District Court New South Wales Medium Neutral Citation: Byers v Frith (No 2) [2017] NSWDC 165 Hearing dates: 29, 30, 31 August; 1, 2, 5, 6, 15 and 16 September 2016 Date of orders: 29 June 2017 Decision date: 29 June 2017 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Judgment for the defendants. (2) Plaintiff to pay the defendants' costs. Catchwords: MERCANTILE – aircraft accident – seaplane – landing gear - causation - breach of implied statutory warranties – consumer guarantees - "fitness for purpose" – "merchantable quality" – "acceptable quality" – "manufacturer" – "assembles goods" – damages – foreign currency payments Legislation Cited: Australian Consumer Law, Pt 5-4, Div 2, s 7, s 54, s 55, s 140 Evidence Act 1995, s 64 Sale of Goods Act 1896 (Qld), s 17 Cases Cited: Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387 Browne v Dunn (1893) 6 R 67 Daewoo Australia Pty Ltd v Suncorp-Metway Ltd [2000] NSWSC 35; (2000) 48 NSWLR 692 Grant v Australian Knitting Mills Ltd (1935) 54 CLR 49 Watson v Foxman (1995) 49 NSWLR 315 Who Ya Gonna Call Bark Busters Pty Ltd v Brooke [2013] NSWDC 133 Texts Cited: J D Heydon, Trade practices law: competition and consumer law (Law Book, 2012) Category: Principal judgment Parties: Malcolm Byers (plaintiff) Jan Frith (first defendant) Kelvin Hutchinson (second defendant) Vision In Action Pty Ltd (third defendant) Representation: Counsel: Mr A J McInerney SC with Mr D Robertson (plaintiff) Mr R Potter (first defendant) Mr A d'Arville (second and third defendants) Solicitors: Ferrier & Associates (plaintiff) Curwoods Lawyers (first defendant) Hallewell Law (second and defendants) File Number(s): 2014/24350 Publication restriction: None Judgment A. Introduction 1. Malcolm Byers purchased a Super Petrel amphibious aircraft from Peter Frith, the Australian distributor for the Brazilian manufacturer. On 4 June 2012, about two and a half months after taking delivery, Mr Byers was flying the aircraft when it was significantly damaged in the course of a water landing. 2. Mr Byers sues for a refund of the purchase price or damages for breach of implied statutory warranties and consumer guarantees of "fitness for purpose", "merchantable quality" and "acceptable quality". Mr Byers also sues for breach of the unsafe goods requirements in s 140 of the Australian Consumer Law ("ACL"). 3. Mr Frith died prior to delivery of the aircraft. His widow, Jane Frith, was appointed his executor. Kelvin Hutchinson, a friend of Mr Frith, assisted Mrs Frith with the importation and subsequent assembly and certification of Mr Byer's aircraft. Mr Hutchinson is also the owner of a company, Vision in Action Pty Ltd ("Vision"), and subsequently became the Australian distributor for the Brazilian manufacturer. Mrs Frith, Mr Hutchinson and Vision are the defendants. B. Issues 1. The primary issue concerns the cause of the damage. Mr Byers asserts that the undercarriage locking mechanism was unsafe, and resulted in the undercarriage being deployed during the water landing, resulting in the damage. The defendants, Mrs Frith, Mr Hutchinson and Vision, agree that the damage resulted from the undercarriage being deployed during the water landing, but dispute that the locking mechanism was unsafe. The issue then is what caused the undercarriage to be deployed. 2. There are also consequential issues arising from the proper construction of the statutory provisions, including whether Mr Hutchinson or Vision were liable as a "manufacturer" of defective goods, whether the damages comprise the purchase price less the salvage cost of the damaged aircraft or the repair costs, the amount of the repair costs, and the proper treatment of payments made in a foreign currency. C. Causation – the primary issue (a) Background 1. In early June 2012 Mr Byers was engaged in three days of flight training with William Lane, a flight instructor. The training included take-offs and landings of the Super Petrel on water at Queens Lake. In the afternoon session of the final day of training, Mr Byers completed three water landings. 2. According to Mr Byers, on the final afternoon the weather was fair, sunny with little cloud or wind and the water surface was glassy with no turbulence. The second water landing in the afternoon session was heavy as a result of Mr Byers wrongly reducing power before landing. The third landing was said to be "normal", and for the first 30 metres was smooth and level, although Mr Byers felt an unusual drag underneath, and then the undercarriage lever "slammed forward", the nose wheel dug in, which "caused us to pitch forward at about 20 degrees" and the aircraft came to an abrupt stop. In his affidavit, Mr Byers said that he felt a vibration through the airframe of the aircraft, and then immediately after, the windscreen shattered and the undercarriage lever slammed forward, the wheels were extended and the front of the aircraft was pulled "back into the water swiftly" (Byers, 6/2/15, [187]). 3. Mr Lane's account was similar. He described the third landing as initially "perfect". He made no mention of the drag but recalled that the seats tilted forward after the aircraft had slowed by about 10 to 15 knots from a touchdown speed of 55 knots, and then the nose rose up in the air, distorting the windscreen, which caused it to explode outwards. He said the gear lever moved "forward to the wheels down position" (Lane, 15/1/15, [44]) and "the lever moved out of its locking position" (Lane, 15/1/15, [64]). Both Mr Byers and Mr Lane were in a position of some peril for about 90 minutes after the landing until emergency services arrived. 4. There was no evidence of impact from a foreign body, or evidence of impact with a mud bar or sea grass during the course of the incident landing (see Exhibit O). Nor were the descriptions by Mr Byers or Mr Lane of the landings (other than in respect of the lever and its restraining cord) disputed by the defendants, so I conclude that the third water landing was initially smooth. (b) The locking mechanism and the elasticised cord 1. The operation of the undercarriage of the Super Petrel is controlled by a lever in the cockpit next to the pilot. The lever is moved forward to lower the undercarriage for a landing on land, and moved backward to raise the undercarriage for a landing on water. The aircraft is designed so that the lever is "forward" weighted (Lane 9/8/16 at [34]). That is, if the lever is placed in a neutral position, "overcentre", it will move forward and lock the undercarriage down, in place for landing on land. When the lever is fully retracted, a blue light illuminates on the dash. Pulling the lever back to raise the undercarriage does not of itself have the effect of securely locking the lever in place: whilst the lever will remain back with the undercarriage up during flight, the greater forces imposed by a landing on water, particularly a rough landing, may cause the lever to move forward and lower the undercarriage. 2. In order to restrain this forward movement of the lever, the aircraft comes equipped with an elasticised cord affixed to the aircraft in the area of the lever handle when it is fully retracted. This cord is designed to be placed over the lever handle so as to resist any forward forces, such as those imposed by a landing. The cord can be manoeuvred by the pilot when he retracts the lever, using his fingers to slip the restraining cord over the end of the lever and across the handle. 3. Mr Byers submitted that this mechanism involving an elasticised cord to restrain the lever is defective and is the primary cause of the incident landing that damaged the aircraft. 4. The cord did not break during the incident landing and it was not suggested that the cord in Mr Byers' Super Petrel was of insufficient strength to restrain the lever. Rather, the incident arose because the cord was not on the lever at all times when the forces of landing operated on the plane. Without the cord restraining the lever throughout the landing, those forces caused the lever to move forward, thereby lowering the undercarriage and causing the damage. As summarised earlier, this cause of the damage is common ground. At issue is the reason why the cord was not in place to restrain the lever from moving forward. 5. Mr Byers asserted that either the cord became disengaged from the lever during landing by slipping off the end of the lever, or by being inadvertently knocked off the lever by Mr Byers or Mr Lane shortly before landing. In either case, whether by slipping off or being knocked off the lever, Mr Byers submits this capacity of the cord to come off the lever meant that the elasticised cord as a restraining device was defective and unsafe, and that this safety defect caused the incident and the damage. 6. Mrs Frith, Mr Hutchinson and Vision, on the other hand, submit that the elasticised cord was an appropriate method to restrain the lever, and that the cord did not restrain the lever because it was not put in place prior to the landing, a failure by Mr Byers and Mr Lane. 7. Mr Byers and Mr Lane were the only persons present in the cockpit on 4 June 2012 when the incident landing took place. They each gave evidence that in regular checks after take-off, during flight, and before landing, the cord was confirmed, visually and tactually, to be in place and that Mr Lane and Mr Byers both spoke audible words of confirmation. Whether this evidence should be accepted depends on the credit of Mr Byers and Mr Lane, and also upon whether the evidence indicated a propensity or possibility of the cord to slip off the lever handle or be inadvertently dislodged. (c) Credit of Mr Byers 1. An assessment of Mr Byers' credit principally involves weighing the account of the incident Mr Byers gave in evidence in the light of the surrounding circumstances, any earlier accounts Mr Byers gave, and the account or accounts of Mr Lane. 2. It is helpful to consider Mr Byers' accounts of the incident chronologically. 