minor, entitled a purchaser to reject a yacht sold as complying with the standard specification. Rather it was a warranty breach of which entitled a purchaser buying a yacht which was sold as complying with the standard specification which did not do so to damages. Whether such damages were nominal or substantial would depend, applying normal principles of the assessment of damages for breach of contract, upon whether the purchaser could demonstrate that he had suffered more than nominal damages by reason of the breach.
- Although not pleaded in terms, it seems to me that the term set out in Sale of Goods Act 1979 s. 13(1) was to be implied into the Contract. The Contract was a contract for the sale of goods by description. I was not addressed by either Counsel on the question what was the relevant description, or how the matter of deciding what was the relevant description should be approached. It was implicit in the submissions of Mr. Rich that the relevant description included at least a statement of the ballast weight. In the Defence and Counterclaim it was pleaded, at paragraph 4, that “The weight of the keel formed no part of the description of the vessel for the purposes of section 13 of the Act”. I have reminded myself of the observations of Lord Diplock in relation to a contract for the sale of unascertained goods in Ashington Piggeries Ltd. v. Christopher Hill Ltd.  AC 441 at pages 503-504:-
“The “description” by which unascertained goods are sold is, in my view, confined to those words in the contract which were intended by the parties to identify the kind of goods which were to be supplied…Ultimately the test is whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him on the ground that their failure to correspond with that part of what was said about them in the contract makes them goods of a different kind from those which he agreed to buy. The key to section 13 is identification.”
I have also reminded myself of what Lord Wilberforce said in Reardon Smith Line Ltd. v. Hansen-Tangen  1 WLR 989 at page 998:-
“Even if a strict and technical view must be taken as regards the description of unascertained future goods (eg commodities) as to which each detail of the description must be assumed to be vital, it may be, and in my opinion is, right to treat other contracts of sale of goods in a similar manner to other contracts generally, so as to ask whether a particular item in a description constitutes a substantial ingredient of the “identity” of the thing sold, and only if it does to treat it as a condition (see Couchman v. Hill, per Scott LJ).”
- In the light of the observations of Lord Diplock and Lord Wilberforce to which I have referred in the preceding paragraph it seems to me that a distinction is to be drawn in construing the Contract between those elements which identify the subject-matter of the Contract, namely the goods described as “one new MALO YACHTS 42…including extras as listed overleaf”, which extras included a “shoal draught keel”, and those provisions which prescribe the detailed attributes which the goods so described are to have. It would be ridiculous to suppose, for example, that each and every item of the Malo standard specification for a Malo 42 was a part of the contract description of the goods to be sold, such that the Yacht could be rejected if it were 10 centimetres too long or too short. Obviously there could be a sufficient number of departures from the Malo standard specification, or departures of such significance, that the resulting yacht could not properly be called a Malo 42. However, subject to that point, the description in the Contract of the goods to be sold did not, in my judgment, include the reference to the yacht to be supplied being “in accordance with the manufacturers standard specifications”. It is plain, in the light of the terms of Sale of Goods Act 1979 s. 13(1A), that the description of the goods the subject of the Contract, properly construed, was a condition and not a warranty.
- It seems to me that the term set out in Sale of Goods Act 1979 s. 14(2) was also a term of the Contract and was also a condition.
- It has always been accepted that the delivery of the Yacht with a keel which was overweight as compared with that for which the Malo specification provided was inappropriate and that the keel required remedy. While it is not admitted in terms in the Defence and Counterclaim that the supply of the Yacht with a keel which was overweight was a breach of the Contract, the attention given in the Defence and Counterclaim to the issues whether the provision of the Yacht to Mr. and Mrs. Clegg with an overweight keel amounted to a breach of condition and, if so, whether the right to reject the Yacht had been lost, indicate that it has always been recognised that there was at least a breach of warranty. That is a realistic assessment and it is what I find. In the light of my findings as to what amounted to the description of the subject-matter of the Contract it is necessary to consider whether the provision of the Yacht with a keel weighing some 607 kilogrammes more than the ballast weight set out in the standard specification of Malo for a Malo 42 meant that the Yacht could not properly be considered as meeting the description “one new MALO YACHTS 42….[with] Shoal draught keel”. It is also necessary to consider whether that circumstance meant that the Yacht was not of satisfactory quality for the purposes of Sale of Goods Act 1979 s. 14(2).
