Salient FaCTS
16 In about 2014, Mr Kane and his son, Branden, who was then aged 20, became interested in having flying lessons and becoming pilots. In that year, they started having flying lessons with Central West Flying School at Bathurst Airport, where their main flying instructor was the principal and chief flying instructor of that school, Mr Chris Stott. Initially, Mr Kane's flying lessons were undertaken in a 2-seater Australian-made aircraft called a Jabiru, but he soon switched to a plane manufactured by BRM Aero, a Bristell aircraft. At some point, which was not identified in the evidence, Branden Kane lost interest in flying, and he never obtained a pilot's licence.
17 In about the middle of 2014, Mr Kane began considering purchasing an aircraft, partly so that he and his son could fly together recreationally, and partly because he thought the aircraft could be used in the business of renting construction industry equipment conducted by Kane's Hire. Mr Kane also considered that Branden could do his flying lessons in an aircraft with modern electronic flight displays. Mr Stott put Mr Kane in touch with Mr Brett Anderson of Anderson Aviation. Mr Anderson provided Mr Kane with a price list of Bristell aircraft valid from June 2012.
18 Mr Kane received his pilot's licence in May 2015. In about July 2015, Mr Kane and Branden travelled to the Osh Kosh Airshow in the United States. Mr Anderson and Mr Stott were also present, and they discussed the possibility of Mr Kane purchasing an aircraft for the above mentioned purposes, and both Mr Stott and Mr Anderson recommended a Bristell aircraft. Mr Anderson pointed out that BRM Aero would have a much more powerful plane with a new 915 turbo engine coming out soon. BRM Aero's US distributor had a pavilion at that airshow, which Mr Kane and his son visited a number of times. At around this time, Mr Anderson sent Mr Kane a copy of an email from Mr Bristela of BRM Aero referring to the prototype of the 915iS turbo engine, which was said to be 10 kg heavier than the 912 ULS. The email foreshadowed that the new engine would be added to the price list in 2017.
19 In September 2017, Mr Kane gained his Recreational Cross Country Pilot's Endorsement. On 18 October 2017, Mr Kane sent an email to Mr Anderson saying that he was considering purchasing a Bristell, and asked for advice on the following when convenient:
Up dated price list and weights like attached previously emailed. However I could not work out what goes with what
New Rotax 130hp [horsepower] option Electronic Fuel Injection
What if we price up about three options including weights
Option 1 with full glass Garmin cock pit
Option 2 semi glass
Option 3 Analogue
I think will require the following as well depending on how weights work out. [sic]
There was then set out a lengthy list of other features of the aircraft. The reference to the "New Rotax 130 hp option" was a reference to the 915 turbo engine which Mr Anderson and Mr Kane had discussed at the Osh Kosh Airshow.
20 On 25 October 2017, Mr Anderson sent an email to Mr Kane with comments in relation to various of the features which Mr Kane had listed in his 18 October 2017 email, and also included three documents entitled "Anderson Aviation PL Australian Price List". Those lists were price and option lists for three differently optioned Bristell aircraft. They each bore the date 1 July 2017. Each of those price lists has a column for weight in kilograms and also a column for total weight. Many of the items which have a dollar figure beside them, however, do not have a corresponding figure either for weight or total weight. Two of the price lists have a total weight of 334.09 kg and the other has a total weight of 334.35 kg. However a plain reading of those documents would indicate that many of the items for which a dollar figure has been included do not have a corresponding weight measurement.
21 Mr Kane claims that shortly after receiving those price and options lists on 25 October 2017, he had a conversation with Mr Anderson in words to the following effect:
Mr Kane: "A Bristell looks to be a good option for flying with Branden and for him to do his lessons in. I can also use it for my company's business. But what about all the different options and their weights? I know I want two parachutes, for example. I am also definitely looking at the bigger 915 engine. But how do I work this options list? Half the things I don't even know what they are. How do I know that I am not choosing the wrong stuff?
Mr Anderson: When you are ready, I will go through the options list with you and explain each item. You can choose what you want. In the end a dry weight of around 350 kg is about the ideal weight. You can also option the plane with a reinforced spar bar. This option will increase the aircraft's legally allowable flying weight.
Mr Kane: Thank you. I will have a talk with Chris and get back to you."
22 Mr Anderson denied that conversation. He pointed out that the Bristell aircraft does not offer two parachutes. Rather, the rescue system consists of a single parachute for the aircraft itself, not parachutes for the pilot and passenger. Mr Anderson also explained that the purpose of the reinforced spar is to increase turbulent penetration speed, not to carry extra weight (T177.1-12).