3. On 8 June 2012, some four days after the third water landing, Mr Byers completed an "Aviation accident or incident notification form". This recorded Mr Byers' first account of the incident. Mr Byers wrote (PTB, volume 2, p 543): "At 1318 on Monday 4th June 2012 I was receiving instruction from William Lane to become endorsed for water hull operations in my newly purchased floating hull type seaplane. We had touched down on the water of Queens Lake NSW during a normal approach and landing. On our landing run of which the first 30 metres on the water was smooth and level, I felt an unusual drag underneath and slightly in front of me a split second afterwards the aircraft had an uncommanded extension of the undercarriage as the [lever] slammed forward between myself and my instructor Bill Lane, the nose wheel then dug in and caused us to pitch forward at about 20 degrees and the aircraft came to an abrupt stop. This caused the windshield to shatter outwards and I noticed damage to the airframe to the left adjacent the dash. … That flight I had landed three times on Queens Lake, the previous landing we had a small bounce or hop at first but then landed normally. I am told by Bill it was well within the limits of normal training. Both Bill and I know the gear was retracted prior to the landing as I had just completed my short final checks and had checked it was up on base leg and downwind. Bill's training requires verbal acknowledgement of these checks." 1. Later in the document, Mr Byers, under the section "Suggested action: What further safety action has been, or could be, taken to prevent similar events?" (PTB, volume 2, p 544), recorded "The hull needs to be strengthened and the undercarriage need[s] to be able to be positively locked by means more than is currently fitted in the aircraft". 2. Although Mr Byers' account records that the "gear was retracted", it does not refer to the restraining cord. Nor was there an assertion that the undercarriage was locked. 3. The first two iterations of the Statement of Claim do not refer to the cause of the damage on the third water landing. The next account given by Mr Byers was in his affidavit of 6 February 2015. The affidavit (at [163]) refers to the need for the pilot to "ensure that all landing checks are carried out and check that the landing gear has been retracted". He records (at [164]) a conversation with Mr Lane where he was instructed to "always be verbal when carrying out the pre-landing checks" and to: "always explain to [the] passenger or passengers that there is a light on the dashboard of the aircraft which shows a blue colour to indicate water meaning you must prepare for a water landing". 1. This reference to the blue light being a sign of what preparations are needed, rather than a signal that everything is in place for a water landing, indicates that Mr Byers would not be misled by the blue light to believe that it indicated that the restraining cord was in place. In any event, Mr Byers gave no evidence that he relied on the blue light to confirm that the restraining cord was in place. 2. Mr Byers also deposed (at [178]-[181]): "On the third practice, I flew the same circuit pattern I had been using for the previous two practice take-offs and landings, and I carried out my usual after take-off checks, downwind checks and pre-landing checks. … I used the acronym BUMPFISH which prompts me for the following checks - B = Brakes … U = Undercarriage. When landing on water (retracted and locked, Blue Light) M … On my landing approach, I did my pre-landing checks as I said the following to Bill Lane in words to the effect of - I said, 'We are landing on the water, the landing gear has been retracted and the gear extension lever is locked, and we have a blue light for landing on the water.' Bill Lane nodded to me agreeing." 1. Mr Byers then described the landing in terms similar to those in the incident report referred to above. 2. Again, this affidavit makes no direct reference to the restraining cord being in place during the third water landing. The reference to the gear being "retracted" says nothing about whether the restraining cord was in place before, during or after the incident. Is a reference to the restraining cord implied by the reference "the gear extension lever is locked" or the undercarriage is "retracted and locked"? Other than the restraining cord, there was no "lock" on the lever, at least no secure lock sufficient to withstand all the forces that may be encountered in a water landing. 3. Accordingly, Mr Byers' reference to "the landing gear has been retracted and the gear extension lever is locked" might be a reference to the restraining cord being in place over the lever. The alternative is that it is a reference only to the position of the landing gear and the lever. 4. The Further Amended Statement of Claim was filed in July 2016. It described the features of the aircraft as including ([8Eg]]): "Upon the undercarriage lever having been pushed into the Water (Up) position, a blue light was illuminated on the dash to confirm that the wheels were retracted and the landing gear locked in the Water (Up) position". 1. As indicated above, the presence or absence of the restraining cord on the undercarriage lever did not directly impact on the illumination of the blue light, and thus the blue light did not confirm that the restraining cord was in place on the lever. The blue light was illuminated when the wheels were retracted, that is, when the landing gear lever was fully pulled back. Thus, the suggestion in the quoted passage that the illumination of the blue light confirmed that the landing gear was "locked" involves a use of the word "locked" otherwise than as a reference to the restraining cord being in place. 2. The Further Amended Statement of Claim (at [8Eh]) describes the next feature of the landing mechanism as "When the landing gear was in the Water (Up) position, the undercarriage lever was also required to be secured by a bungee cord". The separate references to "locked" in subparagraph (g) and the restraining cord in subparagraph (h) indicate an assertion that restraint by the cord is a matter additional to the landing gear being "locked". Subparagraph 32Ca is to a similar effect (but cf subparagraph 32Cb). 3. Mr Byers' gave evidence that his use of the acronym "BUMPFISH" – "U" standing for undercarriage - prompted him to check that when landing on water the undercarriage was "retracted and locked, blue light". Again that evidence leaves uncertain whether this reminder prompted a check of the restraining cord being in position. 4. Shortly before the trial, Mr Byers swore two further affidavits, one dealing again with the incident in detail. Mr Byers annexed another checklist (2/8/16 affidavit, Annexure C, p 2) which he said he prepared shortly after taking possession of the aircraft in March 2012. It referred to: "AFTER TAKE OFF LANDING GEAR LAND – RETRACT/LOCK WATER – KEEP LOCKED" "LANDING … … LAND GEAR SET FOR LAND OR WATER" The phrases in this checklist were apparently derived from a checklist (Exhibit 1D2) he received from Mr Hutchinson when taking possession of the plane (2/8/16 at [9]-[11]). Neither checklist makes reference to the restraining cord and so the relationship between the "lock" and the cord remains uncertain. 1. Mr Byers' first reference in his evidence to the restraining cord is made in his affidavit dated 2 August 2016, shortly before the trial. He records a lengthy oral instruction purportedly given by Mr Lane to him almost four and a half years earlier on 17 March 2012. Mr Byers (at [29]) asserts that Mr Lane orally gave him the following instructions: "After take-off the landing gear of the aircraft is put into the Land Retract Lock position. This has the following steps. The first step is to pull the undercarriage lever back to the locked position. The second step is to put the bungee cord over the end of the undercarriage lever. The third step is to check that the blue light on the dash is illuminated. These three steps ensure that the wheels are pulled up, that the left and right wheels are retracted up, and that the nose wheel is retracted into the fuselage. This is called the Water (Up) position. For landing the aircraft, the procedure for the landing gear is important. There is one procedure for landing on land, and a different procedure for land on water. Before landing on land, the procedure is as follows. The first step is to take the bungee cord off the undercarriage lever. The second step is push the undercarriage lever all the way forward to the locked position to extend the nose wheel all the way out of the fuselage, and to lower the left and right wheels. The third step is to check that the green light on the dash is illuminated. The fourth step is to then say aloud, 'We are landing on land, and we have a green light on'. The wheels are down. This is called the Land (Down) Position. For a water landing, the step is called 'Water - Keep locked', and the procedure is as follows. The first step is to check that the undercarriage lever has been pulled all the way back into the locked Water (Up) position. The second step is to check that the bungee cord is over the end of the undercarriage lever. This is done by checking with your eyes, and also by using your hand to feel that the bungee cord is locked over the end of the undercarriage lever. The third step is to check that the blue light on the dash is illuminated. The fourth step is to then say aloud, 'We are landing on water, and we have a blue light on'. The wheels are up, and you can then proceed to land on water. This is called the Water (Up) Position." 