- It seems to me to be plain beyond argument that the Yacht as delivered met the description in the Contract of the goods to be sold as I have found that description to be. Mr. Rich submitted that the Yacht was not of satisfactory quality with an overweight keel because the fact that the manufacturers of the rig considered that the rig loads imposed by the Yacht with an overweight keel were unacceptable meant that the Yacht was unsafe to sail. Although Mr. Rich made that suggestion repeatedly, both in cross-examining Mr. Andersson and Mr. Leander, and in his submissions, there was no evidence to support it. Neither Mr. Deakin, called as an expert witness on behalf of Mr. and Mrs. Clegg, nor Mr. Katenkamp, who was called on their behalf as a witness of fact, but who is in fact a marine surveyor, expressed the view that the Yacht with an overweight keel was unsafe to sail. What Mr. Deakin said was that the overweight keel would have an effect on the performance of the Yacht in terms of speed and fuel efficiency, but this would be small and difficult to measure. That was also the evidence of Mr. Saunders. While it was common ground between Mr. Deakin and Mr. Saunders that the extra weight of the keel would reduce the factor of safety of the rigging, no one, other than Mr. Rich, suggested that the reduction would be so great as to cause the use of the Yacht to be unsafe. Both Mr. Andersson, who told me that he has been involved in sailing for over 40 years, and Mr. Leander, who is Malo’s designer, told me that the effect of the overweight keel on the rigging in practical terms would be to reduce the service life of the mast and the rigging. However, so Mr. Andersson told me, it would last ten or twenty years anyway. I accept the evidence of Mr. Andersson and Mr. Leander on the issue of the implications for the rigging of the keel of the Yacht being overweight by 607 kilogrammes. I also accept their evidence, and that of Mr. Deakin and Mr. Saunders, as to the implications on the performance of the Yacht of having an overweight keel. In the light of that evidence I find that the Yacht did on delivery on 12 August 2000 meet the description in the Contract of the subject-matter of the sale. I also find that the Yacht was of satisfactory quality in the condition in which it was delivered because the implications of the keel being overweight were so small as to be incapable of measurement in relation to matters such as speed and fuel efficiency, and so long term and so dependent on how often the Yacht was sailed and in what conditions of wind and sea in relation to the possibility of a reduction in the service life of the rigging. So far as those qualities which Mr. Deakin and Mr. Saunders agreed would be affected by an overweight keel, but not necessarily adversely, the evidence of each was that whether one liked those effects or not was a matter of individual taste. Having sailed the Yacht for some nine days in August 2000 Mr. Clegg decided that he did like the feel of the Yacht as it was.