23 The reinforced spar bar is referred to in the options and price lists as "HD Spar 750 kg". HD stands for "heavy duty". Mr Kane gave evidence that he was aware that there was a potential in the future to have aircraft registered in a 750 kg category, but he knew that Australia did not yet have such a category. Mr Kane thought that such a category existed in Europe or elsewhere. He believed that CASA had said that this would never happen in Australia (T56.15-47), although it is possible (but unclear) that he formed that belief only after taking delivery of the Bristell Aircraft. In the light of that evidence, I regard it as highly improbable that Mr Anderson made the comment attributed to him by Mr Kane that the reinforced spar bar would increase the aircraft's legally allowable flying weight and equally improbable that Mr Kane would have relied on any such comment. I reject Mr Kane's evidence of the conversation on 25 October 2017.
24 Mr Kane gives evidence of a second conversation with Mr Anderson in October 2017 in which Mr Kane again says he expressed his desire for the aircraft to have the more powerful engine and also parachutes. Mr Anderson pointed out that if Mr Kane chose the 915 engine then he would also need the heavier MT propeller. Mr Kane says that he and Mr Anderson then went through line by line one of the three price and options lists sent on 25 October 2017. Mr Kane says that he asked Mr Anderson what each item on the list was and Mr Anderson gave him an explanation. If the option was something which Mr Kane thought he wanted for the aircraft then he said to Mr Anderson that he would choose that. That conversation is not disputed by Mr Anderson.
25 On 31 October 2017, Mr Anderson sent a further email to Mr Kane as follows:
Attached is the price list for what we discussed.
The new 915iS is the biggest factor for the increase in price.
Also given the current Euro rate it has pushed the figure up.
26 The email attached a price list dated 1 January 2018. That list begins by referring to the Bristell 912 aircraft and describes it, among other things, as "LSA (600 kg)". It then has a lengthy options list. The list includes the Rotax 915iS 130 hp engine, but does not give a weight figure for that engine. It includes the MT propeller at a weight of 10 kg, but that figure is not included in the "weight total" column. The frame options include the "HD Spar 750 kg" but no weight figure is given for that option. The parachute is referred to as "Rescue System Magnum M 601 LSA" at a weight of 13.5 kg. In relation to many of the items for which a dollar figure has been inserted, there is a corresponding weight figure; however, there are also numerous items for which a dollar figure has been included, but there is either no weight figure at all or no weight figure included in the "total weight" column. The list ends with a figure for total weight of 353.39 kg. However, a plain reading of the document indicates that not all of the options which have been selected and which have accordingly been given a dollar figure, have been allocated a weight figure. It is therefore readily apparent from the document that the total weight figure of 353.39 is incomplete and understated.
27 On 22 November 2017, Mr Bristela sent Mr Anderson an email saying:
it is good combination 915 with rescue and sleeping pack. Thanks seeiping pack it will be fine. MT is for the while the best choice for 915iS engine. [sic]
28 Mr Anderson forwarded that email to Mr Kane on the same day saying: "he has not given me weight figures yet. I expect they will arrive later tonight or in the morning." Both Mr Anderson (T174.2-17) and Mr Bristela (T209.16-26) said in their oral evidence that the reference to "good combination" was a reference to considerations of balance of the aircraft or the centre of gravity (T209.16-26).
29 On 27 November 2017, Mr Bristela sent Mr Anderson a document setting out the weights for various options for the Bristell 912 aircraft. Mr Anderson forwarded that to Mr Kane the following day by email, referring to the attachment as "Bristell 2018 Weight CK17 10 31.xls". The attachment gives a weight allocation for the Rotax 915iS 130 hp engine of 10 kg, and also allocates a weight of 10 kg for the MT propeller. The HD spar 750 kg is given a weight allocation of 2 kg. The document concludes with a total weight of 391.37 kg. The document does not include dollar figures for the various options.
30 In about June 2018, Mr Kane renewed his interest in purchasing a Bristell aircraft. Mr Kane gives evidence that he and Mr Anderson had a conversation towards the end of June 2018 in words to the following effect:
Mr Kane: "I am ready to finalise the purchase of a Bristell. Can you re-send to me the options list we selected last year so I can have another look. One thing I have been thinking about is the reinforced spar and whether to get that or not.
Mr Anderson: I will send you the price list that you selected last year. With the spar, if you get it, you can upgrade to certified registration with CASA for a maximum take-off weight of 750 kg.
Mr Kane: OK. Thanks. Send the options list when you can."
I reject Mr Kane's evidence concerning the reinforced spar, for the same reasons as given above.