1. Mr Byers then recounted his understanding of the steps to be taken after a take-off from land, which included pulling "the undercarriage lever back into the locked Water (Up) position", placing "the bungee cord over the end of the undercarriage lever in the locked Water (Up) position", checking that "the blue light was illuminated" and saying out loud "We are airborne, the wheels have been retracted, and the blue light is on". Mr Byers also gave descriptions of his understanding of the pre-landing procedures for landing on land and water, which were the same as he described Mr Lane instructing him, as quoted in the preceding paragraph. 2. Mr Byers recorded (Byers 2/8/16 at [38]) that a final check of the wheel position is done "immediately before the aircraft lands" on water and involves "a check of the dash light to ensure that the blue light is illuminated which indicates that the wheels are in the locked Wheels (Up) position". 3. The following matters may be noted about these instructions. First, the term "Land Retract Lock" is the name of a position of the landing gear, although the instruction identifies a number of steps to place the undercarriage in that position. 4. Secondly, the "locked position" and the "locked Water (Up) position" are separately stated to be when the lever is pulled back. Thus, the lever can be in the "locked position" without the restraining cord being in place, even though that involves no secure lock on the lever. 5. Thirdly, any significance of the parentheses around the word "Up" was not clarified in the evidence. That form was not derived from a manual in evidence or any checklist. How the parentheses operated on the form of the oral instruction (such as whether the word "Up" was stated, or not) was not clear. 6. Fourthly, the first reference to the restraining cord appears, in Mr Byer's evidence, when, in his 2016 affidavit, he attributed to Mr Lane references to the "bungee cord" repeatedly. Yet Mr Lane and Mr Byers both acknowledged in cross-examination that Mr Lane never referred to the restraining cord as a "bungee cord" (T174/31-39; T218/21-38). 7. Fifthly, on Mr Byers' account, Mr Lane refers to the dual checking method, visually and tactually, to ensure that the cord is over the lever, including checking that "the bungee cord is locked over the end of the undercarriage lever" (2/8/16 at [29]). Strictly there is no locking of the cord. Rather, the cord is properly the locking mechanism on the lever, to hold the lever in place. 8. Sixthly, according to Mr Byers, Mr Lane referred to the check of the blue light for a water landing, and the confirmatory statement (at the conclusion of the quoted instruction) that "we have a blue light on". Without more, this method of instruction might wrongly indicate that the blue light comes on only when the lever is fully retracted and the restraining cord is in place, but this is not so. As indicated above, the blue light is activated by the lever being fully retracted; the securing of the restraining cord does not affect the operation of the blue light (other than indirectly, by operating to keep the lever fully retracted). As the confirmatory statement makes no express reference to the cord being in place or to the lever being fully retracted and locked, and makes no reference to any checks visually or tactually of the lever or the cord, it is difficult to regard that statement as evidence that the restraining cord was in place. Mr Byers' evidence of a final check - that the blue light is illuminated which "indicates that the wheels are in the locked Wheels (Up) position" - underlines that the "locked" position is not dependent upon the restraining cord being in place. 9. Seventhly, Mr Lane is not recorded as giving to Mr Byers an explanation of the steps involved in taking off from water, a matter of some significance given that the incident landing occurred after two take-offs from water. Nor does Mr Lane explain to Mr Byers the confirmatory words to use after a take-off from land: Mr Byers appears to invent his own words. 10. Eighthly, no explanation was given as to how Mr Byers was able to remember the instructions given by Mr Lane in such detail. No notes recording the instructions were produced, and, as mentioned, the recollection occurred some four and a half years after the conversation. The conversation was not at the more memorable time of the incident landing, but about three months earlier at the time of delivery of the aircraft. It is also not clear how Mr Byers was expected or able to remember this detail at the time, without any checklist of items. If Mr Byers needed or was careful enough to adopt a checklist to remind him to leave the undercarriage up after take-off from water ("WATER – KEEP LOCKED"), to expect all this detail to be remembered without a checklist seems unrealistic. 11. The considerations in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 indicate that the reliability of Mr Byers' account of Mr Lane's words must be doubted in the absence of any record or explanation of his memory. Perhaps a recollection of Mr Lane's words and Mr Byers' procedure might be strengthened by a practice of continually following the procedure, but Mr Byers, so far as the evidence reveals, has not flown a similar aircraft in the four years since the incident, and had flown it very few times beforehand. As he was still being instructed and had not performed many water landings beforehand, any "usual" practice would be limited. 12. It was unclear whether Mr Byers' final step in his landing on water routine involved merely a check of the blue light (Byers 2/8/16 at [38]) or a confirmatory statement after having carried out his water landing procedure (2/8/16 at [32]). 13. Mr Byers deposed to having carried out the "After Takeoff Check", which he said were the steps to be taken after a land take-off set out above, after he took off from Camden Haven airfield after lunch on the third day of training on 4 June 2012. 14. In respect of the third water landing that afternoon, Mr Byers gives two inconsistent accounts of his words prior to landing. His second affidavit (2/8/16 at [81]) records that he said, consistent with his training and understanding, "We are landing on water, and we have a blue light on", whereas his first affidavit (6/2/15 at [181]) records him saying, "We are landing on the water, the landing gear has been retracted and the gear extension lever is locked, and we have a blue light for landing on the water." 15. Mr Byers' purported explanation for this is at [84] in his second affidavit, that: "I confirm that I said… ['the gear extension lever is locked']…after I had checked by sight that the undercarriage lever had been pulled all the way back into the locked Water (Up) position and after I had checked by sight and by touch that the bungee cord was secured over the end of the undercarriage lever. This is what I meant by the words 'the gear extension lever is locked'". 1. This does not explain the different accounts. Rather, it proposes a third alternative confirmatory statement that goes beyond the account in [81] of the 2 August 2016 affidavit by referring to the locked gear extension lever, but omits a reference to the landing gear having been retracted, which was in the version at [181] of the 6 February 2015 affidavit. 2. It is also difficult to accept that stating the words "the gear extension lever is locked" are a reference to the action of checking that the restraining cord is in place, as Mr Byers asserts at [84] of his second affidavit. The other references to "locked" are distinguished from, and unconnected to, the positioning of the restraining cord. 3. More than once, when confronted with these inconsistencies during his oral evidence, Mr Byers attributed the differences to a "lack of detail". Although the second affidavit contained more detail in respect of his asserted checks, it contained less detail in respect of his oral confirmation. The assertion of a lack of detail might manifest an unwillingness to concede the obvious, in this case, the inconsistency of his evidence. 4. In his oral evidence at the trial, Mr Byers gave a further account of what he said before the fateful landing. He says (T179/49): "I said what I usually say, which was, 'We are landing on the water. We have a blue light. The gear is retracted and locked. We are landing on the water. We have a blue light.'" 5. This is not what Mr Byers "usually say[s]" if he has not said it for over four years. And it differs from earlier versions in the repeated reference to the blue light, in the repeated reference to landing on the water, and in the absence of any express reference to the lever. 6. In summary, the repeated accounts of Mr Byers are not straightforward, consistent and easily believable. Rather, the accounts contain inconsistencies, references to matters unlikely to be remembered, and explanations which are less than convincing. His first contemporaneous account contained no reference to the restraining cord or visual or tactual checks. Nor did the account in his first affidavit. But shortly before trial, after the defendants had served affidavits referring to the restraining cord, Mr Byers deposed to detailed instructions he had received when he took delivery of the aircraft, his understanding at the time and his account of every water landing during the days of training. I could not accept that Mr Byers actually remembered all those matters, especially the detailed instructions, and his assertion that he did impacts adversely on his credit. 7. Mr Byers was also challenged on his unwillingness to accept that he had volunteered to, and did, assist in the assembly of his aircraft. This unwillingness remained even when he was shown his own correspondence recording his desire to do so. Whether Mr Byers assisted in the assembly of his aircraft does not appear to be material to the issues in the proceedings but the unwillingness of Mr Byers to concede his involvement is relevant, and adverse, to his credit. 