- Even if I were wrong in finding that there had been no breach of any condition of the Contract by the delivery by Mr. Andersson on 12 August 2000 of the Yacht with a keel weighing some 607 kilogrammes more than the ballast weight specified in the Malo standard specification for a Malo 42, it seems to me clear that Mr. Clegg, by what he said and did, intimated that he accepted the Yacht, and did acts inconsistent with the ownership of Mr. Andersson. There was in fact little difference between the evidence of Mr. Clegg and that of Mr. Andersson as to what was said and done, but insofar as there was any difference I prefer the evidence of Mr. Andersson. He gave his evidence with calmness and dignity. He was careful in his evidence and frank. Although there was in fact little difference between the evidence of Mr. Andersson and Mr. Clegg in relation to the dealings between them, Mr. Rich saw fit both to accuse Mr. Andersson of dishonesty in his evidence and to suggest to him that he had been coached in his evidence by his legal advisers. These were disgraceful allegations for which in my judgment there was not a shred of justification. The allegation of coaching is one of serious professional misconduct on the part of Mr. Andersson’s legal advisers. It appears to have been prompted by nothing more than the fact that Mrs. Pines Richman seems to have spent some time in North America and her style of advocacy betrays some North American influence. Mr. Andersson’s measured reaction to the allegations to which I have referred did him great credit. I felt that Mr. Clegg’s evidence was less reliable than that of Mr. Andersson in relation to those matters where they differed because Mr. Clegg was obviously labouring under a considerable sense of grievance as to how he considered he had been treated by Mr. Andersson and Malo, and with hindsight had a recollection of some matters which was more disadvantageous to Mr. Andersson and Malo than was accurate. That was manifested, in particular, in the difference between Mr. Clegg’s pleaded case as to what had been said by Mr. Andersson on the occasion of the delivery of the Yacht about it being overweight and the evidence in his witness statement and what he said orally in court. However, I emphasise, generally the differences between the evidence of Mr. Andersson and Mr. Clegg on relevant matters were small, and ultimately probably not crucial.
- I find that Mr. Clegg was told on 12 August 2000 that the Yacht was overweight, that there seemed to be some 607 kilogrammes excess weight in the keel, and that Mr. Andersson and Malo would put that right. Even on Mr. Clegg’s evidence he knew on 16 August 2000 that the keel was overweight. With that knowledge he took his family on a cruise to Falmouth and Alderney over eight days or so. In the light of that experience he decided that he liked the Yacht as it was and told Mr.Andersson so. That, in my judgment, was an intimation that he accepted the Yacht, knowing of the condition of the keel and that Mr. Andersson considered that it should be corrected and was prepared to have the necessary work done. Mr. Clegg’s concern in his letter dated 28 August 2000 in relation to the keel was not whether its condition was such that he might want to reject the Yacht, but simply whether the remedial work proposed by Mr. Andersson was absolutely necessary. In my judgment by 28 August 2000, in the light of his experience of sailing the Yacht, it had not occurred to Mr. Clegg not to keep the Yacht. He was simply interested in whether he should have the remedial work done or not. The fact that he indicated to Mr. Andersson that he considered that it was his, Mr. Clegg’s, decision whether the remedial work should be done or not was a further intimation that he had accepted the Yacht. The giving by Mr. Clegg of an instruction in his letter dated 5 September 2000 to Mr. Andersson that remedial work should not be undertaken on the keel was, in my judgment, an act inconsistent with the continuing ownership of the Yacht by Mr. Andersson. In informing Mr. Andersson in his letter dated 13 January 2001 that he intended to move the Yacht to Portugal or Gibraltar in early May 2001 it seems to me Mr. Clegg was intimating that he had accepted the Yacht. I also consider that by leaving his personal possessions on the Yacht between August 2000 and the end of March 2001 Mr. Clegg was intimating that he had accepted the Yacht. His action in insuring the Yacht was inconsistent with ownership of the Yacht remaining with Mr. Andersson and amounted to the assertion by Mr. Clegg that he had an insurable interest in the Yacht. Contrary to his evidence to me, he would not have had such an interest unless he had accepted the Yacht. Mr. Clegg’s attempt to register the Yacht in his and his wife’s names was also inconsistent with ownership of the Yacht remaining with Mr. Andersson. For all these reasons in my judgment Mr. and Mrs. Clegg had lost the right to reject the Yacht, if, contrary to my findings, they would otherwise have had such right, well before the letter dated 6 March 2001 was written by Messrs. Blake-Turner & Co. Indeed, the tenor of the correspondence between Mr. Clegg and Mr. Andersson up to the letter dated 6 March 2001 does not in any way foreshadow the terms of that letter, which came rather out of the blue. I reject Mr. Clegg’s evidence that he was moved to give instructions for the letter to be written by a realisation from the terms of Mr. Andersson’s letter dated 14 February 2001 that significant work would be necessary to remedy the Yacht. I find it difficult to avoid the conclusion that the writing of the letter dated 6 March 2001 was in fact prompted by a desire to seek to manoeuvre Mr. and Mrs. Clegg into a better position to extract substantial compensation from Mr. Andersson. Certainly something about which I can only speculate appears to have happened at the beginning of March 2001 to cause Mr. Clegg to wish to adopt a much more confrontational stance as against Mr. Andersson than that which had been adopted up to that point.