31 Mr Anderson gave evidence that in June 2018, he received a number of telephone calls from Mr Kane. Mr Kane said that he was considering purchasing a Bristell with the more powerful 130 hp Rotax 915iS together with a lot of extras he wanted to be installed in the Bristell. Mr Anderson says that he told Mr Kane that the 915iS engine was much heavier than the original 100 hp 912 engine and that he would need to get a heavier duty propeller to match the more powerful 915iS engine. Mr Anderson also says that he told Mr Kane that the 915iS engine was new on the market and the weights were as yet unknown. Mr Anderson also says he told Mr Kane that with all of the additional equipment Mr Kane sought to have fitted to the aircraft, in particular the installation of the much heavier engine and propeller, care had to be taken not to make the aircraft too heavy because it had a MTOW of 600 kg. Mr Anderson says that Mr Kane responded that weight was not critical as he was only intending to use the aircraft by himself as the only occupant, to travel from his work in Sydney to his farm in the central west area.
32 I accept that evidence of Mr Anderson. I add that it was not denied by Mr Kane, nor was it challenged in Mr Anderson's cross-examination.
33 There was then an exchange by emails on 29 and 30 June 2018 as follows. On 29 June 2018 at 6.52 pm, Mr Anderson sent an email to Mr Kane saying:
Here is the price list that you selected back in 2017.
Nothing has changed price wise.
I notice you had two grips chosen and you will only need one of the two chosen so the price will be a bit less but not really worth mentioning.
The attached price list is dated 1 January 2018. It includes dollar figures for the various options which Mr Kane had selected. However, in relation to many of those items, there is no weight figure allocated either at all or in the column headed "Weight Total". The total weight figure at the end of the list is 353.39kg, however that does not include any weight allocation for a number of items including the Rotax 915iS 130 hp engine, the MT propeller, various items of Garmin equipment, and numerous other items of equipment.
34 On 29 June 2018 at 7.12 pm, Mr Anderson sent a further email saying:
The price list that you had was based on .66 and now it is at .63.
I will have to go over it and work it out again.
I will try to do that tomorrow.
Those figures were a reference to the exchange rate between the Australian dollar and the Euro.
35 On 30 June 2018 at 5.00 am, Mr Kane replied:
Please include weight breakdown in case I have to remove items to save weight.
Three minutes later, Mr Kane sent a further email as follows:
Was adjustable speed propeller included? Or is that what constant speed means?
I noticed weights are in spread sheet. Thank You.
The reference to "constant speed" is part of the description for the MT propeller in the price list which Mr Kane had forwarded on 29 June 2018.
36 On 30 June 2018 at 5.24 am, Mr Kane sent an email to Mr Stott as follows:
What do you think of weight attached, seems a bit heavy?
That email attached the same price list that Mr Anderson had sent to Mr Kane on 29 June 2018 at 6.52 pm.
37 Mr Kane claims that at about this time, and in early July 2018, he had a further conversation with Mr Anderson including words to the following effect:
Mr Anderson: "With all the options you have chosen, I can't get you an aircraft at 350 kg dry weight. I can get you the plane at a total dry weight of about 378 to 380 kg. We are going for a maximum take-off weight of 600 kg, which gets registration with the RAA and a Certificate of Airworthiness with CASA as a light sport aircraft. At an empty weight of 378 to 380 kg you are under the 600 kg. But if you get a reinforced spar then the entire plane can handle a total weight of 750 kg and you can upgrade to certified registration directly with CASA and get a Certificate of Airworthiness for a maximum take-off weight up to 750 kg.
Mr Kane: Okay, it is sounding good. I will talk to Chris about the spar."
38 I reject that evidence. As noted above, the alleged comments concerning the reinforced spar are highly improbable. As the price and option list which was the subject of the emails of 29 and 30 June 2018 does not give a weight allocation for the Rotax 915iS engine or the MT propeller and leaves blank the weight of numerous other items, it is highly improbable that Mr Anderson would have committed himself to being able to say that the dry weight of the aircraft with the options which Mr Kane wished to have would be about 378 to 380 kg.
39 Mr Kane says that after the conversation which he claimed to have had with Mr Anderson, he rang Mr Stott and Mr Stott said to him:
"If you get the spar then you can get the registration under General Aviation with CASA and the allowable weight goes up to 750 kg take-off weight."
I reject that evidence for the reasons given above concerning the heavy duty reinforced spar.
40 Mr Stott responded to Mr Kane's email of 30 June 2018 at 5.24 am at 9.07 am that day, saying:
It's OK - 9kgs lighter than the latest I delivered.. And with 140 HP and your new slimmer self, no problem And the 760kg weight limit will come in in time.