8. In these circumstances, I do not accept Mr Byers' account of what he said or what he was told. It follows that this account does not assist to establish, as a form of contemporaneous representation (see e.g. Evidence Act 1995, s 64(3)), what he did. Further, Mr Byers' adherence to these various versions of what he said undermines his credit and diminishes the value of his evidence of what checks he performed and observed on the final day. If his recollection of what he saw and heard Mr Lane say, and what he said and heard himself say, is faulty, then there is a real possibility that what he saw, felt and did, at that same time, is also faulty. (d) Credit of Mr Lane 1. Mr Lane was a paid flight instructor who accompanied Mr Byers on the aircraft including on 4 June 2012 for the purpose of providing flight training and instruction. 2. Mr Lane gave evidence that he had about 40 hours experience flying a different model of the same aircraft, which also had a restraining cord. He had "trained and endorsed four other pilots" who were associated with the Super Petrel. Shortly after the death of Mr Frith, Mr Lane wrote to the Brazilian manufacturer seeking to be considered for the Australian distributorship of the Super Petrel. In further correspondence (Exhibit 2D2), Mr Lane stated that he was "extremely impressed" with the Super Petrel and looked "forward to the opportunity of representing your product in this country and working with your organisation". Mr Lane's application was unsuccessful as Mr Hutchinson was awarded the distributorship. 3. In his affidavit dated 15 January 2015, Mr Lane stated that Mr Byers practised water landings between 1 and 4 June 2012 at Queens Lake, and that Mr Byers' landings on 4 June 2012 were all "conducted within the normal range for landings" ([35]), that he had no need ever to take over from Mr Byers as his technique and ability were good. In Mr Lane's description of the landing, he recalled that the gear lever "was activated by slipping out of its restraint and moving forward to the wheels down position" (Lane 15/1/15 at [44]). He said (Lane 15/1/15 at [63]-[64]): "The landing gear [lever] is usually locked down with a piece of cord on the aircraft. When the nose of the aircraft rose up, the lever moved out of its locking position with the cord letting it go, which allowed the nosewheel to move". 1. Mr Lane made no express reference in this affidavit to Mr Byers placing the restraining cord over the undercarriage lever. Nor was reference made to any visual or tactual checks of the position of the cord on the lever. 2. In a subsequent affidavit on 9 August 2016, shortly before trial, Mr Lane described his understanding of the undercarriage mechanism. He stated at [24]: "f. The landing gear, meaning the wheels of the Super Petrel LS aircraft, are retracted upon pulling the undercarriage lever all the way back into the Water (Up) position; g. Upon pulling the undercarriage lever all the way back into the Water (Up) position, the bungee cord is secured over the end of the undercarriage lever. h. Once the undercarriage lever is pulled all the way back into the Water (Up) position, there is a blue light which is illuminated on the dash. The blue light confirms to the pilot that the undercarriage lever is locked in the Water (Up) position; i. Before proceeding to land on water the pilot should check that the undercarriage lever is pulled all the way back into the Water (Up) position. The pilot should check that the bungee cord is secured over the end of the undercarriage lever, by visual check, and by touch by reaching back to feel that that the bungee cord is secured in place. The pilot should check that the blue light is illuminated. The pilot should then say out aloud to the passenger, 'We are landing on water, and we have a blue light on'." 1. Mr Lane said he explained to Mr Byers the procedure to retract the landing gear after take-off. His explanation covered the same information as his understanding, including (9/8/16 affidavit at [25]): "After the bungee cord is secured over the end of the undercarriage lever, and the lever is locked in the Water (Up) position, a blue light should light up on the dash. If the blue light does not come on then the undercarriage lever is not locked into the Water (Up) position." 1. Mr Lane explained the procedure for landing on water, stating that he said to Mr Byers (9/8/16 affidavit at [27]): "Before landing on water it is necessary to ensure that the wheels are up. The pilot has to check that the undercarriage lever is pulled all the way back into the Water (Up) position. The pilot then has to check that the bungee cord is secured over the end of the undercarriage lever, by visual check, and by reaching back to feel that that the bungee cord is secured in place. The pilot then needs to ensure that the blue light is illuminated. The pilot should then say out aloud to the passenger, 'We are landing on water, and we have a blue light on'." 1. Mr Lane then recorded in his affidavit his understanding of the procedure for landing on land and landing on water. Each is precisely the same in both form and substance as the understanding of Mr Byers recorded in his August 2016 affidavit. So far as understandings of a water landing are concerned, both refer to the confirmatory statement "We are landing on water, and we have a blue light on" and both draw the distinction between the "locked Water (Up) position" and the application of the restraining cord. Mr Lane said that the procedure is the same for a take-off from water (9/8/16, [32]). Plainly, the final confirming statement (referring to a "landing on water") is not appropriate. 2. After a take-off from land, where the undercarriage is retracted and not merely checked to be "up", Mr Lane says the pilot should say aloud, "The undercarriage is retracted and locked". 3. Mr Lane noted that "[o]n a couple of occasions", Mr Byers had pulled the undercarriage lever part way back and it had slipped out of his hand, moving back to the "Land (Down) position" because it was forward weighted. Mr Lane said that on those occasions, Mr Byers was (then) able to pull the undercarriage lever to the "locked Water (Up) position". Mr Lane also observed that the lever was "weighted" to "move to the Land (Down) position unless locked in the Water (Up) position". Mr Lane also stated, in respect of the three days of water landings and take-offs: "My recollection is that [Mr Byers] followed the procedure…for each water landing and for each water take-off" (9/8/16 at [53]). About two of the water landings were heavy, but "within a 'normal' range of landings for a beginner", he said (at [55]). 4. Mr Lane thereafter gave evidence, not with the caveat of "my recollection", that on the afternoon of 4 June 2012, before the first water landing, he observed Mr Byers visually check, and confirmed with Mr Byers that he had carried out the checks. 5. Mr Lane gave evidence (at [60]) that: "After take-off from Camden Haven airfield after lunch on 4 June 2012, I observed Malcolm perform, and confirmed with Malcolm that he carried out, the after take-off procedure described in paragraph [31] above." 1. Paragraph 31 of Mr Lane's affidavit referred to the procedure for landing on water, not for taking off from land. In particular, it does not specify the need to fully retract the undercarriage lever. 2. On the fourth day of the trial, Mr Lane swore a further affidavit correcting a number of his observations. The reference to paragraph 31 in the evidence quoted above was changed, to delete the reference to paragraph 31 and instead refer to a procedure applicable to landing on water and taking off from water. Thus, the absence of any reference to retracting the undercarriage lever, a necessary step after a take-off from land, remained. 3. Mr Lane continued: "I observed Malcolm visually check that the undercarriage lever was all the way back, and locked, into the Water (Up) position. I then saw Malcolm check, visually and by touch, that the bungee cord was secured over the end of the undercarriage lever. I saw Malcolm visually check that the blue light was lit up on the dash. As was my practise, I then also checked that the bungee cord was secured over the end of the undercarriage lever. I checked that the blue light remained on." (At [61c]). 1. Mr Lane gave evidence that as Mr Byers approached the base leg of the circuit he performed the undercarriage checks, and that: "Immediately prior to reaching the water, on each of the occasions in the afternoon of 4 June 2012, Malcolm said out loud 'This is a water landing and the wheels are retracted. I have a blue light and I have checked the bungee is secured'. I said 'Affirm', gave Malcolm a 'thumb's up' signal, and I then said 'We have a blue light on, and the bungee cord is secured'." (At [61f]). 1. Mr Lane also again recounted in somewhat different terms what Mr Byers did on the third water landing, including (at [64a]-[64f]): "Malcolm visually checked that the undercarriage lever was pulled all the way back, and locked, into the Water (Up) position; Malcolm visually checked that the bungee cord was secured over the end of the undercarriage lever, and also checked by touching the bungee cord in its position; I also checked that the bungee cord was secured over the end of the undercarriage lever by putting my hand back and feeling that the bungee cord was tight over the end of the undercarriage lever; The blue light on the dash was lit up and turned 'on'; Malcolm said words to the effect of: 'We are landing on water, we have a blue light, and the bungee is secured'; To which I said words to the effect: 'Affirm that we are landing on water, we have a blue light, and the bungee is secured'." 