- In the circumstances I do not really need to consider the submissions of Mrs. Pines Richman that the right to reject was lost, if in no other way, by the seeking of a price reduction in Mr. Clegg’s letter dated 25 March 2001, or that there was conduct in writing that letter and the letter dated 16 March 2001 which was inconsistent with, and therefore vitiated, the giving of a notice of rejection. However, if it had been necessary to consider those submissions in detail I should have rejected them. It does not seem to me that the circumstances revealed in the present case lead to the conclusion that the letter dated 6 March 2001, if otherwise good as a notice of rejection, should be deprived of the effect which it would have had.
- Subject to the need to have regard to the provision made by Sale of Goods Act 1979 s. 35(4), which was introduced after his decision in Bernstein v. Pamson Motors (Golders Green) Ltd., I respectfully agree with the conclusion of Rougier J. that, on proper construction, Sale of Goods Act 1979 s.35(4) is not concerned with what defects existed in goods in any particular case and how easy they in fact were to discover. What it is concerned with is how long would objectively be a reasonable time on the facts of the particular case to retain goods without intimating a rejection. In applying that objective test what is important, it seems to me, is what opportunities there in fact were to examine the goods to see whether they conformed with the contract requirements, not with whether those opportunities were actually taken. On the facts of the present case Mr. and Mrs. Clegg had ample opportunity, had they chosen to take it, to evaluate whether the Yacht was in conformity with the Contract. Had it been necessary, therefore, I should have held that they had lost any right to reject the Yacht by lapse of time.
- It seems to me that Mrs. Pines Richman’s argument that the offers made by Mr. Andersson to remedy the keel of the Yacht amounted to a retender of goods complying with the Contract is unsound. She accepted that it was not supported by the authorities to which she drew my attention in respect of this part of her argument. I consider it to be bad in principle. While it may well be that, in some circumstances at least, a seller should be treated as having an opportunity to perform his contract properly notwithstanding an initial tender of goods which did not conform with the requirements of the relevant contract, what Mrs. Pines Richman was really contending for was a principle of law that a seller who, in breach of contract, tendered defective goods, should have a right to repair or replace those goods enforceable against the buyer before the buyer could reject the goods. Any such right would, in my judgment, be contrary to the well-established right of a buyer of goods to reject for breach of condition.
- In the light of my conclusions expressed above it is appropriate to turn to a consideration of questions of damages. There are, in theory at least, two issues. The first is what damages Mr. and Mrs. Clegg are entitled to in respect of the breach of the Contract which I have found proved, namely delivering the Yacht with a keel which was some 607 kilogrammes overweight. The second is whether Mr. and Mrs. Clegg should be deprived of the damages to which they would otherwise be entitled for failing to mitigate their loss.
- As I have already indicated, there is no claim for damages pleaded in the Particulars of Claim which represents the alleged loss suffered by Mr. and Mrs. Clegg if, as I have found, they have no right to reject the Yacht. No evidence was led on their behalf of any loss on this basis. During the course of the trial Mr. Saunders was cross-examined about the difference in value between the Yacht as delivered and the Yacht with a keel of the weight of the the ballast indicated in the Malo standard specification for a Malo 42. He said that he considered that the difference would simply be the cost of modifying the keel of the Yacht to make it the weight of the standard ballast. He was not able to say what that cost would be. I accept the evidence of Mr. Saunders on the point of principle as to the measure of damages. Mr. Deakin accepted in his evidence that the lead part of the keel of the Yacht was not a piece of precision engineering. He and Mr. Saunders agreed that from a technical point of view shaving the keel was a satisfactory solution if competently carried out. I have already referred to the evidence of Mr. Saunders that the market for shoal draught yachts is smaller than that for deep draught yachts. The market for shoal draught Malo 42s seems to be extremely limited as only two, one of them the Yacht, have ever been built. The keel of the Yacht is not intended to be aesthetically pleasing, or indeed, visible in ordinary circumstances. It thus seems inherently likely that the only difference between the value of the Yacht as delivered and the Yacht with a keel of a weight of 5.5 tons would be the cost of reducing the weight of the keel to 5.5 tons. Mr. Andersson was asked in cross-examination what the work involved with that operation, if carried out by shaving, would be. He said that he thought that it would take two men three eight hour days to do at a charge of £35 per hour. That would make a total of £1680.