Mr Kane responded at 11.12 am that day saying:
The 760kg is for certified only according to Brett.
41 The meaning of those last two emails is elucidated by the cross-examination of Mr Anderson on a series of text messages between himself and Mr Kane on 29 June 2018. At 2.53 pm, Mr Anderson texted: "750 won't apply to RAA only certified aircraft." That was a reference to aircraft certified only by Recreational Aviation Australia, for which certification is given up to 600 kg. At 5.02 pm, Mr Kane responded: "So if certify [sic: certified] Bristell then 750 may apply?" Mr Anderson replied "Yes" at 5.04 pm. In responding affirmatively, Mr Anderson was referring to a different aircraft, namely the Bristell B23, which was fully certified in the "VH" category (being a category for a range of larger aircraft), but the Bristell B23 was not available in Australia (T178.18-180.5). Mr MacGillivray gave unchallenged evidence that the 750 kg Bristell B23 has been "fully certified to a higher design standard, C5-23, by the European Union Safety Agency". It appears that Mr Kane has confused what he was being told by Mr Anderson about the Bristell B23, and the requirement applicable for certification in the VH category, with what may be allowable for the Bristell 912. Mr Kane acknowledged in his cross-examination that his email at 11.12 am on 30 June 2018 was referring to "certifying to VH 750 kilo" (T87.11-22). Mr Kane was thus aware at least of the fact that Mr Anderson was not referring to certification in the LSA category, but to certification in the larger VH category.
42 As Mr Stott did not give evidence in the case, it is difficult to understand what his reference to the 760 kg weight limit was intended to mean. In any event, counsel for the applicant acknowledges that there is no evidence that Mr Stott was an agent of either Anderson Aviation or BRM Aero, with authority to make representations on their behalf.
43 On 2 July 2018 at 9.16 am, Mr Anderson sent Mr Kane a further email as follows:
Attached is a current price list.
That is based on .64.
There were two attachments to the email. One was the price list dated 1 January 2018, which Mr Kane had sent on 31 October 2017, with a total weight figure of 353.39kg. The second was a new price list dated 2 July 2018, which gave a total weight of 380.35kg. This second price list gave a weight figure of 18 kg to the Rotax 915iS 130 hp engine. It gave a weight figure of 10 kg to the MT propeller, but it did not include that figure in the column for "weight total". There were three items of Garmin equipment for which prices were given but no weight figure was allocated. Accordingly, on a plain reading of the document the "total weight" figure of 380.35kg was incomplete and understated.
44 Mr Anderson's evidence is that at this time, he told Mr Kane that the weights for the 915iS 130hp engine and heavy duty propeller referred to in the price list were unknown and the estimated additional weight for the 915iS 130hp engine over and above the weight of the smaller 100hp 912 ULS engine was provisional, as the final weight had not yet been determined. Mr Anderson also says that he told Mr Kane that the weights for the various constant speed propellers were also not identified at that time, as those components were also new on the market. Mr Anderson says that Mr Kane replied that he understood that the weights were not finalised and that he would wait for the finalised weights. I accept that evidence, which is consistent with the gaps in the weight allocations in the contemporaneous document, being the price and option list which was the subject of the email of 2 July 2018.
45 On 3 July 2018, Mr Anderson sent a further email to Mr Kane as follows:
Attached is the price list with twin screens and also the audio panel.
Milan [Bristela] confirmed my weight estimation was pretty close and if not slightly heavier.