1. Several things can be noted about this evidence. First, in referring to his observations of Mr Byers' conduct, Mr Lane repeatedly distinguishes between Mr Byers checking that the undercarriage lever was "pulled all the way back, and locked" and checking that the "bungee cord was secured" over the lever. This indicates that Mr Lane's use of the term "locked" does not refer to the use of the restraining cord, but to the position of the undercarriage lever. This terminology is also reflected in Mr Lane's reference to Mr Byers' difficulties in retracting the undercarriage lever, which was ultimately "pull[ed]…to the locked water (Up) position" (my underlining) (cf Lane 15/1/15 at [63] and [64]). Similarly, Mr Lane's reference to the tendency of the lever to move forward unless "locked" (9/9/16 at [34]) must be a reference to its position, rather than the restraining cord, because absent other forces the lever would not move forward from a fully retracted position even with the cord not in place. 2. Notably, when Mr Lane refers to Mr Byers' difficulties in retracting the lever (at 9/8/16 at [34]) Mr Lane makes no reference to the restraining cord or any difficulties Mr Byers had with it. 3. Secondly, and related to the first, Mr Lane asserted that he understood, and also stated to Mr Byers in words to similar effect, that the blue light "confirms to the pilot that the undercarriage lever is locked in the Water (Up) position". But the blue light does not confirm that the restraining cord is in place. As the blue light only confirms the position of the undercarriage lever, this again indicates a distinction between the lever being locked and the restraining cord being in place, or a misunderstanding by Mr Lane about the significance of the blue light. 4. Thirdly, Mr Lane instructed Mr Byers to say, before landing on water, (as does Mr Byers in his August 2016 affidavit) "We are landing on water, and we have a blue light on" (9/8/16 at [31]). Mr Lane said that for each water landing in the four days from 1 to 4 June 2012, Mr Byers followed that procedure (at [53]). Yet subsequently, Mr Lane stated that Mr Byers said, in respect of each water landing on the afternoon of 4 June 2012, "This is a water landing and the wheels are retracted. I have a blue light and I have checked the bungee is secured" (9/8/16, [61f]). This reference to "the wheels are retracted. I have a blue light and I have checked the bungee is secured" is not what Mr Byers was taught to say, not the procedure Mr Lane said (at [53]) Mr Byers followed, and not what Mr Byers asserted he said in his affidavits. Mr Byers denied that he had said this, and denied that Mr Lane confirmed by saying, "Affirm…We have a blue light on, and the bungee cord is secured" (as Mr Lane deposed). It might be expected that Mr Lane's recollection of statements said four years earlier might not be the same as Mr Byers' recollection. But it is less clear why Mr Lane would assert that Mr Byers followed the procedure and yet assert that Mr Byers said words quite different from the procedure that Mr Lane instructed Mr Byers to follow. Mr Lane's repeated oral evidence (T218/3; T218/9) of the need to state, "The wheels are up and locked" is another alternative version of what was the instructed procedure. 5. Fourthly, Mr Lane (even after a correcting affidavit served part way through the trial) does not describe Mr Byers' actions after the take-off from Camden Haven airfield in terms other than seeing Mr Byers perform "and confirmed with [Mr Byers] that he carried out" a procedure that is applicable to water landings and take-offs, rather than a take-off from land that involves retraction of the undercarriage. Mr Lane's evidence about the location of the first day of training was unsatisfactory (see T220), indicating an inability to remember general matters. 6. Fifthly, Mr Lane's evidence goes beyond what I think he could have observed. He said he observed Mr Byers check visually the position of the lever, that it was fully retracted, then saw Mr Byers visually check the position of the cord, that it was in place on the lever, then saw Mr Byers visually check that the blue light was on. To ascertain that Mr Byers did this would involve Mr Lane recalling some four years after the event that he had observed where Mr Byers was looking, and at the same time observing the thing at which Mr Byers was looking. In particular, it was not explained how Mr Lane could see Mr Byers visually check that the lever was back, and separately see Mr Byers visually check that the cord was on the lever, so that Mr Lane was able to distinguish between these two visual checks. I think it unlikely that Mr Lane could give specific evidence of where Mr Byers was looking, and if he observed what Mr Byers was looking at, he would have no need himself to separately visually check that the blue light was on and visually check that the restraining cord was in place over the lever, he having already done that in observing Mr Byers' checks. This evidence appeared to be a reconstruction to cover all bases rather than a recollection of what had occurred. 7. Sixthly, Mr Lane accepted that he never referred to the restraining cord as the "bungee cord" or the "bungee" (T174/5; T174/31-39; T218/21-38) contrary to his evidence in his August 2016 affidavit (and Mr Byers' August 2016 affidavit of him repeatedly using the term). When pressed about how he actually referred to the restraining cord, Mr Lane said he used the word "lock" or "locked" (cf "rubber band" (T229/33)). But this terminology would remove all distinction between the two steps of the procedure: that the lever was back and locked, and the bungee cord was secured. He cannot be supposed to have said or taught Mr Byers to say as part of the established procedure, the "lever is back and locked. The lever is locked". At least, I could not regard his evidence as having established that. No explanation was given to reconcile Mr Lane's evidence of Mr Byers using the word "bungee" and Mr Byers' denial of it. 8. Seventhly, Mr Lane confirmed that his evidence of the undercarriage checks was not his actual memory but his practice (T222/16-27). The value of this practice is lessened if it does not contain his actual words, and contains significant differences: between "the bungee is secured" (9/8/16, [61f], [64e] and [64f]) as he stated in his 9 August 2016 affidavit, and "the wheels are up and locked", as he asserted in oral testimony (T218/3; T218/9). 9. Eighthly, Mr Lane, in his 2015 and 2016 affidavits, gave evidence that he saw the lever slip out of the restraint or bungee cord. In oral evidence he conceded that he did not actually see the cord slip off the lever. Observing the lever unrestrained would have left unexplained why he did not immediately remedy that by replacing the cord on the lever. 10. Ninthly, when pressed that the restraining cord on the incident landing was not attached to the lever, and that the checks were confined to the position of the lever and the illumination of the blue light, Mr Lane disagreed, and referred to and relied upon a distinct memory occurring when Mr Byers made an earlier take-off from land. The truthfulness of that memory was challenged, a significant part of it not having been earlier recorded in any affidavit. 11. In this regard, I referred earlier in this judgment to Mr Lane's evidence (9/8/16 at [34]) of Mr Byers' difficulty with retracting the undercarriage lever "on a couple of occasions", although Mr Lane did not specify the dates of those occasions. Mr Lane's oral evidence on Mr Byers' difficulty was as follows (T229/27-35): "Q. I'm going to further suggest to you that it's possible, indeed, probable, that all the checks after take-off from Camden Haven after lunch were in fact confined to a check that the lever was in Water Up position and the blue light was on? A. I disagree with that entirely. I remember distinctly that Malcolm had considerable trouble retracting the undercarriage after take-off at Camden Haven and getting the rubber band over the end of the lever, and because he'd had that trouble I double-checked everything to make sure that the undercarriage was normal." 1. In context, this answer is a reference to the final take-off from Camden Haven airfield, the final occasion when the undercarriage was retracted (because thereafter all landing and take-offs were on or from water). But this significant event is not mentioned by Mr Lane or Mr Byers in their affidavits when they described the take-off from Camden Haven, a matter which must impact adversely at least on Mr Lane's credit. If one of the occasions mentioned by Mr Lane at paragraph 34 of his affidavit occurred on the final take-off, as Mr Lane's evidence in cross-examination suggests, then the absence of any reference to the restraining cord in paragraph 34 supports an inference that the restraining cord was not put on the lever. If, on the other hand, Mr Lane's memory is of another occasion, then it tends to underline the absence of a memory of events of that afternoon, as another different memory is being cited in support. Mr Lane's assertion of a memory that thereafter he double-checked everything does not sit comfortably with his evidence of not remembering the checks but having a "religious practice" of doing so (T225/23, T222/16-27). 2. Mr Lane had no apparent financial interest in the outcome of the litigation, though it would not be unusual as the instructor for him to feel some concern as to whether he played any role in the traumatic landing. His evidence critical of the hull of the Super Petrel and the bungee lock system, which is inconsistent with his earlier praise of the aircraft when applying, ultimately unsuccessfully, to be the Australian distributor of the aircraft and his willingness to teach others to fly it, and most importantly the various matters I have set out above, left me unconvinced of the reliability of Mr Lane's evidence in his last affidavit, including his evidence of his visual checks of the restraining cord being in place and the verbal confirmations he gave. (e) The propensity of the restraining cord to slip from the lever 1. The other significant matter, apart from the evidence of Mr Byers and Mr Lane, in determining what caused the incident is whether there was a propensity in the restraining cord to slip from the lever. The more possible, or likely, that event, the more ready I would be to overlook my concerns about Mr Byers' and Mr Lane's testimony when determining what caused the restraining cord not to be in position on the undercarriage lever. 