- As I have indicated, right at the outset on delivery of the Yacht Mr. Andersson offered to correct the keel of the Yacht at no cost to Mr. and Mrs. Clegg. Evidence that that was not simply an idle promise is the fact that two technicians were sent by Malo from Sweden to do the work thought to be necessary. There is an issue in this action as to whether the works proposed by Mr. Andersson and Malo in September 2000 would, if carried out, have rendered the Yacht into the condition in which it should have been delivered. Mr. Rich persisted in asserting that in September 2000 Mr. Andersson and Malo believed that the keel was 1000 kilogrammes overweight, and that, had Mr. Clegg permitted the Malo technicians to work on the keel on about 5 September 2000, they would simply have hacked 1000 kilogrammes off it. I accept the evidence of Mr. Andersson that his belief was that the Yacht as a whole weighed 1000 kilogrammes more than the standard Malo 42. The weight of the Yacht as a whole was all that could be determined by the calculations undertaken in the light of the inclining tests which he carried out at the beginning of September 2000. I also accept the evidence of Mr. Andersson that he was told by Malo that the invoice rendered by the foundry which had cast the lead bulb for the Yacht revealed an excess casting weight of 607 kilogrammes, and that he was told that on or before 12 August 2000. Mr. Leander had some doubt as to whether Malo would have found out about the casting weight as early as that, as opposed to later in August, but it seemed to me that Mr. Leander was generally a little hazy on precise dates. Both Mr. Andersson and Mr. Leander told me that before any work had been done on the keel of the Yacht further stability tests would have been undertaken to ascertain what precisely was the quantity of lead which needed to be taken off. Mr. Leander told me that the technicians sent had patterns for the keel with them to use to ensure that the correct shape of the keel was maintained. He also told me that the object of the exercise, had it been undertaken in September 2000, would have been to reduce the weight of the keel to the ballast weight of the standard Malo 42, namely 5.5 tons. Some confusion has been introduced, it seems, from the point of view of Mr. and Mrs. Clegg, by the fact that in February 2001 Mr. Andersson was suggesting the removal of some 800 kilogrammes of lead. They do not seem to have understood, and perhaps do not even yet understand, that as a result of various items of equipment, such as a washing machine and a generator, which they had requested be fitted as extras on the Yacht, it weighed some 400 kilogrammes more than a standard Malo 42 for that reason alone. The proposal to remove 800 kilogrammes of lead from the keel was intended both to remedy the effect of having an overweight keel and to compensate for the additional weight which was an inevitable consequence of the extra equipment which they had ordered and would have been a feature of the Yacht even if delivered with a keel of a weight of 5.5 tons. What was being suggested in February 2001 was thus an enhancement of the stability of the Yacht to take account of its actual weight in correct condition. If the only work done had been to reduce the weight of the keel to 5.5 tons, the Yacht would still have had the stability characteristics of a yacht weighing some 400 kilogrammes more than a standard Malo 42. In my judgment in order to mitigate the loss which they would otherwise have suffered as a result of the delivery of the Yacht with an overweight keel, it was the duty of Mr. and Mrs. Clegg to permit the manufacturers of the Yacht, Malo, a very reputable company, to carry out remedial work to the keel in September 2000 as was proposed. Had they done so they would have avoided the cost of shaving the keel which is the only loss of which there is any evidence, even though that loss is not pleaded.