The attached price list allocated weights to many of the optional items but there were numerous items where no weight was given, or no weight was given in the "weight total" column, including the MT propeller and a number of Garmin items. The total weight at the end of the list was given as 378.07 kg, but on a plain reading of the price list that did not include all of the options which Mr Kane had expressed interest in. Further, there are two items which Mr Kane had not yet opted for, namely heated seats and sliding vents in the glass canopy, and accordingly no weight figure was given for those items. In the context of that price list, the comment by Mr Anderson in his email of 3 July 2018 that Mr Bristela had confirmed his weight estimation was "pretty close and if not slightly heavier" was not a reference to the overall total weight but rather was a reference to the weights actually shown for particular items, as Mr Anderson said in his cross-examination (T186.12-22), given that the price list was still missing the weights for some items. Mr Bristela did not agree in cross-examination that he told Mr Anderson that a weight estimate of 378.07 kg was "pretty close to correct", pointing out that he could not see the propeller's weight of 10 kg in the right-hand column for "total weight" (T212.20-45). When asked in cross-examination whether he told Mr Anderson in early July 2018 that an aircraft with the options identified in that price list would weigh about 378 kg, Mr Bristela replied that the figure was not stated as absolute but it would be in the vicinity of or very close to that figure (T214.43-45). That answer leaves open-ended the meaning of "vicinity" and "very close" and the significance of the omission of the 10 kg for the propeller which was plainly not included in the 378 kg figure. More significantly, there is an unresolved ambiguity in Mr Bristela's evidence because the question put to him concerned the weight of a Bristell aircraft with the options identified in the price list, and Mr Bristela thought that the selection of options was indicated by Anderson Aviation inserting the weight of each option in the "total weight" column (T212.41-45, 227.44-228.8). The sum of the weights in that column was 378.07 kg. Mr Bristela could either have been saying that an aircraft with the weights shown for the particular options shown by entries in the "total weight" column would be very close to 378 kg, or he could have been saying that the total weight of an aircraft with those options and any additional ones which could reasonably be expected (thereby including, for example, the MT propeller) would be very close to 378 kg. Accordingly, I do not regard Mr Bristela's evidence as necessarily inconsistent with that of Mr Anderson, but if it were to be regarded as inconsistent, then I would prefer the evidence given by Mr Anderson, as it is consistent with the fact that both Mr Anderson and Mr Bristela were aware that there was no weight included in the 378.07 kg for the MT propeller and certain other items.
46 This was the last price list received by Mr Kane from Mr Anderson before the entry into the contract of sale and purchase.
47 Mr Anderson gives evidence that he had a further discussion with Mr Kane at about this time during which Mr Kane said to Mr Anderson that he understood his aircraft was likely to be very heavy with the inclusion of all the additional extras and options, including the much heavier 130 hp engine and heavy-duty propeller. I accept that evidence.
48 On 5 July 2018, Mr Kane sent an email to Mr Anderson at 6.59 am saying:
I contacted Chris [Stott] if we need to get the weight down to around 350kg what do you suggest for configuration please?
At 7.57 am, Mr Anderson replied to Mr Kane as follows:
The base empty weight is about 330 and the extra weight of a 915iS is another 18kg so basically there is your 350 give or take.
It is impossible to get to 350 if you go with a 915iS and if you try changing props to a fixed pitch then you negate the reason for going with a 915.
The chute is heavy, the motor is heavy and the prop is a heavy prop.
The DUC is a much lighter prop an[d] can reduce the weight by about 5 kilos but not sure if they have used it on a 915 as yet.
I can find out but it is not going to get back to 350.
Attached is the W&B [weight and balance] for the Central West aircraft . That is the weight after Chris removed all the options that he did not need and it is 335.2 kilos. No Chute, fixed pitch prop, no wing lockers etc. Add 18kg just for the 915 and it brings you up to 353.2 kilos with no other real options attached.
I don't know how he figures you can get the aircraft to 350 kilos.
The attached weight and balance worksheet shows an empty weight of 335.2 kg. Mr Anderson accepted that the reference in the first line of that email to 330 kg should have been 320 kg, according to the information which was then available to him. No one appears to have been aware of that error at the time. At 3.42 pm Mr Kane forwarded Mr Anderson's email of 7.57 am to Mr Stott saying:
Any ideas on below?
That question indicates considerable doubt and uncertainty in Mr Kane's mind concerning the weight of the aircraft.
49 On or about 5 July 2018, there was a further conversation between Mr Anderson and Mr Kane. According to Mr Kane's version of the conversation it was in words to the following effect:
Mr Anderson: "With the extra 18kg weight of a 915iS engine and the heavier prop, along with your other options there is no way to get the aircraft down from 378kg to around 350 kg.
Mr Kane: Yes, I understand. I have been thinking about it. I do my lessons in a Bristell that weighs 363 kilograms empty. When 2 people are in the aircraft we can still fly with sufficient fuel. Thinking about that I am satisfied with the plane being 378 kilograms. I will send you an email shortly."
That version was denied by Mr Anderson. Mr Anderson said that the telephone conversation did concern the additional options which Mr Kane wanted installed. Mr Anderson's evidence was that he again emphasised to Mr Kane that the weights of many of the items that Mr Kane wanted installed in the aircraft were as yet unknown and that BRM Aero was still waiting on advice as to those weights from the relevant suppliers. According to Mr Anderson, Mr Kane said that he did not want to wait any longer and wanted to get the order underway. There is a minor inconsistency in Mr Anderson's evidence, in that in his written evidence in chief he placed this conversation on 5 July, whereas in his oral evidence he placed it on 8 July. I do not see that anything turns on this point, but if it is material then I would find that the conversation took place on 5 July.