2. It was not in dispute that forces upon the aircraft may cause movement in the lever. Both parties accepted that the forward movement of the lever in this case resulted from the forces on the aircraft, and the purpose of the cord was to restrain the possible forward movement of the lever. 3. Whether movement of the lever could cause the cord to slip off the lever is a separate question. There was no evidence that the cord had this tendency, and the evidence of Douglas Smith, an aerospace engineer with experience in preparing repair schemes for Super Petrel aircrafts, was to the contrary, that the "'bungee cord' did not show any tendency to slip off the handle" (Exhibit 2D4, p 41, section 6.7, 4th bullet point). Ben Joseph, the plaintiff's expert aircraft maintenance engineer, agreed (T380/33) and the plaintiff's expert aeronautical engineer, Dafydd Llewellyn, had no reason to doubt that observation (T378/44-379/12). The evidence of another Super Petrel owner and pilot instructor, Rohan Whittington, was to the same effect. Nor did any pilot – Mr Lane, Mr Whittington, Mr Vaun Moncur – give evidence of ever having seen the restraining cord slip from the lever. Nor was there any evidence from Mr Byers or Mr Lane that the cord was lacking in tension or was otherwise than fit to restrain the lever. 4. The plaintiff's submissions (at [106]) refer to the evidence of Mr Lane that the lever "was activated by slipping out of its restraint and moving forward". But Mr Lane accepted in evidence that he did not actually see this occurring. 5. Further, the forces on the cord if anything would tend to pull the cord down the lever, away from its end, as the lever rose up and forward from the Water (Up) position, a matter accepted by Mr Smith in evidence (T432/23-42). 6. Accordingly, the evidence indicated no propensity for the cord to slip from the lever. (f) The Browne v Dunn point 1. The defendants' case was that the restraining cord was not in place over the undercarriage lever during the afternoon flights. The plaintiff's case is that the restraining cord was put in place after take-off from Camden Haven airfield that afternoon and remained in place at all times throughout each water landing and take-off, but became dislodged during or immediately before the final water landing. Proof of the plaintiff's case involves proof both that the restraining cord was in place and that it became dislodged, as the defendants asserted. But it was common ground that the restraining cord was not in place at the conclusion of the landing. So if it was in place that afternoon, by some mechanism it must have become dislodged. To put the matter another way, how the cord came to be off the lever at the end of the landing is relevant to determining whether the cord was ever on the lever during the afternoon session. 2. Mr Byers asserted that because of the rule in Browne v Dunn (1893) 6 R 67, it was not open to the defendants to submit that the restraining cord was not secured across the undercarriage lever after take-off from Camden Haven airfield. I do not regard this submission as having any merit. As Mr Byers conceded in submissions, the first defendant's counsel put the following matters to Mr Byers: * "It's possible, I suggest, that in your concentration to get the right touchdown and complete all the necessary checks on that final landing on 4 July, your visual check of the undercarriage was that the lever was water up and the blue light was on, and you verbally confirmed this, but you did not visually or by feel actually check the cord" (T184/1-5); * "that all your checks for each of the circuits were simply a vocal confirmation that the blue light was on and that the lever was up" (T184/16-20); * "there was no actual visual or feel check at all" (T184/23-25); * "you can't be sure that you actually checked for those landings after lunch, that the cord was attached by you after retracting the wheels [after] the initial take-off at the airfield" (T184/30-35); and * "your checks were simply that the lever was in the water-up position, the blue light was on, and now four years on you just can't be certain that you really did lock the bungee rope at all" (T184/30-35). 1. The penultimate and final propositions in particular include the assertion that the restraining cord was not attached after take-off from the airfield. 2. The following matters were put to Mr Lane: * "I'm going to suggest to you, Mr Lane, that the reality is that on the incident landing the bungee rope or the bungee cord was simply not attached at all." (T229/23-34); and * "it possible, indeed probable, that all the checks after take-off from Camden Haven after lunch were in fact confined to a check that the lever was in the Water Up position and the blue light was on" (T299/27-35). 1. Mr Byers criticised the defendants for "simply not establish[ing] in the cross-examination" (plaintiff's reply submissions ("RS") 16/9/16 at [22]) that the "'final checks' did not include securing the bungee cord". But the cross-examiner is not obliged to "establish" this matter. It is sufficient if the proposition was put. 2. The plaintiff's submission is not assisted by the lack of clarity in at least Mr Lane's evidence as to what occurred after take-off from Camden Haven airfield. Mr Lane first gave evidence on this matter in an affidavit sworn less than three weeks before the trial, referring to the "water landing" procedure being adopted by Mr Byers at take-off (see Lane affidavit 9/8/16 at [60] and [31]). Part way through the trial that evidence changed to a "water landing" or a "water takeoff" procedure (see Lane 1/9/16 at [4] and [5]). Then towards the conclusion of cross-examination, Mr Lane referred to Mr Byers' difficulties with retracting the lever, apparently on the final land take-off (T229/27-T231/48 and Lane 9/9/16 at [34]). (g) Theories of the plaintiff 1. Mr Byers submits (plaintiff's submissions ("PS") 9/9/16 at [129]) that the restraining cord came off the lever either by slipping off the end, or by being inadvertently knocked off the end by Mr Lane or Mr Byers. 2. Mr Byers submits that the cord could have slipped off the lever either because of the "springiness" of the undercarriage system or because the cord was placed near the rounded end of the lever. Whilst the springiness of the system was established, there was no evidence to indicate that this had the capacity to move the restraining cord off the lever. Mr Smith conceded the possibility of movement of the cord. But that does not establish any possibility that it would move against the force created by the lever or the cord. Movement requires force, and no force was identified that would operate to stretch the cord towards the end of the lever. That the forces in the cord may cause it to move to be more directly across the lever does not establish that it could move away from that position. 3. Because of the absence of evidence of any forces on the restraining cord acting towards the end of the lever or movement of the cord in that direction, and in the absence of any evidence of the cord on any other occasion slipping off the lever, I do not accept that the cord, if placed correctly on the lever, could have moved during flight or landing so that it would come off the end of the lever. 4. I do not accept the submission (see PS [135]) that the recommended procedure for regular visual and tactual checks by the pilot to ensure that the cord was in place was evidence of a possibility that the cord might slip from the lever. Mr Lane, who gave evidence of implementing this procedure, did not believe the aircraft to be unsafe (T235/3). 5. The other option proposed by the plaintiff about how the cord slipped off the lever is that the cord was placed near the rounded end of the lever. To place the cord "near" the rounded end of the lever seems to be of no significance, at least if it means that it was located on the lever before the lever becomes somewhat rounded at its end. The forces exerted by the cord would tend to bring it to the shortest distance across the lever, which would be away from the end. There is no explanation for why the cord would move against the force toward the shortest distance across the lever, caused by its elasticity and stretching, so as to stretch beyond the end of the lever handle. 