- As I have already indicated, the fact and amount of the overpayment of the purchase price of the Yacht are not in dispute. Subject to setting off against the admitted sum the amounts which he has had to pay as berthing charges for the Yacht Mr. Andersson accepts that the overpayment must be refunded. Although not clearly pleaded as such, the set-off contended for seems to me to be in the nature of damages for breach of the Contract in failing to remove the Yacht after the expiry of an agreed period of free berthing which expired on 31 March 2001. Mr. and Mrs. Clegg were, on my findings, clearly in breach of an implied obligation to remove the Yacht from Mr. Andersson’s berth after the expiry of the agreed period of free berthing, so in principle it seems to me that he is entitled to compensation in respect of the cost to him of that breach. The only evidence coming from Mr. Andersson as to the amount of the berthing charges before me is in the Defence and Counterclaim, which bears a statement of truth signed by him, in which, at paragraph 14 the cost of two month’s berthing is put at £1351.25, or £675.63 per month. It is common ground that the Yacht was in fact taken out of the water for inspection by Mr. Deakin on about 18 December 2001. Mr. Andersson has not paid any berthing fees since then. Eight months and two and a half weeks berthing at £675.63 per month amounts to £5827.31. As the sum admitted otherwise to be due to Mr. and Mrs. Clegg is £5769.87 the set-off is sufficient to extinguish the liability to make repayment.
- Although Mr. and Mrs. Clegg succeed in the allegation that the delivery of the Yacht with an overweight keel was a breach of the Contract, I am not satisfied that they suffered any damage thereby. No claim for damages in respect of the breach which I have found proved was made in the Particulars of Claim, but any loss which would otherwise have been suffered would have been avoided in total had Mr. and Mrs. Clegg, as they ought reasonably to have done, accepted the offer of Mr. Andersson to remedy the keel without charge by reducing the weight to that of the ballast of a standard Malo 42. For these reasons the claim in the main action fails and is dismissed.
- So far as the claim for repayment of the admitted overpayment of the purchase price of the Yacht is concerned, that fails because Mr. Andersson is entitled to set-off against his liability to make repayment berthing fees which exceed the admitted overpayment in amount by £57.44.
- In the circumstances the Counterclaim in the main action would succeed in the sum of £57.44 had there been any indication that the matters raised in it were relied on as something more than just a set-off. The Counterclaim contained no prayer for relief. In the circumstances the Counterclaim as a counterclaim fails and is dismissed.
- Technically there remain the claims in the surviving Bow County Court action for final accounts, export and Value Added Tax documentation. Mr. Andersson told me, and I accept, that he has in fact already provided a final account to those funding the purchase by Mr. and Mrs. Clegg of the Yacht. He seemed willing to provide a further copy to Mr. and Mrs. Clegg, and also to address the need, if Mr. and Mrs. Clegg were found not to be entitled to reject the Yacht, to deal with export and Value Added Tax formalities. What these actions have really been about is whether Mr. and Mrs. Clegg were entitled to reject the Yacht. Now that that matter has been resolved I am confident that the provision of any requisite paperwork will not create any difficulty. Without a comprehensive and detailed listing of the documentation I am not in any event in a position to make any order for the delivery of any documents. What I propose is simply to give permission to apply in relation to the provision of a final account, export and Value Added Tax documentation in case my expectation that the question will not present any difficulty is disappointed.
- Finally, I should record my understanding that Mr. Andersson and Malo remain willing to undertake work to reduce the weight of the keel of the Yacht, if that is what Mr. and Mrs. Clegg desire. That is no more than one would expect of a man of Mr. Andersson’s obvious integrity and a company of the standing which Malo apparently enjoys in the yachting world. Whether Mr. and Mrs. Clegg wish to take up the offer is a matter for them, but it seems to me that they can reasonably be expected to make their wishes known swiftly.