50 I accept Mr Anderson's version of the conversation and reject that of Mr Kane. It seems to me unlikely that Mr Anderson would have referred to getting the aircraft down from 378kg when, as a matter of objective fact, the weight of a number of items had not been included in the price list which reached a figure of approximately 378kg. The most plausible reason for those weights not having been allocated was that those weights were at the time unknown. Accordingly, in addition to the fact that I have expressed a general preference for Mr Anderson's evidence on disputed conversations over that of Mr Kane, the objective facts point towards Mr Anderson's version being likely to have occurred. Mr Stott responded to Mr Kane's email (of 3.42 pm the previous day) on 6 July 2018 at 8.46 am, saying among other things: "I'm not going to be much help to you here. Of course the 915 is heavier." That response tends to indicate that Mr Kane did not receive any comfort from Mr Stott in relation to the dry weight of the aircraft and remained in a state of uncertainty on the issue, consistently with Mr Anderson's evidence.
51 On 6 July 2018, Mr Anderson sent an email attaching a sample contract to Mr Kane in response to Mr Kane's request on 5 July 2018 at 6.42 pm. On 11 July 2018, Mr Anderson sent a draft contract to Mr Kane by email. It appears that Mr Kane was impatient to purchase the aircraft, and was not prepared to wait for further information concerning the weight of the aircraft, including the weights of various particular optional items which Mr Kane had still not been given. Mr Kane gave evidence that at this point, when he received the draft sale and purchase agreement on 11 July 2018, he understood that the Bristell Aircraft including the options referred to in the draft contract weighed about 378.07 kg and was a light sport aircraft. On the contrary, in my view, Mr Kane must have appreciated that the aircraft would weigh significantly more than 378.07 kg, given the uncertainty expressed by Mr Kane about the weights for a number of particular items, and the fact that the price list of 3 July 2018 omitted weights for a number of items. The MT propeller alone was given a weight of 10 kg in the 3 July 2018 price list, but the figure of 10 kg was not included in the column for "weight total". Accordingly, that weight had to be added to the total of 378.07 kg, as too did the weights for the Garmin items which had not been included, together with the heated seats and sliding vents in the glass canopy which were now included as options in Annexure 1 to the Draft Contract.
52 On 12 July 2018, the contract for the sale and purchase of an aircraft was entered into between Anderson Aviation as the Seller and Kane's Hire as the Purchaser. Clause 1 defines the "Aircraft" as meaning:
The aircraft described in paragraph 1 of Schedule 1 - Description of Aircraft and Delivery Documents, including the specified airframe and engine and all parts, components, appliances, accessories, instruments and other items of equipment installed in or attached to such airframe or such engines at Delivery and the related Delivery Document.
Clause 2.1 provides as follows:
In consideration of payment of $230,600.00 exclusive of GST and associated registration costs ["the purchase price"], in cash or cleared funds the Seller sells to the Purchaser and the Purchaser buys from the Seller the goods on the terms and conditions of this agreement as detailed at Annexure 1.
Clause 10 provides the following warranties by the seller:
10.1 The Seller warrants that the goods are as described in the Schedule, that the aircraft will be on the RAA register, unless otherwise agreed between the Seller and the Purchaser, that it will hold a Certificate of Airworthiness (if applicable); and that it will hold an aircraft log book pursuant to CAR & CAO.
10.2 The Purchaser acknowledges that the Seller does not make under this agreement or outside of it any representations or warranties regarding the goods which is or might be relevant to the Purchaser buying or selling the goods other than the representations or warranties expressed in this agreement and by the manufacture of the aircraft.
10.3 The Purchaser acknowledges that it has not carried out an inspection of the goods and the maintenance and registration records of the aircraft, and that the Purchaser is reliant upon the seller to ensure that the goods are as described in the Schedule.
10.4 Any performance figures given by the seller are the aircraft manufacturer's figures and should be considered estimates only. The seller is under no liability for damages for failure of the goods to attain such figures unless specifically guaranteed in writing. Any such written guarantees are subject to the recognized tolerances applicable to such figures.
Clause 20.1 of the contract provides as follows:
This agreement, and any documents referred to in it, constitute the whole agreement between the parties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter they cover.
53 Schedule 1- Item 1 provides a description of the aircraft and its equipment as follows:
Type: Bristell FG / Longwing (9.1M) as per Annexure 1 below.
For full description of inclusions and options for this aircraft see Annexure 1.
As per Excel price list spread sheet.