6. Of course, if the cord was actually placed on the rounded end of the lever, it may be possible for the cord to slip off. But again, there is no evidence that the cord was so placed. On the plaintiff's case, the cord was placed on the lever for the first (and last) time that afternoon after take-off from the airfield at Camden Haven. To have placed it not across the lever, but stretched so that it was on the rounded end of the lever would have been an obviously inappropriate position for the cord to be, effectively no different from failing to secure the cord across the lever. Further, any incorrect positioning of the cord on the rounded end of the lever must have been noticed by Mr Lane and Mr Byers as they each did the checks (if they did the checks) of the position of the cord in the course of each of the two water landings and water take-offs that afternoon. To suppose that the cord could have remained on the end of the lever and not seen is to conclude that Mr Lane and Mr Byers did not separately, visually, tactually and repeatedly check the position of the cord, which is to reject their evidence and Mr Byers' case. 7. I do not accept that the cord was placed on the rounded end of the lever although in any event and, as indicated, that would not be a means of securing the lever by the restraining cord as Mr Byers understood he needed to do. 8. The other possibility postulated by Mr Byers in submissions is that the cord was inadvertently knocked off the lever by Mr Byers or Mr Lane when making the final tactual check of the cord. 9. Again, there is no evidence from anyone to indicate any propensity of the cord to be inadvertently dislodged. Nor is there any evidence from Mr Lane or Mr Byers that allows this possibility. The cord and the lever did not appear to be located in a position where either could inadvertently be knocked. In any event, that is not the plaintiff's submission. The submission is that the inadvertent dislodgment came at a particular time, the final tactual check of the cord on the lever prior to the final landing. I accept that a tactual check of the cord is the only conceivable time when either Mr Lane or Mr Byers are moving close to the cord so as to come into contact with it. 10. If Mr Byers had knocked off the cord during his final tactual check then, reasoning from Mr Lane's evidence, Mr Lane would have both seen and felt that the cord was not on the lever during his final confirmatory checks. Mr Lane's evidence is to the contrary, that his final check confirmed that the restraining cord was in place. As for Mr Lane's final tactual check, the theory supposes that Mr Lane, rather than tactually checking that the cord was on the lever, by his movements caused the cord to be removed from the lever. That is contrary to his evidence (see T229/18). If it was "mandatory" for there to be a tactual check to ensure that the cord was on the lever, as the plaintiff submits is the effect of Mr Lane's testimony (RS 9/9/17 at [132]), it can hardly be fulfilled by knocking the cord off the lever. 11. Quite apart from the evidence of Mr Lane and Mr Byers, my assessment is that it is most unlikely that the cord would be inadvertently knocked from the lever, and impossible to do so by a mere check of the position of the cord on the lever. The cord would need to be pulled by the fingers – against the elastic force of the cord – off the end of the lever, whereas a check would involve merely touching the cord and the lever. Whilst there was no direct evidence of the force needed to pull the cord from the lever, I cannot conclude that it was trivial or nominal given the absence of any propensity in the cord to slip from the lever. To use an admittedly poor analogy, the likelihood seems to be similar to a person knocking a taut rubber band off from around their finger when feeling it to check that it is present. I do not think it is at all feasible to conclude that the restraining cord may have been knocked off inadvertently by Mr Lane during a final tactual check. (h) Conclusion 1. For these reasons, I am not satisfied that the restraining cord slipped off the lever, was knocked off the lever during a tactual check, or was placed on the rounded end of the lever. Each of these possibilities seemed to me to be speculative and without any evidentiary basis or support. As no other possibility was proposed, I reject that aspect of the plaintiff's case. 2. The absence of any real possibility of the cord coming off the lever without intentional conduct is significant in weighing up the value of the evidence of Mr Lane and Mr Byers. Generally, I am inclined to the view that the objective likelihood of the cord coming off the lever in the ways suggested by the plaintiff seems so small that I would likely not accept the evidence of Mr Lane and Mr Byers even if their credit appeared otherwise unimpeachable. I am relieved of that decision because of the unsatisfactory features of Mr Byers' and Mr Lane's testimony to which I have referred. In case it is significant, I also think that if it were otherwise established that there was a significant possibility of the cord slipping or being knocked off the lever, I might have been persuaded to accept the plaintiff's case notwithstanding my reservations about Mr Byers' and Mr Lane's testimony. In other words, the matters proved about the objective features of the undercarriage, the lever and the cord are more significant in my decision than the accuracy or otherwise of the recollections of Mr Lane and Mr Byers. 3. Accordingly, I do not accept Mr Byers' and Mr Lane's account of repeatedly checking that the cord was on the lever, or of putting the cord on the lever after take-off from the airfield, during the afternoon of 4 July 2012. Had they done so, the cord would have remained on the lever, and would have restrained it so as to prevent the uncommanded deployment of the undercarriage. The failure of Mr Byers to put the cord over the lever (and the absence of subsequent checks to ensure the correct position of the cord) was the cause of the deployment of the undercarriage during the final water landing, and the damage to the aircraft. 4. One other matter that requires explanation is the circumstance that the undercarriage did not deploy during the previous rougher water landing, but did on the smooth final landing. 5. If the cord was not restraining the lever during the previous water landing, it must follow that the landing did not produce the level of force required to move the lever forward and lower the undercarriage. The qualitative descriptions of the final landing suggest that it was smoother. That might indicate that the forces on the undercarriage were less. However, it seems at least possible that the undercarriage lever was, by virtue of the earlier landings, not at precisely the same fully retracted position for the final landing, and thus a lesser force might have been sufficient to tip the lever to the neutral or over-centre point where the forward weighting of the lever took over and lowered the undercarriage. Whether that is the explanation, or whether the force was greater during the final landing notwithstanding its apparent smoothness, remains uncertain. What is clear is that when the lever is unrestrained by the cord, the uncommanded deployment of the undercarriage on an apparently smooth water landing was possible (as all parties accept occurred here), and it is also quite possible that the undercarriage could remain up during a water landing if the lever is retracted but not restrained by the cord (Exhibit M, Q7). These possibilities were not the subject of contrary submissions, and were not excluded by the evidence. I am persuaded that one of these possibilities must have occurred in the circumstances as I have found them on the balance of probabilities. 6. Mr Byers was unwilling to concede that a failure to ensure that the cord was placed on the lever, which caused the uncommanded deployment of the undercarriage and damage to aircraft, was determinative of liability, arguing that the undercarriage mechanism was nevertheless defective. But Mr Byers submitted (PS 9/9/16 at [134]) that the "defect" involved a locking mechanism that could and did slip off or was unreliably knocked off, matters that I have rejected above. If this is the only alleged defect, the point does not require further attention. 7. The plaintiff also referred in written submissions (PS 9/9/16 at [149(e)(iii)] to there being no "light or horn or alarm…that indicated that the bungee cord had disengaged prior to landing". This supposed defect, if that is what is suggested, was not developed. It is doubtful if the plaintiff intended that an alarm should sound whenever the restraining cord is not in place on the lever, since the restraining cord must be removed from the lever to allow the undercarriage to be deployed for landing on land. Thus, an alarm that "the landing gear is not safe" (PS 9/9/16 at [219]) overlooks that a deployed undercarriage is perfectly safe, indeed mandatory, for a landing on land, and an alarm in that circumstance would be unhelpful, if not dangerous. 8. I have noted earlier that it was not disputed that the blue light illuminates when the lever is fully retracted, irrespective of whether the restraining cord is in place across the lever handle (see plaintiff's written opening 29/8/16 at [145]). It was not expressly submitted that the illumination of the blue light without the restraining cord being in place was misleading or constituted a defect. That may be because Mr Byers and Mr Lane knew, or accepted that they should have known, that the blue light indicated the position of the lever rather than the engagement of the restraining cord and thus the plaintiff's case did not involve reliance upon the blue light as a sign that the cord was in place. The plaintiff's case was that the restraining cord being in place was established by Mr Lane and Mr Byers making repeated visual and tactual checks and their audible confirmation. If the illuminated blue light was the cause of Mr Byers and Mr Lane not ensuring that the restraining cord was in place, that was not the case the plaintiff sought to make in these proceedings. 9. In any event, I am not satisfied that an absence of a warning that the cord is not in place before a water landing is a defect. There was no evidence to this effect. The need for the visual, tactual and audible checks arises because there is no other sign of the cord being in place. The same can be said of the absence of "the undercarriage lever…[being] in forward view of the pilot" (PS 29/8/16 at [45]). 10. Mr Byers also submitted that the absence of a "mechanical 'latch' or an irreversible mechanism to lock the undercarriage in the 'wheels up' position" was a defect (see PS 9/9/17 at [7], [215]). Reference was made (at [217]) to glider undercarriages which involve a sideways movement at the end of the lever's movement to become locked in place, and a reversing sideways movement to unlock the lever. In that event, the sideways movement produces the lock that is achieved in the Super Petrel by positioning the restraining cord. It is a different form of "locking" or "restraining" the lever, perhaps even a preferable form. But that does not, in my view, render the restraining mechanism in the Super Petrel defective. 