The reference to the Excel price list spread sheet, in my opinion, is a reference to the last of the Excel price lists provided by Anderson Aviation to Kane's Hire, namely that of 3 July 2018. There is no such Excel price list spread sheet in the annexures to the contract itself. Accordingly, the Excel price list of 3 July 2018 was incorporated by reference into the contract.
54 Annexure 1 to the contract provides a list of aircraft specifications as ordered. It begins by referring to the aircraft as a Bristell, Fixed Gear, Ready to Fly, "912 LSA (600 kg) 100Hp, painted white". That is a reference to what may be described as the basic aircraft before the addition of options, because one of those options which is referred to in Annexure 1 was the Rotax 915iS 130hp engine (rather than 100 hp). Annexure 1 does not itself give weights for the individual items which it refers to, nor does it give a total figure for dry empty weight.
55 On 12 October 2018, Mr Anderson sent Mr Kane an email saying that his aircraft was ready for test flying in the Czech Republic, and attached the Aircraft Operating Instructions for a Bristell 915 Aircraft which arrived the previous week for another customer. Section 6 of the Aircraft Operating Instructions which were attached deals with weight and balance, and refers to the basic weight of the empty aircraft as being 403kg. Given that that aircraft was for another customer, I do not attach any significance to that particular communication of a weight figure to Mr Kane.
56 Also on 12 October 2018, Mr Bristela on behalf of BRM Aero signed a Light Sport Aircraft Statement of Compliance for the aircraft sold to Kane's Hire. The manufacturer's certification included a declaration that the design of the aircraft complied with the standards listed under section 3, which included the ASTM standard referred to above, namely F2245-16c. The document also refers to the MTOW as being 600 kg. As I have said above, for that standard to be complied with, the dry empty weight could not exceed 397.98 kg, whereas it is common ground that the Bristell Aircraft had a dry empty weight of 411 kg. Accordingly, BRM Aero's certification was incorrect, as Mr Bristela on behalf of BRM Aero admitted to CASA (as a genuine oversight) in a letter dated 22 February 2020.
57 On 19 November 2018, Mr Anderson sent an email to Mr Kane saying that his aircraft was about to be shipped, which triggered the third payment under the contract of sale. The contract in Schedule 1 referred to four payments, each of $63,415.00, being 25% of the total purchase price, payable at the four stages of signing, painting, shipping and delivery.
58 On 23 December 2018, Mr Anderson sent an email to Mr Kane confirming that final arrangements had been made to ship Mr Kane's aircraft to Melbourne with an expected docking date of 14 February 2019. Mr Anderson's email also attached a copy of the Aircraft Operating Instructions for Mr Kane's aircraft. Section 6 of those Aircraft Operating Instructions related to weight and balance, and gave a final weight for the empty aircraft at 411.0 kg. Mr Anderson's email also refers to Mr Kane now having "some reading to do over the break". Mr Kane raised no concerns or issues with Mr Anderson concerning the empty weight of his aircraft at 411.0 kg.
59 On 19 March 2019, a special certificate of airworthiness for the Bristell Aircraft sold to Kane's Hire was issued. On 21 March 2019, the Bristell Aircraft was registered with RAA, and it was established by the evidence of Ms MacGillivray that the Bristell Aircraft was still registered with RAA through until March 2023. I would infer in the absence of evidence to the contrary that it remains registered with RAA. On 26 March 2019, Kane's Hire paid the final instalment of the purchase price. On 28 March 2019, Mr Anderson delivered the Bristell Aircraft to Mr Kane at Bathurst Airport.
60 On 4 April 2019, Mr Kane raised a query for the first time as to why the empty weight of the aircraft was 411.0 kg, prompted by his instructor, Mr Cavieres. Mr Anderson sent an email to Mr Kane that day stating:
When you and I discussed the aircraft we both knew the weights on the price list were not complete as we did not have all the details and it was always going to be north of the value on the list.
I know you are conscience [sic] of the extra options you were adding but got to the point of thinking they would not add up to much.
I did question Milan [Bristela] tonight and he too was surprised by the weight and mentioned the original prototype with the original engine supplied from Rotax was much lighter.
Your comment has prompted Milan to investigate if Rotax have change [sic] anything to make the engine heavier as BRM have not made any changes to the airframe or elsewhere that should amount to the perceived difference. This is one of those cases where Milan, you and I did not really know the actual end weight at the time or [sic] ordering due to some of the specifications that were being ordered. I will follow up when I received [sic] the list of weights and information from Milan.