11. There is no suggested difficulty in using the restraining cord, which, on the conclusions I have reached, is fully effective so long as the step to engage the cord is adopted. There was no evidence to suggest that the engagement of the restraining cord was other than simple, quick, mandatory, and readily able to be confirmed by sight, touch and speech. That other methods may have been available, that were perhaps even simpler or automatic, is not evidence that the system adopted in the Super Petrel was a defect. 12. The finding that the cause of the damage was due to pilot error in not affixing the restraining cord, rather than any defect in the undercarriage system, is sufficient to determine the result of the claim. Nevertheless, some brief comments are made in relation to other issues raised. D. The statutory and contract claims (a) Fitness for purpose, merchantable quality, acceptable quality 1. Mr Byers alleged that the defendants were liable as the Super Petrel was not fit for purpose as an amphibian aircraft, was not of merchantable quality, and was not of acceptable quality, within the meaning of those terms in s 17(a) and 17(c) of the Sale of Goods Act 1896 (Qld) and ss 54 and 55 of the ACL. 2. Mr Byers submitted (PS 9/9/16 at [179]) that to be fit for purpose the aircraft must in the ordinary course be "capable of landing safely and without incident on both land and on water". To be of merchantable quality, the aircraft must be such that Mr Byers "fully acquainted with the facts and…knowing what hidden defects exist…would buy [it] without abatement of the price" (see Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387, 418 per Dixon J; Grant v Australian Knitting Mills Ltd (1935) 54 CLR 49 at 60-61). Acceptable quality is defined in s 54 of the ACL. 3. The only issue in respect of both fitness for purpose and merchantable quality is whether there was a "latent defect in the aircraft's landing gear mechanism" (PS 9/9/16 at [179], [183]). 4. The plaintiff's written submissions repeatedly purported to specify these "particular defects" in a later section of the submissions (see PS 9/9/16 at [179], [183]) but the later section does not itemise the defects. To the extent that they can be discerned (see PS [213]-[227]), the alleged defects may include no automatic locking device, the potential for the restraining cord to be inadvertently knocked from the lever, the absence of a warning that the cord is not in place, and an absence of a slot in the lever in which the cord would sit. All but the last item have been dealt with above. And the absence of a slot on the lever could only be a defect if the restraining mechanism is defective without it, which I have rejected. 5. Furthermore, only one of these alleged defects could be latent. The method of securing the lever by the cord and the absence of any automatic locking device, alarm, or slot in the lever handle, were apparent and known. The possibility of the cord to slip off or be inadvertently dislodged from the lever may be a latent defect, if it existed, but I have rejected that the restraining cord had that characteristic. 6. The plaintiff also submitted that the aircraft was unsafe, defective and unfit for purpose because the "undercarriage retraction system was not capable of being sufficiently locked or restrained by the bungee cord during a routine water landing". If this submission relies on the restraining cord slipping from the lever, it has been rejected. There was no other inadequacy in the restraining cord established. Mr Smith and Mr Joseph accepted that the cord was safe and durable and would preclude the undercarriage from deploying so as to touch the water (see Exhibit M, pp 2, 3). 7. The springiness of the undercarriage system and the elasticity of the restraining cord allowed movement of the undercarriage on landing. But there is no suggestion that the incident could have occurred had the restraining cord been in place (see Exhibit M, Q6, Q8) and it was common ground that on this occasion it was not in place. 8. Mr Byers did not assert that any additional item constituted an infringement of the acceptable quality requirement imposed by the ACL. Rather, he submitted (at [212]): "as with the breach of contract claim, if the cause of the Incident was due to the defective design of the undercarriage locking mechanism (i.e. the bungee cord), and the Incident occurred in the circumstances…[caused by the cord slipping off or being inadvertently knocked off the lever] it follows that the aircraft was not safe for its normal operation...it was not free from defects…and it was not fit for all [purposes]…therefore the aircraft was not of 'acceptable quality'". 1. Accordingly, no defect is established, nor was the aircraft unfit for purpose or of unmerchantable quality or unacceptable quality. It follows that no liability is established against any of the defendants. (b) Manufacturer's liability 1. The plaintiff sought to extend any liability of Mrs Frith under s 54 of the ACL to Mr Hutchinson and Vision. No clear distinction was drawn between the positions of Mr Hutchinson and his company, with the pleadings and submissions generally referring to "Mr Hutchinson and/or Vision". In these short reasons I propose to deal only with Mr Hutchinson. 2. The liability of Mr Hutchinson depended upon him being a manufacturer under Pt 5-4, Div 2 of the ACL. A manufacturer is defined under s 7 of the ACL to include a person who "assembles goods" (s 7(1)(a)), and a person who imports goods into Australia if the manufacturer does not have a place of business in Australia (s 7(1)(e)). The definition also includes a person on whose behalf goods are imported (s 7(3)). Whilst this final aspect of the definition might in some circumstances lead to more than one importer (the actual importer, and the person on whose behalf goods are imported) (see J D Heydon, Trade practices law: competition and consumer law (2012) at [250.280]), nevertheless, Mr Hutchinson is not a person on whose behalf goods were imported. Mr Hutchinson played a significant role assisting Mrs Frith to import the goods, but nothing in that assistance caused me to conclude that he could properly be termed an importer, or the person who imported the aircraft. 3. The same point could be made about Mr Hutchinson as the person who assembled the goods, that he did no more than assist Mrs Frith. I do not think that is correct. Whilst Mr Hutchinson may have assembled the goods gratuitously for Mrs Frith, or Mr Byers, still Mr Hutchinson assembled the goods. Although the Super Petrel did not need a great deal of assembly, yet the assembly was not de minimus. 4. Nevertheless, the definition of a manufacturer extends not to the person who assembled the goods but the person who "assembles goods". This suggests some regularity about the assembling and does not include a person who, on one occasion, as Mr Hutchinson did here, assembled the relevant item. The surrounding words in this part of the s 7 definition – "grows, extracts, produces, processes or assembles" – support the need for some regularity, repetition or business, rather than one occasion of assembling goods. It may be different if Mr Hutchinson "assembles goods" as the new Australian distributor. 5. Finally, the plaintiff sought to make the defendants liable under s 140 of the ACL. Section 140 imposes a liability on a manufacturer for other goods destroyed by reason of a safety defect in the goods supplied. The plaintiff submitted that the good supplied was the undercarriage system, which because of its alleged defects destroyed the aircraft. 6. The difficulty with this construction is that for Mr Hutchinson to be liable, he must be a manufacturer of the undercarriage system and supply the undercarriage system in trade or commerce. On any view, he did not "assemble" the undercarriage system as it was imported by Mrs Frith, fully assembled. Nor do I think it can be said that his gratuitous assistance to Mrs Frith constituted him, as distinct from Mrs Frith, supplying the undercarriage system in trade or commerce. And, for reasons which have already been given, the requirements under s 140 for the undercarriage system having a safety defect which caused the destruction of the aircraft is rejected. 7. For these further brief reasons, s 140 of the ACL has no application to Mr Hutchinson. E. Damages 1. Mr Smith and Mr Joseph gave competing estimates of the repair costs. Mr Smith had previous experience in repairs and I would accept his estimate. However, if the Super Petrel had a latent defect, which I have not found, Mr Byers may be entitled to reject the aircraft and thus recover all of the purchase cost, less the salvage value attributed by Mr Smith to be between $7,500 and $16,500, say $12,000. 2. Some of Mr Byers' purchase price was paid in American dollars. But Mr Byers did not establish that he had any greater connection to the foreign currency than that he was required by the Brazilian manufacturer to pay it. Any payments in the foreign currency were apparently made by him converting Australian dollars to American dollars for the purpose of payment. His damages should be calculated by applying the exchange rate applicable at the time of his USD payment (see Who Ya Gonna Call Bark Busters Pty Ltd v Brooke [2013] NSWDC 133 at [54]-[63], Daewoo Australia Pty Ltd v Suncorp-Metway Ltd [2000] NSWSC 35; (2000) 48 NSWLR 692 at [27]). It follows that any interest entitlement would be calculated from the date of payment at the applicable local rate. F. Orders 1. The orders of the Court are: 1. Judgment for the defendants. 2. Plaintiff to pay the defendants' costs. ********** Amendments 04 July 2017 - Case title amended to add the words "(No 2)". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 July 2017