61 Mr Anderson's summary of the events corresponds to the findings which I have made above and is a fair and accurate summary. Mr Kane gave evidence that if he had been aware that the Bristell Aircraft had a dry weight of 411 kg and could not comply with the requirements of the MTOW of 600 kg and was not entitled to a Certificate of Airworthiness as an LSA, he would not have caused the applicant to pay the final instalment payment under the Sale and Purchase Agreement for the Bristell Aircraft and he would not have caused the applicant to take delivery of the Bristell Aircraft on 28 March 2019; rather, he would have instead retained legal representation to explore the applicant's immediate legal rights. I reject that evidence. In my opinion, Mr Kane on behalf of Kane's Hire entered into the contract of purchase and paid the remaining instalments of the purchase price knowing that he had not been given a total figure for the dry empty weight of the aircraft with all the options he had selected, and being prepared to take the risk that the final weight may have meant that it would not qualify for a certificate of airworthiness as an LSA under reg 21.186 of the Regulations.
62 On 28 November 2019, CASA wrote to Mr Kane giving notice that it was considering the suspension or cancellation of the certificate of airworthiness for the Bristell Aircraft. The letter points out that on 8 May 2019, Mr Kane had enquired with CASA as to whether there was a way in which he could increase the MTOW of the aircraft, which had been delivered with an empty weight of 411 kg. CASA advised Mr Kane that it was not possible to increase the MTOW of the aircraft, as to do so would take the aircraft outside the definition of an LSA and it was beyond the weight limit specified in the standards set by ASTM, pursuant to which the aircraft manufacturer had certified that the aircraft was constructed. The letter points out that the Statement of Compliance for the aircraft, signed by its manufacturer, declared compliance with the design and performance standard ASTM 2245-16c. The letter says that in order to conform with the ASTM standard, the aircraft would need to have a minimum useful load of 202.02 kg; however with an empty weight of 411 kg, that left the aircraft with only a 189 kg useful load. In order to meet the minimum useful load component of the ASTM standard, the empty weight of the aircraft would need to be not more than 398 kg.
63 While the letter refers to CASA's power to suspend or cancel a certificate of airworthiness if CASA considers that it is necessary to do so in the interests of aviation safety, the letter also refers to reg 21.181(4)(c)(iii) of the Regulations, which states that a certificate of airworthiness for an LSA stops being in force if it does not comply with the LSA standards, and stated that CASA considers that the Bristell Aircraft should not have been issued with a certificate of airworthiness as it does not comply with the LSA standards. The letter allowed Mr Kane 21 days to show cause why the certificate of airworthiness should not be suspended or cancelled, and also invited Mr Kane to participate in a "show cause conference". Mr Kane paid the CASA fee of $240.00 for the experimental certificate application.
64 On 27 April 2020, prompted by a suggestion made by Mr Poole of CASA, Mr Kane applied to CASA for an experimental certificate for LSAs. On 4 August 2020, the previous special certificate of airworthiness for an LSA was cancelled, and a new special certificate of airworthiness was issued in the category "Experimental Light Sport Aircraft". The purpose for which the certificate was given was described as "Private operations only", which may be contrasted with the original certificate of airworthiness, which was issued for the purpose of "Private Operations/Flight Training". The only material difference between the two certificates is that the aircraft cannot now be used for purposes of flight training. An email of 24 April 2020 from Mr Poole of CASA to Mr Kane sets out other requirements of holding an experimental certificate, including placing a warning notice in the cockpit, putting the letter "E" in front of the registration on the aircraft on both sides of the plane, and putting the word "EXPERIMENTAL" on the aeroplane near each entrance to the cockpit. None of the expert witnesses suggests that those requirements affect the aircraft's value.
65 It also appears that after April 2019, suggestions were made to Mr Kane by Mr Stott and also by Mr Anderson as to how the empty weight of the Bristell Aircraft could be reduced so as to bring it under 398.98 kg. The suggested changes included replacing the 915iS engine with a 912iS engine, removing the sleeping tube, replacing the battery, and removing the parachute. Although there was some dispute as to the proposed terms of payment, I accept the evidence of Mr Anderson and Mr Bristela that BRM Aero offered to cover the full cost of parts and labour. Mr Kane rejected the suggestions and the offer.
66 Mr Kane continued to fly the Bristell Aircraft until 2 October 2020. Mr Kane gave evidence that the Bristell Aircraft has not been flown since that date, and that is consistent with the log book for the Bristell Aircraft. The Bristell Aircraft still has the benefit of the experimental certificate of airworthiness, and, as Ms MacGillivray said in her unchallenged evidence in chief, it can still be flown as a two-seat aircraft.